Notices. Notice

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BILLING CODE 7710-12-M SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon written request, copies available from: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. Extension: Rule 0-1; SEC File No. 270-472; OMB Control No. 3235-0531. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the Securities and Exchange Commission (“Commission”) plans to submit to the Office of Management and Budget requests for extension of the previous approved collections of information discussed below.

The Investment Company Act of 1940 (the “Act”) 1 establishes a comprehensive framework for regulating the organization and operation of investment companies (“funds”). A principal objective of the Act is to protect fund investors by addressing the conflicts of interest that exist between funds and their investment advisers and other affiliated persons. The Act places significant responsibility on the fund board of directors in overseeing the operations of the fund and policing the relevant conflicts of interest. 2 1 15 U.S.C. 80a-1. 2 For example, fund directors must approve investment advisory and distribution contracts.

See 15 U.S.C. 80a-15(a), (b), and (c). In one of its first releases, the Commission exercised its rulemaking authority pursuant to sections 38(a) and 40(b) of the Act by adopting rule 0-1 [17 CFR 270.0-1]. 3 Rule 0-1, as subsequently amended on numerous occasions, provides definitions for the terms used by the Commission in the rules and regulations it has adopted pursuant to the Act. The rule also contains a number of rules of construction for terms that are defined either in the Act itself or elsewhere in the Commission's rules and regulations.

Finally, rule 0-1 defines terms that serve as conditions to the availability of certain of the Commission's exemptive rules. More specifically, the term “independent legal counsel,” as defined in rule 0-1, sets out conditions that funds must meet in order to rely on any of ten exemptive rules (“exemptive rules”) under the Act. 4 3 Investment Company Act Release No. 4 (Oct. 29, 1940) [5 FR 4316 (Oct. 31, 1940)]. Note that rule 0-1 was originally adopted as rule N-1. 4 The relevant exemptive rules are:

Rule 10f-3 [17 CFR 270.10f-3], Rule 12b-1 [17 CFR 270.12b-1], Rule 15a-4(b)(2) [17 CFR 270.15a-4(b)(2)], Rule 17a-7 [17 CFR 270.17a-7], Rule 17a-8 [17 CFR 270.17a-8], Rule 17d-1(d)(7) [17 CFR 270.17d-1(d)(7)], Rule 17e-1(c) [17 CFR 270.17e-1(c)], Rule 17g-1 [17 CFR 270.17g-1], Rule 18f-3 [17 CFR 270.18f-3], and Rule 23c-3 [17 CFR 270.23c-3]. The Commission amended rule 0-1 to include the definition of the term “independent legal counsel” in 2001. 5 This amendment was designed to enhance the effectiveness of fund boards of directors and to better enable investors to assess the independence of those directors.

The Commission also amended the exemptive rules to require that any person who serves as legal counsel to the independent directors of any fund that relies on any of the exemptive rules must be an “independent legal counsel.” This requirement was added because independent directors can better perform the responsibilities assigned to them under the Act and the rules if they have the assistance of truly independent legal counsel. 5 *See* Role of Independent Directors of Investment Companies, Investment Company Act Release No. 24816 (Jan. 2, 2001) [66 FR 3735 (Jan. 16, 2001)].

If the board's counsel has represented the fund's investment adviser, principal underwriter, administrator (collectively, “management organizations”) or their “control persons” 6 during the past two years, rule 0-1 requires that the board's independent directors make a determination about the adequacy of the counsel's independence. A majority of the board's independent directors are required to reasonably determine, in the exercise of their judgment, that the counsel's prior or current representation of the management organizations or their control persons was sufficiently limited to conclude that it is unlikely to adversely affect the counsel's professional judgment and legal representation.

Rule 0-1 also requires that a record for the basis of this determination is made in the minutes of the directors' meeting. In addition, the independent directors must have obtained an undertaking from the counsel to provide them with the information necessary to make their determination and to update promptly that information when the person begins to represent a management organization or control person, or when he or she materially increases his or her representation. Generally, the independent directors must re-evaluate their determination no less frequently than annually. 6 A “control person” is any person—other than a fund—directly or indirectly controlling, controlled by, or under common control, with any of the fund's management organizations. *See* 17 CFR 270.01(a)(6)(iv)(B).

Any fund that relies on one of the exemptive rules must comply with the requirements in the definition of “independent legal counsel” under rule 0-1. We assume that approximately 3870 funds rely on at least one of the exemptive rules annually. 7 We further assume that the independent directors of approximately one-third

(1290)of those funds would need to make the required determination in order for their counsel to meet the definition of independent legal counsel. 8 We estimate that each of these 1290 funds would be required to spend, on average, 0.75 hours annually to comply with the recordkeeping requirement associated with this determination, for a total annual burden of approximately 968 hours. Based on this estimate, the total annual cost for all funds' compliance with this rule is approximately $66,126. To calculate this total annual cost, the Commission staff assumed that two-thirds of the total annual hour burden (645 hours) would be incurred by compliance staff with an average hourly wage rate of $89 per hour, 9 and one-third of the annual hour burden (323 hours) would be incurred by clerical staff with an average hourly wage rate of $27 per hour. 10 7 Based on statistics compiled by Commission staff, we estimate that there are approximately 4300 funds that could rely on one or more of the exemptive rules. Of those funds, we assume that approximately 90 percent

(3870)actually rely on at least one exemptive rules annually. 8 We assume that the independent directors of the remaining two-thirds of those funds will choose not to have counsel, or will rely on counsel who has not recently represented the fund's management organizations or control persons. In both circumstances, it would not be necessary for the fund's independent directors to make a determination about their counsel's independence. 9 The staff estimates concerning the wage rate for professional time and for clerical time are based on salary information complied by the Securities Industry Association. We use the annual salaries listed for the Director of Compliance and Executive Secretary positions to make our estimates. See Securities Industry Association, *Report on Management and Professional Earnings in the Securities Industry*

(2004)(available in part at *http://www.careerjournal.com/salaryhiring* (last visited Sept. 14, 2005)). Note that the average hourly wage rate estimates are modified for an 1800-hour work-year, 2.7% inflation and adjusted upward by 35% to reflect possible overhead costs and employee benefits. 10 (645 × $89/hour) + (323 × $27/hour) = $66,126. These burden hour estimates are based upon the Commission staff's experience and discussions with the fund industry. The estimates of average burden hours are made solely for the purposes of the Paperwork Reduction Act. These estimates are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Written comments are invited on:

(a)Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has practical utility;

(b)the accuracy of the Commission's estimate of the burdens of the collection of information;

(c)ways to enhance the quality, utility, and clarity of the information collected; and

(d)ways to minimize the burdens of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Office of Information Technology, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549. Dated: November 16, 2005. Jonathan G. Katz, Secretary. [FR Doc. E5-6538 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon written request, copies available from: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. Extension: Rule 17a-7; SEC File No. 270-238; OMB Control No. 3235-0214. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collections of information summarized below. The Commission plans to submit these existing collections of information to the Office of Management and Budget (“OMB”) for extension and approval. Rule 17a-7 [17 CFR 270.17a-7] under the Investment Company Act of 1940 (the “Act”) is entitled “Exemption of certain purchase or sale transactions between an investment company and certain affiliated persons thereof.” It provides an exemption from section 17(a) of the Act for purchases and sales of securities between registered investment companies (“funds”), that are affiliated persons (“first-tier affiliates”) or affiliated persons of affiliated persons (“second-tier affiliates”), or between a fund and a first-or second-tier affiliate other than another fund, when the affiliation arises solely because of a common investment adviser, director, or officer. Rule 17a-7 requires funds to keep various records in connection with purchase or sale transactions effected in reliance on the rule. The rule requires the fund's board of directors to establish procedures reasonably designed to ensure that the rule's conditions have been satisfied. The board is also required to determine, at least on a quarterly basis, that all affiliated transactions effected during the preceding quarter in reliance on the rule were made in compliance with these established procedures. If a fund enters into a purchase or sale transaction with an affiliated person, the rule requires the fund to compile and maintain written records of the transaction. 1 The Commission's examination staff uses these records to evaluate for compliance with the rule. 1 The written records are required to set forth a description of the security purchased or sold, the identity of the person on the other side of the transaction, and the information or materials upon which the board of directors' determination that the transaction was in compliance with the procedures was made. The Commission estimates that approximately 968 funds enter into transactions effected in reliance on rule 17a-7 each year and, therefore, are subject to the rule's information collection requirements. 2 The average annual burden for rule 17a-7 is estimated to be approximately two burden hours per respondent, for an annual total of 1935 burden hours for all respondents. 3 The estimates of burden hours are made solely for the purposes of the Paperwork Reduction Act, and are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. 2 These estimates are based on conversations with the examination and inspections staff of the Commission and fund representatives. Based on these conversations, the Commission staff estimates that most investment companies (3870 of the estimated 4300 registered investment companies) have adopted procedures for compliance with rule 17a-7. Of these 3870 investment companies, the Commission staff estimates that each year approximately 25%

(968)enter into transactions affected by rule 17a-7. 3 This estimate is based in turn on the staff's estimate that the approximately 968 funds that rely on rule 17a-7 annually engage in an average of 8 rule 17a-7 transactions and spend approximately 15 minutes per transaction on recordkeeping required by the rule. Rule 17a-7 requires investment companies to maintain and preserve permanently a written copy of the procedures governing rule 17a-7 transactions. In addition, investment companies are required to maintain written records of each rule 17a-7 transaction for a period of not less than six years from the end of the fiscal year in which the transaction occurred. The collection of information required by rule 17a-7 is necessary to obtain the benefits of the rule. Responses will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. Written comments are invited on:

(a)Whether the collections of information are necessary for the proper performance of the functions of the Commission, including whether the information has practical utility;

(b)the accuracy of the Commission's estimate of the burdens of the collections of information;

(c)ways to enhance the quality, utility, and clarity of the information collected; and

(d)ways to minimize the burdens of the collections of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Office of Information Technology, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549. Dated: November 17, 2005. Jonathan G. Katz, Secretary. [FR Doc. E5-6539 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon written request, copies available from: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. Extension: Rule 30a-8; SEC File No. 270-516; OMB Control No. 3235-0574. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collections of information summarized below. The Commission plans to submit these existing collections of information to the Office of Management and Budget (“OMB”), for extension and approval. Rule 3a-8 of the Investment Company Act of 1940 (the “Act”), serves as a nonexclusive safe harbor from investment company status for certain research and development companies (“R&D companies”). The rule requires that the board of directors of an R&D company seeking to rely on the safe harbor adopt an appropriate resolution evidencing that the company is primarily engaged in a non-investment business and record that resolution contemporaneously in its minute books or comparable documents. 1 An R&D company seeking to rely on the safe harbor must retain these records only as long as such records must be maintained in accordance with state law. 1 Rule 3a-8(a)(6). This requirement is modeled on the requirement in rule 3a-2 under the Act that provides a temporary exemption from the Act for transient investment companies. 17 CFR 270.3a-2. Rule 3a-8 contains an additional requirement that is also a collection of information within the meaning of the PRA. The board of directors of a company that relies on the safe harbor under rule 3a-8 must adopt a written policy with respect to the company's capital preservation investments. We expect that the board of directors will base its decision to adopt the resolution discussed above, in part, on investment guidelines that the company will follow to ensure its investment portfolio is in compliance with the rule's requirements. The collection of information imposed by rule 3a-8 is voluntary because the rule is an exemptive safe harbor, and therefore, R&D companies may choose whether or not to rely on it. The purposes of the information collection requirements in rule 3a-8 are to ensure that:

(i)The board of directors of an R&D company is involved in determining whether the company should be considered an investment company and subject to regulation under the Act, and

(ii)adequate records are available for Commission review, if necessary. Rule 3a-8 would not require the reporting of any information or the filing of any documents with the Commission. Commission staff estimates that there is no annual recordkeeping burden associated with the rule's requirements. Nevertheless, the Commission requests authorization to maintain an inventory of one burden hour for administrative purposes. There are approximately 33,000 R&D companies in the United States. 2 Rule 3a-8 impacts non-manufacturing R&D companies that would fall within the definition of investment company pursuant to section 3(a)(1)(C) of the Act [15 U.S.C. 80a-3(a)(1)(C)]. 3 Of the 16,170 non-manufacturing R&D Companies, the Commission believes that companies in scientific R&D services are more likely to use the exemption provided by rule 3a-8. 4 This field comprises companies that specialize in conducting R&D for other organizations, such as many biotechnology companies. 5 It accounts for 18%, or approximately 2910 companies. 6 Given that the board resolutions and investment guidelines will generally need to be adopted only once (unless relevant circumstances change), 7 the Commission believes that all the companies that seek to rely on rule 3a-8 would have adopted their board resolutions and established written investment guidelines in 2003 when the rule was adopted. We expect that newly formed R&D companies would adopt the board resolution and investment guidelines simultaneously with their formation documents in the ordinary course of business. 8 Therefore, we estimate that rule 3a-8 will not create additional time burdens. 2 *See* National Science Board, Science and Engineering Indicators 2004 (“NSB Indicators”) (available at *http://www.nsf.gov/statistics/seind04/* ). 3 The Act provides certain exclusions from the definition of investment company for a company that is primarily engaged in a non-investment business. 15 U.S.C. 80a-3(b)(1). For purposes of this PRA analysis, we assume that all manufacturing R&D companies are primarily engaged in the manufacturing industry and, therefore, may rely on the exclusion for companies primarily engaged in a non-investment business. For example, the top two manufacturing R&D companies in terms of dollars spent are Ford Motor Company and General Motors, which are primarily engaged in motor vehicle manufacturing. *See* NSB Indicators, *supra* note 2. 4 We believe that R&D Companies in this field are most likely to rely on the rule because they often raise and invest large amounts of capital to fund their research and product development and may make strategic investments in other R&D companies to develop products jointly. These activities may cause the R&D companies to fall within the definition of investment company and fail to qualify for statutory exclusions under the Act when using the Commission's traditional analysis. *See* Certain Research and Development Companies, Release No. 26077 (Jun. 16, 2003) [68 FR 37045 (Jun. 20, 2003)], at n. 12 and accompanying text (“Rule 3a-8 Release”). 5 *See* NSB Indicators, *supra* note 2. 6 *Id.* 7 In the event of changed circumstances, the Commission believes that the board resolution and investment guidelines will be amended and recorded in the ordinary course of business and would not create additional time burdens. 8 In order for these companies to raise sufficient capital to fund their product development stage, we believe they will need to present potential investors with investment guidelines. Investors would want to be assured that the company's funds are invested consistent with the goals of capital preservation and liquidity. Written comments are invited on:

(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b)the accuracy of the agency's estimate of the burden of the collection of information;

(c)ways to enhance the quality, utility, and clarity of the information collected; and

(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Office of Information Technology, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549. Dated: November 16, 2005. Jonathan G. Katz, Secretary. [FR Doc. E5-6540 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon written request, copies available from: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. Extension: Rule 498; File No. 270-435; OMB Control No. 3235-0488. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (“Act”) [44 U.S.C. 3501 *et seq.* ], the Securities and Exchange Commission (“Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget (“OMB”) for extension and approval. Rule 498 Under the Securities Act of 1933, Profiles for Certain Open-End Management Investment Companies Rule 498 of the Securities Act of 1933 [17 CFR 230.498] permits open-end management investment companies (or a series of an investment company organized as a series company, which offers one or more series of shares representing interests in separate investment portfolios) (“funds”) to provide investors with a “profile” that contains a summary of key information about a fund, including the fund's investment objectives, strategies, risks and performance, and fees, in a standardized format. The profile provides investors the option of buying fund shares based on the information in the profile or reviewing the fund's prospectus before making an investment decision. Investors purchasing shares based on a profile receive the fund's prospectus prior to or with confirmation of their investment in the fund. Consistent with the filing requirement of a fund's prospectus, a profile must be filed with the Commission thirty days before first use. Such a filing allows the Commission to review the profile for compliance with Rule 498. Compliance with the rule's standardized format assists investors in evaluating and comparing funds. It is estimated that approximately 1 initial profile and 252 updated profiles are filed with the Commission annually. The Commission estimates that each profile contains on average 1.25 portfolios, resulting in 1.25 portfolios filed annually on initial profiles and 315 portfolios filed annually on updated profiles. The number of burden hours for preparing and filing an initial profile per portfolio is 25. The number of burden hours for preparing and filing an updated profile per portfolio is 10. The total burden hours for preparing and filing initial and updated profiles under Rule 498 is 3,181, representing a decrease of 1,269 hours from the prior estimate of 4,450. The reduction in burden hours is attributable to the lower number of profiles actually prepared and filed as compared to the previous estimates. The estimates of average burden hours are made solely for the purposes of the Act and are not derived from a comprehensive or even representative survey or study of the cost of Commission rules and forms. Written comments are invited on:

(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b)the accuracy of the agency's estimate of the burden of the collection of information;

(c)ways to enhance the quality, utility, and clarity of the information collected; and

(202)551-6810, SEC, Division of Investment Management, Office of Investment Company Regulation, 100 F Street, NE., Washington, DC 20549-0504. Hilliard Lyons Research Trust [File No. 811-9281] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On August 31, 2005, applicant transferred its assets to The RBB Fund, Inc., based on net asset value. Expenses of approximately, $448,249 incurred in connection with the reorganization were paid by J.J.B. Hilliard, W.L. Lyons, Inc., of which Hilliard Lyons Research Advisors, applicant's investment adviser, is a division. *Filing Dates:* The application was filed on September 27, 2005, and amended on November 7, 2005. *Applicant's Address:* Hilliard Lyons Center, 501 South Fourth St., Louisville, KY 40202. Centurion Counsel Market Neutral [File No. 811-3257] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On September 15, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Applicant incurred approximately $7,000 in expenses in connection with the liquidation. *Filing Dates:* The application was filed on September 19, 2005, and amended on November 4, 2005. *Applicant's Address:* 365 South Rancho Santa Fe Rd., Suite 300, San Marcos, CA 92078. Hillier Funds Trust [File No. 811-21568] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 18, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Applicant incurred no expenses in connection with the liquidation. *Filing Dates:* The application was filed on September 30, 2005, and amended on November 7, 2005. *Applicant's Address:* 36 West 8th St., Suite 210, Holland, MI 49423. Special Money Market Fund, Inc. [File No. 811-5951] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 11, 2005, applicant transferred its assets to MoneyMart Assets, Inc., based on net asset value. Expenses of $148,000 incurred in connection with the reorganization were paid by applicant and the acquiring fund. *Filing Dates:* The application was filed on September 2, 2005, and amended on November 7, 2005. *Applicant's Address:* Gateway Center Three, 100 Mulberry St., Newark, NJ 07102-4077. Davis Park Series Trust [File No. 811-10141] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On January 14, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $13,044 incurred in connection with the liquidation were paid by Ameristock Corporation, applicant's investment adviser. *Filing Dates:* The application was filed on July 29, 2005, and amended on October 27, 2005. *Applicant's Address:* 1320 Harbor Bay Parkway, Suite 145, Alameda, CA 94502. Adhia Funds, Inc. [File No. 811-8775] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 3, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $10,798 incurred in connection with the liquidation were paid by applicant and its investment adviser, Adhia Investment Advisors, Inc. *Filing Dates:* The application was filed on October 11, 2005, and amended on October 28, 2005. *Applicant's Address:* 1408 N Westshore Blvd., Suite 611, Tampa, FL 33607. Combined Penny Stock Fund, Inc. [File No. 811-3888] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On July 28, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $57,906 incurred in connection with the liquidation were paid by applicant. Applicant has retained $31,462 in cash to cover certain remaining liquidation expenses. *Filing Dates:* The application was filed on August 1, 2005, and amended on September 29, 2005. *Applicant's Address:* 5373 N. Union Blvd., #100, Colorado Springs, CO 80918. Investors Mark Series Fund, Inc. [File No. 811-8321] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On July 13, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Investors Mark Advisor, LLC, applicant's investment adviser, paid all expenses incurred in connection with the liquidation. *Filing Date:* The application was filed on September 20, 2005. *Applicant's Address:* 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402. Gateway Variable Insurance Trust [File No. 811-10375] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On August 12, 2005, applicant made a liquidating distribution to all shareholders, based on net asset value. Gateway Investment Advisers, L.P., applicant's investment adviser, paid all expenses incurred in connection with the liquidation. *Filing Dates:* The application was filed on June 28, 2005 and amended on October 21, 2005. *Applicant's Address:* Rookwood Tower, Suite 600, 3805 Edwards Road, Cincinnati, OH 45209. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Jonathan G. Katz, Secretary. [FR Doc. E5-6555 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52804; File No. SR-Amex-2005-114] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to the Amex Initial Listing Standards November 18, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on November 2, 2005, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On November 10, 2005, the Amex submitted Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 (“Amendment No. 1”) makes a clarification to the purpose section of the filing and makes changes to Section 101 of the Guide, to reference Section 102(b) of the Guide in the listing provisions. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Amex proposes to amend Section 102(b) of the Amex Company Guide (“Guide”) to require a minimum market price of $2 per share for issuers seeking to qualify for initial listing pursuant to Initial Listing Standard 3 (Section 101(c)). The Amex also proposes to amend Section 101 of the Guide to include a reference to Section 102(b) in each of the four initial listing standards to clarify that Section 102(b) applies to each initial listing standard listed in Section 101 of the Guide. 4 4 *See* Amendment No. 1, *Id.* Below is the text of the proposed rule change. Proposed new language is in *italics;* proposed deletions are in [brackets]. American Stock Exchange Company Guide Criteria for Original Listing Sec. 101. GENERAL The approval of an application for the listing of securities is a matter solely within the discretion of the Exchange. The Exchange has established certain minimum numerical standards, set forth below. The fact that an applicant may meet the Exchange's numerical standards does not necessarily mean that its application will be approved. Other factors which will also be considered include the nature of a company's business, the market for its products, the reputation of its management, its historical record and pattern of growth, its financial integrity, its demonstrated earning power and its future outlook. See § 110 for special criteria relating to foreign issuers and Rules 1000, 1000A, and 1200 for rules relating to Portfolio Depositary Receipts, Index Fund Shares, and Trust Issued Receipts.

(a)INITIAL LISTING STANDARD 1 (1)-(3) No change. *(4) Stock Price/Market Value of Shares Publicly Held—See Section 102(b).*

(b)INITIAL LISTING STANDARD 2 (1)-(4) No change. *(5) Stock Price/Market Value of Shares Publicly Held—See Section 102(b). *

(c)INITIAL LISTING STANDARD 3 (1)-(4) No change. *(5) Stock Price/Market Value of Shares Publicly Held—See Section 102(b).*

(d)INITIAL LISTING STANDARD 4 (1)-(3) No change. *(4) Stock Price/Market Value of Shares Publicly Held—See Section 102(b).* (e)-(g) No change. Sec. 102. EQUITY ISSUES

(a)No change.

(b)Stock Price/Market Value of Shares Publicly Held—The Exchange requires a minimum market price of $3 per share for applicants seeking to qualify for listing pursuant to Section 101 (a),

(b)or (d), *a minimum market price of $2 per share for applicants seeking to qualify for listing pursuant to Section 101(c),* and $3,000,000 aggregate market value of publicly held shares for applicants seeking to qualify for listing pursuant to Section 101(a). [In certain instances, however, the Exchange may favorably consider listing an issue selling for less than $3 per share after considering all pertinent factors, including market conditions in general, whether historically the issue has sold above $3 per share, the applicant's capitalization and the number of outstanding and publicly-held shares of the issue.]

(c)No change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change, as amended. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Amex states that an approval of an application for the listing of securities on the Exchange is based on an applicant's ability to satisfy a series of quantitative and qualitative listing standards as evaluated by the Listing Qualifications Department. The Amex represents that the quantitative standards currently provide four alternative approaches for a company to satisfy the Amex's initial listing standards. For applicants to meet Initial Listing Standards 1, 2 and 4 (Guide Section 101 (a), (b), and (d), respectively), in addition to specified minimum numerical standards, the Exchange requires a minimum market price of $3 per share. Listing Standard 3 currently requires an applicant to meet minimum specified numerical standards but does not require the applicant to meet a minimum market price per share. The Exchange is proposing to enhance its initial listing quantitative standards to require applicants seeking to qualify under Initial Listing Standard 3 pursuant to Section 101(c) of the Guide to have a minimum market price of $2 per share. Accordingly, the Exchange is proposing to amend Section 102(b) to incorporate this requirement. The Exchange also proposes to amend Section 101 of the Guide to include a reference to Section 102(b) in each of the four initial listing standards to clarify that Section 102(b) applies to each standard listed in Section 101 of the Guide. 5 5 *See* Amendment No. 1, *supra* note 3. In addition, the Exchange proposes to delete the last sentence of Section 102(b) of the Guide. The Exchange states that this provision, which has been in place for many years, gives the Exchange the discretion under certain circumstances to consider listing an issue that qualified under Initial Listing Standards 1, 2 or 4 even if the issue's share price is less than $3. The Exchange represents that this provision was meant to cover the situation in which an applicant issuer meets all of the initial listing standards but experiences a decline in share price to below $3 per share just before listing. In light of the current and proposed configuration of the initial listing standards, the Exchange believes that this provision is no longer necessary or appropriate. 6 6 *Id.* 2. Statutory Basis The Exchange believes the proposal, as amended, is consistent with Section 6(b) of the Act 7 , in general, and furthers the objectives of Section 6(b)(5) of the Act, 8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and the proposal is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers, or to regulate by virtue of any authority conferred by the Act matters not related to the purpose of the Act or the administration of the Exchange. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes the proposed rule change, as amended, will impose no burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received by the Exchange on this proposal, as amended. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or

(ii)as to which the Exchange consents, the Commission will: A. By order approve the proposed rule change, as amended, or B. Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-Amex-2005-114 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-Amex-2005-114. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2005-114 and should be submitted on or before December 19, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Jonathan G. Katz, Secretary. [FR Doc. E5-6537 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52798; File No. SR-CBOE-2005-46] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change and Amendment No. 1 Thereto and Notice of Filing and Order Granting Accelerated Approval to Amendments No. 2 and 4 Thereto Relating to the Removal of Agency Responsibilities From Designated Primary Market-Makers and the Establishment of PAR Officials November 18, 2005. I. Introduction On June 10, 2005, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to amend its rules relating to Designated Primary Market-Makers (“DPMs”) to eliminate the DPM's responsibility to act as agent in the options in which it is registered as the DPM on the Exchange. Instead, the Exchange has proposed to designate a CBOE employee or independent contractor (“PAR Official”) to be responsible for assuming the responsibility for handling certain orders currently undertaken by the DPMs in their allocated options classes, including the operation of the PAR workstation. The Exchange filed Amendment No. 1 with the Commission on July 1, 2005. 3 The amended proposal was published for comment in the **Federal Register** on July 19, 2005. 4 The Commission received one comment letter regarding the proposal. 5 The Exchange filed Amendment No. 2 with the Commission on October 6, 2005. 6 The Exchange filed Amendment No. 3 with the Commission on November 17, 2005, and withdrew Amendment No. 3 on November 18, 2005. The Exchange filed Amendment No. 4 with the Commission on November 18, 2005. 7 This order approves the proposed rule change, as amended. In addition, the Commission seeks comment from interested persons on Amendments No. 2 and 4. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superceded the original rule filing in its entirety. 4 *See* Securities Exchange Act Release No. 52017 (July 12, 2005), 70 FR 41453 (“Notice”). 5 *See* e-mail from Margaret Wiermanski, Chief Operations and Compliance Officer, CTC, LLC, dated July 29, 2005 (“CTC Letter”). 6 *See* Partial Amendment, submitted by James Flynn, Assistant Secretary, CBOE (“Amendment No. 2”). In Amendment No. 2, CBOE proposed an additional change to CBOE Rule 6.8 to conform the text of this rule with the proposal. 7 *See* Partial Amendment, submitted by James Flynn, Assistant Secretary, CBOE (“Amendment No. 4”). In Amendment No. 4, CBOE proposed additional changes to CBOE Rules 6.45, 6.45A, 6.45B, 8.94, and 17.50 to conform the text of these rules with the proposal. II. Description of Proposed Rule Under its current rules, a DPM is defined as a “member organization that is approved by the Exchange to function in allocated securities as a Market-Maker * * *, as a Floor Broker * * *, and as an Order Book Official * * *. 8 CBOE Rule 8.85 further sets out the DPM's obligations regarding agency transactions. According to the CBOE, its uniform practice has been to require DPMs to act as Floor Brokers for the classes of options assigned to them. Accordingly, all DPMs on CBOE presently act as both agent and principal in their allocated options on the Exchange. 8 *See* CBOE Rule 8.80. The CBOE has now determined to eliminate a DPM's agency duties, including the responsibilities associated with operating the PAR workstation. Specifically, CBOE has proposed to amend its rules to remove a DPM's obligation to act as an agent or Floor Broker in its allocated securities on the Exchange. In a DPM's place, the Exchange has proposed to designate a PAR Official who will be responsible for handling certain orders in the same manner as they were formerly handled by the DPM. In particular, the PAR Official will operate the PAR workstation, maintain the public customer limit order book for its assigned non-Hybrid option classes, execute orders that are sent to the PAR workstation or that are placed on the limit order book, display eligible limit orders, and undertake the obligations related to handling certain Linkage Orders. 9 9 *See infra* note 10. The Exchange has proposed to amend its definition of “Principal Acting as Agent (‘P/A’) Order” to remove the requirement that a Market-Maker act as an agent for the unexecuted customer order related to the P/A Order. 10 The CBOE proposed this change to conform to its proposal to remove the DPM's agency responsibilities. The proposed rule change also assigned certain obligations to the PAR Officials related to the handling of Linkage Orders, including using a DPM's account to route P/A Orders, Principal Orders on behalf of orders in the custody of the PAR Official that are for the account of a broker-dealer, and Satisfaction Orders to other participants in the Linkage Plan. In addition, PAR Officials would have the obligation to handle all Linkage Orders or portions of Linkage Orders received by the Exchange that are not automatically executed, and to use the DPM's account to fill a Satisfaction Order that results from a Trade-Through that is effected on the Exchange by a PAR Official. The proposed rule change also requires DPMs to provide prior written instructions to the PAR Officials regarding routing Linkage Orders and handling responses to Linkage Orders. 10 The proposed rule change would amend CBOE Rule 6.80(12) to provide that “Linkage Order” means an Immediate or Cancel Order routed through the Linkage as permitted under the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (“Linkage Plan”). Amended Rule 6.80(12) would change the definition of “Principal Acting as Agent (‘P/A’) Order” to be “an order for the principal account of a Market-Maker (or equivalent entity on another Participant Exchange that is authorized to represent Customer orders) reflecting the terms of a related unexecuted Customer order.” The CBOE has proposed measures designed to ensure the independence of PAR Officials from Exchange members. Specifically, the PAR Official would be required to be an Exchange employee or independent contractor whose compensation would be determined, and paid, solely by CBOE. Further, the PAR Official would be prohibited from having an affiliation with any CBOE member that acts as a Market-Maker on the Exchange. Because the DPM would no longer be operating the PAR workstation, CBOE proposed to amend its Rule 8.51, which defines when a DPM's firm quote obligation attaches for orders received over PAR. Interpretation and Policy .10 to CBOE Rule 8.51 currently provides that, in the case of orders received at a PAR workstation in a DPM trading crowd, the DPM's firm quote obligation attaches at the time the order is received on the PAR workstation. CBOE has proposed to clarify that firm quote obligations attach to all responsible brokers or dealers in the trading crowd, which may include the DPM, at such time as when the PAR Official announces the order to the crowd. The Exchange has proposed this clarification in light of the fact that DPMs will no longer represent orders as Floor Broker from the instant such orders are received on the PAR workstation. In Amendment No. 2, the Exchange has proposed to amend subsection (d)(vi) of Rule 6.8 (RAES Operations) to indicate that:

(1)DPMs no longer would be responsible for handling or representing orders that are routed to a CBOE PAR workstation or to the Exchange's “Live Ammo” functionality, and

(2)to the extent that a PAR Official would be taking such responsibilities, the PAR Official will be required to use his or her best efforts to attempt to ensure that members receive an allocation of any incoming orders for up to their disseminated size. In Amendment No. 4, the Exchange has proposed to amend CBOE Rule 8.93 (e-DPM Obligations) to exclude from the e-DPM's obligations the proposed obligation of DPMs to allow a PAR Official to use the DPM's account to send and respond to linkage orders. 11 The Exchange represents that PAR Officials will use only DPM accounts, not e-DPM accounts, to generate linkage orders and responses as required by proposed CBOE Rule 7.12(e). 12 The Exchange also has proposed conforming changes to CBOE Rules 6.45 (Priority of Bids and Offers—Allocation of Trades), 6.45A (Priority and Allocation of Equity Option Trades on the CBOE Hybrid System), 6.45B (Priority and Allocation of Trades in Index Options and Options on ETFs on the CBOE Hybrid System), 8.93, and 17.50 (Imposition of Fines for Minor Rule Violations) to reflect

(1)that customer orders currently represented by DPMs would be represented by PAR Officials under the proposal and

(2)the proposed removal of DPMs' agency obligations under CBOE Rule 8.85(b). 11 *See* Proposed CBOE Rule 8.85(a)(xiv). 12 Telephone conversation between James Flynn, Assistant Secretary, CBOE, and Tim Fox, Special Counsel, and Nathan Saunders, Special Counsel, Division of Market Regulation (“Division”), Commission, on November 17, 2005. The text of the changes proposed in Amendments No. 2 and 4 is available on CBOE's Web site ( *http://www.cboe.org/legal/* ), at CBOE's office of the secretary, and at the Commission's Public Reference Room. III. Summary of Comments The Commission received one comment letter on the proposed rule change. 13 The commenter, a member firm of the Exchange, endorsed the proposed rule filing and agreed with its purpose and intent. However, the commenter suggested that the proposal be initially approved on a three-month pilot basis to provide the Exchange, its members, and its participants with “some working experience” before the rule is permanently approved. The commenter wrote that certain “basic operational considerations” related to the implementation of the proposed rule change are still unknown—for example, the mechanics of how Linkage Orders will be booked into the DPM's account by the PAR Official, and how the new procedures would affect CBOE's membership rules and compliance by CBOE with the consolidated options audit trail system (“COATS”) regulations. The commenter suggested that a pilot period would make any required modification to the rules administratively easier to accomplish. 13 *See* CTC Letter, *supra* note 5. The CBOE responded to the commenter's concerns related to the implementation and operation of the PAR Official program. 14 The CBOE emphasized the long-term goals of the PAR Official program were promoted by this filing because it would “eliminat[e] the risks associated with a DPM acting as both principal and agent * * *.” The CBOE suggested that a pilot program could “frustrate these efforts” and create “uncertainty” regarding the status of the DPM program. The Exchange also represented that it believed a better mechanism to resolve the complications that arise as a result of the proposed rule change would be for the CBOE to address the problems promptly, either through additional rule filing(s), systems enhancements, or operation modifications. In addition, the CBOE pointed out that the proposal already provides a three-month period following approval for the CBOE and its members to fully implement the PAR Official program in all DPM trading stations, which the CBOE believes should allow it to address any implementation issues that may arise as a result of the proposed rule change. 14 *See* E-mail from James Flynn, Attorney II, CBOE to Jonathan G. Katz, Secretary, Commission, dated September 1, 2005. IV. Discussion After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 15 In particular, the Commission believes that the proposal is consistent with the requirements of Section 6(b)(5) of the Act, 16 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 15 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 16 15 U.S.C. 78f(b)(5). With this proposal, CBOE seeks to eliminate the conflicts of interest that currently exist for their DPMs. Specifically, DPMs today trade for their own accounts as Market-Makers and act as agents for certain orders in their allocated options. CBOE has proposed to eliminate the DPM's obligation and permission to act as agent. 17 The Commission believes that eliminating a DPM's obligation and permission to act as agent will promote just and equitable principles of trade and protect investors and the public interest. 18 17 The Commission notes that CBOE Rule 8.85(b), as amended, will no longer permit a DPM to act as an agent for customer orders. However, to the extent that a DPM nevertheless undertakes to represent a customer's order in violation of CBOE Rule 8.85(b), the DPM will assume all the duties and liabilities of an agent to a principal during the course of such representation. *See* Section 1 of the Restatement, 2d of Agency. 18 In addition, CBOE Rule 4.18, Prevention of the Misuse of Material, Nonpublic Information, will have the effect of mitigating conflicts of interest that might arise when an affiliate of the DPM acts as agent for a customer order in one of the DPM's assigned options classes. CBOE Rule 4.18 requires that every member “shall establish, maintain and enforce written policies and procedures reasonably designed * * * to prevent the misuse * * * of material, nonpublic information by persons associated with such member.” The Exchange represented that this requirement will have the effect of restricting the sharing of material, nonpublic information between the DPM and any affiliate of the DPM who acts as agent for a customer order. Telephone conversation between James Flynn, Assistant Secretary, CBOE, and Kelly Riley, Assistant Director, and Nathan Saunders, Special Counsel, Division, Commission, on October 21, 2005. CBOE has proposed that orders that currently are represented by DPMs as agent be handled by Exchange employees known as PAR Officials and would require that their compensation be determined and paid exclusively by the Exchange. CBOE has also proposed to prohibit affiliations between PAR Officials and CBOE Market-Makers to ensure the PAR Officials are independent from Exchange Market-Makers' interests. The restrictions will mitigate potential conflicts of interest. Pursuant to the proposed rule change, PAR Officials will undertake comparable responsibilities currently held by DPMs with respect to customer orders. For example, the PAR Official must use due diligence to execute the orders placed in his or her custody at the best prices available to him or her under the CBOE rules. In addition, PAR Officials will assume the obligations related to displaying public customer orders that improve CBOE's disseminated quote by maintaining Autobook, the Exchange's automated limit order display facility, and keeping it active. Accordingly, the Commission believes that the CBOE's proposal should ensure that customers' orders continue to be represented and handled in a timely fashion on the Exchange. The PAR Officials would assume responsibilities related to Linkage Orders. Specifically, a PAR Official would use a DPM's account to route P/A Orders, Principal Orders on behalf of orders in the custody of the PAR Official that are for the account of a broker-dealer, and Satisfaction Orders to other participants in the Linkage Plan based on prior written instructions provided by the DPM to the PAR Official. 19 The written instructions provided by the DPM will also include direction as to how the PAR Official should handle responses to Linkage Orders routed to other Linkage Participants that are not responded to in a timely manner. 20 The PAR Official will also use the DPM's account to fill any Satisfaction Order that results from a Trade-Through that is effected on the Exchange by PAR Officials. Finally, the PAR Official will handle all Linkage Orders or portions of Linkage Orders received by the Exchange that are not automatically executed. The Commission believes that the proposed rules governing the handling of Linkage Orders by the PAR Official and the use of the DPMs' accounts for routing Linkage Orders is consistent with the promotion of a national market system because, among other things, it will allow P/A Orders that reflect the terms of CBOE customer orders to be generated by CBOE and routed to other Linkage Participant markets, which will allow a CBOE customer order to receive possible execution at a price better than the price disseminated by CBOE. 19 The Commission today is also granting the CBOE a conditional exemption from the requirement in Rule 608(c) of Regulation NMS promulgated under the Act that the CBOE comply with and enforce compliance by its members with certain provisions of the Linkage Plan to facilitate the establishment of PAR Officials and their handling of Linkage Orders. *See* Letter from Robert L.D. Colby, Acting Director, Division of Market Regulation to Joanne Moffic-Silver, General Counsel, CBOE, dated November 18, 2005. 20 CBOE Rule 6.81(d)(1) specifically addresses the situations in which a CBOE member does not receive a response to a P Order or P/A Order within 20 seconds of sending the order. Pursuant to Section 19(b)(2) of the Act, 21 the Commission finds good cause for approving Amendments No. 2 and 4 prior to the thirtieth day after their publication in the **Federal Register.** In Amendment No. 2, CBOE has proposed an additional change to CBOE Rule 6.8(d)(vi). The additional change provides that DPMs no longer would be responsible for handling or representing RAES orders that are routed to the PAR workstation or to the Exchange's “Live Ammo” functionality when CBOE's disseminated quote is a manual quote (and thus is not eligible for automatic execution against the RAES order). This responsibility will belong to the PAR Official following implementation of the proposed rule change. In Amendment No. 4, CBOE has proposed additional conforming changes to CBOE Rules 6.45, 6.45A, 6.45B, 8.93, and 17.50 in order to render these rules consistent with the proposal as set forth in the Notice published in the **Federal Register** on July 19, 2005. 21 15 U.S.C. 78s(b)(2). The Commission finds good cause to accelerate approval of the amended proposal because the changes proposed in Amendments No. 2 and 4 are consistent with the Exchange's broader proposal to remove a DPM's responsibility to act as agent for orders received on the PAR workstation and instead to assign this responsibility to the PAR Official. V. Solicitation of Comments Concerning Amendments No. 2 and 4 Interested persons are invited to submit written data, views, and arguments concerning Amendments No. 2 and 4, including whether they are consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2005-46 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-CBOE-2005-46. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2005-46 and should be submitted on or before December 19, 2005. VI. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder. *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 22 that the proposed rule change (File No. SR-CBOE-2005-46), as amended, is approved, and that Amendments No. 2 and 4 thereto are approved on an accelerated basis. 22 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 23 23 CFR 200.30-3(a)(12). Jonathan G. Katz, Secretary. [FR Doc. E5-6559 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52808; File No. SR-NFA-2005-01] Self-Regulatory Organizations; National Futures Association; Notice of Filing and Immediate Effectiveness of Proposed Amendments to the Interpretive Notice to NFA Compliance Rule 2-9: Enhanced Supervisory Requirements. November 18, 2005. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (“Exchange Act”), 1 and Rule 19b-7 under the Exchange Act, 2 notice is hereby given that on September 19, 2005, National Futures Association (“NFA”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change described in Items I, II, and III below, which Items have been prepared by NFA. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(7). 2 17 CFR 240.19b-7. NFA also submitted the proposed rule change to the Commodity Futures Trading Commission (“CFTC”) on September 19, 2005 for approval. The CFTC has not yet given such approval. I. Self-Regulatory Organization's Description of the Proposed Rule Change Section 15A(k) of the Exchange Act 3 makes NFA a national securities association for the limited purpose of regulating the activities of Members who are registered as brokers or dealers in security futures products under Section 15(b)(11) of the Exchange Act. 4 NFA's Interpretive Notice entitled “Compliance Rule 2-9: Enhanced Supervisory Requirements” (“Notice”) applies to all Members who meet the criteria and could apply to Members registered under Section 15(b)(11). 3 15 U.S.C. 78o-3(k). 4 15 U.S.C. 78o(b)(11). The Notice requires a Member to adopt certain enhanced supervisory procedures (“Requirements”) if its sales force includes a specified number of associated persons (“APs”) who have worked at Disciplined Firms. NFA's Special Committee to Study Customer Protection Issues recently recommended changes to the Notice to resolve some emergent loopholes in the Requirements and further prevent abusive sales practices. The Board's changes: • Automatically reimpose the Requirements on any firm that, having already completed a term under the Requirements, becomes subject to an NFA or CFTC enforcement action alleging sales practice abuses; • Change the current obligation under the Requirements so that a firm may petition to have the Requirements lifted or modified after two years rather than automatically terminating; • Add a provision designed to address issues related to firms avoiding the Requirements by making sham changes to entities and personnel when they become subject to the Requirements; • Include listed principals who have previously worked for Disciplined Firms in the population used to calculate whether a Member firm has triggered an obligation to operate under the Requirements; and • Exclude APs who worked at Disciplined Firms for less than sixty days more than five years ago from having to be counted for purposes of calculating whether a Member who hires such an individual is required to adopt the Requirements. Below is the text of the proposed amendments to the Notice. Proposed new language is in *italics;* proposed deletions are in [brackets]. Interpretive Notice Compliance Rule 2-9: Enhanced Supervisory Requirements Over the years, NFA's Board of Directors has adopted strict and effective rules to prohibit deceptive sales practices, and those rules have been vigorously enforced by NFA's Business Conduct Committees. The Board notes, however, that by their very nature, enforcement actions occur after the customer abuse has taken place. The Board recognizes that NFA's goal must be not only to punish such deception of customers through enforcement actions but to prevent it, or minimize its likelihood, through fair and effective regulation. One NFA rule designed to prevent abusive sales practices is NFA Compliance Rule 2-9. Subsection

(a)of this rule places a continuing responsibility on every Member to supervise diligently its employees and agents in all aspects of their futures activities, including sales practices. Although NFA has not attempted to prescribe a set of supervisory procedures to be followed by all NFA Members, NFA's Board of Directors believes that Member firms which are identified as having a sales force that has received questionable training in sales practices should be required to adopt specific supervisory procedures designed to prevent sales practice abuse. Subsection

(b)authorizes the Board of Directors to require Members, which meet certain criteria established by the Board, to adopt specific supervisory procedures designed to prevent abusive sales practices. Subsection

(b)covers all activities regulated by NFA, including the off-exchange retail forex activities of Members subject to NFA Compliance Rule 2-36. The Board believes that in order for the criteria used to identify firms subject to the enhanced supervisory requirements to be useful, those criteria must be specific, objective and readily measurable. The Board also believes that any supervisory requirements imposed on a Member must be designed to quickly identify potential problem areas so that the Member will be able to take corrective action before any customer abuse occurs. The purpose of this Interpretive Notice is to set forth the criteria established by the Board and the enhanced supervisory procedures which are required of firms meeting these criteria. In developing the criteria, the Board concluded that it would be helpful to review Member firms which had been closed through enforcement actions taken by the CFTC or NFA for deceptive sales practices. The Board's purpose was to identify factors common to these Member firms and probative of their sales practice problems, which could be used to identify other Member firms with potential sales practice problems. One factor identified by the Board as common to these firms and directly related to their sales practice problems is the employment history and training of their sales forces. For many of these Members, a significant portion of their sales force was previously employed and trained by one or more of the other Member firms closed for fraud. The Board believes that the employment history of a Member's sales force *and principals* is a relevant factor to consider in identifying firms with potential sales practice problems. If a Member firm is closed by NFA or the CFTC for fraud related to widespread telemarketing or promotional material problems or a firm is closed by NASD or the SEC for fraud related to its sales practices regarding security futures products as defined in Section 1a(32) of the Commodity Exchange Act (“Act”), it is reasonable to conclude that the training and supervision of its sales force was wholly inadequate or inappropriate. It is also reasonable to conclude that an AP who received inadequate or inappropriate training and supervision may have learned improper sales tactics, which he will carry with him to his next job. Therefore, the Board believes that a Member firm employing such a sales force must have stringent supervision procedures in place in order to ensure that the improper training its APs have previously received does not taint their sales efforts on behalf of the Member. The Board has determined that a Member will be required to adopt the specific supervisory procedures over its sales practice activities if: • For firms with less than five APs, 2 or more of its APs have been employed by one or more Member firms which have been disciplined by NFA or the CFTC (or one or more firms disciplined by any securities industry self-regulatory organization or the SEC in matters involving security futures products) for sales practice fraud (“Disciplined Firms”); • For firms with at least 5 but less than 10 APs, 40 percent or more of its APs have been employed by one or more Disciplined Firms; • For firms with at least 10 but less than 20 APs, four or more of its APs have been employed by one or more Disciplined Firms; or • For firms with at least 20 APs, 20 percent or more of its APs have been employed by one or more Disciplined Firms. *The Board also takes note that there have been instances in which Members and Associates have subverted the Board's purpose in imposing the enhanced supervisory procedures by closing a firm once it qualifies for those procedures and opening another firm or firms that have a mix of APs that does not meet the criteria for adopting the procedures. The new firms typically have APs who have worked for Disciplined Firms and who worked at the original firm, but they are redistributed so as to keep the AP mix below the threshold for becoming subject to the enhanced supervisory procedures. This strategy deprives the very APs whose questionable training backgrounds gave rise to the creation of the enhanced supervisory procedures of the benefits of those procedures. Therefore, the Board has determined to further ensure that the benefits of the enhanced supervisory procedures are applied where they are of the greatest effect. Once a Member firm triggers the aforementioned criteria and becomes obligated to adopt the enhanced supervisory procedures, any other Members of which the principals of that Member firm are, or become, principals must also adopt the enhanced supervisory procedures or seek a waiver therefrom. In addition, for purposes of determining whether a Member will be required to adopt the enhanced supervisory procedures, principals of a firm, who are not also APs of that firm and who have been previously employed as an AP by one or more Disciplined Firms, shall be counted with the firm's APs in determining whether the firm meets the aforementioned criteria.* Additionally, for purposes of determining whether a futures commission merchant (“FCM”) Member firm meets this requirement, an FCM and its guaranteed introducing brokers (“GIBs”) will be considered a single firm. Therefore, for FCMs with GIBs, the APs of its GIBs will be treated as APs of the FCM for determining whether the FCM meets the requirements. If the FCM Member firm meets the requirements, then the FCM and all its GIBs shall be required to adopt the supervisory procedures specified herein. Of course, individual FCMs or GIBs will be required to adopt the enhanced supervisory procedures provided the FCM or GIB meets the requirements on its own. The Board recognizes that there is a group of APs who worked at Disciplined Firms for only a short period of time many years ago and who have not worked at any Disciplined Firm since. The Board's review of the employment and disciplinary histories of such individuals suggests that APs who served a very brief tenure with Disciplined Firms more than [10] *five* years in the past do not raise the same concerns regarding their previous supervision and training that are raised by APs who have worked at Disciplined Firms for longer periods or at a more recent point in time. Therefore, the Board has determined that APs who have been previously employed by Disciplined Firms for a cumulative total of less than 60 days and who, in addition, have not been employed by any Disciplined Firm during the [10] *5* years preceding the determination of whether a Member firm is required to employ the enhanced supervisory procedures established in this Interpretive Notice shall not be counted for purposes of calculating whether the composition of a firm's sales force triggers enhanced supervisory requirements. For purposes of this requirement, a Disciplined Firm is defined very narrowly to include those firms that meet the following three criteria: 1. the firm has been formally charged by either the CFTC or NFA with deceptive telemarketing practices or promotional material; 2. those charges have been resolved; and 3. the firm has been permanently barred from the industry as a result of those charges. In addition, a Disciplined Firm shall be defined to include any broker-dealer that, in connection with sales practices involving the offer, purchase, or sale of any security futures product as defined in Section 1a

(32)of the Act has been expelled from membership or participation in any securities industry self-regulatory organization or is subject to an order of the SEC revoking its registration as a broker-dealer. Attached is a list of firms currently meeting the definition of a Disciplined Firm. Although this list is current as of the date of this Interpretive Notice, NFA [will provide] *provides* Members with *an* updated [lists] *list* [as necessary] *on its website at www.nfa.futures.org.* Any Member firm meeting these criteria will be required either to operate pursuant to a guarantee agreement or maintain an adjusted net capital of at least $250,000 for the entire period during which the Member is required to tape record its sales solicitations. Any Member opting to maintain the higher level of adjusted net capital would also be subject to the financial record-keeping and reporting requirements applicable to FCMs. Eligible guarantor futures commission merchants are those that meet the eligibility requirements for executing a Supplemental Guarantor Certification Statement pursuant to NFA Registration Rule 504(a)(2)(B). The Board believes that requiring these Members to operate pursuant to a guarantee agreement will likely improve the overall level of supervision at these firms. Those Member firms meeting the criteria will be required to tape record all telephone conversations that occur between their APs and both existing and potential customers, including existing and potential retail forex customers of Members subject to NFA Compliance Rule 2-36. The Board believes that tape recording these conversations provides these Members with the best opportunity to monitor closely the activities of their APs and also provides these Members with complete and immediate feedback on each AP's method of soliciting customers. Members *that are required to tape their conversations* [meeting the criteria must tape record these conversations for a period of two years and] must retain such tapes for a period of five years from the date each tape is created and the tapes shall be readily accessible during the first two years of the five-year period. In retaining the tape recorded conversations, Member firms must catalog the tapes by AP and date. Additionally, any Member firm meeting the criteria must require all its APs to maintain a daily log for sales solicitations which reflects at a minimum the identity of each customer or prospective customer the AP spoke with on each day. A Member firm must be able to promptly produce, upon request from NFA or the CFTC, all conversations relating to a specific AP, and only that AP, for a given date. In addition, [for a period of two years,] those Member firms meeting the criteria will be required to file all promotional material, as defined in NFA Compliance Rule 2-29(i), with NFA at least 10 days prior to its first use. Those Members meeting the criteria shall have written supervisory procedures that include the titles, registration status and locations of the firm's supervisory personnel as these relate to the firm's commodity futures business, retail forex business, and applicable securities laws and regulations for the trading of security futures products. Member firms shall also maintain on an internal record the names of all persons who are designated as supervisory personnel and the dates for which the designation is or was effective. Additionally, a Member meeting the criteria shall by the 30th day of the month following the end of each calendar quarter file with NFA's Compliance Department a report relating to the Member firm's compliance with the supervisory requirements contained herein. Member firms shall retain the internal record and report(s) for a period of five years, the first two years in an easily accessible place. If an NFA Business Conduct Committee disciplinary proceeding or Commodity Futures Trading Commission enforcement proceeding has been filed against a Member firm required to adopt these enhanced supervisory procedures, then the enhanced supervisory procedures will remain in effect for the applicable time period specified or until after the disciplinary or enforcement proceeding is closed and all appeals are completed or the time for appeal has passed without an appeal being filed or perfected, whichever occurs latest. *In addition, any Member that: has previously been required to adopt the enhanced supervisory procedures; has, in fact, fulfilled that requirement either by adopting the enhanced supervisory procedures for a prescribed period or by receiving a full or partial waiver from the enhanced supervisory procedures from the Telemarketing Procedures Waiver Committee; and subsequently becomes subject to a Commodity Futures Trading Commission or NFA enforcement or disciplinary proceeding alleging deceptive sales practices, shall, within 30 days of being served with notice of the action, initiate all of the enhanced supervisory procedures and may not seek a waiver therefrom. This obligation shall continue until after the disciplinary or enforcement proceeding is closed and all appeals are completed or the time for appeal has passed without an appeal being filed or perfected.* Member firms shall be required to retain tapes for the five-year period as specified above. Any Member required to adopt these enhanced procedures may seek a waiver of the enhanced supervisory requirements *by filing a petition with the Telemarketing Procedures Waiver Committee within 30 days of the date of being notified by NFA that it is required to adopt the enhanced procedures.* NFA may grant such a waiver upon a satisfactory showing that the Member's current supervisory procedures provide effective supervision over its employees, including enabling the Member to identify potential problem areas before customer abuse occurs. Additionally, if a Member meets the criteria and trades security futures products, then the Member firm must also make a satisfactory showing that the Member's supervisory procedures ensure compliance with all applicable securities laws and regulations. *Should a Member fail to file a petition seeking a waiver within 30 days or should it file a petition that is denied by the Telemarketing Procedures Waiver Committee, either in whole or in part, the Member may not petition for a full or partial waiver again until at least two years have elapsed since the Member adopted the required enhanced procedures.* Some of the factors that the three-member Waiver Committee may consider in evaluating a waiver request include: • The total number of APs sponsored by the Member; • Number of branch offices and GIBs operated by the Member; • The experience and background of the Member's supervisory personnel; • The number of the Member's APs who had received training from firms which have been closed for fraud, the length of time those APs worked for those firms and the amount of time which has elapsed since those APs worked for the disciplined firms; • The results of any previous NFA examinations; and • The cost effectiveness of the taping requirement in light of the firm's net worth, operating income and related telemarketing expenses. *Conditions that the Telemarketing Procedures Waiver Committee shall impose on any Member to which it grants a full or partial waiver include requirements that the firm: Notify NFA of any action charging the firm with a violation of Commodity Futures Trading Commission or Self Regulatory Organization (“SRO”) regulations or rules; notify NFA of any customer complaint involving sales practices or promotional material; not change ownership; not have any material deficiencies noted during any SRO examination; not hire additional APs from Disciplined Firms; execute a written acknowledgement that the firm understands the conditions of the waiver; and may include any other conditions deemed by the Committee to be appropriate in furtherance of the effectiveness of the enhanced supervisory procedures. Violation of any of those conditions may serve as cause for the Telemarketing Procedures Waiver Committee to review and amend or revoke the waiver.* A Member firm that does not comply with this Interpretive Notice will violate NFA Compliance Rule 2-9(b) and will be subject to disciplinary action. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NFA has prepared statements concerning the purpose of, and basis for, the proposed rule change, burdens on competition, and comments received from Members, participants, and others. The text of these statements may be examined at the places specified in Item IV below. NFA has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose a. Reimposing the Requirements on Members That Have Previously Satisfied an Obligation to Abide by Those Requirements and are Subsequently Charged in a CFTC or NFA Enforcement Action In 1996, NFA's Board amended the Notice to provide that, if a Member that is currently subject to the Requirements becomes subject to a CFTC or NFA enforcement proceeding, the Requirements will remain in place for two years or until after the disciplinary or enforcement proceeding is concluded, whichever is longer. This provision does not, however, apply to Members that have already served full two-year tenures under the Requirements when one of those firms is subsequently charged in an enforcement action by the CFTC or NFA. The practical effect of the current system is that some Members, with a number of APs from Disciplined Firms, that are charged by the CFTC or NFA in actions alleging fraudulent sales practices have a significant window of time during the pendency of the action to continue soliciting the public without any requirement to adopt additional prophylactic measures such as taping. Of course, in appropriate cases, prophylactic measures may be imposed as part of the ultimate resolution of the CFTC's or NFA's action, but it can take many months, or even years in cases that go through multiple layers of appeals, to resolve such actions. There are at least three current NFA Members that served full terms under the Requirements and were subsequently charged in enforcement proceedings. It is worth noting that each of those firms still retains a sales force with histories at Disciplined Firms such that they would require the adoption of the Requirements but for the fact that they have already served the term of their obligation under the Notice. In fact, at one time, one of these firms actually featured its purported immunity from further taping requirements as an inducement in a recruitment advertisement contained in a South Florida newspaper. A review of one firm's history illustrates the differences in the operations of the present system and the system being proposed. This firm has been an introducing broker (“IB”) NFA Member since August 1994. The NFA required the Member to adopt the Requirements from February 1995 through February 1997, when it was automatically discharged of the Requirements. NFA then issued a Complaint alleging deceptive sales practices against the firm in April 1998. A settled Decision was issued at that same time which, among other penalties, required the firm to tape all solicitations from April 1998 through April 2000. NFA issued a second deceptive sales practice Complaint against the firm in January 2002, which was resolved in March 2003. Because the firm had already fulfilled its obligation under the Notice from 1995 to 1997, it was not required under the current system to tape conversations with customers during the pendency of NFA's 2002 Complaint. This gave the firm a 14-month window to solicit the public without any obligation under the Notice to adopt the enhanced supervisory procedures—including taping. Incidentally, during this time, the firm continued to have a mix of APs that otherwise would have triggered the Requirements. The proposed amendments to the Notice would have required the firm to observe all of the Telemarketing Requirements, including taping all customer solicitations, from the time that the 2002 Complaint was initiated until that Complaint was completely resolved in March 2003. The guiding principle in creating and refining the Requirements has always been to improve the overall level of supervision at those few Member firms which are likely to cause sales practice problems. When a firm that has already operated under the Requirements for two years because of the questionable backgrounds of its APs subsequently becomes subject to an NFA or CFTC enforcement action for sales practice abuses, there is a clear indication that the firm is, indeed, part of the group that is likely to cause sales practice problems and that it is prudent to require the firm to improve its level of supervision. The proposed amendments to the Notice provide that any firm that has previously been required to abide by the Requirements but has fulfilled its obligation—either by abiding by the Requirements under the Notice as it currently stands or by successfully petitioning the Telemarketing Procedures Waiver Committee (“Waiver Committee”) to have the Requirements lifted or modified—would again become subject to the Requirements during the pendency and through appeals of a new CFTC or NFA enforcement action. b. Requiring Telemarketing Firms To Abide by the Telemarketing Requirements Until They are Granted a Complete or Partial Waiver by the Telemarketing Procedures Waiver Committee Currently, the obligation to abide by the enhanced procedures runs for two years, at which time it terminates automatically in most circumstances. The proposed amendments make it more likely that firms that continue to pose problems would remain subject to the Requirements for longer than the current two-year tenure provided for in the Notice. The modification puts the burden on Member Firms triggering the criteria to demonstrate that a waiver from the Requirements is warranted after two years rather than automatically discharging the obligation to abide by the Requirements once the two years has passed. The amendments also provide that a Member firm has 30 days to seek a waiver from the Waiver Committee after it first employs an AP mix that would trigger the Requirements. 5 If the Waiver Committee denies the initial petition or no petition is filed, the firm would not be eligible to petition for a waiver again until it had served a full two years under the Requirements. Any waiver would be subject to conditions that, if violated, could subject the firm to revocation of the waiver by the Waiver Committee. 6 This additional component gives the Waiver Committee the flexibility to revisit the issue of whether a waiver is still warranted when there is a material change in the firm's organization or regulatory status. 5 The Notice provides that some of the factors that the Waiver Committee may consider in evaluating a Member's waiver request include: The number of APs; the number of branch offices and GIBs; the experience and background of supervisory personnel; the number of APs who received training at Disciplined Firms, the time those APs worked for those firms and the amount of time which has passed since they worked for Disciplined Firms; The results of previous NFA examinations; and the cost effectiveness of taping. 6 The conditions include requirements that the firm: Notify NFA of any action charging the firm with a violation of CFTC or SRO regulations or rules; Notify NFA of any customer complaint involving sales practices or promotional material; not change ownership; not have any material deficiencies noted during any SRO examination; not hire additional APs from Disciplined Firms; and execute a written acknowledgement that the firm understands the conditions of the waiver, and may include any other conditions deemed by the Waiver Committee to be appropriate in furtherance of the effectiveness of the enhanced supervisory procedures. c. Combating Sham Transactions and Including Principals Who Have Worked at Disciplined Firms in Calculating Whether a Member Firm has Qualified Under the Requirements The principals of several firms that have triggered the Requirements have avoided them by simply closing their firms and opening other firms that have a mix of APs that do not trigger an obligation to abide by the Requirements. The new firms typically have APs from the closed firm who have worked at Disciplined Firms, but their ratios to the overall AP population of the new firms are below the triggering point for imposing the Requirements. For example, one firm, which had been an NFA Member IB since 1987, met the Requirements in March 2004. One particular individual had been the firm's principal and an AP of the firm since May 1987. The firm petitioned the Waiver Committee for a complete waiver from any obligation to abide by the Requirements. Although that Waiver Committee gave the firm a partial waiver by reducing the firm's required minimum adjusted net capital from $250,000 to $100,000, it did not waive the taping or other obligations. Rather than having the firm abide by the Requirements, the individual simply withdrew the firm from NFA membership and created two new firms. Neither of those firms triggered the Requirements because the individual kept their AP populations below the triggering points by judiciously splitting APs from Disciplined Firms between the two firms. In addition, while the individual is a principal of both firms, he did not register as an AP of either of them. By so doing, he was able to avoid being personally counted as an AP from a Disciplined Firm for purposes of determining whether either firm had an AP population that triggered the Requirements. The firm's use of a sham reorganization to avoid triggering the Requirements is not unique. NFA is aware of several other firms that have used similar tactics to avoid the Requirements. NFA has developed a twofold approach to combat sham reorganizations and transfers designed to avoid the Requirements. First, once a firm has triggered the Requirements, then any other firms of which the principals of the qualifying firm are also principals would become subject to the Requirements. Second, individuals who are listed principals, but who are not APs of the firm, will be included in the calculation for purposes of determining whether a firm has triggered the Requirements if such individuals have previously worked as an AP at a Disciplined Firm. Principals who have not previously worked at a Disciplined Firm will not be included in the calculation. Otherwise, a firm could name “straw man” principals, thereby increasing the firm's overall calculation population and diluting the impact of the number of individuals who have worked at Disciplined Firms. Counting non-AP principals who have been APs at Disciplined Firms in the past will cause eight current Member firms to trigger the Requirements. Collectively those firms have 12 individuals who are listed as principals but are not currently registered as APs of their respective firms. Those non-AP principals have worked as APs at 14 different Disciplined Firms in the past, and several of them have been personally named in CFTC and NFA actions. At least three other former Members would have been added during the past few years under the proposed amendments to the Notice, except that the CFTC took injunctive actions against them for sales practice violations and their NFA memberships were withdrawn. Both of the successor firms resulting from the sham reorganization described above would trigger the Requirements under either of NFA's proposed amendments to the Notice. Since the principal of the original firm is also a principal of the two successor firms, that fact would automatically trigger the Requirements for those two firms. In addition, since the individual previously worked at a Disciplined Firm and is a non-AP principal of both successor firms, he would be included in the calculation of whether the AP mix at these two firms triggered the Requirements, which would result in a ratio that would trigger the Requirements for both successor firms. d. Individuals Who Had Brief Tenures at a Disciplined Firm a Number of Years Ago In 2003, the Board amended the calculation of APs that would trigger the Requirements to exclude APs who had worked at Disciplined Firms for less than 60 days more than 10 years ago. The proposed amendments to the Notice decrease the required time away from Disciplined Firms to five years while retaining the requirement that the individual must have worked a total of less than 60 days at Disciplined Firms. Although their impact has been limited in terms of numbers, the 2003 modifications have had the desired effect of allowing a few firms that hire APs who worked at Disciplined Firms for less than 60 days more than ten years ago to avoid triggering the Requirements. In fact, only two firms would have triggered the Requirements under the former method but were not so classified because of the 2003 modification, and neither has been subject of any regulatory action. In its latest review of the Requirements, NFA revisited the question of whether further modifications can be prudently made to decrease the potential burden on NFA's membership and the Waiver Committee. NFA studied data to examine the effect of keeping the less than sixty days at a Disciplined Firm requirement while reducing the time away from Disciplined Firms from ten to five years. NFA's analysis showed that reducing the required period from 10 years to five years while maintaining the less 60 days cumulative tenure at Disciplined Firms requirement yielded a population that is of no more cause for concern than the present system. Approximately 1,280 individuals are exempted from being counted under the current system. Reducing the required length of time away from a Disciplined Firm to five years would add approximately 275 APs who would not have to be counted in determining if a firm triggered the Requirements. As was the case with the group that has been exempted under the current ten-year test, the number of additional APs who would be exempted under the proposed modification who have been subject to any kind of regulatory action is small. 7 7 Ten individuals who have been subject to actions by NFA or the CFTC are exempted from being included in the calculation of whether a Member has become a Telemarketing Firm under the Notice's current 10-year provision. The proposed modification to reduce the required time away from a Disciplined Firm to more than five years would exempt six additional individuals who have been subject to actions by NFA or the CFTC. All charges against those individuals have been resolved. None of the individuals has been permanently barred from the industry and none of them are currently registered. Based upon this data, NFA believes that the triggering criteria as currently set out in the Notice can be further refined to reduce the burden on the membership while still imposing supervisory enhancements on firms that pose a concern given the background of their APs and principals at Disciplined Firms. Not including APs and principals who served less than sixty cumulative days with Disciplined Firms more than five years ago in calculating whether a Member is subject to enhanced supervision would also serve the efficiency and fairness of the Waiver Committee's function by removing a few non-problematic firms from the waiver process. 2. Statutory Basis The rule change is authorized by, and consistent with, Section 15A(k) of the Exchange Act. 8 8 15 U.S.C. 78o-3(k). B. Self-Regulatory Organization's Statement on Burden on Competition The rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act and the Commodity Exchange Act. 9 9 7 U.S.C. 1. C. Self-Regulatory Organization's Statement of Comments on the Proposed Rule Change Received From Members, Participants, or Others NFA discussed the proposed rule change with its Special Committee to Study Customer Protection Issues, which voted to recommend the proposed rule change. NFA did not publish the proposed rule change to the membership for comment. NFA did not receive comment letters concerning the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change is not effective because the CFTC has not approved the proposed rule change. Within 60 days of the date of effectiveness of the proposed rule change, the Commission, after consultation with the CFTC, may summarily abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of Section 19(b)(1) of the Exchange Act. 10 10 15 U.S.C. 78s(b)(1). IV. Solicitation of Comments Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-NFA-2005-01 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-9303. All submissions should refer to File No. SR-NFA-2005-01. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the NFA. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-NFA-2005-01 and should be submitted on or before December 19, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(75). Jonathan G. Katz, Secretary. [FR Doc. E5-6558 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52807; File No. SR-NSX-2005-06] Self-Regulatory Organizations; National Stock Exchange; Order Approving Proposed Rule Change, and Amendment Nos. 1 and 2 Thereto, To Amend the Exchange's Customer Priority Rule To Require Designated Dealers To Implement and Maintain Automated Compliance Systems November 18, 2005. I. Introduction On July 19, 2005, the National Stock Exchange SM (“NSX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to amend the text of NSX Rule 12.6 (“NSX's Customer Priority Rule”) to require the Exchange's Designated Dealers 3 to implement and maintain automated systems reasonably designed to ensure compliance with the NSX Customer Priority Rule. 4 On October 5, 2005, the Exchange filed Amendment No. 1 to the proposed rule change. On October 7, 2005, the Exchange filed Amendment No. 2 to the proposed rule change. Notice of the proposed rule change, as amended, was published for comment in the **Federal Register** on October 18, 2005. 5 No comments were received regarding the proposal. This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 NSX Rule 5.5(a) defines “Designated Dealer” as a specialist. 4 The Exchange filed this proposed rule change, in part, pursuant to the provisions of the Commission's Order Instituting Administrative and Cease-And-Desist Proceedings Pursuant to Sections 19(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Sanctions entered May 19, 2005. *See In the Matter of National Stock Exchange and David Colker* , Securities Exchange Act Release No. 51715 (May 19, 2005) (“Administrative Order”). In Section III.F.6. of the Administrative Order, NSX undertook to file proposed rule changes to require its designated dealers to implement system enhancements, to the extent practicable, such that when a dealer is in the process of executing a proprietary trade while in possession of a customer order that could trade in place of some or all of the dealer's side of the trade, the designated dealer's system will systemically allocate the execution to the customer's order unless the trade meets a specified exemption in NSX's rules. Pursuant to the undertaking, the proposed rule changes must also require that the required system enhancements cannot be disabled by NSX's designated dealers. 5 *See* Securities Exchange Act Release No. 52576 (October 7, 2005), 70 FR 60594 (“Notice”). II. Description of the Proposed Rule Change The NSX Customer Priority Rule, currently provides, in part, that no member of the Exchange shall:

(i)Personally buy or initiate the purchase of any security traded on the Exchange for its own account or for any account in which it or any associated person of the member is directly or indirectly interested while such member holds or has knowledge that any person associated with it holds an unexecuted market or limit price order to buy such security in the unit of trading for a customer, or

(ii)sell or initiate the sale of any such security for any such account while it personally holds or has knowledge that any person associated with it holds an unexecuted market or limit price order to sell such security in the unit of trading for a customer. 6 6 *See* NSX Rule 12.6(a). NSX proposes to amend the text of the NSX Customer Priority Rule to require the Exchange's Designated Dealers to implement and maintain automated systems reasonably designed to ensure compliance with the NSX Customer Priority Rule. 7 The proposed rule change would also prohibit Designated Dealers from disabling or disengaging their automated systems, except under limited circumstances. 8 Furthermore, the proposed rule would make clear that, if a Designated Dealer holds for execution on the Exchange a customer buy order and a customer sell order that can be crossed, the Designated Dealer's automated system shall systemically cross them. 9 7 *See* Proposed NSX Rule 12.6(e). 8 *Id.* 9 *See* Proposed Interpretations and Policies .01 to NSX Rule 12.6. NSX also proposes to provide that, for purposes of Rule 12.6, a member or any associated person of a member responsible for entering orders for its own account or any account in which it is directly or indirectly interested shall be presumed to have knowledge of a particular customer order. 10 The proposed interpretation would also provide that such presumption can be rebutted by adequate evidence that effectively demonstrates, to the Exchange's satisfaction, that the member has implemented a reasonable system of internal policies and procedures and has as adequate system of internal controls to prevent the misuse of information about customer orders by those responsible for entering such proprietary orders. 11 10 *See* Proposed Interpretations and Policies .03 to NSX Rule 12.6. 11 *Id.* III. Discussion and Commission Findings The Commission has reviewed the proposed rule change, as amended, and finds that it is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. 12 Specifically, the Commission finds that the proposed rule change, as amended, furthers the objectives of Section 6(b)(1) 13 of the Act, which requires the Exchange to be so organized and have the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its members, with the Act and the rules of the Exchange. In addition, the Commission finds that the proposed rule change, as amended, is consistent with Section 6(b)(5) of the Act, 14 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 12 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 13 15 U.S.C. 78f(b)(1). 14 15 U.S.C. 78f(b)(5). Currently, NSX Rule 12.6 prohibits an NSX member from trading ahead of its customers' orders. Customer order protection ensures that members consider the orders of their customers when executing their own orders and thus prevents the isolation of customer orders that might otherwise occur if a member were freely able to trade ahead of its customers' orders. The Commission believes that the proposed rule change should enhance investor confidence by helping to improve the quality of executions for customers. By ensuring a customer order's priority over the member's proprietary trading, more trade volume should be available to be matched with the customer's order, resulting in quicker and more frequent executions for customers. Specifically, the Commission believes that proposed NSX Rule 12.6(e) and Interpretations and Policies .01 to NSX Rule 12.6 should enhance the customer protections already provided by NSX Rule 12.6 by requiring NSX specialists to implement and maintain automated systems reasonably designed to ensure compliance with NSX Rule 12.6 and requiring that if an NSX specialist is able to cross two customer orders, such specialist's automated system shall systemically cross such order without the specialist interposing itself as a dealer. Proposed Interpretations and Policies .03 to NSX Rule 12.6 would define what constitutes knowledge for purposes of NSX Rule 12.6 to provide that a member or any associated person of a member responsible for entering orders for its own account or any account in which it is directly or indirectly interested shall be presumed to have knowledge of a particular unexecuted customer order and would provide that such knowledge can be rebutted by adequate evidence that the member has implemented a reasonable system of internal policies and procedures and has an adequate system of internal controls to prevent misuse of information about customer orders by those responsible for entering such proprietary orders. The Commission believes that the proposed interpretation is substantially similar to a rule of the New York Stock Exchange, Inc. interpreting its trading ahead rules, 15 and that such proposed interpretation raises no new issues or regulatory concerns. 15 *See* Securities Exchange Act Release No. 44139 (March 30, 2001), 66 FR 18339 (April 6, 2001) (approving proposed rule change SR-NYSE-94-34, including Supplementary Material .10 of NYSE Rule 92). IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 16 that the proposed rule change (File No. SR-NSX-2005-06) and Amendment Nos. 1 and 2, thereto be, and hereby are, approved. 16 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Jonathan G. Katz, Secretary. [FR Doc. E5-6562 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52780; File No. SR-NYSE-2004-64] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Order Approving Proposed Rule Change and Amendments Nos. 1 and 2 Thereto and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 3 to the Proposed Rule Change Relating to Exchange Rule 342 (“Offices—Approval, Supervision and Control”) November 16, 2005. I. Introduction On November 2, 2004, the New York Stock Exchange, Inc. (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change amending NYSE Rule 342.30 (“Annual Reports”) primarily to require each member organization (“Member Organization”) and each member not associated with a member organization (“Member”) to file with the Exchange annual reports and to file a yearly statement confirming the adequacy of their compliance processes and procedures. On July 11, 2005, the NYSE filed Amendment No. 1 to the proposed rule change (“Amendment No. 1”). 3 On August 12, 2005, the NYSE filed Amendment No. 2 to the proposed rule change (“Amendment No. 2”). 4 The proposed rule change was published for comment in the **Federal Register** on August 22, 2005. 5 The Commission received two comments on the proposal, as amended. 6 On October 31, 2005, the Exchange filed a response to the comment letters, 7 and on the same day the Exchange filed Amendment No. 3 to the proposed rule change (“Amendment No. 3”). 8 This order approves the proposed rule change, as amended by Amendments Nos. 1 and 2, grants accelerated approval to Amendment No. 3 to the proposed rule change, and solicits comments from interested persons on Amendment No. 3. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, which supplemented the original filing, the Exchange added its proposed Interpretive Handbook Interpretations 342.30(d)/01 and 342.30(e)/01 for purposes of clarifying issues related to the designation of a Chief Compliance Officer and the Annual Certification, respectively. The text of interpretations 342.30(d)/01 and 342.30(e)/01 is available on the NYSE's Web site *(http://www.NYSE.com)* , at the NYSE's principal office, and at the Commission's Public Reference Room. 4 In Amendment No. 2, which supplemented the original filing, the Exchange modified proposed interpretation 342.30(e)/01 in order to clarify the obligations of Members and Member Organizations in the preparation of annual certifications. 5 *See* Exchange Act Release No. 52259 (Aug. 15, 2005), 70 FR 48997 (Aug. 22, 2005) (the “Notice”). 6 *See* letter from Scott C. Kursman, Senior Vice President & Chief Counsel for Global Compliance, Lehman Brothers, Inc. (“Lehman Letter”), dated September 14, 2005, and letter from John Polanin, Jr., Chairman, SIA Self-Regulation and Supervisory Practices Committee, dated Sept. 14, 2005 (“SIA Letter”). 7 *See* letter from Mary Yeager, Assistant Secretary, NYSE, to Catherine McGuire, Chief Counsel, Division of Market Regulation, Commission, dated October 31, 2005. 8 In Amendment No. 3, which supplemented the original filing, the Exchange amended the proposed rule text to respond to certain of the commenters' concerns. II. Description of the Proposed Rule Change A. Description of the Proposal 1. Background NYSE Rule 342 requires supervision of the offices, departments and business activities of Members and Member Organizations. NYSE Rule 342.30, which was adopted on May 27, 1988, requires Members and Member Organizations to prepare an Annual Report addressing specified compliance issues by April 1 of each year. Currently, Member Organizations are required to submit this report only to their Chief Executive Officer (“CEO”) or managing partner and Members are required only to prepare, but are not required to submit, the report. 2. Provisions of the Proposed Rule Change The proposed rule change makes the following changes relating to the Annual Reports: • The Annual Reports must be filed with the Exchange by April 1 of each year. • The anti-money laundering compliance programs required by Exchange Rule 445 9 have been added to the list of specific areas of compliance that must be discussed in the Annual Reports. 9 NYSE Rule 445 requires Members and Member Organizations to develop and implement written anti-money laundering programs consistent with the Bank Secrecy Act (31 U.S.C. 5311, *et seq.* and 31 CFR 103.120 thereunder). • Member Organizations must designate a principal officer or general partner as Chief Compliance Officer (“CCO”). 10 10 The Commission recently approved a similar requirement in NASD's Rule 3013. Securities Exchange Act Release No. 50347 (September 10, 2004), 69 FR 56107 (September 17, 2004) (SR-NASD-2003-176). • Each Member, and the CEO (or equivalent officer) of each Member Organization, must submit a certification attesting to the adequacy of their organization's compliance policies and procedures. 11 11 The Commission recently approved a similar requirement in NASD's new Rule 3013. *See id.* 3. Regulatory Purpose of Proposed Rule Change's Provisions

(a)Submission of Annual Reports to the Exchange. Filing the Annual Reports with the Exchange will provide timely information about the compliance efforts of Members and Member Organizations, thereby strengthening and making more efficient the Exchange's regulatory oversight, and facilitating the required annual certifications (see below). Because submission of the Annual Reports to the Exchange was previously not required, the reports were typically provided to the Exchange at the time of, or in connection with, examinations of Member Organizations and Members. 12 Consequently, the Exchange did not always receive important information in a timely, efficient manner. Providing the reports to Exchange staff at annual intervals will afford the Exchange a timely picture of the Members' and Member Organizations' compliance issues from the preceding year, a tool for planning surveillance and examinations, and more comprehensive information for evaluation of compliance systems and programs and identification of potential regulatory problems. 12 Some Member Organizations already submit the Annual Reports to the Exchange and/or make them available to Exchange examiners.

(b)Addition of Anti-Money Laundering Discussion to Annual Report. The USA Patriot Act 13 substantially expanded federal anti-money laundering regulations, and led to the enhancement of Exchange anti-money laundering requirements through the adoption of NYSE Rule 445 in April 2002. The Exchange considers anti-money laundering compliance programs to be important enough to warrant consideration and discussion in the Annual Reports, and so the proposed rule change adds these programs to the list of specific areas of compliance that must be discussed in the Annual Reports. 13 Public Law 107-56, 115 Stat. 272 (2001). The addition of anti-money laundering compliance programs to the aforementioned list continues the Exchange's practice of incrementally supplementing the list to reflect changes in the evolving regulatory environment. A similar augmentation recently occurred through NYSE Rule 342.23, which added Members' and Member Organizations' internal controls to the Annual Report's list of required compliance discussions. 14 14 *See* Securities Exchange Act Release No. 49882 (June 17, 2004), 69 FR 35108 (June 23, 2004) (SR-NYSE-2002-36).

(c)Designation of CCO. The Exchange strongly believes that Member Organizations' compliance with federal laws and Exchange regulations should be of the utmost priority. In furtherance of that belief, the Exchange previously addressed the critically important role of the compliance function by requiring the Series 14 (NYSE Compliance Official) examination and registration, which are intended to ensure the qualifications of key compliance professionals. 15 15 The Series 14 Examination is a qualification examination intended to ensure that the individuals designated as having day-to-day compliance responsibilities for their respective firms, or who supervise ten or more people engaged in compliance activities, have the knowledge necessary to carry out their job responsibilities. NYSE Rule 342.13(b) requires Members' and Member Organizations' compliance supervisors to pass the Series 14 Examination. *See* Securities Exchange Act Release No. 25763 (May 27, 1988), 53 FR 20925 (June 7, 1988). In further recognition of the increasing importance of the compliance function, the proposed rule change requires each Member Organization to formally designate a principal executive officer or general partner of the Member Organization as its CCO. This requirement is consistent with NYSE Rule 311(b)(5), which mandates that “principal executive officers” exercise responsibility over each of the prescribed business areas of a Member Organization ( *e.g.* , compliance). Currently, each principal executive officer and general partner is generally required to pass an examination acceptable to the Exchange that pertains to knowledge of his or her functional responsibility. 16 Based on the type of business that individual conducts, and the structure of his or her organization, acceptable examinations include the Series 9/10 (General Securities Sales Supervisor), Series 14, Series 24 (General Securities Principal), Series 27 (Financial and Operations Principal), or Series 28 (Introducing Broker/Dealer Financial and Operations Principal). 17 16 *See NYSE Interpretation Handbook* , Rule 304A(a), (c)/01. 17 In proposed interpretations 342.30(d)/01 and 342.30(e)/01, the Exchange also proposes guidance regarding: The designation of CCOs; the interaction between CCOs and other executives during preparation of Annual Reports; the scope and subjects of the Annual Reports; and the reporting and certification process. *See supra* note 3. The CCO designation requirement does not apply to Members, because such members, whose activities are limited to interaction with other members on the Floor of the Exchange, generally lack the organizational infrastructure or scope of business activities that would necessitate designation of a CCO. 18 18 This exemption is consistent with other provisions of NYSE Rule 342. For example, under certain circumstances, some compliance officials at Member Organizations are exempt from the Series 14 requirement. *See NYSE Interpretation Handbook* , Rule 342(a)(b)/02.

(d)CEO Certification. The proposed rule change's CEO certification requirement reflects the Exchange's belief that Member Organizations' senior executives, particularly CEOs, should focus the highest degree of attention and resources on the compliance function. While subordinates with supervisory responsibility for specific business lines remain accountable for the discharge of compliance policies and written supervisory procedures, the Exchange considers CEOs ultimately to be accountable for the compliance and supervision of their Member Organizations. 19 In keeping with those principles, the CEO certification requirement is intended to promote and expand dialogue between Member Organization CEOs and their officers who are responsible for compliance with federal laws and Exchange regulations. 20 19 Attestations similar to the yearly CEO certification requirement proposed herein are also required by Exchange Rule 351(f), which calls for annual confirmation of compliance with Exchange Rule 472 (“Communications with the Public”). *See* Securities Exchange Act Release No. 45908 (May 10, 2002), 67 FR 34968 (May 16, 2002) (SR-NYSE-2002-09). 20 The proposed rule change's CEO certification requirement corresponds in substance to NASD Rule 3013, which the Commission favorably described as seeking “to provide a mechanism to compel substantial and purposeful interaction between senior management and compliance personnel to enhance the quality of members' supervisory and compliance systems.” Securities Exchange Act Release No. 50347 (September 10, 2004), 69 FR 56107 (September 17, 2004) (SR-NASD-2003-176). The required annual certification consists of four elements:

(i)Each Member or each Member Organization's CEO (or equivalent officer) must certify that processes are in place to: Establish and maintain policies and procedures designed to achieve compliance with Exchange rules and applicable federal securities laws and regulations; modify such policies and procedures as business, regulatory and legislative changes dictate; and test the effectiveness of such policies and procedures on a periodic basis. This requirement goes to the essential nature of compliance, and assures an appropriately heightened attention to its details.

(ii)Each Member Organization's CEO (or equivalent officer) must certify that he or she has conducted one or more meetings with the CCO during the preceding 12 months, during which they discussed and reviewed the matters described in the certification. Such meetings, which must entail discussion and review of the Member Organization's compliance efforts as of that date, should aid in the identification and resolution of significant ongoing and future compliance problems.

(iii)Each Member Organization's CEO (or equivalent officer) must certify that his or her Member Organization's compliance processes are evidenced in a written report that was reviewed by the Member Organization's CEO, CCO, and such other officers as the Member Organization deems necessary, and submitted to the Member Organization's board of directors and audit committee, if any. The report must be produced prior to the execution of the proposed certification, must describe the manner in which the compliance processes are administered, and must identity the officers and supervisors who are responsible for its administration. 21 21 *See* proposed interpretation 342.30(e)/01.

(iv)Each Member Organization's CEO (or equivalent officer) must certify that he or she has consulted with the CCO, such other officers of the Member Organization as the Member Organization deems necessary, and, to the extent the Member Organization's CEO (or equivalent officer), CCO and such other officers deem appropriate in order to attest to the statements in the certification, outside consultants, lawyers and accountants. This requirement recognizes that the CCO's expertise in the matters underlying the certification make his or her role in the process critical, and make the CCO an indispensable party to the CEO's certification. The sentence “[I]f any of these areas do not apply to the member or member organization, the report should so state,” which currently concludes Rule 342.30, has been repositioned in the amended rule text to avoid the ambiguity that otherwise would have resulted from the addition of Rules 342.30(d) and 342.30(e). In response to commenters' concerns, the Exchange submitted Amendment No. 3, which clarified the parameters of the CEO's certification requirements. B. Comment Summary and NYSE's Response 1. Comments Received The proposal was published for comment in the **Federal Register** on August 22, 2005. 22 22 *See* note 5, *supra* . We received two comments on the proposal. 23 Both commenters generally supported the NYSE's proposed rule change and commended the NYSE for its promotion of compliance efforts. However, both commenters were concerned with certain aspects of the NYSE's proposal. Commenters also generally expressed concern with the differences between the NYSE's compliance certification and reporting requirements and the NASD's requirements in NASD Rule 3013. 24 Both commenters were concerned with the language in the proposed rule change suggesting that the CEO would be required to certify to the “adequacy” of the firm's compliance policies and procedures. The commenters were concerned that the word “adequacy” created obligations inconsistent with the goals behind the certification and conflicted with the NASD's requirements, and both observed that the NASD had opted to remove similar “adequacy” language from Rule 3013. Both commenters were concerned about the subjectivity of certification as to the “adequacy” of the compliance processes and procedures, and both commenters requested that the NYSE remove the adequacy standard from the proposed language. 25 23 *See* note 6, *supra* . 24 *See* Lehman Letter, SIA Letter. 25 *See* Lehman Letter, SIA Letter. Both commenters were also concerned that the proposal created ambiguity about the role of compliance officers. Both commenters stated that the NYSE's statements in the proposed rule change might make it appear that the NYSE intended to treat compliance officers as “business line” supervisors. One commenter said that this was contrary to the common understanding of the role of compliance officers, 26 while the other commenter requested that the Exchange clarify that the CCO does not have business-line responsibility. 27 26 *See* Lehman Letter. 27 *See* SIA Letter. One of the commenters also requested that the Exchange determine why it would require that the certification be filed with the Exchange when this would diverge from the NASD's requirements. 28 The commenter asked that regulators gain additional experience with the NASD's CCO filing before improving on the requirement, and requested consistency between the Exchange's and the NASD's requirements in the filing of the reports. 28 *See* Lehman Letter. 2. NYSE's Response to Comments The NYSE responded to the commenters' concerns by filing an amendment to the proposed rule text to remove the language “the adequacy of.” The Exchange noted in its response, however, that in order to emphasize the necessity of the CEO's belief that the processes attested to in the certification could reasonably achieve the goals of the rule, and that the CEO has an informed basis for the certification, the Exchange added the words “and review” to proposed Rule 342(e)(i)(A). In response to commenters” concerns that the proposed rule change might create business line responsibility for compliance officers, the Exchange responded that it sought to recognize the importance of the compliance function. The Exchange stated that the rule as written and intended would not vest the CCO with business-line responsibility. The Exchange noted that the language in the proposed rule change regarding “business areas” differs from that in Rule 311(b)(5), which sets forth the areas of responsibility of a CEO, and uses the phrase “areas of the business.” The Exchange stated that it had no intention of addressing the relationship of a CCO to such covered “areas of the business.” The Exchange also stated that the proposed rule change does not affect the determination of whether a compliance manager is a business-line manager, which the Exchange instead described as a fact-specific determination. The Exchange stated that the proposed rule change and filing should not be read as an alteration to the existing standards of determining whether a compliance manager is a business-line supervisor. With respect to the filing requirement, the Exchange observed not only that the proposed rule change required members and member organizations to file the report previously required to be prepared during the preceding year, but also that the Exchange understood that NASD would be instituting a similar requirement, thereby creating consistency in requirements between the NYSE and the NASD. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 3, including whether Amendment No. 3 is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSE-2004-64 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-NYSE-2004-64. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro/shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2004-64 and should be submitted on or before December 19, 2005. IV. Discussion and Findings After careful review, the Commission finds that the proposed rule change is consistent with section 6(b) 29 of the Act in general and section 6(b)(5) of the Act 30 in particular, which require that the rules of the Exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade and, in general, to protect investors and the public interest. 31 The proposed rule change facilitates the Exchange's review of Members' and Member Organizations' regulatory programs, strengthens Members' and Member Organizations' oversight of their compliance processes and procedures, and promotes increased involvement of Members and Member Organization CEOs in compliance matters. The Commission believes that the proposed rule change accomplishes these goals by emphasizing the importance of compliance procedures and processes and ensuring that CEOs will give these processes and procedures high priority. The proposal's requirements for designation of CCOs, annual CEO certifications, mandatory meetings of the CCOs and CEOS, annual compliance reports, and provision of the compliance reports to the Exchange should increase members' senior management's focus on the effectiveness of member compliance efforts with applicable NYSE rules and Federal securities laws. The proposed rule change will involve CEOs in the compliance processes by requiring the CEOs to be engaged with the creation of a report and a certification documenting compliance procedures and processes, further enhancing focus on Members' and Member Organizations' compliance and supervision systems, and thereby decreasing the likelihood of fraud and manipulative acts and increasing investor protection. The requirement for annual CEO certifications and preparation of a related report will help motivate firms to keep their compliance programs current with business and regulatory developments. 29 15 U.S.C. 78f(b) 30 15 U.S.C. 78f(b)(5) 31 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). The proposed requirement of a certification that the Member or Member Organization has in place processes to establish, maintain, review, modify and test policies and procedures reasonably designed to achieve compliance with applicable NYSE rules and federal securities laws and regulations will help to ensure that members have in place a compliance framework that will allow the member to adapt its compliance efforts to the ever-changing business and regulatory environment. Especially helpful in this regard is the requirement that the processes in a Member Organization, at a minimum, must include one or more meetings annually between the CEO and CCO to

(1)discuss and review the matters that are the subject of the certification;

(2)discuss and review the Member Organization's compliance efforts as of the date of such meetings; and

(3)identify and address significant compliance problems and plans for emerging business areas. The Commission also believes that the proposed rule change will create procedures at the NYSE that are similar to those at the NASD, assisting Members and Member Organizations in their compliance efforts by creating a parallel framework for certifications to and reports on compliance processes and procedures at the NASD and NYSE. The Commission believes that the commenters' concerns are addressed by the NYSE's responsive amendment as well as the NYSE's letter responding to the comments. The NYSE amended the rule text in Amendment No. 3 to address commenters' concerns that the proposed rule change would require Members and Member Organizations to certify as to the adequacy of their procedures. In its response to comments, the Exchange clarified that determining whether compliance officers are “business-line” is a fact-specific determination, and that the proposed rule change was not intended to affect that determination. Lastly, the NYSE's filing requirement requires only that the Member or Member Organization file with the Exchange a report that they are already required to prepare, which will provide the Exchange with useful information in its examinations of Members and Member Organizations. Further, submission of the certification to the Exchange assures timely completion of the Certification and will provide notice of any issues with the completion of the Certification. Further, the NASD has recently amended its Rules 3012 and 3013 to require that its members' reports be provided to its members' boards on a similar time frame to that of the NASD. 32 The commenter's concern with inconsistent timing of requirements between the NYSE and NASD should therefore be addressed by the NASD's proposed rule change. 32 *See* Exchange Act Release No. 52727 (Nov. 3, 2005), 70 FR 68122 (Nov. 9, 2005). Accelerated Approval of Amendment No. 3 The Commission finds good cause for approving Amendment No. 3 to the proposed rule change prior to the thirtieth day after the amendment is published for comment in the **Federal Register** pursuant to section 19(b)(2) of the Act. 33 Amendment No. 3 responded to comment letters by amending proposed NYSE Rule 342 to eliminate the words “the adequacy of” and to further clarify the rule by requiring that the Member or Member Organization review its procedures and processes. The amendment therefore clarified that although a CEO has no obligation to attest to the adequacy of the compliance processes and procedures, the CEO must nonetheless have an informed basis for the certification. The Commission finds that, given the objections raised with respect to the language “the adequacy of” by commenters, and the Exchange's concern that despite deletion of the “adequacy” concept, the CEO nonetheless have an informed basis for the certification, it is appropriate and responsive for the Exchange to amend the proposed rule text to reflect these concerns. Furthermore, the Commission believes that deletion of the “adequacy” language from the rule text and addition of a review requirement will allow the requirements set forth in the rule to more closely conform to those already instituted by the NASD in its Rule 3013, creating consistency between the two rules. Accordingly, the Commission believes that accelerated approval of Amendment No. 3 is appropriate. 33 15 U.S.C. 78s(b)(2). V. Conclusion *It is therefore ordered* , pursuant to section 19(b)(2) of the Act 34 that the proposed rule change (SR-NYSE-2004-64) be, and hereby is, approved. 34 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 35 Jonathan G. Katz, Secretary. 35 17 CFR 200.30-3(a)(12). [FR Doc. E5-6557 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52806; File No. SR-PCX-2005-88] Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change and Amendment Nos. 1 and 2 Relating to Dissemination of Index Values November 18, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on July 27, 2005, the Pacific Exchange, Inc. (“PCX” or “Exchange”), through its wholly owned subsidiary PCX Equities, Inc. (“PCXE”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the PCX. The PCX filed Amendment Nos. 1 and 2 to the proposal on September 16, 2005, and October 27, 2005, respectively. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. In addition, the Commission is granting accelerated approval of the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 clarified the time during which the current value of an index underlying a Portfolio Depositary Receipt or Investment Company Unit must be disseminated. Amendment No. 2, which replaced and superseded the original filing and Amendment No. 1 in their entirety, retained the clarification proposed in Amendment No. 1 and, in addition, revised the proposal to provide that the last official calculated index value must remain available during any period when the official index value does not change. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The PCX, through its wholly owned subsidiary PCXE, proposes to amend its rules governing the Archipelago Exchange (“ArcaEx”), the equities trading facility of PCXE. Specifically, the PCX proposes to amend the listing standards for Investment Company Units (“ICUs”) and Portfolio Depositary Receipts (“PDRs”) to provide that the current value of an index underlying a series of ICUs or PDRs must be widely disseminated by one or more major market data vendors at least every 15 seconds during the time the ICU or PDR trades on ArcaEx. The proposed rules also provide that the last official calculated index value must remain available during any period when the official index value does not change. The text of the proposed rule change is available on the PCX's Web site ( *http://www.pacificex.com* ) and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it had received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The PCX has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose PCXE Rule 5.2(j)(3), Commentary .01 and PCXE Rule 8.100, Commentary .01 provide listing standards for ICUs and PDRs, respectively, to permit the listing and trading of these securities pursuant to Rule 19b-4(e) under the Act. 4 Rule 19b-4(e) provides that the listing and trading of a new derivative securities product by a self-regulatory organization (“SRO”) will not be deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4, if the Commission has approved, pursuant to section 19(b) of the Act, the SRO's trading rules, procedures and listing standards for the product class that would include the new derivative securities product and the SRO has a surveillance program for the product class. 5 4 17 CFR 240.19b-4(e). 5 *See* Securities Exchange Act Release No. 40761 (December 8, 1998), 63 FR 70952 (December 22, 1998). The Exchange's rules for ICUs and PDRs currently provide that the current value of an index underlying a series of ICUs or PDRs will be disseminated every 15 seconds over the consolidated tape. The Exchange believes that, rather than identifying specifically in its rules the index dissemination service (that is, the consolidated tape), it is preferable to reflect in its rules a requirement for wide dissemination of the underlying index values. Accordingly, the proposal revises the PCXE's rules to provide that the value of the underlying index must be widely disseminated by a reputable index dissemination service, such as the Consolidated Tape Association, Reuters, or Bloomberg. The Exchange believes that the specific identity of the index dissemination service is not necessary, and the purpose of the rules would be achieved, as long as the service used for dissemination is reputable, accepted in the investment community, and effects appropriately wide dissemination of the particular index. The Exchange therefore proposes to revise the listing standards for ICUs and PDRs to provide that the value of the underlying index must be widely disseminated by one or more major market data vendors at least every 15 seconds during the time when the ICU or PDR trades on ArcaEX. As currently is the case, if the official index value does not change during some or all of the period when trading is occurring (as is typically the case with pre-market-open and after-hours trading, and also with foreign indexes because of time zone differences or holidays in the countries where such indexes' components trade), then the last official calculated index value must remain available during the time the ICU or PDR trades on ArcaEx. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act, 6 in general, and furthers the objectives of section 6(b)(5), 7 in particular, because it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and to protect investors and the public interest. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments on the proposed rule change were neither solicited nor received. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *(http://www.sec.gov/rules/sro.shtml)* ; or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-PCX-2005-88 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-PCX-2005-88. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site *(http://www.sec.gov/rules/sro.shtml)* . Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the PCX. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR-PCX-2005-88 and should be submitted on or before December 19, 2005. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. In particular, the Commission finds that the proposed rule change, as amended, is consistent with section 6(b)(5) of the Act, 8 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 9 The proposal amends the PCXE's rules to provide that the current value of an index underlying a series of ICUs or PDRs must be widely disseminated by one or more major market data vendors at least every 15 seconds during the time the ICU or PDR trades on ArcaEx. In its proposal, the PCX states that “one or more major market data vendors” would include the Consolidated Tape Association or private vendors, such as Reuters or Bloomberg. The Commission believes, however, that it is critical that such service widely disseminate such index values to market participants. The Commission notes that the rules of several other SROs contain an identical index dissemination requirement, 10 and that the proposed index dissemination requirement is similar to the index dissemination requirement used in the listing standards for narrow-based index options. 11 The Commission believes that the index dissemination requirement will help to ensure the transparency of current index values for indexes underlying series of ICUs and PDRs. 8 15 U.S.C. 78f(b)(5). 9 In approving this proposal, the Commission has considered the proposal's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 *See,* *e.g.* , Amex Rules 1000, Commentary .03; and 1000A, Commentary .02 (listing standards for PDRs and Index Fund Shares); NASD Rule 4420(i) and

(j)(listing standards for PDRs and Index Fund Shares); and Phlx Rule 803(i) and

(l)(listing standards for Trust Shares and Index Fund Shares). *See also* Amex Order, Phlx Order, and NASD Order at note 13, *infra.* 11 *See* *e.g.* , Chicago Board Options Exchange Rule 24.2(b); International Securities Exchange Rule 2002(b); Pacific Exchange Rule 5.13; and Philadelphia Stock Exchange Rule 1009A(b) (listing standards for narrow-based index options requiring that, among other things, the current underlying index value be reported at least once every 15 seconds during the time the index option trades on the exchange). The PCX's rules also provide that the last official calculated index value must remain available during any period when the official index value does not change. As stated above, the PCX notes that periods when the official index value underlying an ICU or PDR do not change occur at the pre-market-open, during after-hours trading sessions, and for certain foreign indexes underlying an ICU or PDR, based on the time zone differences or foreign holidays. 12 The Commission notes that this provision is consistent with other SRO proposals that the Commission has approved recently. 13 12 Nothing herein is meant to address the situation of whether the ICU or PDR can actually remain trading when the primary market has halted or suspended trading in the underlying components or the official index provider ceases to disseminate and/or calculate the official index value during official day time trading hours. Rather, the provision is merely meant to address those times that the underlying value is unavailable on a real time basis because the marketplace for the component securities is not open for trading for legitimate business reasons, such as due to the time difference between the foreign and U.S. markets. 13 *See,* *e.g.* , Securities Exchange Act Release Nos. 52572 (October 7, 2005), 70 FR 60125 (October 14, 2005) (notice of filing and order granting accelerated approval to File No. SR-PHLX-2005-57) (“Phlx Order”); 51868 (June 17, 2005), 70 FR 36672 (June 24, 2005) (notice of filing and order granting accelerated approval to File No. SR-Amex-2005-044) (“Amex Order”); and 51559 (April 15, 2005), 70 FR 20787 (April 21, 2005) (notice of filing of File No. SR-NASD-2005-024) (all noting that, if the official index value does not change during some or all of the time when trading is occurring, as is typically the case with pre-market open and after-hours trading, and also with foreign indexes due to time zone differences or holidays in the countries where the indexes' components trade, then the last official calculated index value must remain available throughout the market's trading hours). The Commission subsequently approved the NASD's proposal, as well as the proposals by the American Stock Exchange and the Philadelphia Stock Exchange. *See* Securities Exchange Act Release No. 51748 (May 26, 2005), 70 FR 32684 (June 3, 2005) (order approving File No. SR-NASD-2005-024) (“NASD Order”). The PCX has requested that the Commission find good cause for approving the proposed rule change prior to the thirtieth day after publication of notice of filing thereof in the **Federal Register** . As noted above, the Commission has approved identical index dissemination requirements for other SROs. 14 The Commission received no comments regarding these proposals. The Commission believes that granting accelerated approval of the PCX's proposal will allow the PCX to implement the same index dissemination requirement that the Commission has approved for other SROs, thereby helping the PCX to compete with these markets. Accordingly, the Commission finds good cause, consistent with sections 6(b)(5) and 19(b) of the Act, to approve the proposed rule change, as amended, prior to the thirtieth day after the date of publication of notice of filing thereof in the **Federal Register** . 14 *See* Amex Order, NASD Order, and PHLX Order, *supra* note 13. V. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 15 that the proposed rule change (SR-PCX-2005-88), as amended, is approved on an accelerated basis. 15 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Jonathan G. Katz, Secretary. [FR Doc. E5-6556 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52777; File No. SR-Phlx-2004-37] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto to Increase the Size of the Audit Committee November 16, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on May 20, 2004, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On October 20, 2005, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange revised the proposed rule text to add a definition of “independent director” and to make certain technical changes, and also revised the purpose section to reflect these changes and to enhance the description of the proposal generally. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Phlx By-Laws, Article X, Sections 10-9(a)-(b) to:

(i)Allow the Board of Governors the ability to increase the size of the Audit Committee beyond its current three persons to a maximum of five persons, and

(ii)to require the members of the Audit Committee to be independent directors. Additionally, the proposed amendment to the Phlx By-Laws incorporates enhanced Audit Committee responsibilities. The text of the proposed rule change, as amended, is below. Proposed deletions are bracketed; proposed insertions are in *italics* . PHLX BY-LAWS Article 10, Sec. 10-9, Audit Committee SEC. 10-9.

(a)The Audit Committee shall consist of *at least* three

(3)members, *the exact number to be determined from time to time by the Board of Governors* . [who] *All members* shall [all] be [public] [independent non-industry Governors who have no material business relationship with the Exchange. A majority of the members, but not less than three

(3)members shall be public Governors] *independent directors who have no material relationship with the Exchange* . [Audit Committee members shall not serve in a management capacity with the Exchange or any affiliate thereof and must be free of any other relationships that, by decision of the Board of Governors, would interfere with the exercise of independent judgment.] *The term “independent director” will be defined as a director who has no material relationship with the Exchange or any affiliate of the Exchange, any Member of the Exchange or any affiliate of such Member, or any issuer of securities that are listed or traded on the Exchange or a facility of the Exchange. The term “material relationship” will be defined as a relationship, whether compensatory or otherwise, that reasonably could affect the independent judgment or decision-making of the director* .

(b)The Audit Committee shall have responsibility for dealings with the Exchange's [independent public accountants including] *external auditors, which includes:*

(i)[making recommendations to the Board of Governors as to] *sole responsibility for the appointment* , retention and [dismissal of such public accountants] replacement of such auditors;

(ii)*direct oversight over such auditors;

(iii)review, at least annually, of the qualification and performance of such auditors;* [reviewing the scope of their services and fees;

(iii)reviewing the audit plan;]

(iv)*direct authority to resolve disagreements between management and such auditors regarding financial reporting* [reviewing internal controls];

(v)*responsibility to ensure the rotation of the lead and concurrent auditors every five years and certain other auditors every seven years, with time out periods* ;

(vi)*evaluation of the independence of external auditors, including ensuring that, other than deferred tax and compliance services, external auditors do not engage in certain non-audit services, as identified in the Audit Committee Charter, when they conduct audits for the Exchange, and approval of non-audit services where appropriate; (vii)* [reviewing] *review of* the “management letter” and reply thereto; and *(viii)* [having] the ability to meet with [the public accountants] *external auditors* without Exchange officers or employees. The Audit Committee shall have responsibility for the Exchange's Internal Audit Department, which shall report to the Audit Committee. Such responsibility will include review of policies and procedures for and significant reports produced by the Internal Audit Department. The Audit Committee shall review any legal matters that may materially impact the Exchange's financial statements and all examination, inspection or other reports made by any regulatory agency with regulatory oversight for the Exchange and the Exchange's responses thereto. The Audit Committee shall review, at least annually, compliance with the Exchange's Code of Conduct with the assistance of the General Counsel's office. The Audit Committee shall have the authority to conduct special reviews of any alleged improper conduct with respect to Exchange related activity, operations, finance or regulation. *The Audit Committee shall establish procedures for the receipt, retention, and treatment of complaints received by the Exchange regarding accounting, internal accounting controls, or other auditing matters and confidential anonymous submissions by Exchange employees regarding questionable accounting practices* . The Audit Committee may select and engage its own [counsel, consultants, accountants or other experts] *advisor(s)* to assist [in such reviews] *it in carrying out its duties* . * The Audit Committee shall determine the appropriate amount of funding to be provided by the Exchange for the purpose of paying:

(i)Compensation to external auditors retained by the Audit Committee to prepare or issue an audit report;

(ii)compensation to adviser(s) employed by the Audit Committee that it determines are necessary to carry out its duties; and

(iii)ordinary administrative expenses of the Audit Committee that are necessary or appropriate to carry out its duties in respect of external auditors * . The Audit Committee shall have the authority to compel to appear and/or provide documents or other information, by members, member organizations, associated persons of member organizations, members of the Board of Governors, committee members, Exchange officers or Exchange employees.

(c)The Audit Committee shall meet at least once every calendar quarter. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change, as amended, is to strengthen the composition and charter of the Exchange's Audit Committee by increasing the pool of candidates eligible to serve, which may bring additional expertise to the Committee, as well as codifying more of the Audit Committee's responsibilities. The Exchange believes that expanding the size of its Audit Committee to permit (but not mandate) additional Committee members should be beneficial, because additional persons should bring new and different expertise and experience to Committee workings. The Exchange further believes that by setting higher standards with the independence requirement, it will promote independent decision-making by the Audit Committee. The term “independent director” would be defined as a director who has no material relationship with the Exchange or any affiliate of the Exchange, any member of the Exchange or any affiliate of such member, or any issuer of securities that are listed or traded on the Exchange or a facility of the Exchange. 4 The term “material relationship” would be defined as a relationship, whether compensatory or otherwise, that reasonably could affect the independent judgment or decision-making of the director. 5 4 In submitting this proposal, the Exchange has cited to the Commission's proposed rules for “independent directors” of self-regulatory organizations and certain other aspects of the Commission's self-regulatory organization governance proposal. *See* Securities Exchange Act Release No. 50699 (November 18, 2004), 69 FR 71126 (December 8, 2004) (proposing Commission rules relating to the governance of self-regulatory organizations, among other things) (“SRO Governance Proposal”), Proposed Rules 6a-5(c)(2) and 15Aa-3(c)(2). 5 *See* SRO Governance Proposal, Proposed Rules 6a-5(b)(13) and 15Aa-3(b)(14) (proposed definition of “material relationship”). The proposal would require the Exchange's Board of Governors' to determine whether each Audit Committee member is independent upon that director's nomination and thereafter no less frequently than annually and as often as necessary in light of the director's circumstances. 6 The proposal would also give the Exchange's Board of Governors the opportunity from time to time to adjust the number of members of the Exchange's Audit Committee. 6 *See* SRO Governance Proposal, Proposed Rules 6a-5(c)(2) and 15Aa-3(c)(2) (proposed schedule of independence determinations by Board). The Exchange believes that the codification of the Committee's responsibilities with greater specificity is also appropriate. The proposal incorporates into the Phlx By-Laws enhanced Audit Committee responsibilities that are primarily adopted from the Sarbanes-Oxley Act of 2002. 7 The Exchange also proposes to remove the phrase “independent public accountants” from Section 10-9(b) of Article X of the Phlx By-Laws and replace it with the phrase “external auditors” to broaden the scope of the audit committee's oversight. 7 While the Sarbanes-Oxley Act of 2002 does not by its terms apply to the Exchange, the Exchange has embraced applicable concepts on a voluntary compliance basis. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 8 in general, and furthers the objectives of Section 6(b)(5) of the Act 9 in particular, in that it is designed to protect investors and the public interest. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change, as amended, will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or

(ii)as to which the Exchange consents, the Commission will:

(A)By order approve the proposed rule change, or

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Phlx-2004-37 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-Phlx-2004-37. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( * http://www.sec.gov/ rules/sro.shtml * ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2004-37 and should be submitted on or before December 19, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Jonathan G. Katz, Secretary. [FR Doc. E5-6561 Filed 11-25-05; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10254 and # 10255] Kentucky Disaster # KY-00003 AGENCY: U.S. Small Business Administration. ACTION: Notice. SUMMARY: This is a notice of an administrative declaration of a disaster for the State of Kentucky dated 11/15/2005. *Incident:* Severe Storms and Tornadoes. *Incident Period:* 11/06/2005. *Effective Date:* 11/15/2005. *Physical Loan Application Deadline Date:* 01/16/2006. *EIDL Loan Application Deadline Date:* 08/14/2006. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Hart. Contiguous Counties: Kentucky: Barrenn, Edmonson, Grayson, Green, Hardin, Larue, Metcalfe. The Interest Rates are: *Homeowners With Credit Available Elsewhere:* 5.375. *Homeowners Without Credit Available Elsewhere:* 2.687. *Businesses With Credit Available Elsewhere:* 6.557. *Business and Small Agricultural Cooperatives Without Credit Available Elsewhere:* 4.000. *Other (Including Non-Profit Organizations) With Credit Available Elsewhere:* 4.750. *Businesses and Non-Profit Organizations Without Credit Available Elsewhere:* 4.000. The number assigned to this disaster for physical damage is 10254 C and for economic injury is 10255 O. The State which received an EIDL Declaration # is Kentucky. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Hector V. Barreto, Administrator. [FR Doc. E5-6543 Filed 11-25-05; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10256 and # 10257] Massachusetts Disaster # MA-00003 AGENCY: U.S. Small Business Administration. ACTION: Notice. SUMMARY: This is a Notice of the Presidential declaration of a major disaster for the State of Massachusetts (FEMA-1614-DR), dated 11/10/2005. *Incident:* Severe Storms and Flooding. *Incident Period:* 10/07/2005 through 10/16/2005. *Effective Date:* 11/10/2005. *Physical Loan Application Deadline Date:* 01/09/2006. *Economic Injury

(EIDL)Loan Application Deadline Date:* 08/10/2006. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the President's major disaster declaration on 11/10/2005, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties (Physical Damage and Economic Injury): Berkshire, Bristol, Franklin, Hampden, Hampshire, Middlesex, Norfolk, Plymouth, Worcester. Contiguous Counties (Economic Injury Only): Massachusetts: Barnstable, Essex, Suffolk. Connecticut: Hartford, Litchfield, Tolland, Windham. New Hampshire: Cheshire, Hillsborough. New York: Columbia, Dutchess, Rennselaer. Rhode Island: Bristol, Newport, Providence. Vermont: Bennington, Windham. The Interest Rates are: *For Physical Damage:* *Homeowners With Credit Available Elsewhere:* 5.375. *Homeowners With Credit Available Elsewhere:* 2.687. *Businesses With Credit Available Elsewhere:* 6.557. *Businesses and Non-Profit Organizations Without Credit Available Elsewhere:* 4.000. *Other (Including Non-Profit Organizations) With Credit Available Elsewhere:* 4.750. *For Economic Injury:* *Businesses and Small Agricultural Cooperatives Without Credit Available Elsewhere:* 4.000. The number assigned to this disaster for physical damage is 102566 and for economic injury is 102570. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Herbert L. Mitchell, Associate Administrator for Disaster Assistance. [FR Doc. E5-6544 Filed 11-25-05; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10228 and # 10229] New Hampshire Disaster Number NH-00001 AGENCY: U.S. Small Business Administration. ACTION: Amendment 1. SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of New Hampshire (FEMA-1610-DR), dated 10/26/2005. *Incident:* Severe Storms and Flooding. *Incident Period:* 10/07/2005 through 10/18/2005. *Effective Date:* 11/17/2005. *Physical Loan Application Deadline Date:* 12/27/2005. *EIDL Loan Application Deadline Date:* 07/26/2006. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the Presidential disaster declaration for the State of New Hampshire, dated 10/26/2005 is hereby amended to include the following areas as adversely affected by the disaster: Primary County: Belknap. All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Cheri L. Cannon, Acting Associate Administrator for Disaster Assistance. [FR Doc. E5-6542 Filed 11-25-05; 8:45 am] BILLING CODE 8025-01-P[?USGPO Galley End:?] SMALL BUSINESS ADMINISTRATION CommunityExpress Pilot Program AGENCY: U.S. Small Business Administration (SBA). ACTION: Notice of Pilot Program extension. SUMMARY: This notice announces the extension of SBA's CommunityExpress Pilot Program until May 31, 2006. This extension will allow time for SBA to complete its decision making regarding potential modifications and enhancements to the Program. DATES: The CommunityExpress Pilot Program is extended under this notice until May 31, 2006. FOR FURTHER INFORMATION CONTACT: Charles Thomas, Office of Financial Assistance, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416; Telephone

(202)205-6490; *charles.thomas@sba.gov* . SUPPLEMENTARY INFORMATION: The CommunityExpress Pilot Program was established in 1999 as a subprogram of the Agency's SBAExpress Pilot Program. Lenders approved for participation in CommunityExpress are authorized to use the expedited loan processing procedures in place for the SBAExpress Pilot Program, but the loans approved under this Program must be to distressed or underserved markets. To encourage lenders to make these loans, SBA provides its standard 75-85 percent guaranty, which contrasts to the 50 percent guaranty the Agency provides under SBAExpress. However, under CommunityExpress, participating lenders must arrange and, when necessary, pay for appropriate technical assistance for any borrowers under the program. Maximum loan amounts under this Program are limited to $250,000. SBA previously extended CommunityExpress until November 30, 2005 to consider possible changes and enhancements to the Program (70 FR 56962). The further extension of this Program until May 31, 2006, will allow SBA to more fully evaluate the results and impact of the Program and to consider possible changes and enhancements to the Program. It will also allow SBA to further consult with its lending partners and the small business community about the Program. (Authority: 13 CFR 120.3) James E. Rivera, Associate Administrator for Financial Assistance. [FR Doc. E5-6546 Filed 11-25-05; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION Export Express Pilot Program AGENCY: U.S. Small Business Administration (SBA). ACTION: Notice of Pilot Program extension. SUMMARY: This notice announces the extension of SBA's Export Express Pilot Program until May 31, 2006. This extension will allow time for SBA to complete its decisionmaking regarding potential modifications and enhancements to the Program. DATES: The Export Express Pilot Program is extended under this notice until May 31, 2006. FOR FURTHER INFORMATION CONTACT: Charles Thomas, Office of Financial Assistance, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416; Telephone

(202)205-6490; *charles.thomas@sba.gov.* SUPPLEMENTARY INFORMATION: The Export Express Pilot Program was established as a subprogram of the Agency's SBAExpress Pilot Program. It was established in 1998 to assist current and prospective small exporters, particularly those needing revolving lines of credit. Export Express generally conforms to the streamlined procedures of SBAExpress, although it carries SBA's full 75-85 percent guaranty. The maximum loan amount under this Program is limited to $250,000. SBA previously extended Export Express until November 30, 2005 to consider possible changes and enhancements to the Program (70 FR 56962). The further extension of this Program until May 31, 2006, will allow SBA to more fully evaluate the results and impact of the Program and to consider possible changes and enhancements to the Program. It will also allow SBA to further consult with its lending partners and the small business community about the Program. (Authority: 13 CFR 120.3) James E. Rivera, Associate Administrator for Financial Assistance. [FR Doc. E5-6547 Filed 11-25-05; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION Small Business Investment Companies; Increase in Maximum Leverage Ceiling 13 CFR 107.1150(a) sets forth the maximum amount of Leverage (as defined in 13 CFR 107.50) that a Small Business Investment Company may have outstanding at any time. The maximum Leverage amounts are adjusted annually based on the increase in the Consumer Price Index published by the Bureau of Labor Statistics. The cited regulation states that SBA will publish the indexed maximum Leverage amounts each year in a Notice in the **Federal Register** . Accordingly, effective the date of publication of this Notice, and until further notice, the maximum Leverage amounts under 13 CFR 107.1150(a) are as stated in the following table: If your Leverageable capital is: Then your maximum Leverage is:

(1)Not over $20,700,000 300 percent of Leverageable Capital

(2)Over $20,700,000 but not over $41,500,000 $62,100,000 + [2 × (Leverageable Capital—$20,700,000)]

(3)Over $41,500,000 but not over $62,200,000 $103,700,000 + (Leverageable Capital—$41,500,000)

(4)Over $62,200,000 $124,400,000 (Catalog of Federal Domestic Assistance Program No. 59.011, small business investment companies) Dated: November 18, 2005. Jaime Guzmán-Fournier, Associate Administrator for Investment. [FR Doc. E5-6545 Filed 11-25-05; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF STATE [Public Notice 5172] FY 2005 Funding Under the Research and Training for Eastern Europe and the Independent States of the Former Soviet Union Act of 1983 (Title VIII) Deputy Secretary of State Robert B. Zoellick approved on July 20, 2005, the FY 2005 funding recommendations of the Advisory Committee for the Study of Eastern Europe and the Independent States of the Former Soviet Union. The FY 2005 Title VIII Program grants were awarded in late September 2005. The Title VIII Program, administered by the U.S. Department of State, seeks to build expertise on the countries of Eurasia and Central and East Europe through support to national organizations in the U.S. for advanced research, language and graduate training, and other activities conducted domestically and overseas. The FY 2005 grant recipients are listed below. 1. American Council of Learned Societies Grant: $517,000 ($517,000 Southeast Europe). Purpose: To support Individual Language Training Grants; Institutional Language Grants; Institutional Advanced Mastery Grants; the Dissertation Fellowships; the Junior Scholars' Training Seminar; and the Post-Doctoral Research Fellowships. Contact: Andrzej W. Tymowski, Director of International Programs, American Council of Learned Societies, 633 Third Avenue, New York, NY 10017-6795, Tel:

(646)485-5945, Fax:

(212)949-8058, E-mail: *ANDRZEJ@acls.org.* 2. American Councils for International Education Grant: $525,000 ($425,000-Eurasia, $100,000-Southeast Europe). Purpose: To support fellowships for research and language training programs in Eurasia and Southeast Europe, including Advanced Russian Language and Area Studies Grants; Eurasia Regional Language Program Grants; Combined Research and Language Training Fellowships on Eurasia; Research Scholar Fellowships on Eurasia and Southeast Europe; Special Initiatives Research Fellowships on Central Asia and the Caucasus; Russian Language Flagship Fellowships; and Southeast Europe Language Fellowships. Contact: Graham Hettlinger, Program Manager, American Councils for International Education, 1776 Massachusetts Avenue, NW., Suite 700, Washington, DC 20036, Tel:

(202)833-7522, ext. 168, Fax:

(202)833-7523, E-mail: *hettlinger@actr.org.* 3. International Research and Exchanges Board Grant: $801,000 ($500,000-Eurasia; $301,000-Southeast Europe). Purpose: To support Individual Advanced Research Opportunities on policy relevant topics on Eurasia and Southeast Europe; Short-term Travel Grants, including four fellowships at embassies; Policy Connect Program for Collaborative Research; and the Regional Policy Symposium on EU Borderlands in conjunction with the Woodrow Wilson Center. Contact: Joyce Warner, Director, Academic Exchanges and Research Division, International Research and Exchanges Board, 2121 K Street, NW., Suite 700, Washington, DC 20037, Tel:

(202)628-8188, Fax:

(202)628-8189, E-mail: *jwarner@irex.org.* 6. National Council for Eurasian and East European Research Grant: $1,017,000 ($690,000-Eurasia; $327,000-Southeast Europe). Purpose: To support the research contracts and fellowship grants of the National Research Program; the Hewett Fellowships; the Short-term Research Fellowships; and the Policy Research Fellowships. Contact: Robert Huber, President, National Council for Eurasian and East European Research 910 Seventeenth Street, NW., Suite 300, Washington, DC 20006, Tel:

(202)822-6950, Fax:

(202)822-6955, E-mail: *dc@nceeer.org.* 5. Social Science Research Council Grant: $700,000 ($700,000-Eurasia). Purpose: To support advanced graduate and dissertation fellowships; post-doctoral fellowships; one dissertation workshop; the Training Seminar in Policy Research; the institutional language programs for advanced Russian and other Eurasian languages; and outreach and field-building activities. Contact: Anthony Koliha, Assistant Director, Eurasia Program, Social Science Research Council, 810 Seventh Avenue, 31st Floor, New York, NY 10019, Tel:

(212)377-2700, Fax:

(212)377-2727 E-mail: *koliha@ssrc.org.* 6. University of Illinois at Urbana-Champaign Grant: $175,000 ($125,000-Eurasia; $50,000-Southeast Europe). Purpose: To support the Slavic Reference Service, which provides assistance to scholars in locating hard-to-find resources through electronic library resources, and electronic delivery of reference materials and resources; the Summer Research Laboratory, which provides two weeks of housing for associates pursuing policy relevant research on Russia, Southeast Europe, and Eurasia; a Balkans Studies Workshop for Junior Scholars and a Russian-Jewish Studies Training Workshop for Junior Scholars; and travel grants for doctoral students to conduct policy relevant research on Eurasia and Southeast Europe at the University of Illinois. Contact: Merrily Shaw, Assistant to the Director of the Russian and East European Center, University of Illinois at Urbana-Champaign, 104 International Studies Building, 910 South Fifth Street, Champaign, IL 61820, Tel:

(217)244-4721/333-1244, Fax:

(217)333-1582, E-mail: *mshaw2@uiuc.edu* or *reec@uiuc.edu.* 7. University of Michigan: William Davidson Institute and Institute for Social Research Grant: $100,000 (100,000-Eurasia). Purpose: To support grants for research projects on business development, public policy and social research on Eurasia. Contact: Kelly Janiga, Manager of Research Programs, The William Davidson Institute, University of Michigan Business School, 724 East University Avenue, Ann Arbor, MI 48109-1234, Tel:

(734)615-4562, Fax:

(734)763-5850, E-mail: *janigak@umich.edu.* 8. The Woodrow Wilson International Center for Scholars Grant: $715,000 ($425,000-Eurasia; $290,000-Southeast Europe). Purpose: To support the residential programs for post-doctoral Research Scholars, Short-term Scholars and Interns; the Meetings Program for both the Kennan Institute and East European Studies, including a Workshop on Democracy and Civil Society in Ukraine; the Regional Policy Symposium on EU Borderlands in conjunction with IREX; and the East European Studies Program's Junior Scholars' Training Seminar in conjunction with the American Council of Learned Societies. Contact: Martin Sletzinger, Director, East European Studies, Tel:

(202)691-4263, E-mail: *martin.sletzinger@wilsoncenter.org.* Maggie Paxson, Senior Associate, Kennan Institute, Tel:

(202)691-4237, E-mail: *Margaret.Paxson@wilsoncenter.org.* The Woodrow Wilson Center, 1300 Pennsylvania Avenue, NW., Washington, DC 20004-3027, Fax:

(202)691-4247. Dated: October 24, 2005. Kenneth E. Roberts, Executive Director, Advisory Committee for Study of Eastern Europe and the Independent States of the Former Soviet Union, Department of State. [FR Doc. E5-6620 Filed 11-25-05; 8:45 am] BILLING CODE 4710-32-P DEPARTMENT OF STATE [Public Notice 5215] Notice of Meeting; United States International Telecommunication Advisory Committee; Information Meeting on the World Summit on the Information Society The Department of State announces a meeting of the U.S. International Telecommunication Advisory Committee (ITAC). The purpose of the Committee is to advise the Department on matters related to telecommunication and information policy matters in preparation for international meetings pertaining to telecommunication and information issues. The ITAC will meet to discuss matters related to the recently concluded World Summit on the Information Society (WSIS). The meeting will take place on Thursday, December 15, 2005 from 10:30 a.m. to 12 p.m. in the auditorium of the Historic National Academy of Science Building. The National Academy of Sciences is located at 2100 C St. NW., Washington, DC. Members of the public are welcome to participate and may join in the discussions, subject to the discretion of the Chair. Persons planning to attend this meeting should send the following data by fax to

(202)647-5957 or e-mail to *jillsonad@state.gov* not later than 24 hours before the meeting:

(1)Name of the meeting,

(2)your name, and

(3)organizational affiliation. A valid photo ID must be presented to gain entrance to the National Academy of Sciences Building. Directions to the meeting location may be obtained by calling the ITAC Secretariat at

(202)647-5205. Dated: November 17, 2005. Anne Jillson, Foreign Affairs Officer, International Communications and Information Policy, Department of State. [FR Doc. E5-6617 Filed 11-25-05; 8:45 am] BILLING CODE 4710-07-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Proposed Advisory Circular 25.981-2A, Fuel Tank Flammability AGENCY: Federal Aviation Administration, DOT. ACTION: Notice of Availability of Proposed Advisory Circular

(AC)25.981-2A, and request for comments. SUMMARY: This notice announces the availability of and requests comments on a proposed advisory circular

(AC)which sets forth an acceptable means, but not the only means, of demonstrating compliance with the provisions of the airworthiness standards for transport category airplanes related to Fuel Tank Flammability Reduction. This proposed AC complements revisions to the airworthiness standards that are being proposed by a separate notice. This notice is necessary to give all interested persons an opportunity to present their views on the proposed AC. DATES: Comments must be received on or before March 23, 2006. ADDRESSES: Send all comments on proposed AC to: Federal Aviation Administration, Attention: Mike Dostert, Propulsion/Mechanical Systems Branch, ANM-112, FAA, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, WA 98055-4056. Comments may be inspected at the above address between 7:30 a.m. and 4 p.m. weekdays, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Jan Thor, Transport Standards Staff, at the address above, telephone

(425)227-2127. SUPPLEMENTARY INFORMATION: Comments Invited Interested persons are invited to comment on the proposed AC by submitting such written data, views, or arguments, as they may desire. Commenters should identify AC 25.981-2A and submit comments, in duplicate, to the address specified above. All communications received on or before the closing date for comments will be considered by the Transport Standards Staff before issuing the final AC. The proposed AC can be found and downloaded from the Internet at *http://www.airweb.faa.gov/rgl* under “Draft Advisory Circulars.” A paper copy of the proposed AC may be obtained by contacting the person named above under the caption FOR FURTHER INFORMATION CONTACT . Discussion This proposed AC provides information and guidance on compliance with the airworthiness standards for transport category airplanes about limiting the time a fuel tank may be flammable or mitigation of hazards from flammable fuel air mixtures within fuel tanks. This guidance is applicable to transport category airplanes for which a new, amended, or supplemental type certificate is requested and affected existing design approval holders as stated in proposed §§ 25.1815, 25.1817, 25.1819, and 25.1821 contained in a proposed new subpart I to Title 14, Code of Federal Regulations (14 CFR) part 25, “Continued Airworthiness and Safety Improvements.” The AC also provides guidance on compliance with the associated proposed requirements for operators of affected airplanes that must comply with the requirements of 14 CFR parts 91, 121, 125, and 129 (for a foreign person or foreign air carrier operating a U.S.-registered airplane) to incorporate flammability mitigation means by specified dates. The Notice of Proposed Rulemaking would not apply the proposed new requirements to transport category airplanes designed solely for cargo carriage. However, AC 25.981-2 remains applicable to these airplanes, which must comply with the current flammability standards contained in § 25.981(c) that would be moved to the proposed § 25.981(e). We will consider combining this guidance for all transport category airplanes into one AC when the final rule and AC are issued. It is one means, but not the only means, of complying with the part 25 revisions proposed in Notice No. 05-14 entitled “Fuel Tank Flammability Reduction,” published in this same edition of the **Federal Register** . Issuance of AC 25.981-2A is contingent on final adoption of the proposed revisions to part 25. Issued in Washington, DC, on November 18, 2005. Dorenda D. Baker, Acting Director, Aircraft Certification Service. [FR Doc. E5-6531 Filed 11-25-05; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Passenger Facility Charge

(PFC)Approvals and Disapprovals AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Monthly Notice of PFC Approvals and Disapprovals. In May 2005, there were three applications approved. This notice also includes information on two applications, approved in April 2005, inadvertently left off the April 2005 notice. Additionally, nine approved amendments to previously approved applications are listed. SUMMARY: The FAA publishes a monthly notice, as appropriate, of PFC approvals and disapprovals under the provisions of the Aviation Safety and Capacity Expansion Act of 1990 (Title IX of the Omnibus Budget Reconciliation Act of 1990) (Pub. L. 101-508) and Part 158 of the Federal Aviation Regulations (14 CFR Part 158). This notice is published pursuant to paragraph

(d)of § 158.29. PFC Applications Approved *Public Agency:* County of Emmet, Pellston, Michigan. *Application Number:* 05-10-C-00-PLN. *Application Type:* Impose and use a PFC. *PFc Level:* $4.50. *Total PFC Revenue Approved in This Decision:* $280,750. *Earliest Charge Effective Date:* July 1, 2011. *Estimated Charge Expiration Date:* July 1, 2013. *Class of Air Carriers Not Require to Collect PFC's:* Air taxi/commercial operators filing FAA Form 1800-31. *Determination:* Approved. Based on information contained in the public agency's application, the FAA has determined that the proposed class accounts for less than 1 percent of the total annual enplanements at Pellston Regional Airport. *Brief Description of Projects Approved for Collections and Use:* Apron expansion of the north. Terminal are drainage improvements. Reconstruction of apron. Animal control/security fencing. Parking lot rehabilitation and reconstruction. Snow removal equipment: two plow trucks with sanders. Land acquisition—Ely Road. Relocation of Ely Highway. Purchase runway snow sweeper. Purchase a snow blower. Purchase a front end loader. Master plan study. Purchase of a generator. Apron expansion of the south. Expansion of general aviation terminal building. *Decision Date:* April 28, 2005. FOR FURTHER INFORMATION CONTACT: Jason Watt, Detroit Airports District Office,

(734)229-2906. *Public Agency:* City of Eugene, Oregon. *Application Number:* 05-06-C-00-EUG. *Application Type:* Impose and use a PFC. *PFC Level:* $4.50. *Total PFC Revenue Approved in This Decision:* $2,400,000. *Earliest Charge Effective Date:* July 1, 2005. *Estimated Charge Expiration Date:* September 1, 2007. *Classes of Air Carriers Not Required to Collect PFC'S:*

(1)Operations by air taxi/commercial operators utilizing aircraft having a maximum seating capacity of less than 20 passengers when enplaning revenue passengers in a limited, irregular/non-scheduled, or special service manner;

(2)operations by air taxi/commercial operators without regard to seating capacity for revenue passengers transported for student instruction, non-stop sightseeing flights that begin and end at the airport and are conducted within a 25-mile radius of the same airport, firefighting charters, ferry or training flights, air ambulance/medical evacuation flights, and aerial photography or survey flights. *Determination:* Approved. Based on information contained in the public agency's application, the FAA has determined that each proposed class accounts for less than 1 percent of the total annual enplanements at Mahlon Sweet Field—Eugene Airport. *Brief Description of Project Approved for Collection and Use:* Terminal rehabilitation. *Decision Date:* April 29, 2005. FOR FURTHER INFORMATION CONTACT: Suzanne Lee-Pang, Seattle Airports District Office,

(425)227-2654. *Public Agency:* Dallas-Fort Worth International Airport Board, Dallas-Fort Worth, Texas. *Application Number:* 05-08-C-00-DFW. *Application Type:* Impose and use a PFC. *PFC Level:* $4.50. *Total PFC Revenue Approved in This Decision:* $2,892,040,000. *Earliest Charge Effective Date:* August 1, 2017. *Estimated Charge Expiration Date:* December 1, 2032. *Class of Air Carriers Not Required to Collect PFC'S:* All air taxi/commercial operators. *Determination:* Approved. Based on information contained in the public agency's application, the FAA has determined that the proposed class accounts for less than 1 percent of the total annual enplanements at Dallas-Forth Worth International Airport. *Brief Description of Projects Approved for Collection and Use at a $4.50 PFC Level:* Construct terminal D apron and associated development. Construct terminal D. Construct terminal D access roads. Acquire and demolish hotel. *Brief Description of Projects Approved for Collection and Use at a $3.00 PFC Level:* Mitigate runway 17L/35R wetlands. Construct terminal D major storm drain. Install surface movement guidance and control system. Construct three terminal D skybridges. Modify central utilities plant. Install SkyLink flight information display system. Reconstruct taxiway K. *Decision Date:* May 4. 2005. FOR FURTHER INFORMATION CONTACT: G. Thomas Wade, Southwest Region Airports Division,

(817)222-5613. *Public Agency:* Yakima Air Terminal Board, Yakima, Washington. *Application Number:* 05-09-C-00-YKM. *Application Type:* Impose and use a PFC. *PFC Level:* $3.00. *Total PFC Revenue Approved in This Decision:* $198,184. *Earliest Charge Effective Date:* August 1, 2005. *Estimated Charge Expiration Date:* August 1, 2006. *Class of Air Carriers Not Required to Collect PFC'S:* Air taxi/commercial operators. *Determination:* Approved. Based on information contained in the public agency's application, the FAA has determined that the proposed class accounts for less than 1 percent of the total annual enplanements at Yakima Air Terminal-McAllister Field. *Brief Description of Projects Approved for Collection and Use:* Construct west general aviation/air freight ramp. Purchase aircraft rescue and firefighting vehicle, Index B. Develop sign and marking plan. Wildlife management plan. Relocate runway hold position signs. Pavement maintenance program, crack seal. Obstruction removal. *Decision Date:* May 17, 2005. FOR FURTHER INFORMATION CONTACT: Suzanne Lee-Pang, Seattle Airports District Office,

(425)227-2654. *Public Agency:* Parish of East Baton Rouge/City of Baton Rouge, Baton Rouge, Louisiana. *Application Number:* 05-06-C-00-BTR. *Application Type:* Impose and use a PFC. *PFC Level:* $4.50. *Total PFC Revenue Approved in This Decision:* $9,986,100. *Earliest Charge Effective Date:* November 1, 2021. *Estimated Charge Expiration Date:* March 1, 2026. *Class of Air Carriers Not Required to Collect PFC's:* Part 135 air taxi/commercial operators filing FAA Form 1800-31. *Determination:* Approved. Based on information contained in the public agency's application, the FAA has determined that the proposed class accounts for less than 1 percent of the total annual enplanements at Baton Rouge Metropolitan Airport. *Brief Description of Projects Approved for Collection and Use:* Extend runway 4L/22R. Professional fees. Expand general aviation apron. *Decision Date:* May 19, 2005. FOR FURTHER INFORMATION CONTACT: G. Thomas Wade, Southwest Region Airports Division,

(817)222-5613. Amendment to PFC Approvals Amendment No. city, state Amendment approved date Original approved net PFC revenue Amended approved net PFC revenue Original estimated charge exp. date Amended estimated charge exp. date *01-08-C-01-CMX, Hancock, MI 04/14/05 $254,644 $254,644 10/01/05 08/01/05 03-09-C-01-CMX, Hancock, MI 04/14/05 104,266 104,266 05/01/07 09/01/06 93-01-C-01-FCA, Kalispell, MI 04/27/05 1,211,000 1,027,388 11/01/99 04/01/98 01-01-C-01-SBY, Salisbury, MD 04/28/05 440,892 507,026 07/01/05 10/01/05 98-02-C-01-IDA, Idaho Falls, ID 05/02/05 820,404 836,239 11/01/00 10/01/00 00-03-C-01-BIL, Billings, MT 05/03/05 4,153,600 5,163,262 10/01/05 05/01/06 02-02-C-02-AVL, Asheville, NC 05/04/05 4,936,653 4,936,653 11/01/06 11/01/06 00-05-C-01-CLM, Port Angeles, WA 05/06/05 211,683 198,350 10/01/03 10/01/03 00-03-C-03-MSO, Missoula, MT 05/10/05 2,500,000 2,500,000 12/01/04 12/01/04 (Note: The amendment denoted by an asterisk (*) include a change to the PFC level charged from $3.00 per enplaned passenger to $4.50 per enplaned passenger. For Hancock, MI, this change is effective on July 1, 2005.) Issued in Washington, DC on November 15, 2005. Joe Hebert, Manager, Financial Analysis and Passenger Facility Charge Branch. [FR Doc. 05-23305 Filed 11-25-05; 8:45 am]

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