Notices. Notice of issuance
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/register/2006/02/06/06-1069A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 50-02] University of Michigan; University of Michigan Ford Nuclear Reactor; Environmental Assessment and Finding of No Significant Impact The U.S. Nuclear Regulatory Commission (the Commission) is considering the issuance of a license amendment to Facility Operating License No. R-28, issued to the University of Michigan (UM or the licensee), that would allow decommissioning of the UM Ford Nuclear Reactor
(FNR)located at the North Campus in Ann Arbor, Washtenaw County, Michigan. Environmental Assessment Identification of the Proposed Action By letter dated June 18, 2004, the licensee submitted a decommissioning plan in accordance with Title 10 of the Code of Federal Regulation Part 50.82(b)(5) (10 CFR 50.82(b)(5)) in order to dismantle the 2 megawatts thermal
(MWt)FNR, to dispose of its component parts and radioactive material, and to decontaminate the facility in accordance with the proposed dismantling plan to meet the Commission's unrestricted release criteria. After the Commission verifies that the release criteria have been met, Facility Operating License No. R-28 would be terminated. The licensee submitted an Environmental Report on June 18, 2004, that addressed the estimated environmental impacts resulting from decommissioning the UM FNR. A “Notice and Solicitation of Comments Pursuant to 10 CFR 20.1405 and 10 CFR 50.82(b)(5) Concerning Proposed Action to Decommission the University of Michigan Ford Nuclear Reactor (FNR)” was published in the **Federal Register** on September 8, 2004 (69 FR 54326). No comments were received during the comment period. Need for the Proposed Action The proposed action is necessary to permanently cease operations of UM FNR. The licensee needs this license change because it no longer plans to conduct licensed activities at the UM FNR. As specified in 10 CFR 50.82, any licensee may apply to the Nuclear Regulatory Commission for authority to surrender a license voluntarily and to decommission the affected facility. Additionally, 10 CFR 51.53(d) stipulates that each applicant for a license amendment to authorize decommissioning of a production or utilization facility shall submit with its application an environmental report that reflects any new information or significant environmental change associated with the proposed decommissioning activities. Upon completion of the decommissioning activities, UM is planning to use the area that would be released for other academic purposes. Environmental Impact of the Proposed Action Residual radioactive contamination resulting from past reactor operations is contained in the FNR facility. All decontamination will be performed by trained personnel in accordance with previously reviewed procedures, and will be overseen by experienced health physics staff. Solid and liquid waste will be removed from the facility and managed in accordance with NRC regulations. The operations are calculated to result in a total occupational radiation exposure of about 4.8 person-rem. Radiation exposure to the general public during decommissioning is expected to be negligible. This will be accomplished by keeping the public at a safe distance and by meeting NRC requirements for effluent releases during decommissioning. Occupational and public exposure may result from offsite disposal of the low-level residual radioactive material from the FNR. The handling, storage, and shipment of this radioactive material are to meet the requirements of 10 CFR 20.2006, “Transfer for Disposal and Manifest,” and 49 CFR Parts 100-177, “Transportation of Hazardous Materials.” It is anticipated that about 112 ft 3 of irradiated hardware will be shipped during one truck shipment in Type B shipping casks to a waste processor. A volume of 11,000 ft 3 of other waste in strong tight containers will be shipped during 27 truck shipments to the Envirocare of Utah facility. Included in the other waste shipment is mixed waste consisting primarily of activated and/or contaminated lead with a volume of 43 ft 3 and cadmium with a volume of 1 ft 3 . Radiation exposure to the general public during waste shipments is expected to be negligible. In addition, Liquid waste that is generated during the decommissioning activities will be released to the environment in accordance with the regulations in 10 CFR Part 20, Subpart K, “Waste Disposal,” or will be solidified and disposed of as solid waste in accordance with state and Federal guidelines. The licensee analyzed accidents applicable to decommissioning activities. These accidents involve inhalation of hazardous or radioactive materials, confined space issues, heavy equipment movement, external radiation exposure, and dermal contact with radioactive and hazardous materials. To minimize the risk from identified hazards, procedures and conformance with FNR license and regulatory requirements will be used. Based on the review of the specific proposed activities associated with the dismantling and decontamination of the UM FNR facility, the staff has determined that the proposed action will not increase the probability or consequences of accidents, change any effluents that may be released off site, and cause any significant increase in occupational or public radiation exposure. Therefore, the staff concludes that there are no significant radiological environmental impacts associated with the proposed action. With regard to potential non-radiological impacts, the proposed action does not involve any historic sites. In addition to the lead and cadmium discussed above, asbestos is present at the UM FNR facility. Asbestos will be removed by a licensed asbestos abatement contractor. Decommissioning activities will not affect non-radiological facility effluents and have no other environmental impact. The licensee states that there are no significant plant communities and no wetlands within the site. There are three species listed as threatened or endangered under the Federal ESA within Washtenaw County. These are Indiana bat ( *Myotis sodalis* ), the Mitchell's satyr butterfly ( *Neonympha mitchellii mitchellii* ), and the Eastern prairie fringed orchid ( *Platanthera leucophaea* ). There are no records of any of these three species on the UM FNR site. Therefore, the staff concludes that there are no significant non-radiological environmental impacts associated with the proposed action. Accordingly, the NRC staff concludes that there are no significant environmental impacts associated with the proposed action. Alternatives to the Proposed Action The licensee has proposed to use the DECON alternative for the UM FNR facility. The DECON alternative is where the equipment, structures, and portions of the facility containing radioactive contaminants are removed or decontaminated to a level that permits the property to be released for unrestricted use. As a first alternative to the proposed DECON method, SAFSTOR will be used. In SAFSTOR, the nuclear facility is placed and maintained in a condition that allows the nuclear facility to be safely stored and subsequently decontaminated (deferred decontamination) to levels that permit release for unrestricted use. As a second alternative, the ENTOMB alternative is where radioactive contaminants are encased in a structurally long-lived material, such as concrete; the entombed structure is appropriately maintained; and continued surveillance is carried out until the radioactivity decays to a level permitting release of the property for unrestricted use. The SAFSTOR, ENTOMB, and no-action alternatives would entail continued surveillance and physical security measures to be in place and continued monitoring by licensee personnel. The SAFSTOR and no-action alternatives would also require continued maintenance of the facility. The radiological impacts of SAFSTOR would be less than the DECON option because of radioactive decay prior to the start of decommissioning activities. However, this option involves the continued use of resources during the SAFSTOR period. The ENTOMB option would also result in lower radiological exposure than the DECON option but would involve the continued use of resources. UM FNR has determined that the proposed action (DECON) is the most efficient use of the existing facility, since it proposes to use the space that will become available for other academic purposes. These alternatives would have no significant environmental impact. In addition, the regulations in 10 CFR 50.82(b)(4)(i) only allow an alternative if it provides for completion of decommissioning without significant delay. Alternative Use of Resources This action does not involve the use of any resources not previously considered in the Environmental Report submitted on June 18, 2004, for the UM FNR facility. Agencies and Persons Contacted In accordance with the NRC staff's stated policy, on November 22, 2005, the NRC staff consulted with the Michigan State official, Chris Antieau, Department of Environmental Quality, Land and Water Management Division, regarding the environmental impact of the proposed action on the Coastal Zone Management Act. The state official stated that he concurred with the environmental assessment and had no comments. In addition, the staff contacted U.S. Fish and Wildlife Service
(FWS)regarding the environmental impact of the proposed action to threatened or endangered species. The FWS provided the NRC staff with a list of threatened and endangered species to assist the NRC staff to determine if the UM FNR proposed action would cause any environmental impact in reference to the Endangered Species Act. On December 2, 2005, the NRC staff also consulted with the Michigan State Official, Robert D. Skowronek, Department of Environmental Quality, Waste and Hazardous Materials Division. Mr. Skowronek had no comments. Finding of No Significant Impact On the basis of the environmental assessment, the Commission concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined not to prepare an environmental impact statement for the proposed action. For further details with respect to the proposed action, see the licensee's letter dated June 18, 2004, which is available for public inspection, and can be copied for a fee, at the U.S. Nuclear Regulatory Commission's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland. The NRC maintains an Agencywide Documents Access and Management System (ADAMS), which provides text and image files of NRC's public documents. These documents may be accessed through the NRC's Public Electronic Reading Room on the internet at *http://www.nrc.gov.* Persons who do not have access to ADAMS or who have problems in accessing the documents located in ADAMS may contact the PDR reference staff at 1-800-397-4209, 301-415-4737 or by e-mail at *pdr@nrc.gov.* Dated at Rockville, Maryland, this 25th day of January 2006. For the Nuclear Regulatory Commission. Brian E. Thomas, Branch Chief, Research and Test Reactors Branch, Division of Policy and Rulemaking, Office of Nuclear Reactor Regulation. [FR Doc. E6-1571 Filed 2-3-06; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Steam Generator Tube Integrity and Associated Technical Specifications AGENCY: Nuclear Regulatory Commission. ACTION: Notice of issuance. SUMMARY: The U.S. Nuclear Regulatory Commission
(NRC)has issued Generic Letter
(GL)2006-01 to all holders of operating licenses for pressurized water reactors, except those who have permanently ceased operation and have certified that fuel has been removed from the reactor vessel. A response to this GL is not needed for the following units since they have revised their technical specifications
(TS)to be conceptually similar to the TS discussed in this GL: Arkansas Nuclear One Unit 1, Callaway, Catawba Units 1 and 2, Farley Units 1 and 2, Salem Unit 1, and South Texas Project Units 1 and 2. The NRC is issuing this generic letter to: 1. Request that addressees either submit a description of their program for ensuring steam generator
(SG)tube integrity for the interval between inspections or adopt alternative TS requirements for ensuring SG tube integrity, and 2. Require addressees to provide a written response to the NRC in accordance with Title 10 of the Code of Federal Regulations, Section 50.54(f). This **Federal Register** notice is available through the NRC's Agencywide Documents Access and Management System (ADAMS) under accession number ML060240020. DATES: The GL was issued on January 20, 2006. ADDRESSES: Not applicable. FOR FURTHER INFORMATION CONTACT: Kenneth Karwoski at 301-415-2752 or by e-mail kjk1@nrc.gov or David Beaulieu at 301-415-3243 or e-mail dpb@nrc.gov. SUPPLEMENTARY INFORMATION: NRC GL 2006-01 may be examined, and/or copied for a fee, at the NRC's Public Document Room at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/NRC/ADAMS/index.html.* The ADAMS number for the generic letter is ML060200385. If you do not have access to ADAMS or if you have problems in accessing the documents in ADAMS, contact the NRC Public Document Room
(PDR)reference staff at 1-800-397-4209 or 301-415-4737 or by e-mail to *pdr@nrc.gov.* Dated at Rockville, Maryland, this 27th day of January, 2006. For The Nuclear Regulatory Commission. Christopher I. Grimes, Director, Division of Policy and Rulemaking, Office of Nuclear Reactor Regulation. [FR Doc. E6-1569 Filed 2-3-06; 8:45 am] BILLING CODE 7590-01-P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27220; 812-12818] American Capital Strategies, Ltd.; Notice of Application January 31, 2006. AGENCY: Securities and Exchange Commission (the “Commission”). ACTION: Notice of an application for an order under section 61(a)(3)(B) of the Investment Company Act of 1940 (the “Act”). *Summary of Application:* Applicant, American Capital Strategies, Ltd., requests an order approving its 2000 Disinterested Director Stock Option Plan (the “Plan”) and the grant of certain stock options under the Plan. *Filing Dates:* The application was filed on April 24, 2002 and amended on January 24, 2006. *Hearing or Notification of Hearing:* An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicant with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on February 27, 2006, and should be accompanied by proof of service on applicant, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, U.S. Securities and Commission, 100 F Street, NE., Washington, DC 20549-1090; Applicant, 2 Bethseda Metro Center, 14th Floor, Bethesda, Maryland 20814. FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at
(202)551-6873, or Nadya B. Roytblat, Assistant Director, at
(202)551-6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application is available for a fee at the Public Reference Desk, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-0102 (tel. 202-551-5850). Applicant's Representations 1. Applicant, a Delaware corporation, is a business development company (“BDC”) within the meaning of section 2(a)(48) of the Act. 1 Applicant's primary business objectives are to increase its net operating income and net asset value by investing its assets in senior debt, subordinated debt with detachable warrants and equity of small to medium sized businesses with attractive current yields and potential for equity appreciation. Applicant's investment decisions are either made by its board of directors (the “Board”), based on recommendations of an investment committee comprised of senior officers of applicant, or, for investments that meet certain objective criteria established by the Board, by the investment committee, under authority delegated by the Board. Applicant does not have an external investment adviser within the meaning of section 2(a)(20) of the Act. 1 Section 2(a)(48) defines a BDC to be any closed-end investment company that operates for the purpose of making investments in securities described in sections 55(a)(1) through 55(a)(3) of the Act and makes available significant managerial assistance with respect to the issuers of such securities. 2. Applicant requests an order under section 61(a)(3)(B) of the Act approving the Plan, which provides for the grant of options to purchase shares of applicant's common stock to directors who are neither officers nor employees of applicant (“Non-employee Directors”). 2 Applicant has a nine member Board. Six of the seven current members of the Board are not “interested persons” (as defined in section 2(a)(19) of the Act) of the applicant (“Disinterested Directors”). 3 The Board initially approved the Plan at a meeting held on March 30, 2000 and amended the Plan on October 30, 2003 and July 28, 2005. Applicant's stockholders approved the Plan at the annual meeting of stockholders held on May 3, 2000. The Plan would become effective on the date that the Commission issues an order on the application (the “Order Date”). 2 The Non-employee Directors receive a $50,000 per year retainer payment and $1,500 for each Board or committee meeting attended, and reimbursement of related expenses. Prior to July 1, 2005, the retainer payment was set at a rate of $25,000 per year. 3 The Board presently has two vacancies. All of the Non-employee Directors are Disinterested Directors. 3. The Plan provides that on the Order Date, options for 25,000 shares of applicant's common stock will be granted to each of the six Non-employee Directors serving on the Board as of October 20, 2003 (the “Initial Grants”). Two-thirds of the options granted under the Initial Grants will vest on the Order Date and the remaining one-third of such options will vest on the third anniversary of October 20, 2003. In the event that any of the six Non-employee Directors are not directors on the Order Date or leave the Board before their options vest fully, persons who join the Board as Non-employee Directors will be eligible to receive options for 15,000 shares of applicant's common stock (the “Other Grants”). The options granted under the Other Grants will vest in three equal installments of 5,000 shares on each of the three anniversaries of the date of the grant. The Plan provides that a maximum of 150,000 shares of applicant's common stock may be issued to Non-employee Directors as a group. Under the Plan, no single Non-employee Director may receive options to purchase more than 25,000 shares of applicant's common stock. 4. Under the terms of the Plan, the exercise price of an option will not be less than 100% of the current market value of, or if no such market value exists, the current net asset value per share of, applicant's common stock on the date of the issuance of the option. 4 Options granted under the Plan will expire ten years from the date of grant and may not be assigned or transferred other than by will or the laws of descent and distribution. In the event of the death or disability of a Non-employee Director during such director's service, all such director's unexercised options will immediately become exercisable and may be exercised for a period of three years following the date of death (by such director's personal representative) or one year following the date of disability, but in no event after the respective expiration dates of such options. In the event of the termination of a Non-employee Director for cause, any unexercised options will terminate immediately. If a Non-employee Director's service is terminated for any reason other than by death, disability, or for cause, the options may be exercised within one year immediately following the date of termination, but in no event later than the expiration date of such options. 4 Under the Plan, “current market value” (defined as “fair market value”) is generally the closing sales price of applicant's shares as quoted on the Nasdaq National Market, or alternatively, on the exchange where applicant's shares are traded, on the day the option is granted. 5. Applicant's officers and employees, including employee directors are eligible or have been eligible to receive options under applicant's six other stock option plans under which Non-employee Directors are not entitled to participate (the “Employee Plans”). Non-employee Directors have participated in applicant's prior Disinterested Director stock option plan under which options for all available shares have been granted (such plan together with the Employee Plans, the “Other Plans”). The maximum number of applicant's voting securities that would result from the exercise of all outstanding options issued or options issuable to the directors, officers, and employees under the Other Plans and the Plan would be 12,240,580 shares, or approximately 10.3% of the 118,913,029 shares of applicant's common stock outstanding as of December 30, 2005. Applicant has no outstanding warrants, options, or rights to purchase its voting securities, other than the options granted or to be granted to its directors, officers, and employees under the Other Plans and the Plan. Applicant's Legal Analysis 1. Section 63(3) of the Act permits a BDC to sell its common stock at a price below current net asset value upon the exercise of any option issued in accordance with section 61(a)(3) of the Act. Section 61(a)(3)(B) of the Act provides, in pertinent part, that a BDC may issue to its non-employee directors options to purchase its voting securities pursuant to an executive compensation plan, provided that:
(a)The options expire by their terms within ten years;
(b)the exercise price of the options is not less than the current market value of the underlying securities at the date of the issuance of the options, or if no market exists, the current net asset value of the voting securities;
(c)the proposal to issue the options is authorized by the BDC's shareholders, and is approved by order of the Commission upon application;
(d)the options are not transferable except for disposition by gift, will or intestacy;
(e)no investment adviser of the BDC receives any compensation described in section 205(a)(1) of the Investment Advisers Act of 1940, except to the extent permitted by clause (b)(1) or (b)(2) of that section; and
(f)the BDC does not have a profit-sharing plan as described in section 57(n) of the Act. 2. In addition, section 61(a)(3) of the Act provides that the amount of the BDC's voting securities that would result from the exercise of all outstanding warrants, options, and rights at the time of issuance may not exceed 25% of the BDC's outstanding voting securities, except that if the amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights issued to the BDC's directors, officers, and employees pursuant to an executive compensation plan would exceed 15% of the BDC's outstanding voting securities, then the total amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights at the time of issuance will not exceed 20% of the outstanding voting securities of the BDC. 3. Applicant represents that the terms of the Plan meet all the requirements of section 61(a)(3)(B) of the Act. Applicant states that the Board is actively involved in the oversight of applicant's affairs and that it relies extensively on the judgment and experience of its Board. In addition to their duties as Board members generally, applicant states that the Non-employee Directors provide guidance and advice on operational issues, underwriting policies, credit policies, asset valuation and strategic direction, as well as serving on committees. Applicant believes that the Plan will provide significant at-risk incentives to Non-employee Directors to remain on the Board and devote their best efforts to ensure applicant's success. Applicant states that the options will provide a means for the Non-employee Directors to increase their ownership interests in applicant, thereby ensuring close identification of their interests with those of applicant and its stockholders. Applicant asserts that by providing incentives such as options, applicant will be better able to maintain continuity in the Board's membership and to attract and retain the highly experienced, successful and dedicated business and professional people who are critical to applicant's success as a BDC. 4. Applicant states that the maximum number of voting securities that would result from the exercise of all outstanding options issued or options issuable to the directors, officers, and employees under the Other Plans and the Plan would be 12,240,580 shares, or approximately 10.3% of applicant's common stock outstanding as of December 30, 2005, which is below the percentage limitations in the Act. Applicant asserts that, given the relatively small amount of common stock issuable upon the exercise of the options under the Plan, the exercise of options would not, absent extraordinary circumstances, have a substantial dilutive effect on the net asset value of applicant's common stock. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Jill M. Peterson, Assistant Secretary. [FR Doc. E6-1542 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27221] Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 January 31, 2006. The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of January, 2006. A copy of each application may be obtained for a fee at the SEC's Public Reference Branch (tel. 202-551-5850). An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC's Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on February 27, 2006, and should be accompanied by proof of service on the applicant, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. For Further Information Contact: Diane L. Titus at
(202)551-6810, SEC, Division of Investment Management, Office of Investment Company Regulation, 100 F Street, NE., Washington, DC 20549-0504. WPG Large Cap Growth Fund [File No. 811-1447]; WPG Tudor Fund [File No. 811-1745]; Weiss Peck & Greer Funds Trust [File No. 811-4404] *Summary:* Each applicant seeks an order declaring that it has ceased to be an investment company. On April 29, 2005, each applicant transferred its assets to a corresponding series of the RBB Fund, Inc., based on net asset value. Total expenses of $667,090 incurred in connection with the reorganizations were paid by Robeco USA, L.L.C., applicants' investment adviser. *Filing Date:* The applications were filed on December 16, 2005. *Applicants' Address:* 909 Third Ave., 31st Floor, New York, NY 10022. Security Municipal Bond Fund [File No. 811-3225] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 14, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $14,017 incurred in connection with the liquidation were paid by Security Management Company, LLC, applicant's investment adviser. *Filing Date:* The application was filed on November 30, 2005. *Applicant's Address:* One Security Benefit Place, Topeka, KS 66636-0001. Aquila Fund [File No. 811-4083] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On December 31, 2004, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $1,113 incurred in connection with the liquidation were paid by Aquila Investment Management LLC, applicant's investment adviser. *Filing Date:* The application was filed on December 19, 2005. *Applicant's Address:* 380 Madison Ave., New York, NY 10017. Forward Funds, Inc. [File No. 811-8419] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On June 30, 2005, each series of applicant transferred its assets to corresponding series of Forward Funds, based on net asset value. Expenses of $580,000 incurred in connection with the reorganization were paid by Forward Management, LLC, applicant's investment adviser. *Filing Date:* The application was filed on December 12, 2005. *Applicant's Address:* 433 California St., Suite 1100, San Francisco, CA 94104. Oppenheimer Multi-Sector Income Trust [File No. 811-5473] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On July 22, 2005, applicant transferred its assets to Oppenheimer Strategic Income Fund, based on net asset value. Expenses of $88,313 incurred in connection with the reorganization were paid by applicant. *Filing Date:* The application was filed on December 13, 2005. *Applicant's Address:* 6803 S. Tucson Way, Centennial, CO 80112. Oppenheimer Capital Preservation Fund [File No. 811-8799] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On February 10, 2005, applicant transferred its assets to Oppenheimer Cash Reserves, based on net asset value. Expenses of $55,563 incurred in connection with the reorganization were paid by applicant. *Filing Date:* The application was filed on December 20, 2005. *Applicant's Address:* 6803 S. Tucson Way, Centennial, CO 80112. Quadrant Fund, Inc. [File No. 811-21704] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On November 3, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $75,000 incurred in connection with the liquidation were paid by applicant and GMAC Institutional Advisors LLC, applicant's investment adviser. Applicant has retained approximately $123,000 to pay additional accrued expenses for which it has not yet been billed. *Filing Date:* The application was filed on December 21, 2005. *Applicant's Address:* 116 Welsh Rd., Horsham, PA 19044. Columbia National Municipal Bond Fund, Inc. [File No. 811-7832] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On June 17, 2005, applicant made liquidating distribution to its shareholders, based on net asset value. Applicant paid approximately $27,510 in expenses incurred in connection with the liquidation. *Filing Dates:* The application was filed on October 21, 2005 and amended on January 11, 2006. *Applicant's Address:* One Financial Center, Boston, MA 02110. Tax-Free Income Trust [File No. 811-7397] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. By October 18, 2005, applicant's two shareholders had redeemed all their shares at net asset value. Expenses of $4,890 incurred in connection with the liquidation were paid by Ameriprise Financial, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on November 18, 2005, and amended on January 18, 2006. *Applicant's Address:* 901 Marquette Avenue South, Suite 2810, Minneapolis, MN 55402-3268. BQT Subsidiary Inc. [File No. 811-10451] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On December 13, 2004, applicant made a liquidating distribution to its shareholders based on net asset value. Applicant incurred no expenses in connection with the liquidation. *Filing Date:* The application was filed on December 30, 2005. *Applicant's Address:* 100 Bellevue Parkway, Wilmington, DE 19809. Sterling Capital Corporation [File No. 811-1537] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On September 13, 2005, applicant transferred its assets to The Gabelli Equity Trust Inc. (“Gabelli”). Applicant's shareholders received .7914 newly issued shares of Gabelli common stock for each share of applicant, which represented a 1.4% premium to applicant's net asset value. Expenses of $121,000 incurred in connection with the reorganization were paid by applicant. Applicant has transferred $250,000 in cash to a liquidating trust to pay applicant's remaining liabilities. Any cash remaining after applicant's liabilities are paid will be distributed pro rata to applicant's former shareholders. *Filing Date:* The application was filed on December 15, 2005. *Applicant's Address:* 100 Wall St., 11th Floor, New York, NY 10005. Lorent Investment Company [File No. 811-2935] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering. Applicant has fewer than one hundred beneficial owners and will continue to operate as private investment vehicle in reliance on section 3(c)(1) of the Act. *Filing Dates:* The application was filed on July 1, 2005, and amended on August 16, 2005 and January 13, 2006. *Applicant's Address:* 500 West Harbor Dr., Suite 1213, San Diego, CA 92101. Pilgrim Government Securities Income Fund, Inc. [File No. 811-4031] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On February 23, 2001, applicant transferred its assets to ING GNMA Income Fund, Inc. (formerly Pilgrim GNMA Income Fund, Inc.), based on net asset value. Expenses of $106,385 incurred in connection with the reorganization were paid by applicant, the acquiring fund, and applicant's investment adviser, ING Investments, LLC. *Filing Dates:* The application was filed on October 19, 2001, and amended on September 9, 2005 and January 24, 2006. *Applicant's Address:* 7337 East Doubletree Ranch Rd., Scottsdale, AZ 85258. Pilgrim Silver Fund, Inc. [File No. 811-4111] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 23, 2001, applicant transferred its assets to ING Precious Metals Fund, Inc. (formerly Pilgrim Precious Metals Fund, Inc.), based on net asset value. Expenses of $28,135 incurred in connection with the reorganization were paid by applicant, the acquiring fund, and applicant's investment adviser, ING Investments, LLC. *Filing Dates:* The application was filed on October 19, 2001, and amended on September 9, 2005 and January 24, 2006. *Applicant's Address:* 7337 East Doubletree Ranch Rd., Scottsdale, AZ 85258. Pilgrim SmallCap Asia Growth Fund, Inc. [File No. 811-7287] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 23, 2001, applicant transferred its assets to ING Asia-Pacific Equity Fund, a series of ING Advisory Funds, Inc. (formerly Pilgrim Advisory Funds, Inc.), based on net asset value. Expenses of $19,892 incurred in connection with the reorganization were paid by applicant, the acquiring fund, and applicant's investment adviser, ING Investments, LLC. *Filing Dates:* The application was filed on October 19, 2001, and amended on September 9, 2005, and January 24, 2006. *Applicant's Address:* 7337 East Doubletree Ranch Rd., Scottsdale, AZ 85258. Pilgrim Global Technology Fund, Inc. [File No. 811-9649] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 23, 2001, applicant transferred its assets to ING Global Information Technology Fund, a series of ING Funds Trust (formerly Pilgrim Funds Trust), based on net asset value. Expenses of $20,972 incurred in connection with the reorganization were paid by applicant, the acquiring fund, and applicant's investment adviser, ING Investments, LLC. *Filing Dates:* The application was filed on October 19, 2001, and amended on September 9, 2005 and January 24, 2006. *Applicant's Address:* 7337 East Doubletree Ranch Rd., Scottsdale, AZ 85258. Pilgrim High Yield Fund III [File No. 811-5496]; Pilgrim Global Income Fund, Inc. [File No. 811-4675]; Pilgrim Global Corporate Leaders Fund, Inc. [File No. 811-5113]; Pilgrim Worldwide Emerging Markets Fund, Inc. [File No. 811-1838] *Summary:* Each applicant seeks an order declaring that it has ceased to be an investment company. On March 31, 2000, February 23, 2001, February 23, 2001 and April 27, 2001, respectively, each applicant transferred its assets to a corresponding series of ING Mutual Funds (formerly Pilgrim Mutual Funds), based on net asset value. Expenses incurred in connection with the reorganizations were paid by applicants, the acquiring funds, and applicants' investment adviser, ING Investments, LLC. *Filing Dates:* The applications were filed on October 19, 2001, and amended on September 9, 2005 and January 24, 2006. *Applicants' Address:* 7337 East Doubletree Ranch Rd., Scottsdale, AZ 85258. Acacia Variable Annuity Separate Account (formerly Acacia National Variable Annuity Separate Account II) [File No. 811-07627] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. Substantially all the assets of Applicant were transferred by Acacia National Life Insurance Company (Acacia National) to Ameritas Variable Life Insurance Company (Ameritas) under an assumption and reinsurance agreement transaction approved by the Securities and Exchange Commission in Release No. IC-25763, dated October 4, 2002. The Board of Directors of the parent of Acacia National approved the transfer of assets to Ameritas on December 3, 2001, and Applicant completed the transfer of its assets effective November 1, 2004. Shareholder approval of the transfer was not required. The fund surviving the transfer is Ameritas Variable Separate Account VA. Ameritas paid all the expenses incurred in connection with the transfer. *Filing Date:* The application was filed on November 29, 2005, as amended. *Applicant's Address:* 7315 Wisconsin Avenue, Bethesda, MD 20814. Acacia Variable Life Separate Account (formerly Acacia National Variable Life Separate Account 1) [File No. 811-08998] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. Substantially all the assets of Applicant were transferred by Acacia National Life Insurance Company (Acacia National) to Ameritas Variable Life Insurance Company (Ameritas) under an assumption and reinsurance agreement transaction approved by the Securities and Exchange Commission in Release No. IC-25763, dated October 4, 2002. The Board of Directors of the parent of Acacia National approved the transfer of assets to Ameritas on December 3, 2001, and Applicant completed the transfer of its assets effective November 1, 2004. Shareholder approval of the transfer was not required. The fund surviving the transfer is Ameritas Variable Separate Account VL. Ameritas paid the expenses incurred in connection with the transfer. *Filing Date:* The application was filed on November 29, 2005, as amended. *Applicant's Address:* 7315 Wisconsin Avenue, Bethesda, MD 20814. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Nancy M. Morris, Secretary. [FR Doc. E6-1575 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. PA-35; File No. S7-04-06] Privacy Act of 1974: Establishment of a New System of Records: Automated Emergency Notification System (SEC-53) AGENCY: Securities and Exchange Commission. ACTION: Notice of the establishment of a new system of records. SUMMARY: In accordance with the requirements of the Privacy Act of 1974, as amended, 5 U.S.C. 552a, the Securities and Exchange Commission gives notice of a proposed Privacy Act system of records: “Automated Emergency Notification System (SEC-53).” This system will contain emergency contact information for current members, employees, and selected contractors of the Commission. DATES: The new system will become effective March 20, 2006 unless further notice is given. The Commission will publish a new notice if the effective date is delayed to review comments or if changes are made based on comment received. To be assured of consideration, comments should be received on or before March 8, 2006. ADDRESSES: Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/other.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number S7-04-06 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number S7-04-06. This file number should be included on the subject line if e-mail is used. To help us 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/other.shtml* ). Comments are also available for public inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. FOR FURTHER INFORMATION CONTACT: Barbara A. Stance, Chief Privacy Officer, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-7, Alexandria, VA 22312-2413,
(202)551-7209. SUPPLEMENTARY INFORMATION: The Commission gives notice of the proposed establishment of a new system of records, entitled “Automated Emergency Notification System (SEC-53).” The new system will contain emergency contact information for current members, employees, and selected contractors of the Commission. The Commission has submitted a report of the new system of records to the Senate Committee on Homeland Security and Governmental Affairs, the House Committee on Government Reform, and the Office of Management and Budget, pursuant to 5 U.S.C. 552a(r) of the Privacy Act of 1974, as amended, and Appendix I to OMB Circular A-130, “Federal Agency Responsibilities for Maintaining Records About Individuals,” as amended on February 20, 1996 (61 FR 6435). Accordingly, the Commission is adding a new system of records to read as follows: SEC-53 SYSTEM NAME: Automated Emergency Notification System. SYSTEM LOCATION: Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM: Members and employees of the Commission, and selected contractors. CATEGORIES OF RECORDS IN THE SYSTEM: Name, Commission division or office, home zip code, work and personal electronic mail addresses, work, home and cellular telephone numbers, and Blackberry PIN numbers. AUTHORITY FOR MAINTENANCE OF THE SYSTEM: 5 U.S.C. 301 and Executive Order 12656 of Nov. 18, 1988 on Assignment of Emergency Preparedness Responsibilities. PURPOSE(S): The purpose of this system of records is to maintain emergency contact information for current members, employees and selected contractors of the Commission. The system provides for high-speed message delivery that reaches all Commission personnel in response to threat alerts issued by the Department of Homeland Security, weather related emergencies or other critical situations that disrupt the operations and accessibility of a worksite. The system also provides for personnel accountability during an emergency, through personnel sign-in and rapid alert and notification. ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES OF USERS AND THE PURPOSE OF SUCH USES: In addition to the conditions of disclosure under 5 U.S.C. 552a(b), Commission staff may provide these records to any Federal government authority for the purpose of coordinating and reviewing agency continuity of operations plans or emergency contingency plans developed for responding to Department of Homeland Security threat alerts, weather related emergencies or other critical situations. POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, AND DISPOSING OF RECORDS IN THE SYSTEM: STORAGE: Records are maintained in a computerized database and on paper. Paper documents are kept in filing cabinets in secured facilities. RETRIEVABILITY: Records may be retrieved by the individual's name or by the categories listed above under “Categories of Records in the System.” SAFEGUARDS: Records are safeguarded by restricted computer passwords, locked file cabinets, and safes. Access to the records is restricted to those who require the records in the performance of official duties related to the purposes for which the system is maintained. RETENTION AND DISPOSAL: Periodic purging and disposal of those records concerning individuals no longer members, employees or contractors of the Commission. Otherwise, records are retained and disposed of in accordance with the appropriate National Archives and Records Administration General Records Schedules. SYSTEM MANAGER(S) AND ADDRESS: Executive Director, Office of the Executive Director, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1627. NOTIFICATION PROCEDURES: All requests to determine whether this system of records contains a record pertaining to the requesting individual may be directed to the Privacy Act Officer, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-7, Alexandria, VA 22312-2413. RECORD ACCESS PROCEDURES: Persons wishing to obtain information on the procedures for gaining access to or contesting the contents of this record may contact the Privacy Act Officer, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-7, Alexandria, VA 22312-2413. CONTESTING RECORDS PROCEDURES: See record access procedures above. RECORD SOURCE CATEGORIES: Information is provided by current members and employees of the Commission and selected contractors. EXEMPTIONS CLAIMED FOR THE SYSTEM: None. Dated: January 31, 2006. By the Commission. Nancy M. Morris, Secretary. [FR Doc. E6-1574 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53191; File No. SR-Amex-2005-061] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Change and Amendment No. 1 Thereto Relating to the Listing and Trading of Options on Certain Russell Indexes January 30, 2006. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, 2 notice is hereby given that on June 3, 2005, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. 3 On July 14, 2005, Amex submitted Amendment No. 1 to the proposed rule change. 4 The Commission is publishing this notice and order to solicit comments on the proposed rule change, as amended, from interested persons and to approve the proposal on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 The Commission has made technical and clarifying changes to this notice with Amex's consent. Telephone conversation between Florence Harmon, Special Counsel, Division of Market Regulation (“Division”), Commission, Angela Muehr, Attorney, Division, Commission, Kristie Diemer, Attorney, Division, Commission and Jeffrey P. Burns, Associate General Counsel, Amex on June 29, 2005. 4 In Amendment No. 1, Amex made clarifying changes to the contract specifications. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade on the Exchange the following cash-settled, European-style index options on the full value of the following Russell Indexes:
(1)Russell 1000® Index;
(2)Russell 1000® Growth Index;
(3)Russell 1000® Value Index;
(4)Russell 2000® Index;
(5)Russell 2000® Growth Index;
(6)Russell 2000® Value Index;
(7)Russell 3000® Index;
(8)Russell 3000® Growth Index;
(9)Russell 3000® Value Index;
(10)Russell Midcap® Index;
(11)Russell Midcap® Growth Index;
(12)Russell Midcap® Value Index and
(13)Russell Top 50® Index (each an “Index,” and collectively, the “Russell Indexes” or “Indexes”). Additionally, the Exchange is also proposing to be able to list and trade long-term options on each of the full value Russell Indexes noted above. 5 5 Under Amex Rule 903C(a)(iii), “Long-term Options Series,” the Exchange may list long-term options that expire twelve to sixty months from the date of issuance. The text of the proposed rule change is available on Amex's Web site at *http://www.amex.com,* at Amex's principal office 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 received on the proposed rule change. The text of these statements may be examined at the places specified in Item III 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 the Statutory Basis for, the Proposed Rule Change
(1)Purpose The purpose of the proposed rule change is to permit the Exchange to list and trade cash-settled, European-style, stock index options on the Russell Indexes. Each Russell Index is a capitalization-weighted index containing various groups of stocks drawn from the largest 3,000 companies incorporated in the U.S. and its territories. All component securities of the Russell Indexes are traded on the Amex, New York Stock Exchange, Inc. (“NYSE”), or The Nasdaq Stock Market, Inc. (“Nasdaq”). Options contracts on the Russell Indexes (except for the Russell Top 50) are currently listed and traded on the Chicago Board Options Exchange, Incorporated (“CBOE”) and the International Securities Exchange, Inc. (“ISE”). 6 6 *See* Securities Exchange Act Release Nos. 51619 (April 27, 2005), 70 FR 22947 (May 3, 2005) (approving the listing and trading of ISE options on 21 Russell Indexes); 49388 (March 10, 2004), 69 FR 12720 (March 17, 2004) (approving listing and trading on CBOE of options, including LEAPS, on the Russell Top 200 Index, Russell Top 200 Growth Index, and the Russell Top 200 Value Index); 48591 (October 2, 2003), 68 FR 58728 (October 10, 2003) (approving listing and trading on CBOE of options, including LEAPS, on the Russell 3000 Index, Russell 3000 Value Index, Russell 3000 Growth Index, Russell 2000 Value Index, Russell 2000 Growth Index, Russell 1000 Index, Russell 1000 Value Index, Russell 1000 Growth Index, Russell MidCap Index, Russell MidCap Value Index, and Russell MidCap Growth Index); and 31382 (October 30, 1992), 57 FR 52802 (November 5, 1992) (approving listing and trading on CBOE of options, including LEAPS, on the Russell 2000 Index). Amex recently listed the Rydex Russell Top 50 ETF and options on the Rydex Russell Top 50 ETF. *See http://www.amex.com.* Index Design and Composition The Russell Indexes are designed to be a comprehensive representation of the investable U.S. equity market. These Indexes are capitalization-weighted and include only those common stocks of corporations domiciled in the U.S. and its territories and that are traded on Amex, NYSE, or Nasdaq. The component securities are weighted by their “available” market capitalization (also called “float-adjusted” market capitalization), which is calculated by multiplying the primary market price by the “available” shares. 7 7 “Available shares” are the total shares outstanding less corporate cross-owned shares, ESOP and LESOP-owned shares comprising 10% or more of shares outstanding, unlisted share classes and shares held by an individual, a group of individuals acting together, a corporation not in the index that owns 10% or more of the shares outstanding or shares subject to IPO lock-ups. ESOP and LESOP-owned shares represent, generally, those shares of a corporation that are owned through employee stock ownership plans. The following is a brief description of each Index: 8 8 Additional information about the Russell Indexes can be found at *http://russell.com/us/indexes/us/definitions.asp.* Russell 3000—Measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. Russell 3000 Growth—Measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000 Growth or the Russell 2000 Growth indexes. Russell 3000 Value—Measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000 Value or the Russell 2000 Value. Russell 2000—Measures the performance of the 2,000 smallest companies in the Russell 3000 Index, representing approximately 8% of the total market capitalization of the Russell 3000 Index. Russell 2000 Growth—Measures the performance of those Russell 2000 Companies with higher price-to-book ratios and higher forecasted growth values. Russell 2000 Value—Measures the performance of those Russell 2000 Companies with lower price-to-book ratios and lower forecasted growth values. Russell 1000—Measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. Russell 1000 Growth—Measures the performance of those Russell 1000 Companies with higher price-to-book ratios and higher forecasted growth values. Russell 1000 Value—Measures the performance of those Russell 1000 Companies with lower price-to-book ratios and lower forecasted growth values. Russell Midcap—Measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 26% of the total market capitalization of the Russell 1000 Index. Russell Midcap Growth—Measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth index. Russell Midcap Value—Measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value index. Russell Top 50—Measures the performance of the 50 largest companies in the Russell 3000 Index, representing approximately 41% of the total market capitalization of the Russell 3000. All equity securities listed on Amex, NYSE, or Nasdaq are considered for inclusion in the universe of stocks that comprise the Russell Indexes, with the following exceptions:
(1)Stocks trading less than $1.00 per share on May 31 each year;
(2)non-U.S. incorporated companies; and
(3)preferred and convertible preferred stock, redeemable shares, participating preferred stock, warrants and rights, trust receipts, royalty trusts, limited liability companies, Bulletin Board and Pink Sheet stocks, closed-end investment companies, limited partnerships, and foreign stocks. As a special exception, Berkshire Hathaway is also excluded. The Russell 3000 Index is comprised of the top 3,000 eligible stocks ranked by available market capitalization. All of these stocks are “reported securities,” as defined in Rule 11Aa3-1(a)(4) under the Act. 9 9 17 CFR 240.11Aa3-1(a)(4), n/k/a Rule 600(47) of Regulation NMS under the Act, 17 CFR 242.600(47). Telephone conversation between Florence Harmon, Special Counsel, Division, Commission and Jeffrey P. Burns, Associate General Counsel, Amex on January 29, 2006. All of the Russell Indexes described above are subsets of the Russell 3000 Index. The Growth and Value versions of each of the Russell 1000, Russell 2000, Russell 3000 and Russell Midcap may contain common components, but the capitalization of those components is apportioned so that the sum of the total capitalization of the Growth and Value indexes equals the total capitalization of the respective primary index. As of May 5, 2005, the stocks comprising the Russell 3000 Index (and the other Russell Indexes) had an average market capitalization of $4.519 billion ranging from a high of $380.007 billion (General Electric Co.) to a low of $22.2 million (ITC Deltacom, Inc.). The number of available shares outstanding ranged from a high of 10.8 billion (Microsoft Corp.) to a low of 1.26 million (Seaboard Co.), and averaged 144.5 million shares. The six-month average daily trading volume for Russell 3000 Index components was 1.072 million shares per day, ranging from a high of 83.2 million shares per day (Sirus Satellite Radio) to a low of 1,500 shares per day (Wesco Financial Corp.). Component securities that averaged less than 50,000 shares per day for the previous six months accounted for 0.75% of the index weight. Over 66.18% of the Russell 3000 Index components satisfied Amex's listing criteria for equity options as set forth in Amex Rule 915, representing over 94.82% of the index weight. The Russell Indexes themselves range in capitalization from a high of $13.6 trillion (Russell 3000) to a low of $866.2 billion (Russell 2000 Growth). The number of index components range from a high of 3,019 (Russell 3000) to a low of 49 (Russell Top 50). The Russell 1000 Growth Index has the highest percentage of options-eligible components with 100% by weight and 100% by number. The Russell 2000 Value Index has the lowest percentage of options-eligible components with 54.70% by weight and 44.97% by number. Index Calculation and Index Maintenance The values of each Index are currently calculated by Reuters on behalf of the Frank Russell Company and would be disseminated at 15-second intervals during regular Amex trading hours to market information vendors via the Options Price Reporting Authority (“OPRA”). The methodology used to calculate the value of the Russell Indexes is similar to the methodology used to calculate the value of other well-known market-capitalization weighted indexes. The level of each Index reflects the total market value of the component stocks relative to a particular base period and is computed by dividing the total market value of the companies in each Index by its respective index divisor. The divisor is adjusted periodically to maintain consistent measurement of each Index. The following is a table of base dates and the respective Index levels as of May 5, 2005: \\ Index Base date/ Base index value 05/05/2005 Index value Russell 3000 12/31/86 = 140.00 670.29 Russell 3000 Growth 3/16/00 = 700.00 379.95 Russell 3000 Value 3/16/00 = 700.00 848.58 Russell 2000 12/31/86 = 135.00 595.64 Russell 2000 Growth 3/16/00 = 500.00 303.72 Russell 2000 Value 3/16/00 = 500.00 892.40 Russell 1000 12/31/86 = 130.00 632.33 Russell 1000 Growth 8/31/92 = 200.00 470.62 Russell 1000 Value 8/31/92 = 200.00 648.51 Russell Midcap 12/31/86 = 200.00 768.48 Russell Midcap Growth 3/16/00 = 500.00 321.56 Russell Midcap Value 3/16/00 = 500.00 859.76 Russell Top 50 12/31/01 = 1,000 973.11 Options on the Russell Indexes would expire on the Saturday following the third Friday of the expiration month. Trading in options on the Russell Indexes would normally cease at 4:15 p.m. Eastern time (“ET”) on the Thursday preceding an expiration Saturday. The exercise settlement value at expiration of each Russell Index option would be calculated by Reuters on behalf of the Frank Russell Company, based on the opening prices of the Index's component securities on the last business day prior to expiration (“Settlement Day”). 10 The Settlement Day would normally be the Friday preceding “Expiration Saturday.” If a component security in a Russell Index does not trade on Settlement Day, the last reported sales price in the primary market from the previous trading day would be used to calculate the settlement value. Settlement values for the Russell Indexes would be disseminated by OPRA. 10 The aggregate exercise value of the option contract is calculated by multiplying the Index value by the Index multiplier, which is 100. The Russell Indexes are monitored and maintained by the Frank Russell Company. The Frank Russell Company is responsible for making all necessary adjustments to the Indexes to reflect component deletions, share changes, stock splits, stock dividends (other than an ordinary cash dividend), and stock price adjustments due to restructuring, mergers, or spin-offs involving the underlying components. Some corporate actions, such as stock splits and stock dividends, require simple changes to the available shares outstanding and the stock prices of the component securities. Other corporate actions, such as share issuances, change the market value of the Indexes and would require the use of an index divisor to effect adjustments. The Russell Indexes are re-constituted annually on June 30th, based on prices and available shares outstanding as of the preceding May 31st. New index components are added only as part of the annual re-constitution and, after which, should a component security be removed from an index for any reason, it cannot be replaced until the next re-constitution. Although not involved in the maintenance of any of the Russell Indexes, the Exchange would monitor each Russell Index on a quarterly basis and notify the Commission's Division by filing a proposed rule change pursuant to Rule 19b-4 of the Act 11 if:
(i)The number of securities in any Index drops by one-third or more;
(ii)10% or more of the weight of any Index is represented by component securities having a market value of less than $75 million;
(iii)less than 80% of the weight of any Index is represented by component securities that are eligible for options trading pursuant to Amex Rule 915;
(iv)10% or more of the weight of any Index is represented by component securities trading less than 20,000 shares per day; or
(v)the largest component security in any Index accounts for more than 15% of the weight of the Index, or the largest five components in the aggregate account for more than 50% of the weight of the Index. 11 17 CFR 240.19b-4. The Exchange would also notify the Division immediately if the Frank Russell Company ceases to maintain or calculate any of the Russell Indexes on which Amex is proposing to list and trade options, or if the value of any of these Russell Indexes is not disseminated every 15 seconds by a widely available source. If a Russell Index ceases to be maintained or calculated, or its values are not disseminated every 15 seconds by a widely available source, the Exchange would not list any additional series for trading and would limit all transactions in options on that Index to closing transactions only for the purpose of maintaining a fair and orderly market and protecting investors. Contract Specifications The proposed contract specifications for the options on the Russell Indexes are based on the contract specifications of similar options currently listed on CBOE and ISE. 12 The Russell Indexes are broad-based indexes, as defined in Amex Rule 900C(b)(1). Options on the Russell Indexes would be European-style and a.m. cash-settled. The Exchange's standard trading hours for broad-based index options (9:30 a.m. to 4:15 p.m. ET), as set forth in Commentary .02 to Amex Rule 1, would apply to options on the Russell Indexes. Exchange rules that apply to the trading of options on broad-based indexes would also apply to options on the Russell Indexes. 13 The trading of these options would also be subject to, among others, Exchange rules governing margin requirements and trading halt procedures for index options. 12 *See supra* note 6. 13 *See* Amex Rules 900C through 980C. For options on the Russell Indexes, the Exchange proposes to establish in Amex Rule 904C(b) an aggregate position limit of 50,000 contracts on the same side of the market, provided that no more than 30,000 of such contracts are in the nearest expiration month series. 14 These limits are identical to the limits applicable to options based on the Russell Indexes that currently trade on CBOE and ISE. 15 14 14 The same limits that apply to position limits would apply to exercise limits for these products. 15 *See* CBOE Rule 24.4(e) and ISE Rule 2004. However, neither CBOE nor ISE currently list and trade options on the Russell Top 50. The Exchange believes that the proposed position and exercise limits for the Russell Top 50 is appropriate because it measures the performance of the 50 largest companies in the Russell 3000 Index, representing approximately 41% of the total market capitalization of the Russell 3000. Russell Midcap options traded on both CBOE and ISE have the same position and exercise limits as are proposed for the Russell Top 50 options. The Russell Midcap measures the performance of the 800 smallest companies in the Russell 1000 Index, representing approximately 26% of the total market capitalization of the Russell 1000 Index. Since the Russell Top 50 represents 41% of the Russell 3000 as compared to the Russell Midcap representing 26% of the Russell 1000, the Exchange believes that the same position and exercise limits are appropriate. Accordingly, the Exchange submits that the Russell Top 50 should have position and exercise limits of 50,000 contracts with no more than 30,000 for the near term. Commentary .01(c) to Amex Rule 904C provides that position limits for hedged index options may not exceed twice the established position limits for broad stock index groups. The Exchange proposes that a hedge exemption of 75,000 be available for the Russell Indexes. Furthermore, pursuant to Commentary .02 to Amex Rule 904C, proprietary accounts of member organizations could receive an exemption of up to three times the established position limit for the purpose of facilitating public customer orders, to the extent they comply with the procedures and criteria listed in Commentary .02 to Amex Rules 950(d) and 950(d)—ANTE. The Exchange proposes to apply broad-based index margin requirements for the purchase and sale of options on the Russell Indexes. Accordingly, purchases of put or call options with nine months or less until expiration would have to be paid for in full. Writers of uncovered put or call options would have to deposit/maintain 100% of the option proceeds, plus 15% of the aggregate contract value (current index level × $100), less any out-of-the-money amount, subject to a minimum of the option proceeds plus 10% of the aggregate contract value for call options and a minimum of the option proceeds plus 10% of the aggregate exercise price amount for put options. The Exchange proposes to set a strike price interval of at least 2 1/2 points for a near-the-money series in a near-term expiration month when the level of a Russell Index is below 200, a 5-point strike price interval for any options series with an expiration up to one year, and at least a 10-point strike price interval for any longer-term option. The minimum tick size for series trading below $3 would be $0.05, and for series trading at or above $3 would be $0.10. The Exchange proposes to list options on the Russell Indexes in the three consecutive near-term expiration months, plus up to three successive expiration months in the March cycle. For example, consecutive expirations of January, February, March, plus June, September, and December expirations would be listed. 16 In addition, long-term option series having up to 60 months to expiration may be traded. 17 The trading of long-term options on the Russell Indexes would be subject to the same rules that govern all the Exchange's index options, including sales practice rules, margin requirements, and trading rules. 16 *See* Amex Rule 903C(a). 17 *See* Amex Rule 903C(a)(iii). Surveillance and Capacity The Exchange represents that it has an adequate surveillance program in place for options on the Russell Indexes and intends to apply those same procedures that it applies to the Exchange's other index options. In addition, the Exchange is a member of the Intermarket Surveillance Group (“ISG”). The members of the ISG include all of the national securities exchanges, plus the National Association of Securities Dealers, Inc. The ISG members work together to coordinate surveillance and share information regarding the stock and options markets. In addition, the major futures exchanges are affiliated members of the ISG, which allows for the sharing of surveillance information for potential intermarket trading abuses. The Exchange also represents that it has the necessary systems capacity to support the new options series that would result from the introduction of options on the Russell Indexes, including long-term options. The Exchange has provided the Commission with system capacity information to support this representation.
(2)Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6 of the Act, 18 in general, and furthers the objectives of Section 6(b)(5) of the Act, 19 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 facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 18 15 U.S.C. 78f. 19 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change does not 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 solicited or received with respect to the proposed rule change. 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-Amex-2005-061 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2005-061. 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 Amex. 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-2005-061 and should be submitted on or before February 27, 2006. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change 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. 20 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act, 21 which requires that the rules of an 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. 20 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 21 15 U.S.C. 78f(b)(5). The Commission notes that it previously has found that the listing and trading on CBOE and ISE of options on most of the Russell Indexes described above, and CBOE's position and ISE's position and exercise limits associated with those options, are consistent with the Act. Amex has proposed substantially the same contract specifications for these options, as well as identical position and exercise limits for these options. The Commission presently is not aware of any issue that would cause it to revisit those earlier findings or preclude the listing and trading of these options on Amex. Amex also has proposed to list and trade new options on the Russell Top 50 Index—options that have not previously been approved by the Commission for listing and trading on any national securities exchange. The Commission believes that the composition of this Index and the characteristics of Amex's proposed options on this Index will minimize the potential for manipulation, and that listing and trading them on Amex is reasonable and consistent with the Act. As noted above, the Russell Indexes are designed to represent broad segments of the U.S. equity securities markets. Furthermore, Amex has represented that it would notify the Commission if:
(i)The number of securities in any Index drops by one-third or more;
(ii)10% or more of the weight of any Index is represented by component securities having a market value of less than $75 million;
(iii)less than 80% of the weight of any Index is represented by component securities that are eligible for options trading pursuant to Amex Rule 915;
(iv)10% or more of the weight of any Index is represented by component securities trading less than 20,000 shares per day; or
(v)the largest component security accounts for more than 15% of the weight of any Index or the largest five components in the aggregate account for more than 50% of the weight of any Index. The Commission also believes that the position and exercise limits for the new Russell Index options, including the index hedge exemption from such position limits, are reasonable and consistent with the Act. These limits are modeled on existing position and exercise limits for options on very similar Russell Indexes that previously have been approved by the Commission. In approving this proposal, the Commission has specifically relied on the following representations made by the Exchange: 1. The Exchange will notify the Division immediately if the Frank Russell Company ceases to maintain or calculate any Russell Index on which an Amex option is based, or if the value of any such Russell Index is not disseminated every 15 seconds by a widely available source. If a Russell Index ceases to be maintained or calculated, or its values are not disseminated every 15 seconds by a widely available source, the Exchange will not list any additional series on that Index and will limit all transactions in such options to closing transactions only for the purpose of maintaining a fair and orderly market and protecting investors. 2. The Exchange has an adequate surveillance program in place for the proposed options on the Russell Indexes. 3. The additional quote and message traffic that will be generated by listing and trading the proposed options on the Russell Indexes will not exceed the Exchange's current message capacity allocated by the Independent System Capacity Advisor. The Commission further notes that, in approving this proposal, it relied on the Exchange's discussion of how the Frank Russell Company currently calculates the Russell Indexes. If the manner in which any Russell Index is calculated were to change substantially, this approval order, with respect to any Amex options on that Index, might no longer be effective. The Commission finds good cause for approving this proposal before the thirtieth day after the publication of notice thereof in the **Federal Register** . Most of the proposed options on the Russell Indexes already have been approved for listing and trading on another exchange and are governed by contract specifications that are substantially the same as those proposed by Amex. The new options proposed by Amex will be governed by contract specifications that are substantially the same as those that govern the similar existing products. Therefore, accelerating approval of Amex's proposal should benefit investors by creating, without undue delay, additional competition in the market for the existing options, as well as an additional investment opportunity with regard to the new options. V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 22 that the proposed rule change, as amended (SR-Amex-2005-061), is hereby approved. 22 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 23 23 17 CFR 200.30-3(a))12). Nancy M. Morris, Secretary. [FR Doc. E6-1536 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53187; File No. SR-NASD-2006-006] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Modify the Hours of Operation of Nasdaq's Brut System January 30, 2006. 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 January 20, 2006, the National Association of Securities Dealers, Inc.(“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), submitted to the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by Nasdaq. Nasdaq filed the proposed rule change pursuant to section 19(b)(3)(A) of the Act 3 which renders it effective upon filing with the Commission. On January 25, 2006, the Amex filed Amendment No. 1 to the proposed rule change. 4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 Amendment No. 1 clarified that the filing was made pursuant to section 19(b)(3)(A)(iii) of the Act and Rule 19b-4(f)(6) thereunder. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to amend NASD Rule 4912. The text of the proposed rule change is below. Additions are *italicized;* deletions are [bracketed]. 5 5 Changes are marked to the rule text that appears in the electronic NASD Manual found at *http://www.nasd.com.* Prior to the date when The NASDAQ Stock Market LLC (“NASDAQ LLC”) commences operations, NASDAQ LLC will file a conforming change to the rules of NASDAQ LLC approved in Securities Exchange Act Release No. 53128 (January 13, 2006). 4912. Normal Business Hours The Brut System operates from [6:30] 7:30 a.m. to 8:00 p.m. Eastern Time on each business day. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq 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 Nasdaq proposes to modify the starting time for the Brut ECN hours of operation, order acceptance time, from 6:30 a.m. to 7:30 a.m. (Eastern Time). This change will standardize the system start times of the Nasdaq Market Center and Nasdaq's Brut Facility. The current configuration allows connectivity and order entry from the time the System is brought online beginning at 6:30 a.m., which allows orders and executions to begin at 6:30 a.m. 6 6 Phone call from Jonathan Cayne, Associate General Counsel, Nasdaq, to Angela R. Muehr, Attorney, Commission, on January 27, 2006. The proposed amendment would:
(1)Allow client connection from System up time, scheduled to begin at 6:30 a.m. (this process takes 10-15 minutes);
(2)Reject orders entered prior to 7:30 a.m.;
(3)Allow orders and executions beginning at 7:30 a.m. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with section 15A of the Act, 7 in general, and furthers the objectives of section 15A(b)(6) of the Act, 8 in particular, in that it is designed to protect investors and the public interest. 7 7 15 U.S.C. 78o-3. 8 8 15 U.S.C. 78o-3(6). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in 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. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Nasdaq has filed the proposed rule change pursuant to section 19(b)(3)(A) of the Act 9 and subparagraph (f)(6) of Rule 19b-4 thereunder. 10 Because the foregoing proposed rule change:
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder. As required under Rule 19b-4(f)(6)(iii), Nasdaq provided the Commission with written notice of its intent to file the proposed rule change at least five business days prior to filing the proposal with the Commission or such shorter period as designated by the Commission. 9 9 15 U.S.C. 78s(b)(3)(A). 10 10 17 CFR 240.19b-4(f)(6). At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 11 11 The effective date of the original proposed rule change is January 20, 2006 and the effective date of Amendment No. 1 is January 25, 2006. The proposed rule change does not become operative for 30 days from the date of filing. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change, as amended, under section 19(b)(3)(C) of the Act, the Commission considers the period to commence on January 25, 2006, the date on which Nasdaq submitted Amendment No. 1. *See* 15 U.S.C. 78s(b)(3)(C). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change 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-NASD-2006-006 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASD-2006-006. 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 Nasdaq. 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-NASD-2006-006 and should be submitted on or before February 27, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-1537 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53189; File No. SR-NASD-2006-007] Self-Regulatory Organizations; National Association of Securities Dealers, Inc; Notice of Filing of Proposed Rule Change Relating to Position Limits and Position Reporting Obligations for Conventional Index and Equity Options January 30, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on January 23, 2006, the National Association of Securities Dealers, Inc. (“NASD”) 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 NASD. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing to amend NASD Rule 2860 to:
(a)Revise the definition of the term “underlying index” to include indexes underlying standardized index options and other indexes that meet certain specified criteria; and
(b)allow members to calculate the position limits, in accordance with volume and float criteria specified by the options exchanges, for conventional equity options overlying securities that are part of the FTSE All-World Index Series. 3 The text of the proposed rule change is available on the NASD's Web site ( *http://www.nasd.com* ), at the NASD's principal office, and at the Commission's Public Reference Room. 3 The Financial Times and the London Stock Exchange operate the FTSE All-World Index Series, which covers approximately 30 different countries and over 1900 stocks. 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 NASD included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. 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 *Amendment to Definition of “Underlying Index”:* NASD Rule 2860 governs the activities of members in standardized and conventional options contracts. Paragraph (b)(5) of Rule 2860 imposes a position-reporting obligation on members when they or their customers establish options positions that exceed certain thresholds. Specifically, members are required to file, or cause to be filed, a report with NASD with respect to each account that establishes an aggregate position of 200 or more contracts on the same side of the market covering the same underlying security or index. The current definition of “underlying index” is limited to an index upon which a Nasdaq index option is based. 4 Since Nasdaq no longer trades any index options, this definition fails to require members to report positions in conventional index options. The proposed rule change would require members to report positions in conventional 5 index options and would require access firms to report position limits in standardized index options. 6 In a separate filing, in connection with NASD's proposed rule changes to reflect Nasdaq's separation from NASD following the Commission's approval of Nasdaq as a national securities exchange, 7 NASD has proposed to amend Rule 2860 to remove all references to Nasdaq. 8 4 Nasdaq briefly traded stock index options in the mid-1980s. 5 A “conventional option” is an option contract not issued or subject to issuance by the Options Clearing Corporation. *See* Rule 2860(b)(2)(N). 6 As noted in *Notice to Members* 01-01, the options position reporting requirements are applicable to all standardized options positions established by “access” firms or their customers and all conventional options positions established by members or their customers. Access firms, in this context, are understood to be NASD members that conduct a business in standardized options but are not themselves members of the options exchange upon which such options are listed and traded. 7 *See* In the Matter of the Application of the Nasdaq Stock Market LLC, Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131). 8 *See* Securities Exchange Act Release No. 52049 (July 15, 2005), 70 FR 42398 (July 22, 2005) (SR-NASD-2005-087). To require members to report members' and customers' positions in conventional index options, NASD proposes amending the definition of “underlying index” to mean an index underlying a “standardized index option” or “conventional index option.” In addition, the proposed rule change would define the terms “standardized index option” and “conventional index option.” Under the proposed rule change, the definition of “underlying index” would include indexes such as the S&P 500, Dow Jones Industrial Average, and the Nasdaq 100, because these indexes underlie standardized index options that are issued, or subject to issuance, by the Options Clearing Corporation. The proposed rule change also would amend the definition of “underlying index” to include certain indexes that do not underlie standardized index options but that meet specified criteria. The proposed criteria for customized indexes are based upon the standards in place at the options exchanges for listing narrow-based index options. 9 The purpose of these criteria is to exclude from the definition of “underlying index” indexes that are so narrowly constructed that they are the economic equivalent of, or have attributes of, an equity option on common stock. These criteria also serve to prevent the creation of an index so narrow as to subvert position limit requirements, which do not apply to conventional index options. 10 9 *See* , *e.g.* , Chicago Board Options Exchange (“CBOE”) Rule 24.2(b). 10 *See* NASD *Notice to Members* 94-46 (June 1994). Under the proposed rule change, a member would have the burden of demonstrating that an index meets the specified criteria before it would be considered a “conventional index option.” Thus, members should maintain detailed records to be able to demonstrate promptly, upon a request from NASD, that a particular “conventional index option” meets the necessary criteria. Members also should be aware that options based on a security that do not meet the definition of “conventional index option” would continue to be subject to position limits and position reporting requirements as if the non-conforming index were deconstructed into its equity security components. *Position Limits for Conventional Equity Options Overlying Certain Foreign Securities:* The proposed rule change also addresses the need for members to identify position limits for conventional equity options on securities that do not underlie a standardized equity option. Under Rule 2860(b)(3)(viii), the position limits for conventional equity options are the same as the limits for the standardized equity options overlying the same security. For example, if standardized equity options on ABC have a position limit of 75,000 contracts, then conventional equity options on ABC also have a position limit of 75,000 contracts. On the other hand, for an option on an equally liquid foreign security such as DEF, for which there are no standardized equity options, a member must obtain prior approval from NASD staff for any position limit in excess of 13,500 contracts (the base limit in the absence of a pilot program 11 ). Obtaining prior approval could place a significant burden on a member's ability to execute transactions with customers given the time difference between the foreign market and the U.S. market and the time frame in which customers typically desire to trade. 11 The six national securities exchanges that list and trade options have adopted pilot rules establishing higher position limits for standardized options. These pilots expire between February 23, 2006 and March 3, 2006. *See infra* note 12. The proposed rule change would allow members to calculate on their own the position limits for conventional equity options overlying securities that are part of the FTSE All-World Index Series using the volume and float criteria (as measured during the most recent six-month period) established by the option exchanges' rules. 12 The position limit levels are described in the chart below: 12 *See* Commentary .07 to American Stock Exchange Rule 904, section 7(c) of Chapter III of the Boston Options Exchange Rules, Interpretation .02 to CBOE Rule 4.11; International Securities Exchange Rule 412(d); Commentary .06 to Pacific Exchange Rule 6.8; Commentary .05 to Philadelphia Stock Exchange Rule 1001. Options position limit Criteria 22,500 (or 50,000 during the pilot period) Trading volume of 20,000,000 shares; or trading volume of 15,000,000 shares, *and* 40,000,000 shares currently outstanding. 31,500 (or 75,000 during the pilot period) Trading volume of 40,000,000 shares; or trading volume of 30,000,000 shares, *and* 120,000,000 shares currently outstanding. 60,000 (or 200,000 during the pilot period) Trading volume of 80,000,000 shares; or trading volume of 60,000,000 shares, *and* 240,000,000 shares currently outstanding. 75,000 (or 250,000 during the pilot period) Trading volume of 100,000,000 shares; or trading volume of 75,000,000 shares, *and* 300,000,000 shares currently outstanding. NASD has chosen the FTSE All-World Index Series 13 in part because the Commission staff has deemed securities in the predecessor to this index of foreign securities to receive comparable treatment to U.S. equity securities under the securities haircut provisions of the Commission's net capital rule as set forth in Rule 15c3-1 under the Exchange Act, 14 and the Federal Reserve Board recognizes this index for determining whether stocks are eligible for margin treatment. 15 Under the proposed rule change, a member would make a post-trade notice filing-within one business day—to NASD staff providing the necessary trade data and/or current float data to support the member's position limit calculation. Thus, in the example above, a conventional equity option on DEF would be subject to a position limit of 75,000 contracts rather than 13,500 contracts because the underlying securities' characteristics meet the volume and float thresholds established by the options exchanges necessary to raise the position limits from 13,500 contracts to 75,000 contracts, provided the member makes the necessary filing within the prescribed time. 13 In the event NASD designates another index in addition to or instead of the FTSE All-World Index Series, NASD will publish the designation of the new applicable index in a *Notice to Members* and provide members at least 30 days written notice of the change. 14 Letter to Dominic A. Carone, Capital Committee Chairman, Securities Industry Association from Michael Macchiaroli, Assistant Director, Division of Market Regulation, Commission, dated August 13, 1993. *See* 1993 SEC No-Act LEXIS 967 (Aug. 13, 1993). 15 *See* section 220.11(c) and
(d)of Regulation T, 12 CFR part 220.11(c) and (d). *See also* 69 FR 10601 (March 8, 2004) (removing certain foreign securities from the list of securities that meet the financial requirements of section 220.11(c) and
(d)of Regulation T). Under the proposed rule change, NASD staff would review the member's notice filing, and, if the staff determined that a member incorrectly assigned a position limit, it would notify the firm and instruct the firm to reduce its position promptly to fall below the appropriate limits determined by the NASD staff. NASD would announce the effective date of the proposed rule change in a *Notice to Members* to be published no later than 60 days following Commission approval, if the Commission approves this proposal. The effective date would be 30 days following publication of the *Notice to Members* announcing any Commission approval. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of section 15A(b)(6) of the Exchange Act, 16 which requires, among other things, that NASD's rules must 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. NASD believes that amending the definition of “underlying index” would ensure more complete reporting of options positions. NASD also believes that permitting members to calculate position limits for certain foreign securities would enable members to effect options transaction in such securities without unnecessary delay. 16 15 U.S.C. 78 *o* -3(b)(6). B. Self-Regulatory Organization's Statement on Burden on Competition NASD does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor 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 NASD consents, the Commission will: A. By order approve such 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 is consistent with the Exchange 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 *rules-comments@sec.gov* . Please include File No. SR-NASD-2006-007 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-NASD-2006-007. 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 NASD. 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-NASD-2006-007 and should be submitted on or before February 27, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-1541 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53190; File No. SR-NFA-2005-02] Self-Regulatory Organization; National Futures Association; Notice of Filing and Immediate Effectiveness of a Proposed Amendment to NFA Compliance Rule 2-10 Regarding Recordkeeping January 30, 2006. Pursuant to section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-7 under the Act, 2 notice is hereby given that on December 6, 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. NFA also has filed the proposed rule change with the Commodity Futures Trading Commission (“CFTC”). 1 15 U.S.C. 78s(b)(7). 2 17 CFR 240.19b-7. NFA, on December 6, 2005, submitted the proposed rule change to the CFTC for approval. The CFTC approved the proposed rule change on January 5, 2006. 3 3 *See* Letter from Thomas W. Sexton, Vice President and General Counsel, NFA, to Elizabeth King, Associate Director, Division of Market Regulation, Commission, dated January 26, 2006 (enclosing letter from Jean A. Webb, Secretary, CFTC, to Thomas W. Sexton, Vice President and General Counsel, NFA, dated January 5, 2006, confirming approval of the proposal) (“Confirmation of CFTC Approval”). I. Self-Regulatory Organization's Description of the Proposed Rule Change The proposed rule change amends NFA Compliance Rule 2-10 to ensure that NFA has effective access to books and records maintained by foreign firms or in a foreign language. Section 15A(k) of the Act 4 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 Act. 5 This rule change will apply to all NFA Members, including Members registered under section 15(b)(11). 4 4 15 U.S.C. 78 *o* -3(k). 5 5 15 U.S.C. 78 *o* (b)(11). The text of the proposed rule change is below. Proposed new language is italicized. Text of Proposed Rule Changes COMPLIANCE RULES RULE 2-10. RECORDKEEPING *(a)* Each member shall maintain adequate books and records necessary and appropriate to conduct its business including, without limitation, the records required to be kept under CFTC Regulations 1.18 and 1.32 through 1.37 for the period required under CFTC Regulation 1.31. *(b) Each FCM Member must either:* *(1) Maintain an office in the continental United States, Alaska, Hawaii, or Puerto Rico responsible for preparing and maintaining financial and other records and reports required by CFTC and/or NFA rules; or* *(2) Maintain an office in a jurisdiction that the CFTC has found to have a comparable regulatory scheme for purposes of Part 30 of the CFTC's rules and be subject to that regulatory scheme. This foreign office must be responsible for preparing and maintaining financial and other records and reports required by CFTC and/or NFA rules, and the Member must agree to reimburse NFA for any travel, translation, telephone, and similar expenses incurred in connection with inquiries, examinations and investigations of the Member that exceed the normal expenses incurred by NFA in examining an FCM Member located at the closest point in the continental United States, Alaska, Hawaii, or Puerto Rico.* *(c) Each Member subject to minimum capital requirements must:* *(1) Prepare financial reports required to be filed with the CFTC and/or NFA in English, using U.S. dollars, and according to U.S. accounting standards; and* *(2) Maintain a general ledger in English using U.S. dollars.* *(d) Each Member must:* *(1) File reports, requests for extensions, and other documents required to be filed with the CFTC and/or NFA in English;* *(2) Maintain English translations of all foreign-language promotional material, including disclosure documents and Web sites, distributed to or intended for viewing by customers located in the United States, its territories, or possessions;* *(3) Maintain written procedures required by CFTC or NFA rules in English (as well as in any other language if necessary for them to be understood by the Member's employees and agents);* *(4) Provide English translations of other foreign-language documents and records and file financial information in U.S. dollars when requested by NFA; and* *(5) Make available to NFA (during an examination or to respond to other inquiries) an individual who is authorized to act on the Member's behalf, is fluent in English, and is knowledgeable about the Member's business and about financial matters.* 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 NFA has seen a marked increase in the number of foreign firms applying for Futures Commission Merchant (“FCM”) 6 registration and NFA membership. NFA Compliance Rule 2-10 requires all Members to maintain books and records necessary to conduct their business, but that requirement is useless if NFA staff cannot audit or understand those books and records. 6 “Futures Commission Merchant” means a person who is required to register or is registered as a futures commission merchant under the Commodities Exchange Act (“CEA”) and CFTC rules. NFA Compliance Rule 1-1(o). NFA is concerned about its ability to audit and obtain information from foreign FCMs located in countries without regulatory systems comparable to that in the U.S. Furthermore, there have been instances where promotional materials and other documents prepared by U.S. Members were in a foreign language and it fell on NFA to get them translated. Amending NFA Compliance Rule 2-10 ensures that NFA has effective access to books and records maintained by foreign firms or in a foreign language. Although NFA has had foreign firms as Members since its inception, they have been concentrated in the Commodity Pool Operator (“CPO”) 7 and Commodity Trading Advisor (“CTA”) 8 categories, with a few Introducing Brokers (“IBs”) 9 sprinkled in. Applications from foreign FCMs were rare, and those firms all had a U.S. office by the time they became Members. This has changed recently, primarily due to membership applications from foreign firms that want to offer retail forex to U.S. customers. 7 “Commodity Pool Operator” means a person who is required to register or is registered as a commodity pool operator under the CEA and CFTC rules. NFA Compliance Rule 1-1(g). 8 “Commodity Trading Advisor” means a person who is required to register or is registered as a commodity trading advisor under the CEA and CFTC rules. NFA Compliance Rule 1-1(h). 9 “Introducing Broker” means a person who is required to register or is registered as an introducing broker under the CEA and CFTC rules. NFA Compliance Rule 1-1(q). As of October 3, 2005, NFA had six foreign FCM Members. Four of the foreign FCMs are located in London and the other two are located in Ontario, Canada, so they are all subject to established regulatory schemes in their home countries. As of that same date, there were three firms with pending applications for FCM registration and NFA membership and one firm with a pending application for registration only. The four pending firms are located in Columbia (two firms), Cyprus, and Israel. Within the past few years, NFA has also received applications from firms located in Argentina, Jordan, Pakistan, Romania, Russia, and Singapore, although those firms withdrew their applications before they completed the registration process. Since December 1987, NFA has required foreign firms to certify that they can and will produce their books and records in the U.S. within 72 hours and that they are not subject to any blocking, privacy, or secrecy laws that would interfere with this inspection. NFA shortened the response time for FCMs to 24 hours in 2003, after more foreign firms started applying for FCM registration. NFA audits most foreign firms by asking them to provide copies of their books and records, and this procedure has proven workable for auditing CPOs, CTAs, and IBs. For the foreign FCMs, NFA sent auditors to Canada, and each of the London firms either maintains a U.S. office to prepare and maintain the books relating to its U.S.-regulated business or provides those books and records through a U.S. agent. As the number of foreign FCM applicants grows, however, concerns about NFA's ability to conduct efficient and effective audits of these firms increase. Finally, U.S. firms occasionally provide NFA with documents written in foreign languages without also providing a translation. NFA has taken at least two disciplinary actions involving foreign-language solicitations made to a targeted group within the U.S. In the most recent case, a Forex Dealer Member located in California solicited Chinese-speaking individuals to trade OTC forex. In the other case, a CTA Member located in New York solicited Chinese-speaking individuals to trade products on U.S. exchanges. In both cases, NFA bore the onus of translating the materials into English. We believe this onus should be on the Member rather than on NFA, although NFA would check the accuracy of the translations in appropriate circumstances. The amendments to NFA Compliance Rule 2-10 add three new sections, with the current text becoming section (a). 10 Section
(b)requires FCMs to maintain their books and records in an office located in the U.S. or a part 30 jurisdiction ( *e.g.* , Great Britain, Canada). 11 Section
(b)also requires FCMs that do not maintain their books and records in the U.S. to reimburse NFA for travel and related expenses if travel to a foreign jurisdiction is necessary. 10 Many of these requirements are taken from NASD Rule 1090 or CBOE Rule 3.4 regarding foreign members. 11 *See* CFTC Rule 30.10 (17 CFR 30.10) and Appendix C to that rule. A list of the Part 30 jurisdictions can be found on the CFTC's Web site at *http://www.cftc.gov.* Section
(c)applies to all Members subject to minimum capital requirements ( *i.e.* , FCMs and independent IBs). It requires them to prepare financial and other required reports in English, using U.S. dollars and U.S. accounting standards, and to maintain a general ledger in English using U.S. dollars. Section
(d)applies to all Members. That section requires them to: • File documents with NFA in English; • Maintain English translations of foreign-language promotional material; • Maintain required procedures in English; • Provide English translations of other documents when requested by NFA; and • Ensure that an English-speaking individual who is knowledgeable about the firm's business is available to assist NFA during an audit. 2. Statutory Basis The rule change is authorized by, and consistent with, section 15A(k) of the Act. 12 12 15 U.S.C. 78 *o* -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 Act and the CEA. 13 13 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 did not publish the rule change to the membership for comment. NFA did not receive comment letters concerning the rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change became effective on January 5, 2006, upon approval by the CFTC. 14 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 Act. 15 14 *See* Confirmation of CFTC Approval, *supra* note 3. 15 15 U.S.C. 78s(b)(1). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change 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 No. SR-NFA-2005-02 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-NFA-2005-02. 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-2005-02 and should be submitted on or before February 27, 2006. 16 17 CFR 200.30-3(a)(73). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 Nancy M. Morris, Secretary. [FR Doc. E6-1540 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53188; File No. SR-Phlx-2005-70] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to the Deletion of Phlx Rule 454, “Limitations on Members” Trading Because of Options, etc.” January 30, 2006. 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 9, 2005, 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 Phlx. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to delete Phlx Rule 454, “Limitations on Members” Trading Because of Options, etc.” The text of Phlx Rule 454 is set forth below, with [brackets] indicating its proposed deletion. [Rule 454. Limitations on Members' Trading Because of Options, etc. No member, while on the floor, shall initiate the purchase or sale on the Exchange for his own account or for any account in which he, or the organization of which he is a partner or officer, or any partner or officer of such organization, is directly or indirectly interested, of any security in which he holds or has granted any put, call, straddle or option, or in which he has knowledge that the organization of which he is a partner or officer, or any partner or officer of such organization holds or has granted any put, call, straddle or option, unless such put, call, straddle or option position is in an exchange-traded option issued by the Options Clearing Corporation and is immediately reported to the Exchange. * * * Supplementary Material: * * * .01 A member who issues a commitment to trade from the Exchange through ITS or any other Application of the System shall, as a consequence thereof, be deemed to be initiating a purchase or a sale of a security on the Exchange as referred to in this Rule.] 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 Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Phlx 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 Phlx Rule 454 prohibits a member on the floor from initiating the purchase or sale of stock on the Exchange for his own or a related account if he or a related account holds or has granted an option on it. According to a 1976 Commission approval order, Phlx Rule 454 was originally adopted at the urging of the Commission in 1935 for the purpose of deterring options-related manipulation of underlying stocks by specialists, odd-lot dealers, and floor traders. 3 The rule change approved by this 1976 approval order carved out Options Clearing Corporation (“OCC”)-issued options from the coverage of the rule. The approval order stated that because the Phlx's share of the total market volume in securities for which options trading would be permitted by the proposed rule change averaged less than 1.7 percent, the manipulative potential inherent in changing the restrictions appeared insignificant. 4 3 *See* Securities Exchange Act Release No. 13016 (November 29, 1976), 41 FR 53383 (December 6, 1976) (order approving File No. SR-Phlx-76-15). 4 *Id.* The Exchange is now proposing to delete Phlx Rule 454 in its entirety because the Phlx believes that the likelihood that any options-related manipulation of an underlying stock could occur through an equities trade initiated on the Phlx floor is extremely remote. The Exchange believes that the costs of manipulating the price of a security to produce a gain in a pre-established options position would outweigh the benefits due to the capital that would be required to manipulate the price of a security in the National Market System today. The Exchange notes that it is required to take into account the consolidated national best bid and offer quotations of the National Market System. As such, any attempt to manipulate the price of a security would involve moving the price not only on the Phlx but on other exchanges as well. The Phlx believes that even in less liquid securities this seems unlikely, and there are other rules and mechanisms to capture such activity. As with the 1976 proposed rule change, the Phlx believes that the manipulative potential inherent in eliminating Phlx Rule 454's restrictions appears insignificant. The Exchange notes that it has found no comparable rule for Nasdaq market makers, who can have over-the-counter or “OTC” (non-OCC-issued, non-exchange traded) options on either Nasdaq or listed stocks. Furthermore, Phlx Rule 454 does not in any event prohibit the Phlx member from buying stock first, prior to obtaining an OTC option on it. Thus, the Exchange believes that the rule is of little real usefulness and therefore unnecessarily restricts its floor members from engaging in productive business on the floor of the Exchange. 5 5 Note that Phlx Rule 213, “Puts and Calls,” will continue to apply to Phlx specialists. Phlx Rule 213 provides that “[n]o specialist, no organization of which he is a partner or officer and no partner or officer of such organization shall acquire, hold or grant, directly or indirectly, any interest in any put, call, straddle, or option in any security in which such specialist is registered by the Exchange, unless such put, call, straddle or option position is in any exchange-traded option issued by the Options Clearing Corporation and is immediately reported to the Exchange.” 2. Statutory Basis The Exchange believes that its proposal is consistent with section 6(b) of the Act, 6 in general, and furthers the objectives of section 6(b)(5) of the Act, 7 in particular, in that it eliminates an outdated prohibition which imposes an unnecessary burden on floor members and serves no real useful purpose. The Phlx believes that lifting the prohibition should result in enhanced market depth and liquidity, which should benefit investors. 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 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 Phlx consents, the Commission will:
(A)By order approve such 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 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-2005-70 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR--Phlx-2005-70. 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 Phlx. 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-2005-70 and should be submitted on or before February 27, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-1538 Filed 2-3-06; 8:45 am] BILLING CODE 8010-01-P DEPARTMENT OF STATE [Public Notice 5298] Bureau of Educational and Cultural Affairs; U.S. Summer Institutes for Pakistani Undergraduate Students *Announcement Type:* New Cooperative Agreement. *Funding Opportunity Number:* ECA/A/E/NEA-SA-06-001SIP. *Catalog of Federal Domestic Assistance Number:* 00.0000. *Key Dates:* Application Deadline: March 31, 2006. *Executive Summary:* The Near East/South Asia Branch, Office of Academic Exchange Programs, Bureau of Educational and Cultural Affairs, announces an open competition for public and private non-profit organizations to develop and implement the U.S. Summer Institutes for Pakistani Undergraduate Students, to take place in the U.S. during the summer of 2006. The Bureau anticipates awarding two separate assistance awards to support two institutes for Pakistani undergraduate students. Each institute is intended to provide a minimum of 15-20 highly motivated second- and third-year undergraduate students from Pakistan with a six-week academic seminar, including a two-week U.S. travel component that will give the participants a deeper understanding of the program themes. I. Funding Opportunity Description Authority: Overall grant making authority for this program is contained in the Mutual Educational and Cultural Exchange Act of 1961, Public Law 87-256, as amended, also known as the Fulbright-Hays Act. The purpose of the Act is “to enable the Government of the United States to increase mutual understanding between the people of the United States and the people of other countries * * *; to strengthen the ties which unite us with other nations by demonstrating the educational and cultural interests, developments, and achievements of the people of the United States and other nations * * * and thus to assist in the development of friendly, sympathetic and peaceful relations between the United States and the other countries of the world.” The funding above is provided through legislation. *Purpose:* The Bureau is seeking detailed proposals for the U.S. Summer Institutes for Pakistani Undergraduate Students from U.S. colleges, universities, consortia of colleges and universities, and other not-for-profit academic organizations that have an established reputation in one or more of the following fields: Political science, international relations, law, history, sociology, American studies, and/or other disciplines or sub-disciplines related to the study of the United States. “The United States Today: Politics, Society and Culture” Summer Institutes are intended to provide two groups of 15-20 undergraduate students from Pakistan with an introduction to the main contours of contemporary American life and institutions. The Summer Institutes should be designed in such a way that the central institutions of the American experience political, economic, social, religious and cultural are explored through a series of lectures, debates, roundtable discussions, and site visits. While the general focus should be on the United States today, the program should be structured to provide an introductory overview on the evolution of American institutions throughout U.S. history. The program should therefore seek to introduce participants to the core values of the people of the United States in the 21st century as those values have evolved over time. Among the many themes and topics that might be explored are: American constitutionalism; the American federal system; civil liberties and the rule of law; freedom of speech and the role of media, particularly broadcast media, in American society; the U.S. political economy and market economics; American foreign policy; the role of women; multiculturalism; ethnic pluralism; the demography of American religion; individualism and equality; national unity and diversity; and the role of popular culture, literature, music and the arts. The program may be organized in a variety of ways—historically, thematically, or topically, or through a combination thereof. The grantee institution for each institute should take into account that the participants may have little or no prior knowledge of the U.S. and varying degrees of experience in expressing their opinions, and should tailor the curriculum and classroom activities accordingly. The grantee institution will be required to develop a program that provides ample time and opportunity for discussion, training and interaction, rather than standard lectures or broad survey reading assignments. It is critical that the participants gain a more informed and coherent understanding of the United States and share their own culture and way of life. To accomplish this, each institute should include opportunities for participants to meet American citizens from a variety of backgrounds, to interact with peers, and to speak to appropriate student and civic groups about their experiences and life in their home countries. Additionally, as grassroots ambassadors to the communities in which they will be studying, an important objective of the institutes is to develop the participants' leadership skills. In this context, the programs should include lectures, community service activities, group discussions, training, and exercises focusing on such topics as the essential attributes of leadership; teambuilding; effective communication and problem-solving skills; and management skills for diverse organizational settings. The host institution for each institute will also be expected to provide participants post-program opportunities for further investigation and research on the topics and issues examined and discussed during each institute. Each institute should be six weeks in length including a domestic travel component of not more than fourteen
(14)days, of which 3-4 days should be spent in Washington, DC, at the end of the program. This travel component should directly complement the academic residency segment. It should include visits to cities and other sites of interest in the region of the host institution. The project director or one of the key program staff responsible for the academic program must have an advanced degree in one of the following fields: Political science, history, art, sociology, American studies, and/or other disciplines or sub-disciplines related to the study of the United States. If the project director or key program staff does not have an advanced degree, the proposal will be considered technically ineligible. Programs must conform with Bureau requirements and guidelines outlined in the Solicitation Package. Bureau programs are subject to the availability of funds. Applicants are encouraged to design thematically coherent programs in ways that draw upon the particular strengths, faculty and resources of their institutions as well as upon the expertise of nationally recognized scholars and other experts throughout the United States. Within the limits of their thematic focus and organizing framework, institutes should also be designed to: 1. Bring an interdisciplinary or multi-disciplinary focus to bear on the program content; 2. Give participants a multi-dimensional view of U.S. society and institutions that includes a broad and balanced range of perspectives. Where possible, programs should therefore include the views not only of scholars, cultural critics and public intellectuals, but also those of other professionals such as government officials, journalists and others who can substantively contribute to the topics at issue; and, 3. Ensure access to library and material resources that will enable grantees to continue their research and studies upon returning to their home institutions. *Participants:* As specified in the Project Objectives, Goals and Implementation
(POGI)guidelines in the solicitation package, each program should be designed for highly motivated second- and third-year undergraduates from colleges, universities, and teacher training institutions in Pakistan who have demonstrated leadership through academic achievements, community involvement, and extracurricular activities. Their major fields will be varied, including the arts and humanities, social sciences, education, business, and other professional fields. All participants will be conversant in English. Please note: The level of English among the students may vary. The host institution will be required to prepare lectures and discussions meeting the highest academic standards while using language appropriate for students with English as their second or third language. The U.S. Embassy will make a particular effort to recruit participants from non-elite or underprivileged backgrounds and from both rural and urban sectors of Pakistan. All participants will be 22 years of age or younger; have completed their first or second year of undergraduate studies; be committed to returning to their home universities in the fall of 2006 following completion of their institute program; have had little or no prior study or travel experience in the United States or elsewhere outside of their home countries; and be willing and able to fully participate in an intensive academic program, community service, and active educational travel program. As participants will be selected in large part on the basis of their demonstrated leadership capacity, it is expected they will utilize the experience derived from the program in positions of leadership upon return to their home countries. Please note: Special attention will be required on the part of the host institution to the students' limited knowledge of the U.S. and their varying levels of academic sophistication. Special sensitivity on the part of the host institution also will be required to the cultural traditions and religious practices of the participating students, who will represent a variety of Muslim or other religious traditions. Special requirements and restrictions regarding diet, daily worship, housing and medical care should be considered. The Bureau will provide guidance and assistance, as needed. *Program Dates:* Ideally, the program should be 44 days in length (including participant arrival and departure days) and is anticipated to begin mid July 2006. *Program Guidelines:* While the conception and structure of each institute program is the responsibility of the organizers, it is critically important that proposals provide a full, detailed and comprehensive narrative describing the objectives of the institute; the title, scope and content of each session; and how each session relates to the overall institute theme. A syllabus must be included that indicates the subject matter for each lecture, panel discussion or other activity (e.g., group exercises), confirms or provisionally identifies proposed lecturers, trainers and session leaders, and clearly shows how assigned readings will support each session. A calendar of all program activities must also be included. Additionally, applicant institutions should describe their plans for public and media outreach in connection with the program. Note: In a cooperative agreement, the Bureau is substantially involved in program activities above and beyond routine grant monitoring. ECA activities and responsibilities for this program are as follows: ECA will participate in the selection of participants, exercise oversight with one or more site visits, debrief participants while they are in Washington and also engage in follow-up communications with the participants upon their return home. ECA may require changes in the content of the program as well as the activities proposed after the grant is awarded. The recipient will be required to obtain review and approval of significant agenda/syllabus changes in advance of their implementation. II. Award Information *Type of Award:* Cooperative Agreement. ECA's level of involvement in this program is listed under “Note” above. The numbers below reflect figures for each institute. *Fiscal Year Funds:* FY-06. *Approximate Total Funding for each institute:* $250,000. *Approximate Number of Awards:* 2. *Approximate Average Award for each institute:* $250,000. *Floor of Award Range for each institute:* $225,000. *Ceiling of Award Range for each institute:* $250,000. *Anticipated Award Date for each institute:* Pending availability of funds, May 18, 2006. *Anticipated Project Completion Date for each institute:* September 30, 2006. III. Eligibility Information III.1. Eligible applicants Applications may be submitted by public and private non-profit organizations meeting the provisions described in Internal Revenue Code section 26 U.S.C. 501(c)(3). III.2. Cost Sharing or Matching Funds There is no minimum or maximum percentage required for this competition. However, the Bureau encourages applicants to provide maximum levels of cost sharing and funding in support of its programs. When cost sharing is offered, it is understood and agreed that the applicant must provide the amount of cost sharing as stipulated in its proposal and later included in an approved cooperative agreement. Cost sharing may be in the form of allowable direct or indirect costs. For accountability, you must maintain written records to support all costs which are claimed as your contribution, as well as costs to be paid by the federal government. Such records are subject to audit. The basis for determining the value of cash and in-kind contributions must be in accordance with OMB Circular A-110, (Revised), Subpart C.23—Cost Sharing and Matching. In the event you do not provide the minimum amount of cost sharing as stipulated in the approved budget, ECA's contribution will be reduced in like proportion. III.3 Other Eligibility Requirements (a.) Bureau grant and cooperative agreement guidelines require that organizations with less than four years experience in conducting international exchanges be limited to $60,000 in Bureau funding. ECA anticipates awarding one cooperative agreement in an amount up to $250,000 for each institute to support program and administrative costs required to implement these exchange programs. Therefore, organizations with less than four years experience in conducting international exchanges are ineligible to apply under this competition. (b.) Technical Eligibility: All proposals must comply with the following: The project director or one of the key program staff responsible for the academic program must have an advanced degree in one of the following fields: political science, international relations, law, history, art, sociology, literature, American studies, and/or other disciplines or sub-disciplines related to the program themes. Failure to meet this criterion will result in your proposal being declared technically ineligible and given no further consideration in the review process. IV. Application and Submission Information Note: Please read the complete announcement before sending inquiries or submitting proposals. ECA staff will be available to consult with prospective applicant institutions about program design and content up until the proposal submission deadline. Once the RFGP deadline has passed, Bureau staff may not discuss this competition with applicants until the proposal review process has been completed. IV.1 Contact Information to Request an Application Package Please contact the Near East/South Asia Branch ECA/A/E/NEA-SA, Room Number 252, U.S. Department of State, SA-44, 301 4th Street, SW., Washington, DC 20547, telephone number
(202)453-8096 and fax number
(202)453-8095, e-mail *KreiserJD@state.gov* to request a Solicitation Package. Please refer to the Funding Opportunity Number ECA/A/E/NEA-SA-06-001SIP located at the top of this announcement when making your request. Alternatively, an electronic application package may be obtained from grants.gov. Please see section IV.3f for further information. The Solicitation Package contains the Proposal Submission Instruction
(PSI)document which consists of required application forms, and standard guidelines for proposal preparation. It also contains the Project Objectives, Goals and Implementation
(POGI)document, which provides specific information, award criteria and budget instructions tailored to this competition. Please specify Program Officer Joshua Kreiser and refer to the Funding Opportunity Number ECA/A/E/NEA-SA-06-001SIP located at the top of this announcement on all other inquiries and correspondence. IV.2. To Download A Solicitation Package Via Internet The entire Solicitation Package may be downloaded from the Bureau's Web site at *http://exchanges.state.gov/education/rfgps/menu.htm* , or from the grants.gov Web site at *http://www.grants.gov.* Please read all information before downloading. IV.3. Content and Form of Submission Applicants must follow all instructions in the Solicitation Package. The original and ten
(10)copies of the application should be sent per the instructions under IV.3f. “Submission Dates and Times section” below. IV.3a. You are required to have a Dun and Bradstreet Data Universal Numbering System
(DUNS)number to apply for a grant or cooperative agreement from the U.S. Government. This number is a nine-digit identification number, which uniquely identifies business entities. Obtaining a DUNS number is easy and there is no charge. To obtain a DUNS number, access *http://www.dunandbradstreet.com* or call 1-866-705-5711. Please ensure that your DUNS number is included in the appropriate box of the SF—424 which is part of the formal application package. IV.3b. All proposals must contain an executive summary, proposal narrative and budget. Please Refer to the Solicitation Package. It contains the mandatory Proposal Submission Instructions
(PSI)document and the Project Objectives, Goals and Implementation
(POGI)document for additional formatting and technical requirements. IV.3c. You must have nonprofit status with the IRS at the time of application. If your organization is a private nonprofit which has not received a grant or cooperative agreement from ECA in the past three years, or if your organization received nonprofit status from the IRS within the past four years, you must submit the necessary documentation to verify nonprofit status as directed in the PSI document. Failure to do so will cause your proposal to be declared technically ineligible. IV.3d. Please take into consideration the following information when preparing your proposal narrative: IV.3d.1 Adherence to All Regulations Governing the J Visa. The Bureau of Educational and Cultural Affairs is placing renewed emphasis on the secure and proper administration of Exchange Visitor (J visa) Programs and adherence by grantees and sponsors to all regulations governing the J visa. Therefore, proposals should demonstrate the applicant's capacity to meet all requirements governing the administration of the Exchange Visitor Programs as set forth in 22 CFR part 62, including the oversight of Responsible Officers and Alternate Responsible Officers, screening and selection of program participants, provision of pre-arrival information and orientation to participants, monitoring of participants, proper maintenance and security of forms, record-keeping, reporting and other requirements. ECA will be responsible for issuing DS-2019 forms to participants in this program. A copy of the complete regulations governing the administration of Exchange Visitor
(J)programs is available at *http://exchanges.state.gov* or from: United States Department of State, Office of Exchange Coordination and Designation, ECA/EC/ECD—SA-44, Room 734, 301 4th Street, SW., Washington, DC 20547, Telephone:
(202)203-5029, Fax:
(202)453-8640. Please refer to Solicitation Package for further information. IV.3d.2 Diversity, Freedom and Democracy Guidelines. Pursuant to the Bureau's authorizing legislation, programs must maintain a non-political character and should be balanced and representative of the diversity of American political, social, and cultural life. “Diversity” should be interpreted in the broadest sense and encompass differences including, but not limited to ethnicity, race, gender, religion, geographic location, socio-economic status, and physical challenges. Applicants are strongly encouraged to adhere to the advancement of this principle both in program administration and in program content. Please refer to the review criteria under the ‘Support for Diversity’ section for specific suggestions on incorporating diversity into your proposal. Public Law 104-319 provides that “in carrying out programs of educational and cultural exchange in countries whose people do not fully enjoy freedom and democracy,” the Bureau “shall take appropriate steps to provide opportunities for participation in such programs to human rights and democracy leaders of such countries.” Public Law 106-113 requires that the governments of the countries described above do not have inappropriate influence in the selection process. Proposals should reflect advancement of these goals in their program contents, to the full extent deemed feasible. IV.3d.3. Program Monitoring and Evaluation. Proposals must include a plan to monitor and evaluate the project's success, both as the activities unfold and at the end of the program. The Bureau recommends that your proposal include a draft survey questionnaire or other technique plus a description of a methodology to use to link outcomes to original project objectives. The Bureau expects that the grantee will track participants or partners and be able to respond to key evaluation questions, including satisfaction with the program, learning as a result of the program, changes in behavior as a result of the program, and effects of the program on institutions (institutions in which participants work or partner institutions). The evaluation plan should include indicators that measure gains in mutual understanding as well as substantive knowledge. Successful monitoring and evaluation depend heavily on setting clear goals and outcomes at the outset of a program. Your evaluation plan should include a description of your project's objectives, your anticipated project outcomes, and how and when you intend to measure these outcomes (performance indicators). The more that outcomes are “smart” (specific, measurable, attainable, results-oriented, and placed in a reasonable time frame), the easier it will be to conduct the evaluation. You should also show how your project objectives link to the goals of the program described in this RFGP. Your monitoring and evaluation plan should clearly distinguish between program *outputs* and *outcomes. Outputs* are products and services delivered, often stated as an amount. Output information is important to show the scope or size of project activities, but it cannot substitute for information about progress towards outcomes or the results achieved. Examples of outputs include the number of people trained or the number of seminars conducted. *Outcomes,* in contrast, represent specific results a project is intended to achieve and is usually measured as an extent of change. Findings on outputs and outcomes should both be reported, but the focus should be on outcomes. We encourage you to assess the following four levels of outcomes, as they relate to the program goals set out in the RFGP (listed here in increasing order of importance): 1. Participant satisfaction with the program and exchange experience. 2. Participant learning, such as increased knowledge, aptitude, skills, and changed understanding and attitude. Learning includes both substantive (subject-specific) learning and mutual understanding. 3. Participant behavior, concrete actions to apply knowledge in work or community; greater participation and responsibility in civic organizations; interpretation and explanation of experiences and new knowledge gained; continued contacts between participants, community members, and others. 4. Institutional changes, such as increased collaboration and partnerships, policy reforms, new programming, and organizational improvements. Please note: Consideration should be given to the appropriate timing of data collection for each level of outcome. For example, satisfaction is usually captured as a short-term outcome, whereas behavior and institutional changes are normally considered longer-term outcomes. Overall, the quality of your monitoring and evaluation plan will be judged on how well it
(1)specifies intended outcomes;
(2)gives clear descriptions of how each outcome will be measured;
(3)identifies when particular outcomes will be measured; and
(4)provides a clear description of the data collection strategies for each outcome (i.e., surveys, interviews, or focus groups). Please note: Because the cooperative agreements to be awarded under the terms of this RFGP are likely to be of less than one year's duration, prospective host institutions will not be expected to be able to demonstrate significant specific results in terms of participant behavior or institutional changes during the agreement period. Applicant institutions monitoring and evaluation plans should, therefore, focus primarily on the first and more particularly the second level of outcomes (learning). ECA will assume principal responsibility for developing performance indicators and conducting post-institute evaluations to measure changes in participant behavior as a result of the program, and effect of the program on institutions, over time. Grantees will be required to provide reports analyzing their evaluation findings to the Bureau in their regular program reports. All data collected, including survey responses and contact information, must be maintained for a minimum of three years and provided to the Bureau upon request. IV.3d.4. Describe your plans for overall program management, staffing, and coordination with ECA. ECA considers program management, staffing and coordination with the Department of State essential elements of your program. Please be sure to give sufficient attention to these elements in your proposal. Please refer to the Technical Eligibility Requirements and the POGI in the Solicitation package for specific guidelines. IV.3e. Please take the following information into consideration when preparing your budget: IV.3e.1. Applicants must submit a comprehensive budget for the entire program. Awards for each institute may not exceed $250,000. There must be a summary budget as well as breakdowns reflecting both administrative and program budgets. Applicants may provide separate sub-budgets for each program component, phase, location, or activity to provide clarification. Separate budgets must be submitted if applicants intend to submit proposals for each institute. Based on a group of 15-20 participants, the total Bureau-funded budget (program and administrative) for each program should not exceed $250,000, with Bureau-funded administrative costs as defined in the budget details section of the solicitation package accounting for no more than $85,000 of the total amount. Justifications for any costs above these amounts must be clearly indicated in the proposal submission. Proposals should try to maximize cost sharing in all facets of the program and to stimulate U.S. private sector, including foundation and corporate, support. Applicants must submit a comprehensive budget for the entire program. The Bureau reserves the right to reduce, revise, or increase proposal budgets in accordance with the needs of the program, and availability of U.S. government funding. Please refer to the “POGI” in the Solicitation Package for complete institute budget guidelines and formatting instructions. IV.3e.2. Allowable costs for the program include the following:
(1)Institute staff salary and benefits;
(2)Honoraria for Guest speakers;
(3)Participant per diem. Please refer to the Solicitation Package for complete budget guidelines and formatting instructions. IV.3f. Application Deadline and Methods of Submission: Application Deadline Date: Friday, March 31, 2006. Reference Number: ECA/A/E/NEA-SA-06-001SIP. Methods of Submission: Applications may be submitted in one of two ways: (1.) In hard-copy, via a nationally recognized overnight delivery service (i.e., DHL, Federal Express, UPS, Airborne Express, or U.S. Postal Service Express Overnight Mail, etc.), or (2.) Electronically through *http://www.grants.gov.* Along with the Project Title, all applicants must enter the above Reference Number in Box 11 on the SF-424 contained in the mandatory Proposal Submission Instructions
(PSI)of the solicitation document. IV.3f.1 Submitting Printed Applications. Applications must be shipped no later than the above deadline. Delivery services used by applicants must have in-place, centralized shipping identification and tracking systems that may be accessed via the Internet and delivery people who are identifiable by commonly recognized uniforms and delivery vehicles. Proposals shipped on or before the above deadline but received at ECA more than seven days after the deadline will be ineligible for further consideration under this competition. Proposals shipped after the established deadlines are ineligible for consideration under this competition. ECA will not notify you upon receipt of application. It is each applicant's responsibility to ensure that each package is marked with a legible tracking number and to monitor/confirm delivery to ECA via the Internet. Delivery of proposal packages may not be made via local courier service or in person for this competition. Faxed documents will not be accepted at any time. Only proposals submitted as stated above will be considered. Important note: When preparing your submission please make sure to include one extra copy of the completed SF-424 form and place it in an envelope addressed to “ECA/EX/PM”. The original and ten
(10)copies of the application should be sent to: U.S. Department of State, SA-44, Bureau of Educational and Cultural Affairs, Ref.: ECA/A/E/NEA-SA/06-001SIP, Program Management, ECA/EX/PM, Room 534, 301 4th Street, SW., Washington, DC 20547. IV.3f.2 Submitting Electronic Applications. Applicants have the option of submitting proposals electronically through Grants.gov ( *http://www.grants.gov* ). Complete solicitation packages are available at Grants.gov in the “Find” portion of the system. Please follow the instructions available in the “Get Started” portion of the site ( *http://www.grants.gov/GetStarted* ). Applicants have until midnight (12 a.m.) of the closing date to ensure that their entire applications have been uploaded to the grants.gov site. Applications uploaded to the site after midnight of the application deadline date will be automatically rejected by the grants.gov system, and will be technically ineligible. Applicants will receive a confirmation e-mail from grants.gov upon the successful submission of an application. ECA will not notify you upon receipt of electronic applications. IV.3g. Intergovernmental Review of Applications: Executive Order 12372 does not apply to this program. Applicants must also submit the “Executive Summary” and “Proposal Narrative” sections of the proposal in text (.txt) format on a PC-formatted disk. The Bureau will provide these files electronically to the Public Affairs Section at the U.S. embassy for its review. V. Application Review Information V.1. Review Process The Bureau will review all proposals for technical eligibility. Proposals will be deemed ineligible if they do not fully adhere to the guidelines stated herein and in the Solicitation Package. All eligible proposals will be reviewed by the program office, as well as the Public Diplomacy section overseas, where appropriate. Eligible proposals will be subject to compliance with Federal and Bureau regulations and guidelines and forwarded to Bureau grant panels for advisory review. Proposals may also be reviewed by the Office of the Legal Adviser or by other Department elements. Final funding decisions are at the discretion of the Department of State's Assistant Secretary for Educational and Cultural Affairs. Final technical authority for cooperative agreements resides with the Bureau's Grants Officer. Review Criteria Technically eligible applications will be competitively reviewed according to the criteria stated below. These criteria are not rank ordered and all carry equal weight in the proposal evaluation: 1. *Overall Quality of Proposal, Program Planning and Administration, and Ability To Achieve Objectives:* Proposals should exhibit originality and substance, consonant with the highest standards of American teaching and scholarship, and be suitable for students with English as their second or third language. Program elements should be tailored for students with limited knowledge of the U.S. and with varying degrees of academic sophistication. Lectures, panels, and other interactive classroom activities, readings, community service, and site visits, taken as a whole, should offer a balanced presentation of issues, reflecting both the continuity of the American experience as well its inherent diversity and dynamism. Proposals should demonstrate careful planning. The organization and structure of each institute should be clearly delineated and be fully responsive to all program objectives. A program syllabus (noting specific sessions and topical readings supporting each academic unit) should be included, as should a calendar of activities. The travel component should not simply be a tour, but should be an integral and substantive part of the program, reinforcing and complementing the academic segment. Proposals should provide evidence of continuous administrative and managerial capacity as well as the means by which program activities and logistical matters will be implemented. Objectives should be reasonable, feasible, and flexible. Proposals should clearly demonstrate how the institution will meet the program's objectives and plan. 2. *Institutional Capacity and Record/Ability:* Proposed personnel, including faculty and administrative staff as well as outside presenters, should be fully qualified to achieve the project's goals. Library and meeting facilities, housing, meals, transportation and other logistical arrangements should fully meet the needs of participants. Proposals should demonstrate an institutional record of successful exchange program activities, indicating the experience that the organization and its professional staff have had working with foreign students. The Bureau will consider the past performance of prior recipients and the demonstrated potential of new applicants. 3. *Support of Diversity:* Proposals should demonstrate substantive support of the Bureau's policy on diversity. “Diversity” should be interpreted in the broadest sense and encompass differences including, but not limited to ethnicity, race, gender, religion, geographic location, socio-economic status, and disabilities. Applicants are strongly encouraged to adhere to the advancement of this principle both in program administration and in program content. Applicant should highlight instances of diversity in their proposal. 4. *Project Evaluation and Follow-up:* Proposals should include a plan to evaluate the activity's success, both as the activities unfold and at the end of the program. A draft survey questionnaire or other technique plus description of a methodology to link outcomes to original project objectives is strongly recommended. Proposals should discuss provisions for follow-up with returned grantees as a means of establishing longer-term individual and institutional linkages. 5. *Cost-effectiveness and cost sharing:* The overhead and administrative components of the proposal, including salaries and honoraria, should be kept as low as possible. All other items should be necessary and appropriate. VI. Award Administration Information VI.1. Award Notices Final awards cannot be made until funds have been appropriated by Congress, allocated and committed through internal Bureau procedures. Successful applicants will receive an Assistance Award Document
(AAD)from the Bureau's Grants Office. The AAD and the original grant proposal with subsequent modifications (if applicable) shall be the only binding authorizing document between the recipient and the U.S. Government. The AAD will be signed by an authorized Grants Officer, and mailed to the recipient's responsible officer identified in the application. Unsuccessful applicants will receive notification of the results of the application review from the ECA program office coordinating this competition. VI.2 Administrative and National Policy Requirements Terms and Conditions for the Administration of ECA agreements include the following: Office of Management and Budget Circular A-122, “Cost Principles for Nonprofit Organizations.” Office of Management and Budget Circular A-21, “Cost Principles for Educational Institutions.” OMB Circular A-87, “Cost Principles for State, Local and Indian Governments”. OMB Circular No. A-110 (Revised), Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Nonprofit Organizations. OMB Circular No. A-102, Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments. OMB Circular No. A-133, Audits of States, Local Government, and Non-profit Organizations. Please reference the following Web sites for additional information: *http://www.whitehouse.gov/omb/grants* , *http://exchanges.state.gov/education/grantsdiv/terms.htm#articleI.* VI.3. Reporting Requirements You must provide ECA with a hard copy original plus two
(2)copies of a final program and financial report no more than 90 days after the conclusion of the program. Grantees will be required to provide reports analyzing their evaluation findings to the Bureau in their regular program reports. (Please refer to IV. Application and Submission Instructions (IV.3d.3) above for Program Monitoring and Evaluation information. All data collected, including survey responses and contact information, must be maintained for a minimum of three years and provided to the Bureau upon request. All reports must be sent to the ECA Grants Officer and ECA Program Officer listed in the final assistance award document. VI.4. Program Data Requirements Organizations awarded grants will be required to maintain specific data on program participants and activities in an electronically accessible database format that can be shared with the Bureau as required. As a minimum, the data must include the following:
(1)Name, address, contact information and biographic sketch of all persons who travel internationally on funds provided by the grant or who benefit from the grant funding but do not travel.
(2)Itineraries of international and domestic travel, providing dates of travel and cities in which any exchange experiences take place. Final schedules for in-country and U.S. activities must be received by the ECA Program Officer at least three work days prior to the official opening of the activity. VII. Agency Contacts For questions about this announcement, contact: Joshua Kreiser, ECA/A/E/NEA-SA, Room Number 252, Ref. #: ECA/A/E/NEA-SA-06-001SIP, U.S. Department of State, SA-44, 301 4th Street, SW., Washington, DC 20547, telephone number
(202)453-8096 and fax number
(202)453-8095, e-mail *KreiserJD@state.gov.* All correspondence with the Bureau concerning this RFGP should reference the above title and number ECA/A/E/NEA-SA-06-001SIP. Please read the complete announcement before sending inquiries or submitting proposals. Once the RFGP deadline has passed, Bureau staff may not discuss this competition with applicants until the proposal review process has been completed. VIII. Other Information Notice The terms and conditions published in this RFGP are binding and may not be modified by any Bureau representative. Explanatory information provided by the Bureau that contradicts published language will not be binding. Issuance of the RFGP does not constitute an award commitment on the part of the Government. The Bureau reserves the right to reduce, revise, or increase proposal budgets in accordance with the needs of the program and the availability of funds. Awards made will be subject to periodic reporting and evaluation requirements per section VI.3 above. Dated: January 31, 2006. C. Miller Crouch, Principal Deputy Assistant Secretary, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. 06-1069 Filed 2-3-06; 8:45 am]
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CFR
- Termination of license.§ 50.82
- Public notification and public participation.§ 20.1405
- Postconstruction environmental reports.§ 51.53
- Transfer for disposal and manifests.§ 20.2006
- NMS security designation and definitions.§ 242.600
- Delegation of authority to Director of Division of Trading and Markets.§ 200.30-3
- Requirements for the list of marginable OTC stocks and the list of foreign margin stocks.§ 220.11
- Petitions for exemption.§ 30.10
U.S. Code
- Records maintained on individuals§ 552a
- Departmental regulations§ 301
- Registration, responsibilities, and oversight of self-regulatory organizations§ 78s
- National securities exchanges§ 78f
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Definitions and application§ 78c
- Registered securities associations§ 78o–3
- Short title§ 1
- Exemption from tax on corporations, certain trusts, etc.§ 501
8 references not yet in our index
- 10 CFR 20
- 17 CFR 240.19
- 17 CFR 240.11
- 15 USC 78
- Pub. L. 87-256
- 22 CFR 62
- Pub. L. 104-319
- Pub. L. 106-113
Citation graph
cites case law
Notices
Notice of issuance
Cite10 CFR 20
Cite17 CFR 240.19
Cite17 CFR 240.11
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