Notices. Order denying motion to dismiss and notice of proceeding

8,287 words·~38 min read·/register/2006/04/18/06-3662

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 3210-01-M POSTAL RATE COMMISSION [Docket No. C2004-3; Order No. 1460] Order and Notice of Proceeding AGENCY: Postal Rate Commission. ACTION: Order denying motion to dismiss and notice of proceeding. SUMMARY: This document announces the Commission's decision to institute a formal proceeding to consider issues raised in a complaint concerning stamped stationery. Conducting this proceeding will allow the Commission to determine whether the complaint raises any genuine issues of material fact and to make related determinations.

DATES: 1. Deadline for filing issue statements and notices of intervention: April 27, 2006. 2. Deadline for filing replies to issue statements: May 4, 2006. ADDRESSES: File all documents referred to in this order electronically via the Commission's Filing Online system at *http://www.prc.gov.* FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, 202-789-6820. SUPPLEMENTARY INFORMATION: The Commission has before it a complaint filed by Douglas F. Carlson (Carlson or Complainant) concerning stamped stationery 1 and a motion to dismiss the complaint filed by the Postal Service. 2 The central issue presented by these pleadings is whether stamped stationery is a postal or philatelic product.

If the former, it is subject to the Commission's jurisdiction; if the latter, it is not. 1 Douglas F. Carlson Complaint on Stamped Stationery, June 24, 2004 (Complaint). 2 Motion of the United States Postal Service to Dismiss Complaint, January 18, 2006 (Motion to Dismiss). The Postal Service's motion to dismiss is denied. This should not, however, be read as a finding on the merits on the jurisdictional question presented. The pleadings raise mixed questions of fact and law.

Based solely on the pleadings, the Commission is disinclined to determine whether or not genuine issues of material fact remain in dispute. Accordingly, by this order the Commission hereby notices the proceeding and, as discussed below, provides interested persons an opportunity to address whether or not genuine issues of material fact remain to be presented in this case. Following submission of responsive pleadings, the Commission will determine whether to proceed with or without hearing.

If no genuine material issue of fact is presented, the Commission will establish a briefing schedule affording participants an opportunity to address the principal legal issue whether or not stamped stationery is a postal service. I. Background *The Complaint.* In his Complaint, filed pursuant to 39 U.S.C. 3662, Carlson contends that stamped stationery is a postal service subject to the Commission's jurisdiction. The specific stationery in question consists of sheets of 6.25″ x 14.31″ paper imprinted with *“The Art of Disney:

Friendship”* postage stamps or indicia. Each pre-stamped sheet has room for a message and address; the sheet is designed to be folded, sealed, and mailed. 3 3 At the time the Complaint was filed, the stamped stationery sold in pads of 12 for $14.95, while the face value of the postage was $4.44. Complaint at 2, para. 8. While Carlson makes several claims, the gravamen of his complaint is that stamped stationery is a postal service within the meaning of 39 U.S.C. 3621, 3622, and 3623. *Id.* at 2, para. 10.

In support, he compares stamped stationery to stamped envelopes and stamped cards, both of which are postal services. *Id.* at 3, paras. 14-15. He observes that section 960 of the Domestic Mail Classification Schedule

(DMCS)is entitled “Stamped Paper” and that it includes stamped envelopes and stamped cards. *Ibid.* paras. 16-17. He contends that stamped stationery is a form of stamped paper within the meaning of section 960 of the DMCS. *Ibid.* para. 21. In addition, Carlson notes that the Postal Service describes stamped stationery in terms of its value as a means for sending correspondence. 4 4 *Id.* at 2, paras. 11-13. Complainant's remaining claims are derivatives of his principal claim that stamped stationery is a postal service. For example, he asserts that stamped stationery constitutes a change in the mail classification schedule and that the Postal Service is required to request a recommended decision from the Commission, pursuant to sections 3622 and 3623 of the Act, before either establishing a new classification for, or selling, stamped stationery. *Id.* at 4, paras. 22-24. This claim is true if stamped stationery is found to be a postal product. The claim is premised on the belief that stamped stationery is postal and thus does not go to the nature of the product (or service) itself. Accordingly, the Commission finds it unnecessary to address this claim in detail at this stage of the proceeding. Carlson's other derivative claims are that the rate or fee for stamped stationery is inconsistent with the Act and unduly discriminates against stamp collectors. *Id.* at 4-5, paras. 30-35. These claims, too, are premised on the assumption that stamped stationery is a postal product and, likewise, need not be addressed for purposes of this order. This is not to suggest, however, that claims do not raise factual or legal issues that may need to be addressed if the Commission concludes that stamped stationery is jurisdictional. Pursuant to section 3662, Carlson requests that the Commission issue a recommended decision establishing fee and classification schedules for stamped stationery. Alternatively, he requests that, pursuant to section 3623(b), the Commission submit, on its own initiative, a recommended decision establishing a new classification for stamped stationery. *Id.* at 6. *Informal procedures.* Upon its review of the Complaint, the Commission elected to employ informal procedures in an effort to facilitate settlement. 5 To that end, the director of the Office of the Consumer Advocate

(OCA)was appointed settlement coordinator to facilitate efforts to resolve the Complaint informally. 6 OCA was charged with reporting on the status of negotiations. Pending the outcome of the negotiations, the due date for the Postal Service's answer to the Complaint was postponed. In its second report, OCA informed the Commission that settlement could not be achieved. 7 Subsequently, the Postal Service submitted its answer to the Complaint, contending, among other things, that “[t]he stationery at issue is a philatelic item and mailing product which has much more in common with similar items over which the Commission does not assert jurisdiction than with the utilitarian stamped envelope product which is currently in the DMCS.” 8 5 PRC Order No. 1412, July 8, 2004, at 2. 6 Notice Designating Settlement Coordinator, July 8, 2004. 7 Office of the Consumer Advocate Second Report on the Status of Negotiations for Informal Resolution of Complaint, August 12, 2004. 8 Answer of United States Postal Service, August 31, 2004, at 8 (Answer). *The Postal Service's Motion to Dismiss.* Pursuant to Order No. 1449, the Postal Service recently filed a motion to dismiss the Complaint. 9 At the outset, the Postal Service asserts that the sale of “Disney stationery” falls within its statutory authority to provide philatelic services. 10 In support, it points to the Commission's decision in Docket No. R76-1 generally disclaiming jurisdiction over philatelic products. *Id.* at 1. Second, it argues that “Disney stationery is intended to be a philatelic item,” 11 distinguishable by its design and artwork from “utilitarian” stamped envelopes and cards which, it contends, have little inherent artistic or philatelic value. 12 Third, the Postal Service postulates that philatelic choices may be diminished if the Commission were to assert jurisdiction over Disney stationery, suggesting even the possibility that “no such future issuances might be able to occur.” *Id.* at 4-5. Alternatively, it notes that it could “avoid the process” by selling unstamped stationery with a packet of stamps included. *Id.* at 5. 9 Motion to Dismiss, *supra,* January 18, 2006. *See* PRC Order No. 1449, Docket No. RM2004-1, January 4, 2006, at 30, n.88. 10 *Id.* at 1. The Postal Service characterizes the Complaint as requesting the Commission to “assert jurisdiction over *The Art of Disney: Friendship* stamped stationery.” *Ibid.* To that end, the Postal Service uses the phrase “Disney stationery,” apparently reading the Complaint as limited to that issuance rather than to the issue of stamped stationery generally. The Commission does not read the Complaint so narrowly. To be sure, “Disney stationery” precipitated the Complaint. Carlson's arguments, however, concern stamped stationery generally, not that Disney stationery alone is a postal service. The relief requested, that the Commission recommend stamped stationery as a new classification, confirms this reading of the Complaint. 11 *Ibid.* 12 *Id.* at 2-3. In passing, the Postal Service argues that the caption to DMCS section 960, “Stamped Paper” has no substantive meaning beyond stamped envelopes and cards. *Id.* at 2. Lastly, the Postal Service infers comparability between stamped stationery and packaging supplies. The Postal Service disputes that its encouragement of buyers to use stamped stationery to write letters has any jurisdictional consequences. It observes that the Postal Service also sells packaging supplies, “presumably for the purpose of encouraging and making it easier for customers to send packages.” *Ibid.* It concludes by noting that the Commission does not exercise jurisdiction over such supplies. *Carlson's opposition.* Carlson opposes the Postal Service's motion to dismiss. 13 Citing the Commission's recently adopted definition of the term postal service, Carlson argues that stamped stationery is a postal service because it “is incidental to the receipt, transmission, and delivery by the Postal Service of correspondence, including letters.” 14 In support of this contention, Carlson advances several arguments. First, he argues that the stamped stationery is specifically designed for mailing, including identifiable space for the mailing address and for a written message, and that, to facilitate mailing, it can be folded and sealed. 15 13 Douglas F. Carlson Answer in Opposition to the Postal Service Motion to Dismiss Complaint, January 24, 2006 (Carlson Opposition). 14 *Id.* at 4. As historical background, Carlson provides a brief discussion of the use and development of stamped and unstamped letter sheets. He contends that what the Postal Service now calls stamped stationery is known generically as letter sheets. Distinguishing between stamped and unstamped letter sheets, he indicates that stamped letter sheets were not used by the Post Office Department until 1861. Further, he states that the Disney stamped stationery was the first domestic stamped letter sheets issued in more than a century. He argues that stamped letter sheets (stamped stationery) are, along with stamped envelopes and stamped cards, forms of postal stationery. *Id.* at 2-4. 15 *Id.* at 4. Carlson points to the Postal Service's own advertising, which trumpets the benefits of correspondence using stamped stationery, as corroboration that stamped stationery is a postal service. *Id.* at 4-5. Second, Carlson contends that if stamped cards and stamped envelopes are postal services then stamped stationery must be as well. He discusses Postal Service witness Needham's testimony, sponsoring proposed fee increases in Docket No. R97-1, which detailed the benefits and value of stamped cards and stamped envelopes that facilitate the mailing of correspondence and letters. He contends that stamped stationery provides the same service incidental to the receipt, transmission, or delivery of correspondence as do these two acknowledged postal products. *Id.* at 5-6. Third, Carlson also distinguishes between products with pre-affixed postage, such as stamped stationery and stamped cards, and those, such as packaging supplies, plain envelopes, and post cards, without it. He argues that the pre-affixed postage is significant because it entitles the purchaser to mailing services, which are not available to purchasers of unstamped envelopes, cards, or packaging supplies. *Id* . at 7-8. The balance of Carlson's Opposition responds to arguments that are largely peripheral to the central legal issue of whether stamped stationery is a postal service. These include, for example, the philatelic value associated with any postage item, including all postal stationery ( *id* . at 10), and that for ratemaking purposes, the philatelic and design value of stamped stationery are irrelevant. *Id* . at 11-12. II. Proceedings Based on a review of the pleadings, the Commission concludes that the facts, as alleged in the pleadings, do not warrant a summary dismissal of the Complaint. In light of this finding, and given the failure of informal procedures to resolve the Complaint, the Commission finds it appropriate, under rule 86 of the Rules of Practice, to conduct a formal proceeding pursuant to section 3624 of the Act in this docket. In noticing the proceeding pursuant to rule 17, the Commission has made no determination of whether or not to hold hearings in this docket. That determination will be made after submission of the statements discussed below. Section 3662 provides that, in response to a complaint, the Commission may in its discretion hold a hearing. Generally, hearings are held only if genuine issues of material fact are presented. In this proceeding, the Commission is disinclined to rule on that issue based solely on the pleadings. Consequently, each participant shall be given an opportunity to address the question of whether or not genuine issues of material fact are presented in this case. Each participant addressing this issue should identify with specificity each issue of material fact, if any, it believes is presented along with the reason(s) it believes that issue is material. Such statements are due no later than April 27, 2006. Replies to such statements may be filed no later than May 4, 2006. *Intervention.* Any interested person may file a notice of intervention, consistent with the Commission's Rules of Practice, as a full or limited participator. *See* 39 CFR 3001.20 and 39 CFR 3001.20a. The notice of intervention shall be filed using the Internet (Filing Online) at the Commission's Web site ( *www.prc.gov* ), unless a waiver is obtained for hardcopy filing. *See* 39 CFR 3001.9(a) and 39 CFR 3001.10(a). Notices of intervention are due no later than April 27, 2006. *Representation of the general public.* Having noticed the proceeding, the Commission finds it appropriate that the interests of the general public be represented in this proceeding and thus the Commission designates Shelley S. Dreifuss, director of the Commission's Office of the Consumer Advocate, to represent those interests. Pursuant to this designation, Ms. Dreifuss will direct the activities of Commission personnel assigned to assist her and, upon request, will supply their names for the record. Neither Ms. Dreifuss nor any of the assigned personnel will participate in or provide advice on any Commission decision in this proceeding. Ordering Paragraphs *It is ordered:* 1. Statements of genuine issues of material fact as discussed in the body of this order are due no later than April 27, 2006. Replies may be filed on or before May 4, 2006. 2. The deadline for filing notices of intervention is April 27, 2006. 3. Shelley S. Dreifuss, director of the Commission's Office of the Consumer Advocate, is designated to represent the interests of the general public. 4. The Secretary shall arrange for publication of this notice and order in the **Federal Register** . Dated: April 13, 2006. Steven W. Williams, Secretary. [FR Doc. E6-5774 Filed 4-17-06; 8:45 am] BILLING CODE 7710-FW-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27287; 812-13068] Special Value Opportunities Fund, LLC, et al.; Notice of Application April 11, 2006. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of application for an order under rule 17d-1 under the Investment Company Act of 1940 (“Act”) to permit certain joint transactions. Applicants: Special Value Opportunities Fund, LLC (“SVOF”); Special Value Expansion Fund, LLC (“SVEF”); Tennenbaum Capital Partners, LLC (“TCP”), on behalf of itself and its successors; Babson Capital Management LLC (“Babson”), on behalf of itself and its successors; Special Value Bond Fund II, LLC (“SVBF II”); Special Value Absolute Return Fund, LLC (“SVARF”); Tennenbaum Multi-Strategy Master Fund (“MSMF”); Tennenbaum Multi-Strategy Fund I LLC (“MSFI”); and Tennenbaum Multi-Strategy Fund (Offshore) (“MSFO”). 1 1 The term “successor,” as applied to TCP and Babson, means an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. Summary of Application: Applicants request an order to permit certain registered investment companies to coinvest with certain affiliated entities. 2 2 All existing entities that currently intend to rely on the requested order have been named as applicants. Any other existing or future entity that subsequently relies on the order will comply with the terms and conditions of the application. Filing Dates: The application was filed on February 19, 2004, and amended on April 10, 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 applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on May 8, 2006, and should be accompanied by proof of service on applicants, 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, Commission, 100 F Street, NE., Washington, DC 20549. Applicants: c/o Tennenbaum Capital Partners, LLC, 2951 28th Street, Suite 1000, Santa Monica, CA 90405. FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel, at

(202)551-6812, or Nadya B. Roytblat, Assistant Director, at

(202)942-6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the SEC's Public Reference Branch, 100 F Street, NE., Washington, DC 20549-0102 (tel. 202-551-5850). Applicants' Representations 1. TCP, a limited liability company organized under the laws of Delaware, is an investment adviser registered under the Investment Advisers Act of 1940 (“Advisers Act”). Babson, an indirect, wholly owned subsidiary of Massachusetts Mutual Life Insurance Company (“MassMutual Life”), is registered as an investment adviser under the Advisers Act. 2. SVOF, a Delaware limited liability company, is registered under the Act as a nondiversified closed-end management investment company. SVOF has $1.422 billion in total available capital (“Total Available Capital”), consisting of common equity capital, amounts available under a senior secured revolving credit facility, and preferred stock. SVOF's approximate target investment allocations are equity securities (generally with a view to influencing the governance of the issuers) (20%), distressed debt (generally with a view to acquiring equity ownership in restructuring transactions) (20%), mezzanine investments (20%), and high yielding debt (40%). TCP serves as SVOF's investment adviser and manages the day-to-day operations of SVOF. TCP and Babson co-manage SVOF's investments through their joint participation on SVOF's investment committee. 3. SVEF, a Delaware limited liability company, is registered under the Act as a nondiversified closed-end management investment company. SVEF has $600 million in Total Available Capital, consisting of common equity capital commitments, amounts available under a revolving credit facility, and preferred stock. SVEF has the same investment objective and target investment allocations as SVOF. TCP acts as SVEF's investment adviser and manages the day-to-day operations of SVEF. From time to time, TCP may form other registered closed-end management investment companies (together with SVOF and SVEF, the “Registered Funds”) to engage in investment activities similar to those engaged in by SVOF and SVEF. 4. TCP currently manages, or co-manages with Babson, five accounts that are not registered investment companies and that expect to be actively investing. Two of these, SVBF II and SVARF, are investment pools that are excepted from the definition of investment company under section 3(c)(7) of the Act and have investment strategies that are similar to those of SVOF and SVEF. SVBF II has $450 million in Total Available Capital, consisting of drawn common equity, notes, and a revolving credit facility, and SVARF has Total Available Capital of $884.5 million, consisting of drawn common equity, notes, and a revolving credit facility. The other three unregistered accounts, MSMF, MSFI, and MSFO (collectively, the “Hedge Fund”), are a set of private investment funds, organized as a master fund with separate domestic and offshore feeders, that are excepted from the definition of investment company under section 3(c)(7) of the Act. The Hedge Fund, which had net assets of $82 million as of September 30, 2005, invests primarily in publicly traded securities and related hedges and probably will not coinvest in private securities on more than an occasional basis. From time to time, TCP or another Adviser may manage other accounts that are not registered investment companies in reliance on section 3(c)(1) or 3(c)(7) of the Act (such accounts, together with SVBF II, SVARF, MSMF, MSFI, and MSFO, the “Unregistered Accounts”). 5. Applicants seek an order under rule 17d-1 under the Act to permit SVOF, SVEF, and any other Registered Fund that is managed by TCP or an entity controlling, controlled by, or under common control with TCP (collectively with TCP, the “Adviser”) and the Unregistered Accounts to coinvest in private placement securities, make follow-on investments in the issuers of private placement securities (“Follow-On Investments”), and exercise warrants, conversion privileges, and other rights associated with private placement securities. Applicants' Legal Analysis 1. Section 17(d) of the Act and rule 17d-1 under the Act generally prohibit any affiliated person of a registered investment company, or affiliated person of an affiliated person, when acting as principal, from effecting any joint transaction in which the company participates unless the transaction is approved by the Commission. Rule 17d-1 under the Act provides that in passing upon applications under section 17(d), the Commission will consider whether the participation of a registered investment company in a joint enterprise on the basis proposed is consistent with the provisions, policies, and purposes of the Act and the extent to which the company's participation is on a basis different from or less advantageous than that of other participants. 2. SVOF, SVEF, and the Unregistered Accounts have been sponsored and managed by TCP and, accordingly, may be deemed to be affiliated persons of each other and of TCP because TCP may be deemed to control each of them. TCP may be deemed to be an affiliated person of SVOF and SVEF because it acts as their investment adviser and may be deemed to control them. TCP also may be deemed to be an affiliated person of the Unregistered Accounts because it may control them. Babson may be deemed to be an affiliated person of SVOF because it acts as an investment adviser to SVOF. Babson may also be a second-tier affiliated person of SVOF because MassMutual Life owns 5% or more of the voting securities of SVOF. In addition, Babson may in certain circumstances be deemed to be an affiliated person of SVBF II and SVARF. 3. Applicants state that the ability to participate in proposed coinvestments will benefit the Registered Funds and their shareholders by increasing the favorable investment opportunities available to them. Applicants represent that the Registered Funds will be able to

(i)have a larger pool of capital available for investment, thereby obtaining access to a greater number and variety of potential investments than any Registered Fund could obtain on its own, and

(ii)increase their bargaining power to negotiate more favorable terms. 4. Applicants believe that the terms and conditions contained in the application ensure that the proposed coinvestments are consistent with the protection of each Registered Fund's investors and with the purposes intended by the policy and provisions of the Act. Specifically, all participants will invest at the same time for the same price and with the same terms, conditions, class, registration rights, and any other rights, so that no participant receives terms more favorable than any other participant. In addition, the decision to participate in a proposed coinvestment must be approved by the Independent Directors of each Registered Fund to ensure that the terms of the proposed coinvestment are fair and reasonable, do not involve overreaching, and are consistent with the investment objectives and policies of the Registered Fund. Applicants' Conditions Applicants agree that any order granting the requested relief shall be subject to the following conditions: 1. Each time that an Unregistered Account or a Registered Fund proposes to acquire private placement securities, the acquisition of which would be consistent with the investment objectives and policies of another Registered Fund, the Adviser will offer the other Registered Fund the opportunity to acquire a *pro rata* amount (based on the amounts available for investment by such Registered Fund and the applicable Unregistered Account or Registered Fund) of such private placement securities up to the entire amount being offered to it. If one Registered Fund declines the offer or accepts a portion of the private placement securities offered to it, but one or more other Registered Funds accepts the private placement securities offered, that portion of the private placement securities declined by the Registered Fund may be allocated to the other Registered Fund or Unregistered Account, based on their amounts available for investment. For purposes of the foregoing, the phrase “amounts available for investment” means the Total Available Capital, which includes available leverage so long as such leverage is able to be drawn. 2.

(a)Prior to any coinvestment by a Registered Fund, the Adviser will make an initial determination of whether the acquisition of the private placement security is consistent with the investment objectives and policies of the Registered Fund. If the Adviser determines that the acquisition of the private placement securities would be consistent with the investment objectives and policies of the Registered Fund, the Adviser will then determine whether participation in the investment opportunity is appropriate for the Registered Fund and, if so, the appropriate amount that the Registered Fund should invest. If the aggregate of the amount to be invested by the Registered Fund in such proposed coinvestment and the amount proposed to be invested by any other Registered Fund and any Unregistered Accounts in the same transaction exceeds the amount of the investment opportunity, the amount invested by each such party will be allocated among them *pro rata* based on the amount available for investment by the Registered Funds and the Unregistered Accounts participating in the transaction. The Adviser will provide the Independent Directors of the Registered Fund's Board (“Joint Transactions Committee”) with information concerning the amount of capital the Registered Funds and the Unregistered Accounts have available for investment in order to assist the Joint Transactions Committee with its review of the Registered Fund's investments for compliance with these allocation features.

(b)After making the determinations required in

(a)above, the Adviser will submit written information concerning the proposed coinvestment, including the amount proposed to be acquired by the Registered Fund, any other Registered Funds, and any Unregistered Account, to the members of the Joint Transactions Committee. A Registered Fund may coinvest in a private placement security only if a majority of the members of the Joint Transactions Committee who have no direct or indirect financial interest in the transaction (“Required Majority”) determine that: i. The terms of the transaction, including the consideration to be paid, are reasonable and fair to the Registered Fund and its shareholders and do not involve overreaching of the Registered Fund or its shareholders on the part of any person concerned; ii. the transaction is consistent with the Registered Fund's investment objectives and policies as recited in its registration statement and its reports to shareholders; and iii. the coinvestment by another Registered Fund or an Unregistered Account would not disadvantage the Registered Fund, and participation by the Registered Fund would not be on a basis different from or less advantageous than that of the other participants. 3. If the Adviser determines that a Registered Fund should not acquire any private placement securities offered to it pursuant to condition 1 above, the Adviser will submit its determination to the Joint Transactions Committee for approval. 4. The Registered Funds and any Unregistered Account shall acquire private placement securities in reliance on the order only if the terms, conditions, price, class of securities being purchased, registration rights, if any, and other rights are the same for each Registered Fund and any Unregistered Account participating in the coinvestment. When more than one Registered Fund proposes to coinvest in the same private placement securities, the Joint Transactions Committee of each Registered Fund shall review the transaction and make the determinations set forth in condition 2 above, on or about the same time. 5. Except as described below, no Registered Fund may make a Follow-On Investment or exercise warrants, conversion privileges, or other rights unless each Unregistered Account and any other Registered Fund make such Follow-On Investments or exercise such warrants, conversion rights, or other rights at the same time and in amounts proportionate to their respective holdings of such private placement securities. If an Unregistered Account or another Registered Fund anticipates participating in a Follow-On Investment or exercising warrants, conversion rights, or other rights in an amount disproportionate to its holding, the Adviser will formulate a recommendation as to the proposed Follow-On Investment or exercise of rights by each Registered Fund and submit the recommendation to each Registered Fund's Joint Transactions Committee. That recommendation will include an explanation why an Unregistered Account is not participating to the extent of, or exercising, its proportionate amount. Prior to any such disproportionate Follow-On Investment or exercise, a Registered Fund must obtain approval for the transaction as set forth in condition 2 above. Transactions pursuant to this condition 5 will be subject to the other conditions set forth in the application. 6. No Unregistered Account or Registered Fund will sell, exchange, or otherwise dispose of any interest in any private placement securities acquired pursuant to the order unless each Registered Fund has the opportunity to dispose of the interests at the same time, for the same unit consideration, on the same terms and conditions, and in amounts proportionate to their holdings of the private placement securities. With respect to any such transaction, the Adviser will formulate a recommendation as to the proposed participation by a Registered Fund and submit the recommendation to such Registered Fund's Joint Transactions Committee. The Registered Fund will dispose of such private placement securities to the extent the Joint Transactions Committee, upon the affirmative vote of the Required Majority, determines that the disposition is in the best interests of the Registered Fund, is fair and reasonable, and does not involve overreaching of the Registered Fund or its shareholders by any person concerned. 7. The expenses, if any, associated with acquiring, holding, or disposing of any private placement securities (including, without limitation, the expenses of the distribution of any private placement securities registered for sale under the Securities Act of 1933) shall, to the extent not payable solely by the Adviser under its investment management agreements with the Registered Funds and the Unregistered Accounts, be shared by the Registered Funds and the Unregistered Accounts in proportion to the relative amounts of such private placement securities held or being acquired or disposed of, as the case may be, by the Registered Funds and the Unregistered Accounts. 8. The Joint Transactions Committee of each Registered Fund will be provided quarterly for its review all information concerning coinvestments made by the Registered Fund and the Unregistered Accounts and other Registered Funds, including investments made by the Unregistered Accounts in which the Registered Fund declined to participate, so that the Joint Transactions Committee may determine whether all investments made during the preceding quarter, including those investments in which the Registered Fund declined to participate, comply with the conditions of the order. In addition, the Joint Transactions Committee will consider at least annually the continued appropriateness of the standards established for coinvestment by the Registered Fund, including whether the use of the standards continues to be in the best interests of the Registered Fund and its shareholders and does not involve overreaching on the part of any person concerned. 9. Except for a Follow-On Investment made pursuant to condition 5 above, no investment will be made by a Registered Fund in reliance on the order in private placement securities of any entity if the Adviser knows or reasonably should know that another Registered Fund or Unregistered Account or any affiliated person of such Registered Fund or Unregistered Account then currently holds a security issued by that entity. 10. Any transaction fee (including break-up or commitment fees but excluding brokerage fees contemplated by section 17(e)(2) of the Act) received by the applicants in connection with a transaction entered into in reliance on the requested order will be distributed to the participants on a *pro rata* basis based on the amounts they invested or committed, as the case may be, in such transaction. If any transaction fee is to be held by the Adviser pending consummation of the transaction, the fee will be deposited into an account maintained by the Adviser at a bank or banks having the qualifications prescribed in section 26(a) of the Act, and the account will earn a competitive rate of interest that also will be divided *pro rata* among the participants based on the amounts they invested or committed, as the case may be, in such transaction. The Adviser will receive no additional compensation or remuneration of any kind as a result of or in connection with a coinvestment, or compensation for its services in sponsoring, structuring, or providing managerial assistance to an issuer of private placement securities that is not shared *pro rata* with the coinvesting Registered Funds and Unregistered Accounts. 11. Each Registered Fund will comply with the fund governance standards as defined in Rule 0-1(a)(7) under the Act. The Registered Funds will not have common Independent Directors. 12. Each applicant will maintain and preserve all records required by section 31 of the Act and any other provisions of the Act and the rules and regulations under the Act applicable to such applicant. The Registered Funds will maintain records required by section 57(f)(3) of the Act as if each of the Registered Funds were a business development company and the coinvestments and any Follow-On Investments (or exercise of warrants, conversion rights or other rights) were approved under section 57(f). For the Commission, by the Division of Investment Management, pursuant to delegated authority. Nancy M. Morris, Secretary. [FR Doc. E6-5709 Filed 4-17-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53630; File No. SR-ISE-2006-18] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fees for Non-ISE Market Maker Orders April 11, 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 April 3, 2006, the International Securities Exchange, Inc. (“ISE” 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 ISE. The ISE has designated this proposal as one changing a fee imposed by the ISE under section 19(b)(3)(A)(ii) of the Act, 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to amend its Schedule of Fees to adopt a fee for non-ISE market maker orders. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.iseoptions.com/legal/proposed_rule_changes.asp* ) and at the Commission's Public Reference Room. Below is the text of the proposed rule change. Proposed new language is *italicized* . Electronic market place Amount Billable unit Frequency Notes Execution Fees * * * * * * * • *ISE* Market Maker For Complex Orders, fee charged only for the leg of the trade consisting of the most contracts. For a pilot period ending November 30, 2006 in transactions in QQQQ, this fee

(i)is reduced by $.10 per Member for monthly A.D.V. above 8,000 contracts/sides and

(ii)is waived entirely per Member for monthly A.D.V. above 10,000 contracts/sides. A.D.V. Less Than 300,000 $0.21 Contract/side Transaction Based on Exchange A.D.V. A.D.V. From 300,001 to 500,000 $0.17 Contract/side Transaction Based on Exchange A.D.V. A.D.V. From 500,001 to 1,000,000 $0.14 Contract/side Transaction Based on Exchange A.D.V. A.D.V. Over 1,000,000 $0.12 Contract/side Transaction Based on Exchange A.D.V. • *Non-ISE Market Maker* $0.16 Contract/side *Transaction* *The term “Non-ISE Market Maker” means a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934 registered in the same options class on another options exchange.* * * * * * * * 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 ISE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received regarding the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The ISE has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to establish a fee for FARMM orders. FARMM orders are orders that are sent to the Exchange for execution by an Electronic Access Member, an ISE member, on behalf of a non-ISE market maker. FARMM orders do not include Linkage Orders. Under ISE's Schedule of Fees, the Exchange currently treats FARMM orders as Firm Proprietary orders. As such, both these order types are charged an execution fee and a comparison fee of $0.15 and $0.03 per contract, respectively. The ISE represents that non-ISE market makers that trade on the Exchange do not pay all of the same fees that ISE market makers pay, such as membership and regulatory fees. Thus, ISE market makers are subsidizing non-ISE market makers' trading on the Exchange. Accordingly, for competitive reasons, the Exchange proposes to create a new fee of $0.19 per contract for all FARMM orders, comprised of an execution fee and a comparison fee of $0.16 and $0.03 per contract, respectively. The Exchange notes that other options exchanges currently assess a per contract surcharge on non-Linkage trades executed for the account of a non-member market maker. For example, the Exchange believes that the Chicago Board Options Exchange (“CBOE”), the American Stock Exchange (“Amex”), and the Philadelphia Stock Exchange (“Phlx”) currently charge FARMM orders $0.26, 5 $0.21, 6 and $0.24, 7 per contract, respectively. The Exchange believes that the proposed increase by the Exchange of $0.01 per contract from the current fees paid by non-ISE market makers will still leave ISE as the least expensive venue for executing FARMM orders. 5 *See* CBOE Fees Schedule, dated March 1, 2006, at *http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf.* 6 *See* Amex Price List, dated March 15, 2006, at *http://www.amex.com/atamex/constitutionRules/at_feeSched.pdf.* 7 *See* Phlx Fee Schedule, dated February 2006, at *http://www.phlx.com/exchange/memservices/feesched.pdf* . 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b)(4) of the Act 8 in that it provides for the equitable allocation of reasonable dues, fees and other charges among the ISE's members and other persons using its facilities. 8 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has been designated as a fee change pursuant to section 19(b)(3)(A) of the Act 9 and Rule 19b-4(f)(2) thereunder, 10 because it establishes or changes a due, fee or other charge imposed by the Exchange. Accordingly, the proposal will take effect upon filing with the Commission. At any time within 60 days of the filing of the 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. 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b-4(f)(2). 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-ISE-2006-18 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ISE-2006-18. 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 ISE. 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-ISE-2006-18 and should be submitted on or before May 9, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-5708 Filed 4-17-06; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10437 and # 10438] Illinois Disaster Number IL-00003 AGENCY: U.S. Small Business Administration. ACTION: Amendment 1. SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of Illinois (FEMA-1633-DR), dated March 28, 2006. *Incident:* Tornadoes and Severe Storms. Incident Period: March 11, 2006 through March 13, 2006. *Effective Date:* April 6, 2006. *Physical Loan Application Deadline Date:* May 30, 2006. *EIDL Loan Application Deadline Date:* December 28, 2006. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the Presidential disaster declaration for the State of ILLINOIS, dated March 28, 2006 is hereby amended to include the following areas as adversely affected by the disaster: *Primary Counties:* Morgan, and Greene. *Contiguous Counties:* Illinois: Brown, Calhoun, Jersey, Pike, and Scott. All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Cheri L. Cannon, Acting Associate Administrator for Disaster Assistance. [FR Doc. E6-5699 Filed 4-17-06; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #10428 and #10429] Missouri Disaster Number MO-00002 AGENCY: U.S. Small Business Administration. ACTION: Amendment 2. SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of Missouri (FEMA-1631-DR), dated March 16, 2006. *Incident:* Severe storms, tornadoes, and flooding. *Incident Period:* March 11, 2006 through March 31, 2006. *Effective Date:* April 6, 2006. *Physical Loan Application Deadline Date:* May 15, 2006. *EIDL Loan Application Deadline Date:* December 15, 2006. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: Alan Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the Presidential disaster declaration for the State of Missouri, dated March 16, 2006 is hereby amended to include the following areas as adversely affected by the disaster: *Primary Counties:* Crawford *Contiguous Counties:* All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Cheri L. Cannon, Acting Associate, Administrator for Disaster Assistance. [FR Doc. E6-5697 Filed 4-17-06; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10440 and # 10441] Tennessee Disaster Number TN-00008 AGENCY: U.S. Small Business Administration. ACTION: Amendment 1. SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of Tennessee (FEMA-1634-DR), dated April 5, 2006. *Incident:* Tornadoes and Severe Storms. *Incident Period:* April 2, 2006 and continuing through April 8, 2006. *Effective Date:* April 10, 2006. *Physical Loan Application Deadline Date:* June 5, 2006. *EIDL Loan Application Deadline Date:* January 5, 2006. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the President's major disaster declaration for the State of Tennessee, dated April 5, 2006, is hereby amended to re-establish the incident period for this disaster as beginning April 2, 2006 and continuing through April 8, 2006. All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Herbert L. Mitchell, Associate Administrator for Disaster Assistance. [FR Doc. E6-5698 Filed 4-17-06; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Aviation Proceedings, Agreements Filed the Week Ending March 24, 2006 The following Agreements were filed with the Department of Transportation under Sections 412 and 414 of the Federal Aviation Act, as amended (49 U.S.C. 1382 and 1384) and procedures governing proceedings to enforce these provisions. Answers may be filed within 21 days after the filing of the application. *Docket Number:* OST-2006-24237. *Date Filed:* March 20, 2006. *Parties:* Members of the International Air Transport Association. *Subject:* TC12 North Atlantic-Middle East except between USA and Jordan (Memo 0249). *Minutes:* TC12 North/Mid/South Atlantic-Middle East Geneva & Teleconference, 16-17 February 2006 (Memo 0252). *Fares:* TC12 North/Mid/South Atlantic-Middle East Geneva & Teleconference, 16-17 February 2006 (Memo 0138). *Intended effective date:* 1 April 2006. *Docket Number:* OST-2006-24266. *Date Filed:* March 23, 2006. *Parties:* Members of the International Air Transport Association. *Subject:* PTC2 ME-AFR 0144 dated 23 February 2006 TC2 Middle East-Africa Resolutions r1-r14. *Minutes:* PTC2 ME-AFR 0145 dated 28 January 2006. *Tables:* PTC2 ME-AFR Fares 0072 dated 23 February 2006. *Intended effective date:* 1 May 2006. *Docket Number:* OST-2006-24272. *Date Filed:* March 23, 2006. *Parties:* Members of the International Air Transport Association. *Subject:* PTC2 AFR 0167 dated 23 February 2006, PTC2 Within Africa Resolutions R1-R23, PTC2 AFR 0168 dated 28 February 2006, PTC2 AFR Fares 0060 dated 23 February 2006. *Intended effective date:* 1 May 2006. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E6-5716 Filed 4-17-06; 8:45 am] BILLING CODE 4910-62-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Dealer's Aircraft Registration Certificates AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice—Dealer's Aircraft Registration Certificate, AC Form 8050-6. SUMMARY: The Federal Aviation Administration will begin assigning permanent Dealer's Aircraft Registration Certificate numbers to manufacturers and dealers who currently hold an unexpired dealer's certificate and any new issuances. DATES: *Effective Date:* May 1, 2006. FOR FURTHER INFORMATION CONTACT: Walter Binkley, Manager, Aircraft Registration Branch (AFS-750), Mike Monroney Aeronautical Center, Federal Aviation Administration (AFS-750), Post Office Box 25504, Oklahoma City, OK 73125. Telephone

(405)954-3131. SUPPLEMENTARY INFORMATION: There are currently more than 3,900 U.S. civil aircraft registered using Dealer's Aircraft Registration Certificate, AC Form 8050-6, (dealer's certificate). Historically, each time a dealer's certificate was issued or renewed, a new certificate number was assigned. In order to facilitate administration of the Dealer Certificate program, beginning May 1, 2006, the FAA's Aircraft Registry will begin issuing replacement Dealer Certificates with a permanent number assigned to that dealer. Expired Dealer Certificates will not be reissued with a permanently assigned number unless restored as discussed in the last paragraph of this notice. The assignment of a permanent number does not cause the certificate itself to be permanent. In accordance with 14 CFR part 47.71, a dealer's certificate continues to expire 1 year after the date it is issued. The new permanent dealer certificate number will begin with the letter “D” followed by six numbers, i.e. D000001, The permanent certificate number will facilitate linking all aircraft currently registered under that dealer's certificates to that dealer. The aircraft records will reflect the address shown on the Dealer's Aircraft Registration Certificate Application, AC Form 8050-5 (dealer's application). Aircraft registered under a dealer's certificate in the future will be linked to the dealer by the permanent certificate number and show the same address as the dealer's application. Any aircraft registered under a dealer's certificate that has expired will be placed in an Expired Dealer status. An acceptable Dealer's Aircraft Registration Certificate Application, AC Form 8050-5, or an Aircraft Registration Application, AC Form 8050-1, and the appropriate fee must be submitted to re-register the aircraft in accordance with 14 CFR part 47. Issued in Oklahoma City, OK on April 7, 2006. Mark Lash, Manager, Civil Aviation Registry. [FR Doc. 06-3662 Filed 4-17-06; 8:45 am]

Connections15 off-index

15 references not yet in our index

39 USC 3662
39 USC 3621
39 CFR 3001.20
39 CFR 3001.9(a)
39 CFR 3001.10(a)
15 USC 78s(b)(1)
17 CFR 240.19
15 USC 78s(b)(3)(A)(ii)
15 USC 78f(b)(4)
15 USC 78s(b)(3)(A)
5 USC 552
17 CFR 200.30-3(a)(12)
49 USC 1382
14 CFR 47.71
14 CFR 47

Citation graph

cites case law

Notices

Order denying motion to dismiss and notice of proceeding

Cite39 USC 3662

Cite39 USC 3621

Cite39 CFR 3001.20

Cite39 CFR 3001.9(a)

Cite39 CFR 3001.10(a)

Cites 15 · showing 5Cited by 0 across 0 sources