Notices. Notice of application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (“Act”) for an exemption from sections 12(d)(1)(A) and (B) of the Act and under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act

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BILLING CODE 3910-A7-P RAILROAD RETIREMENT BOARD Proposed Collection; Comment Request SUMMARY: In accordance with the requirement of Section 3506 (c)(2)(A) of the Paperwork Reduction Act of 1995 which provides opportunity for public comment on new or revised data collections, the Railroad Retirement Board

(RRB)will publish periodic summaries of proposed data collections. *Comments are invited on:*

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

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

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

(d)ways to minimize the burden related to the collection of information on respondents, including the use of automated collection techniques or other forms of information technology. *Title and purpose of information collection:* Employer Reporting; OMB 3220-0005. Under Section 9 of the Railroad Retirement Act (RRA), and Section 6 of the Railroad Unemployment Insurance Act (RUIA), railroad employers are required to submit reports of employee service and compensation to the RRB as needed for administering the RRA and RUIA. To pay benefits due on a deceased employee's earnings records or determine entitlement to, and amount of annuity applied for, it is necessary at times to obtain from railroad employers current

(lag)service and compensation not yet reported to the RRB through the annual reporting process. The reporting requirements are specified in 20 CFR 209. The RRB currently utilizes Form G-88a.l, Notice of Retirement and Verification of Date Last Worked, Form G-88a.2, Notice of Retirement and Request for Service Needed for Eligibility, and Form AA-12, Notice of Death and Compensation, to obtain the required lag service and related information from railroad employers. Form G-88a.1 is a computer-generated listing sent by the RRB to railroad employers and used for the specific purpose of verifying information previously provided to the RRB regarding the date last worked by an employee. If the information is correct, the employer need not reply. If the information is incorrect, the employer is asked to provide corrected information. Form G-88a.2 is used by the RRB to secure lag service and compensation information when it is needed to determine benefit eligibility. Form AA-12 obtains a report of lag service and compensation from the last railroad employer of a deceased employee. This report covers the lag period between the date of the latest record of employment processed by the RRB and the date an employee last worked, the date of death or the date the employee may have been entitled to benefits under the Social Security Act. The information is used by the RRB to determine benefits due on the deceased employee's earnings record. The RRB proposes changes to Form AA-12 to delete items no longer needed. Minor editorial and formatting changes are also proposed to Form AA-12. No changes are proposed to Form G-88a.1. Non-burden impacting editorial and formatting changes are proposed to Form G-88a.2. In addition, 20 CFR 209.12(b) requires all railroad employers to furnish the RRB with the home addresses of all employees hired within the last year (new-hires). Form BA-6a, BA-6 Address Report, is used by the RRB to obtain home address information of employees from railroad employers that do not have the home address information computerized and who submit the information in a paper format. The form also serves as an instruction sheet to railroad employers who can also submit the information electronically by magnetic tape, cartridge, PC diskette or via the Internet utilizing the RRB's Employer Reporting System. No changes are proposed to the approved versions of Form BA-6a currently in use. The RRB is proposing the addition of a secure E-mail equivalent option of Form BA-6a to the information collection. The completion time for Form G-88a.1 is estimated at 5 to 20 minutes. Form G-88a.2 is estimated at 5 minutes per response. The estimated completion time for Form AA-12 is 5 minutes per response. The estimated completion time for Form BA-6a is 10 to 30 minutes. Completion is mandatory. The RRB estimates that approximately 60 Form AA-12's, 504 Form G-88a.1's, 480 Form G-88a.2's and 914 Form BA-6a's are completed annually. *Additional Information or Comments:* To request more information or to obtain a copy of the information collection justification, forms, and/or supporting material, please call the RRB Clearance Officer at

(312)751-3363 or send an e-mail request to *Charles.Mierzwa@RRB.GOV.* Comments regarding the information collection should be addressed to Ronald J. Hodapp, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092 or send an e-mail to *Ronald.Hodapp@RRB.GOV.* Written comments should be received within 60 days of this notice. Charles Mierzwa, Clearance Officer. [FR Doc. E6-7271 Filed 5-11-06; 8:45 am] BILLING CODE 7905-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27315; 812-13167] Phoenix Life Insurance Company, et al.; Notice of Application May 8, 2006. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (“Act”) for an exemption from sections 12(d)(1)(A) and

(B)of the Act and under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act. *Summary of Application:* The order would permit certain registered open-end management investment companies to acquire shares of other registered open-end management investment companies and unit investment trusts (“UITs”) both within and outside the same group of investment companies. *Applicants:*

(a)Phoenix Life Insurance Company (“Phoenix”), PHL Variable Insurance Company (“PHL Variable”) and Phoenix Life and Annuity Company (“PLAC,” and together with Phoenix, PHL Variable and any insurance company controlling, controlled by or under common control with Phoenix, PHL Variable or PLAC, the “Insurance Companies”);

(b)Phoenix Edge Series Fund (the “Insurance-Dedicated Fund”), including the currently existing series and all future series thereof;

(c)Phoenix Pholios (the “Retail Fund,” and together with the Insurance-Dedicated Fund, the “Phoenix Funds”) including the currently existing series and all future series thereof;

(d)any existing or future registered open-end management investment companies and any series thereof that are part of the same “group of investment companies,” as defined in section 12(d)(1)(G)(ii) of the Act, as the Phoenix Funds, and are, or will be, advised by either Phoenix Investment Counsel, Inc. or Phoenix Variable Advisors, Inc. (collectively, the “Manager”) 1 or any entity controlling, controlled by or under common control with the Manager (included in the term, “Phoenix Funds”); and

(e)the Manager. 2 1 The Manager, together with any existing or future entity controlling, controlled by or under common control with the Manager are referred to collectively as the “Manager.” 2 All entities that currently intend to rely on the requested order are named as applicants. Any other entity that relies on the order in the future will comply with the terms and conditions of the application. DATES: *Filing Dates:* The application was filed on February 14, 2005 and amended on January 6, 2006 and May 1, 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. June 2, 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, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090; Applicants, Phoenix, PHL Variable, PLAC, and Phoenix Variable Advisors, Inc., One American Row, Hartford, CT 06102; the Retail Fund and the Insurance-Dedicated Fund, 101 Munson Street, Greenfield, MA 01301; Phoenix Investment Counsel, Inc., 56 Prospect Street, Hartford, CT 06115. FOR FURTHER INFORMATION CONTACT: John Yoder, Senior Counsel, at

(202)551-6878, or Mary Kay Frech, Branch Chief, 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 may be obtained for a fee at the Public Reference Desk, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-0102 (telephone

(202)551-5850). Applicants' Representations 1. Phoenix is a New York life insurance company and an indirect wholly-owned subsidiary of The Phoenix Companies, Inc. (“The Phoenix Companies”), a publicly traded Delaware corporation. PHL Variable is a Connecticut life insurance company and an indirect wholly-owned subsidiary of Phoenix. PLAC is a Connecticut life insurance company and an indirect wholly-owned subsidiary of The Phoenix Companies. The Insurance Companies issue group and individual variable annuity contracts and variable life insurance policies (collectively, the “Contracts”) that offer opportunities to invest in the Insurance-Dedicated Fund through separate accounts registered under the Act (“Registered Separate Accounts”) and separate accounts exempt from registration under the Act (“Unregistered Separate Accounts,” and together with the Registered Separate Accounts, the “Separate Accounts”). 2. The Insurance-Dedicated Fund is a Massachusetts business trust registered under the Act as an open-end management investment company. The Retail Fund is a Delaware statutory trust registered under the Act as a diversified open-end management investment company. The Insurance-Dedicated Fund and the Retail Fund currently offer 26 and 7 series, respectively (each series is referred to as a “Fund,” and collectively, as “Funds”). Except for organizational seed capital for certain of the Funds invested by the Manager or an affiliate, shares of the Insurance-Dedicated Fund are sold exclusively to the Insurance Companies on behalf of their Separate Accounts to fund benefits under the Contracts. Shares of the Insurance-Dedicated Fund may also be offered in the future to unaffiliated insurance companies to fund benefits under variable annuity contracts and variable life insurance policies issued by the unaffiliated insurance companies, and directly to certain qualified pension and profit sharing plans pursuant to an order granted by the Commission. 3 Shares of the Retail Fund are sold directly to the public. 3 The Phoenix Edge Series Fund, Investment Company Act Release Nos. 25687 (July 26, 2002) (notice) and 25703 (August 20, 2002) (order). 3. The Manager is an affiliated person of the Insurance Companies and is registered under the Investment Advisers Act of 1940. The Manager serves as investment adviser to the Funds. 4. Applicants request relief to permit certain Funds (each a “Fund of Funds”) to invest in:

(a)Other Funds in the same group of investment companies as the Fund of Funds (“Affiliated Funds”), and/or

(b)registered open-end management investment companies and UITs that are not part of the same group of investment companies as the Fund of Funds (“Unaffiliated Funds,” and together with the Affiliated Funds, the “Underlying Funds”). The Unaffiliated Funds may include UITs (“Unaffiliated Underlying Trusts”) and open-end management investment companies registered under the Act (“Unaffiliated Underlying Funds”). Certain of the Unaffiliated Funds may be “exchange-traded funds” that are registered under the Act as UITs or open-end management investment companies and have received exemptive relief to sell their shares on a national securities exchange at negotiated prices (“ETFs”). Each Fund of Funds may also make investments in government securities, domestic and foreign common and preferred stock, fixed income securities, futures transactions, options on the foregoing and in other securities that are not issued by registered investment companies and which are consistent with its investment objective, including money market instruments (the “Other Securities”). Applicants state that the requested relief will provide an efficient and simple method of allowing investors to create a comprehensive asset allocation program. Applicants' Legal Analysis A. Section 12(d)(1) 1. Section 12(d)(1)(A) of the Act prohibits a registered investment company from acquiring shares of an investment company if the securities represent more than 3% of the total outstanding voting stock of the acquired company, more than 5% of the total assets of the acquiring company, or, together with the securities of any other investment companies, more than 10% of the total assets of the acquiring company. Section 12(d)(1)(B) of the Act prohibits a registered open-end investment company, its principal underwriter and any broker or dealer from selling the shares of the investment company to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company's voting stock, or if the sale will cause more than 10% of the acquired company's voting stock to be owned by investment companies generally. 2. Section 12(d)(1)(G) provides, in relevant part, that section 12(d)(1) will not apply to securities of a registered open-end investment company or registered UIT if the acquired company and the acquiring company are part of the same group of investment companies, provided that certain other requirements contained in section 12(d)(1)(G) are met. Applicants state that, while the Funds of Funds currently rely on section 12(d)(1)(G) with respect to their investments in Affiliated Funds, if the Funds of Funds wish to invest in Unaffiliated Funds and Other Securities in addition to Affiliated Funds, they cannot then rely on section 12(d)(1)(G). 3. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Applicants seek an exemption under section 12(d)(1)(J) to permit the Funds of Funds to acquire shares of Affiliated and Unaffiliated Funds and to permit the Affiliated and Unaffiliated Funds, their principal underwriters and any broker or dealer to sell shares to the Funds of Funds beyond the limits set forth in sections 12(d)(1)(A) and

(B)of the Act. 4. Applicants state that the proposed arrangement will not give rise to the policy concerns underlying sections 12(d)(1)(A) and (B), which include concerns about undue influence by a fund of funds over underlying funds, excessive layering of fees, and overly complex fund structures. Accordingly, applicants believe that the requested exemption is consistent with the public interest and the protection of investors. 5. Applicants state that the proposed arrangement will not result in undue influence by a Fund of Funds or its affiliated persons over the Unaffiliated Funds. To limit the control that a Fund of Funds may have over an Unaffiliated Fund, applicants propose a condition prohibiting:

(a)The Manager and any person controlling, controlled by or under common control with the Manager, and any investment company and any issuer that would be an investment company but for section 3(c)(1) or section 3(c)(7) of the Act advised or sponsored by the Manager or any person controlling, controlled by or under common control with the Manager (collectively, the “Group”), and

(b)any investment adviser within the meaning of section 2(a)(20)(B) of the Act (“Sub-Adviser”) to a Fund of Funds, any person controlling, controlled by or under common control with the Sub-Adviser, and any investment company or issuer that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act (or portion of such investment company or issuer) advised by the Sub-Adviser or any person controlling, controlled by or under common control with the Sub-Adviser (collectively, the “Sub-Adviser Group”) from controlling an Unaffiliated Fund within the meaning of section 2(a)(9) of the Act. 6. Applicants also propose conditions to preclude a Fund of Funds and its affiliated entities from taking advantage of an Unaffiliated Fund. Under condition 2, no consideration will be received by a Fund of Funds or its Manager, Sub-Adviser, promoter, principal underwriter and any person controlling, controlled by or under common control with any of these entities (each, a “Fund of Funds Affiliate”) from an Unaffiliated Fund or its investment adviser(s), sponsor, promoter, principal underwriter and any person controlling, controlled by or under common control with any of these entities (each, an “Unaffiliated Fund Affiliate”) in connection with any services, transactions or the investment by the Fund of Funds in the Unaffiliated Fund. Condition 3 precludes a Fund of Funds and Fund of Funds Affiliate (except to the extent it is acting in its capacity as an investment adviser to an Unaffiliated Underlying Fund or sponsor to an Unaffiliated Underlying Trust) from causing an Unaffiliated Fund to purchase a security in an offering of securities during the existence of any underwriting or selling syndicate of which a principal underwriter is an officer, director, member of an advisory board, Manager, Sub-Adviser, or employee of the Fund of Funds, or a person of which any such officer, director, member of an advisory board, Manager, Sub-Adviser, or employee is an affiliated person (each, an “Underwriting Affiliate,” except any person whose relationship to the Unaffiliated Fund is covered by section 10(f) of the Act is not an Underwriting Affiliate). An offering of securities during the existence of any underwriting or selling syndicate of which a principal underwriter is an Underwriting Affiliate is an “Affiliated Underwriting.” 7. As an additional assurance that an Unaffiliated Underlying Fund understands the implications of an investment by a Fund of Funds under the requested order, prior to a Fund of Funds' investment in an Unaffiliated Underlying Fund in excess of the limit in section 12(d)(1)(A)(i), condition 6 requires that the Fund of Funds and Unaffiliated Underlying Fund execute an agreement stating, without limitation, that their boards of directors or trustees and their investment advisers understand the terms and conditions of the order and agree to fulfill their responsibilities under the order. Applicants note that an Unaffiliated Fund (other than an ETF whose shares are purchased by a Fund of Funds in the secondary market) will retain the right to reject an investment by a Fund of Funds. 4 4 An Unaffiliated Fund, including an ETF, would retain its right to reject any initial investment by a Fund of Funds in excess of the limit in section 12(d)(1)(A)(i) of the Act by declining to execute the agreement with the Fund of Funds. 8. Applicants do not believe that the proposed arrangement will involve excessive layering of fees. With respect to investment advisory fees, applicants state that, prior to reliance on the requested order and subsequently in connection with the approval of any investment advisory contract under section 15 of the Act, the board of directors or trustees (“Board”) of each Fund of Funds, including a majority of the directors or trustees who are not “interested persons,” as defined in section 2(a)(19) of the Act (“Disinterested Trustees”), will find that the investment advisory fees charged under a Fund of Fund's investment advisory contract(s) are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to any Affiliated Fund's and Unaffiliated Underlying Fund's advisory contract(s). 9. Applicants state that the proposed arrangement will not create an overly complex fund structure. Applicants note that an Underlying Fund will be prohibited from acquiring securities of any investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A), except to the extent that such Underlying Fund:

(a)Receives securities of another investment company as a dividend or as a result of a plan of reorganization of a company (other than a plan devised for the purpose of evading section 12(d)(1) of the Act); or

(b)acquires (or is deemed to have acquired) securities of another investment company pursuant to exemptive relief from the Commission permitting such Underlying Fund to:

(i)Acquire securities of one or more affiliated investment companies for short-term cash management purposes, or

(ii)engage in interfund borrowing and lending transactions. Applicants also represent that a Fund of Funds' prospectus and sales literature will contain concise, “plain English” disclosure designed to inform investors of the unique characteristics of the proposed Fund of Funds structure, including, but not limited to, its expense structure and the additional expenses of investing in Underlying Funds. B. Section 17(a) 6. Section 17(a) of the Act generally prohibits sales or purchases of securities between a registered investment company and any affiliated person of the company. Section 2(a)(3) of the Act defines an “affiliated person” of another person to include

(a)Any person directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of the other person;

(b)any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the other person; and

(c)any person directly or indirectly controlling, controlled by, or under common control with the other person. 7. Applicants state that the Funds of Funds and the Affiliated Funds might be deemed to be under common control of the Manager and therefore affiliated persons of one another. Applicants also state that the Funds of Funds and the Underlying Funds might be deemed to be affiliated persons of one another if a Fund of Funds acquires 5% or more of an Underlying Fund's outstanding voting securities. In light of these possible affiliations, section 17(a) could prevent an Underlying Fund from selling shares to and redeeming shares from a Fund of Funds. 8. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that

(a)The terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned;

(b)the proposed transaction is consistent with the policies of each registered investment company involved; and

(i)Vote its shares of the Unaffiliated Fund in the same proportion as the vote of all other holders of the Unaffiliated Fund's shares; or

(ii)seek voting instructions from its Contract holders and vote its shares in accordance with the instructions received and vote those shares for which no instructions were received in the same proportion as the shares for which instructions were received. This condition will not apply to the Sub-Adviser Group with respect to an Unaffiliated Fund for which the Sub-Adviser or a person controlling, controlled by, or under common control with the Sub-Adviser acts as the investment adviser within the meaning section 2(a)(20)(A) of the Act (in the case of an Unaffiliated Underlying Fund) or as the sponsor (in the case of an Unaffiliated Underlying Trust). 2. No consideration will be received by a Fund of Funds or a Fund of Funds Affiliate from an Unaffiliated Fund or an Unaffiliated Fund Affiliate in connection with any services, transactions or the investment by the Fund of Funds in the Unaffiliated Fund. 3. No Fund of Funds or Fund of Funds Affiliate (except to the extent it is acting in its capacity as an investment adviser to an Unaffiliated Underlying Fund or sponsor to an Unaffiliated Underlying Trust) will cause an Unaffiliated Fund to purchase a security in any Affiliated Underwriting. 4. The Board of an Unaffiliated Underlying Fund, including a majority of the Disinterested Trustees, will adopt procedures reasonably designed to monitor any purchases of securities by the Unaffiliated Underlying Fund in an Affiliated Underwriting, once an investment by a Fund of Funds in the securities of the Unaffiliated Underlying Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act, including any purchases made directly from an Underwriting Affiliate. The Board of the Unaffiliated Underlying Fund will review these purchases periodically, but no less frequently than annually, to determine whether the purchases were influenced by the investment by the Fund of Funds in the Unaffiliated Underlying Fund. The Board of the Unaffiliated Underlying Fund will consider, among other things:

(a)Whether the purchases were consistent with the investment objectives and policies of the Unaffiliated Underlying Fund;

(b)how the performance of securities purchased in an Affiliated Underwriting compares to the performance of comparable securities purchased during a comparable period of time in underwritings other than Affiliated Underwritings or to a benchmark such as a comparable market index; and

(c)whether the amount of securities purchased by the Unaffiliated Underlying Fund in Affiliated Underwritings and the amount purchased directly from an Underwriting Affiliate have changed significantly from prior years. The Board of the Unaffiliated Underlying Fund will take any appropriate actions based on its review, including, if appropriate, the institution of procedures designed to assure that purchases of securities in Affiliated Underwritings are in the best interests of shareholders. 5. Each Unaffiliated Underlying Fund will maintain and preserve permanently in an easily accessible place a written copy of the procedures described in the preceding condition, and any modifications to such procedures, and will maintain and preserve for a period of not less than six years from the end of the fiscal year in which any purchase from an Affiliated Underwriting occurred, the first two years in an easily accessible place, a written record of each purchase of securities in an Affiliated Underwriting once an investment by a Fund of Funds in the securities of an Unaffiliated Underlying Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act, setting forth from whom the securities were acquired, the identity of the underwriting syndicate's members, the terms of the purchase, and the information or materials upon which the determinations of the Board of the Unaffiliated Underlying Fund were made. 6. Prior to its investment in shares of an Unaffiliated Underlying Fund in excess of the limit in section 12(d)(1)(A)(i) of the Act, the Fund of Funds and the Unaffiliated Underlying Fund will execute an agreement stating, without limitation, that their boards of directors or trustees and their investment advisers understand the terms and conditions of the order and agree to fulfill their responsibilities under the order (“Participation Agreement”). At the time of its investment in shares of an Unaffiliated Underlying Fund in excess of the limit in section 12(d)(1)(A)(i), a Fund of Funds will notify the Unaffiliated Underlying Fund of the investment. At such time, the Fund of Funds will also transmit to the Unaffiliated Underlying Fund a list of the names of each Fund of Funds Affiliate and Underwriting Affiliate. The Fund of Funds will notify the Unaffiliated Underlying Fund of any changes to the list as soon as reasonably practicable after a change occurs. The Unaffiliated Underlying Fund and the Fund of Funds will maintain and preserve a copy of the order, the Participation Agreement, and the list with any updated information for the duration of the investment and for a period of not less than six years thereafter, the first two years in an easily accessible place. 7. Before approving any advisory contract under section 15 of the Act, the Board of each Fund of Funds, including a majority of the Disinterested Trustees, shall find that the advisory fees charged under the advisory contract are based on services provided that are in addition to, rather than duplicative of, services provided under the advisory contract(s) of any Underlying Fund in which the Fund of Funds may invest. Such finding, and the basis upon which the finding was made, will be recorded fully in the minute books of the appropriate Fund of Funds. 8. With respect to Registered Separate Accounts that invest in a Fund of Funds, no sales load will be charged at the Fund of Funds level or at the Underlying Fund level. Other sales charges and service fees, as defined in NASD Conduct Rule 2830, if any, will only be charged at the Fund of Funds level or at the Underlying Fund level, not both. With respect to other investments in a Fund of Funds, any sales charges and/or service fees charged with respect to shares of a Fund of Funds will not exceed the limits applicable to funds of funds set forth in NASD Conduct Rule 2830. 9. No Underlying Fund will acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent that such Underlying Fund:

(b)acquires (or is deemed to have acquired) securities of another investment company pursuant to exemptive relief from the Commission permitting such Underlying Fund to:

(i)Acquire securities of one or more affiliated investment companies for short-term cash management purposes, or

(ii)engage in interfund borrowing and lending transactions. 10. The Board of any Fund of Funds will satisfy the fund governance standards as defined in rule 0-1(a)(7) under the Act (“Governance Standards”) by the earlier of the date of reliance on the order or the date on which the Fund of Funds executes a Participation Agreement. The Board of any Unaffiliated Fund will satisfy the Governance Standards by the date on which the Unaffiliated Fund executes a Participation Agreement. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Nancy M. Morris, Secretary. [FR Doc. E6-7259 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27314; 812-13157] Vanguard Index Funds, et al.; Notice of Application May 5, 2006. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of an application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (the “Act”) for exemption from sections 12(d)(1)(A) and

(B)of the Act and under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act. *Summary of the Application:* The order would permit certain registered management investment companies and unit investment trusts to acquire shares of other registered open-end management investment companies that issue an exchange-traded class of shares and that are within or outside the same group of investment companies. The order would also amend a condition in two prior orders. *Applicants:* Vanguard Index Funds, Vanguard International Equity Index Funds, Vanguard World Funds, Vanguard Specialized Funds (collectively, the “Trusts”), The Vanguard Group, Inc. (“VGI”) and Vanguard Marketing Corporation (“VMC”). DATES: *Filing Dates:* The application was filed on January 21, 2005, and amended on August 4, 2005 and March 17, 2006. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in the notice. *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 May 30, 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, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, P.O. Box 2600, Mail Stop V26, Valley Forge, PA 19482. FOR FURTHER INFORMATION CONTACT: Keith A. Gregory, Senior Counsel, at

(202)551-6815, and Michael W. Mundt, Senior Special Counsel, at

(202)551-6821 (Office of Investment Company Regulation, Division of Investment Management). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the Commission's Public Reference Branch, 100 F Street, NE., Washington, DC 20549-0102 (tel.

(202)551-5850). Applicants' Representations 1. The Trusts are open-end management investment companies registered under the Act and organized as Delaware statutory trusts. Each of the Trusts has, or intends to have, at least one portfolio that issues a class of exchange-traded shares known as “VIPER Shares” (such portfolios referred to as “VIPER Funds”). 1 VGI is a Pennsylvania corporation that is registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”) and provides advisory services to each of the VIPER Funds. VMC, a wholly owned subsidiary of VGI, is a broker-dealer registered under the Securities Exchange Act of 1934 (“Exchange Act”) and provides all distribution and marketing services to the VIPER Funds. 1 VIPER Funds created in the future, or existing investment companies that commence issuing VIPER Shares in the future may be organized as portfolios of registrants other than the Trusts that are parties to the application. Future VIPER Funds that rely on the requested order will

(i)be open-end management investment companies in the same “group of investment companies,” within the meaning of section 12(d)(1)(G)(ii) of the Act, as the existing VIPER Funds,

(ii)be advised by VGI, and

(iii)comply with the terms and conditions of the application. 2. Applicants request an exemption to permit:

(i)Certain management investment companies and unit investment trusts (“Investing Funds”) to acquire shares of a VIPER Fund beyond the limitations in section 12(d)(1)(A), and

(ii)a VIPER Fund to sell its shares, or VMC or a broker-dealer registered under the Exchange Act (“Broker”) to sell a VIPER Fund's shares, to an Investing Fund beyond the limits of section 12(d)(1)(B). 2 Applicants also seek an exemption from section 17(a) of the Act to permit a VIPER Fund to sell its shares to, and redeem its shares from, an Investing Fund of which the VIPER Fund is an affiliated person, or an affiliated person of an affiliated person. 3 2 VIPER Funds issue multiple classes of shares including the VIPER Shares, and the relief requested in the application would apply to all share classes issued by a VIPER Fund, not just VIPER Shares. However, applicants expect Investing Funds to purchase VIPER Shares, not any of the other share classes issued by the VIPER Funds. 3 3 Applicants expect that the VIPER Shares generally will be purchased in the secondary market through Brokers and would not involve a sale by the VIPER Funds or VMC. 3. Investing Funds may be investment companies within the Vanguard group of investment companies (“Investing Vanguard Funds”) or outside the Vanguard group of investment companies (“Investing Non-Vanguard Funds”). 4 Investing Funds that are organized as management investment companies are referred to as “Investing Management Companies.” Investing Management Companies that are not part of the Vanguard group of investment companies are referred to as “Investing Non-Vanguard Management Companies.” Investing Funds that are unit investment trusts are referred to as “Investing UITs.” Each Investing Management Company will be advised by an investment adviser that is registered under the Advisers Act or exempt from registration (“Advisor”) and may be advised by investment adviser(s) within the meaning of section 2(a)(20)(B) of the Act (each, a “Subadvisor”). Each Investing UIT will have a Sponsor (“Sponsor”). 4 All investment companies that currently intend to rely on the requested order are named as applicants. Any other investment company that relies on the order in the future will comply with the terms and conditions of the application. An Investing Non-Vanguard Fund may rely on the requested order only to invest in the VIPER Funds and not in any other registered investment company. 4. Applicants state that the VIPER Funds will offer the Investing Funds simple and efficient vehicles to achieve their asset allocation, diversification, and other investment objectives and to implement various investment strategies. Among other purposes, applicants assert that the VIPER Funds provide highly liquid exposure to a broad range of markets, sectors, and geographic regions, and permit investors to achieve such exposure through a single transaction instead of the many transactions that might otherwise be needed to obtain comparable market exposure. Applicants' Legal Analysis A. Section 12(d)(1) 1. Section 12(d)(1)(A) of the Act prohibits a registered investment company from acquiring shares of an investment company if the securities represent more than 3% of the total outstanding voting stock of the acquired company, more than 5% of the total assets of the acquiring company, or, together with the securities of any other investment companies, more than 10% of the total assets of the acquiring company. Section 12(d)(1)(B) of the Act prohibits a registered open-end investment company, its principal underwriter, or any Broker from selling its shares to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company's voting stock, or if the sale will cause more than 10% of the acquired company's voting stock to be owned by investment companies generally. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. 2. Applicants assert that the proposed transactions will not lead to any of the abuses that section 12(d)(1) was designed to prevent. Applicants submit that the proposed conditions to the requested relief address the concerns underlying the limits in section 12(d)(1), which include concerns about undue influence, excessive layering of fees and overly complex structures. 3. Applicants state that the proposed arrangement will not result in undue influence by an Investing Non-Vanguard Fund or its affiliates over a VIPER Fund. To limit the control that an Investing Non-Vanguard Fund may have over a VIPER Fund, applicants propose a condition prohibiting the Investing Non-Vanguard Fund's Advisor or Sponsor; any person controlling, controlled by, or under common with the Investing Non-Vanguard Fund's Advisor or Sponsor, and any investment company and any issuer that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act that is advised or sponsored by the Investing Non-Vanguard Fund's Advisor or advised or sponsored by the Sponsor, or any person controlling, controlled by, or under common control with the Investing Non-Vanguard Fund's Advisor or Sponsor (“Investing Non-Vanguard Fund's Advisory Group”) from controlling (individually or in the aggregate) a VIPER Fund within the meaning of section 2(a)(9) of the Act. The same prohibition would apply to any Investing Non-Vanguard Fund's Subadvisor; any person controlling, controlled by, or under common control with the Investing Non-Vanguard Fund's Subadvisor; and any investment company and any issuer that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act (or portion of such investment company or issuer) that is advised or sponsored by the Investing Non-Vanguard Fund's Subadvisor or any person controlling, controlled by, or under common control with the Investing Non-Vanguard Fund's Subadvisor (“Investing Non-Vanguard Fund's Subadvisory Group”). 4. To limit further the potential for undue influence by an Investing Non-Vanguard Fund over a VIPER Fund, applicants propose conditions 2 through 7, stated below, to preclude an Investing Non-Vanguard Fund and certain of its affiliates from taking advantage of a VIPER Fund and certain VIPER Fund affiliates with respect to transactions between the entities and to ensure the transactions will be on an arm's length basis. Applicants note that a VIPER Fund may choose to reject any direct purchase of VIPER Shares by an Investing Fund. 5 5 A VIPER Fund would retain its right to reject any initial investment by an Investing Non-Vanguard Fund in excess of the limits in section 12(d)(1)(A) by declining to execute an Investing Agreement (as defined below) with the Investing Non-Vanguard Fund. 5. Applicants do not believe that the proposed arrangement will involve excessive layering of fees. The board of directors or trustees of each Investing Management Company, including a majority of the disinterested directors or trustees, before approving any advisory contract under section 15 of the Act, will be required to determine that the advisory fees charged to the Investing Management Company are based on services provided that will be in addition to, rather than duplicative of, the services provided under the advisory contract(s) of any VIPER Fund in which the Investing Management Company may invest. In addition, the Advisor, trustee or Sponsor of an Investing Non-Vanguard Fund, as applicable, will waive fees otherwise payable to it by the Investing Non-Vanguard Fund in an amount at least equal to any compensation received from a VIPER Fund by the Advisor, trustee or Sponsor, or an affiliated person of the Advisor, trustee or Sponsor (other than any advisory fees), in connection with the investment by the Investing Non-Vanguard Fund in the VIPER Funds. Applicants also state that any sales charges and/or service fees charged with respect to shares of an Investing Fund will not exceed the limits applicable to a fund of funds set forth in Conduct Rule 2830 of National Association of Securities Dealers (“NASD Conduct Rules”). 6. Applicants submit that the proposed arrangement will not create an overly complex fund structure. Applicants note that a VIPER Fund will be prohibited from acquiring securities of any investment company, or of any company relying on sections 3(c)(1) or 3(c )(7) of the Act, in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent permitted by an exemptive order that allows the VIPER Fund to purchase shares of an affiliated money market fund for short-term cash management purposes. 7. To ensure that Investing Non-Vanguard Funds are aware of the terms and conditions of the requested order, the Investing Non-Vanguard Funds must enter into an agreement with the respective VIPER Funds (“Investing Agreement”). The Investing Agreement will include an acknowledgement from the Investing Non-Vanguard Fund that it may rely on the order only to invest in the VIPER Funds and not in any other investment company. The Investing Agreement will further require any Non-Vanguard Investing Fund that exceeds the 5% or 10% limitations in section 12(d)(1)(A)(ii) and

(iii)to disclose in its prospectus the unique characteristics of the Investing Funds investing in investment companies, including but not limited to the expense structure and any additional expenses of investing in investment companies. B. Section 17(a) 1. Section 17(a) of the Act generally prohibits an affiliated person of a registered investment company or an affiliated person of such person, from selling any security to or purchasing any security from the company. Section 2(a)(3) of the Act defines an “affiliated person” of another person to include any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the other person, and any person directly or indirectly controlling, controlled by, or under common control with the other person. Applicants request an exemption to permit a VIPER Fund that is an affiliated person of an Investing Fund to sell its shares to and purchase its shares from an Investing Fund. 2. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if evidence establishes that

(a)The terms of the proposed transaction are reasonable and fair and do not involve overreaching on the part of any person concerned;

(b)the proposed transaction is consistent with the policies of each registered investment company involved; and

(c)the proposed transaction is consistent with the general purposes of the Act. Section 6(c) of the Act permits the Commission to exempt any person or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. 3. Applicants submit that the proposed arrangement satisfies the standards for relief under sections 17(b) and 6(c) of the Act. Applicants submit that the proposed transactions are appropriate in the public interest, consistent with the protection of investors, and do not involve overreaching. Applicants note that the consideration paid for the purchase or received for the redemption of shares directly from a VIPER Fund by an affiliated Investing Fund (or any other investor) will be based on the net asset value of the shares of the VIPER Funds. Applicants also state that the proposed transactions will be consistent with the policies of each Investing Fund and VIPER Fund and with the general purposes of the Act. Applicants state that the Investing Agreement will require an Investing Non-Vanguard Fund to represent that its ownership of shares issued by a VIPER Fund is consistent with the investment policies set forth in the Investing Non-Vanguard Fund's registration statement. C. Prior Orders Applicants also seek to amend a condition to certain prior exemptive orders (“Prior Orders”) so that the condition is consistent with the relief requested from section 12(d)(1). 6 Existing condition 2 to each of the Prior Orders currently provides that each VIPER Shares prospectus (“VIPER Shares Prospectus”) and Product Description will clearly disclose that, for purposes of the Act, VIPER Shares are issued by the VIPER Fund and that the acquisition of VIPER Shares by investment companies is subject to the restrictions of section 12(d)(1) of the Act. 7 In light of the requested order to permit Investing Funds to invest in VIPER Funds in excess of the limits of section 12(d)(1), applicants wish to replace this condition in the Prior Orders with condition 14, as stated below. Under the new condition, each VIPER Shares Prospectus and Product Description will disclose that Investing Funds may purchase shares of the VIPER Funds in excess of the limits of section 12(d)(1) to the extent that they comply with the terms and conditions of the requested order granting relief from section 12(d)(1). 6 The Prior Orders are Vanguard International Equity Index Funds, *et al.* , Investment Company Act Release Nos. 26246 (Nov. 3, 2003) (notice) and 26281 (Dec. 1, 2003) (order) and Vanguard Index Funds, *et al.* , Investment Company Act Release Nos. 24680 (Oct. 6, 2000) (notice) and 24789 (Dec. 12, 2000) (order). 7 A “Product Description” is a document that provides a plain English overview of VIPER Shares and the VIPER Fund that issues them. The Product Description is delivered by broker-dealers to secondary market purchases of VIPER Shares. Applicants' Conditions Applicants agree that the order granting the requested relief will be subject to the following conditions: 1. The members of the Investing Non-Vanguard Fund's Advisory Group will not control (individually or in the aggregate) a VIPER Fund within the meaning of Section 2(a)(9) of the Act. The members of the Investing Non-Vanguard Fund's Subadvisory Group will not control (individually or in the aggregate) a VIPER Fund within the meaning of Section 2(a)(9) of the Act. If, as a result of a decrease in the outstanding voting securities of a VIPER Fund, an Investing Non-Vanguard Fund's Advisory Group or Investing Non-Vanguard Fund's Subadvisory Group, each in the aggregate, becomes a holder of more than 25 percent of the outstanding voting securities of a VIPER Fund, it will vote its shares of the VIPER Fund in the same proportion as the vote of all other holders of the VIPER Fund's shares. This condition does not apply to the Investing Non-Vanguard Fund's Subadvisory Group with respect to a VIPER Fund for which the Subadvisor or a person controlling, controlled by, or under common control with the Subadvisor, acts as the investment adviser within the meaning of section 2(a)(20)(A) of the Act. 2. No Investing Non-Vanguard Fund or Investing Non-Vanguard Fund Affiliate will cause any existing or potential investment by the Investing Non-Vanguard Fund in a VIPER Fund to influence the terms of any services or transactions between the Investing Non-Vanguard Fund or Investing Non-Vanguard Fund Affiliate and a VIPER Fund or a VIPER Fund Affiliate. An “Investing Non-Vanguard Fund Affiliate” means an Investing Non-Vanguard Fund's Advisor, Subadvisor, Sponsor, promoter, or principal underwriter, or any person controlling, controlled by, or under common control with any of those entities. A “VIPER Fund Affiliate” means a VIPER Fund's investment adviser(s), promoter or principal underwriter and any person controlling, controlled by, or under common control with any of those entities. 3. The board of directors or trustees of an Investing Non-Vanguard Management Company, including a majority of the disinterested directors or trustees, will adopt procedures reasonably designed to assure that the Advisor and any Subadvisor are conducting the investment program of the Investing Non-Vanguard Management Company without taking into account any consideration received by the Investing Non-Vanguard Management Company or an Investing Non-Vanguard Fund Affiliate from a VIPER Fund or a VIPER Fund Affiliate in connection with any services or transactions. 4. Once an investment by an Investing Non-Vanguard Fund in the securities of a VIPER Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, the board of directors or trustees of the VIPER Fund, including a majority of the disinterested board members, will determine that any consideration paid by the VIPER Fund to the Investing Non-Vanguard Fund or an Investing Non-Vanguard Fund Affiliate in connection with any services or transactions:

(i)Is fair and reasonable in relation to the nature and quality of the services and benefits received by the VIPER Fund;

(ii)is within the range of consideration that the VIPER Fund would be required to pay to another unaffiliated entity in connection with the same services or transactions: and

(iii)does not involve overreaching on the part of any person concerned. This condition does not apply with respect to any services or transactions between a VIPER Fund and its investment adviser(s), or any person controlling, controlled by, or under common control with such investment adviser(s). 5. No Investing Non-Vanguard Fund or Investing Non-Vanguard Fund Affiliate (except to the extent it is acting in its capacity as an investment adviser to a VIPER Fund) will cause a VIPER Fund to purchase a security in an offering of securities during the existence of any underwriting or selling syndicate of which a principal underwriter is an officer, director, member of an advisory board, Advisor, Subadvisor, employee, or Sponsor of the Investing Non-Vanguard Fund, or a person of which any such officer, director, member of an advisory board, Advisor, Subadvisor, employee, or Sponsor is an affiliated person (each, an “Underwriting Affiliate,” except any person whose relationship to the VIPER Fund is covered by Section 10(f) of the Act is not an Underwriting Affiliate). An offering of securities during the existence of any underwriting or selling syndicate of which a principal underwriter is an Underwriting Affiliate is an “Affiliated Underwriting.” 6. The board of a VIPER Fund, including a majority of the disinterested board members, will adopt procedures reasonably designed to monitor any purchases of securities by the VIPER Fund in an Affiliated Underwriting, once an investment by an Investing Non-Vanguard Fund in the securities of the VIPER Fund exceeds the limit in Section 12(d)(1)(A)(i) of the Act, including any purchases made directly from an Underwriting Affiliate. The board of the VIPER Fund will review these purchases periodically, but no less frequently than annually, to determine whether the purchases were influenced by the investment by the Investing Non-Vanguard Fund in the VIPER Fund. The board of the VIPER Fund will consider, among other things:

(i)Whether the purchases were consistent with the investment objectives and policies of the VIPER Fund;

(ii)how the performance of securities purchased in an Affiliated Underwriting compares to the performance of comparable securities purchased during a comparable period of time in underwritings other than Affiliated Underwritings or to a benchmark such as a comparable market index; and

(iii)whether the amount of securities purchased by the VIPER Fund in Affiliated Underwritings and the amount purchased directly from an Underwriting Affiliate have changed significantly from prior years. The board of the VIPER Fund will take any appropriate actions based on its review, including, if appropriate, the institution of procedures designed to assure that purchases of securities in Affiliated Underwritings are in the best interests of shareholders. 7. The VIPER Fund will maintain and preserve permanently in an easily accessible place a written copy of the procedures described in the preceding condition, and any modifications to such procedures, and will maintain and preserve for a period of not less than six years from the end of the fiscal year in which any purchase in an Affiliated Underwriting occurred, the first two years in an easily accessible place, a written record of each purchase of securities in Affiliated Underwritings once an investment by an Investing Fund in the securities of the VIPER Fund exceeds the limit of Section 12(d)(1)(A)(i) of the Act, setting forth from whom the securities were acquired, the identity of the underwriting syndicate's members, the terms of the purchase, and the information or materials upon which the determinations of the board of the VIPER Fund were made. 8. Before investing in a VIPER Fund in excess of the limits in Section 12(d)(1)(A), each Investing Non-Vanguard Fund and the VIPER Fund will execute an agreement stating, without limitation, that their boards of directors or trustees and their investment advisers, or Sponsor and trustee, as applicable, understand the terms and conditions of the order, and agree to fulfill their responsibilities under the order. At the time of its investment in shares of a VIPER Fund in excess of the limit in Section 12(d)(1)(A)(i), an Investing Non-Vanguard Fund will notify the VIPER Fund of the investment. At such time, the Investing Non-Vanguard Fund will also transmit to the VIPER Fund a list of each Investing Non-Vanguard Fund Affiliate and Underwriting Affiliate. The Investing Non-Vanguard Fund will notify the VIPER Fund of any changes to the list of names as soon as reasonably practicable after a change occurs. The VIPER Fund and the Investing Non-Vanguard Fund will maintain and preserve a copy of the order, the agreement, and the list with any updated information for the duration of the investment and for a period of not less than six years thereafter, the first two years in an easily accessible place. 9. Before approving any advisory contract under Section 15 of the Act, the board of directors or trustees of each Investing Management Company, including a majority of the disinterested directors or trustees, will find that the advisory fees charged under such advisory contract are based on services provided that will be in addition to, rather than duplicative of, the services provided under the advisory contract(s) of any VIPER Fund in which the Investing Management Company may invest. These findings and their basis will be recorded fully in the minute books of the appropriate Investing Management Company. 10. The Advisor, trustee or Sponsor, as applicable, will waive fees otherwise payable to it by an Investing Non-Vanguard Fund, in an amount at least equal to any compensation received from a VIPER Fund by the Advisor, trustee or Sponsor, or an affiliated person of the Advisor, trustee or Sponsor, other than any advisory fees paid to the Advisor, trustee or Sponsor or its affiliated person by the VIPER Fund, in connection with the investment by the Investing Non-Vanguard Fund in the VIPER Fund. Any Subadvisor will waive fees otherwise payable to the Subadvisor, directly or indirectly, by the Investing Non-Vanguard Management Company in an amount at least equal to any compensation received from a VIPER Fund by the Subadvisor or an affiliated person of the Subadvisor, other than any advisory fees paid to the Subadvisor or its affiliated person by the VIPER Fund, in connection with the investment by the Investing Non-Vanguard Management Company in the VIPER Fund made at the direction of the Subadvisor. In the event that the Subadvisor waives fees, the benefit of the waiver will be passed through to the Investing Non-Vanguard Management Company. 11. Any sales charges and/or service fees charged with respect to shares of an Investing Fund will not exceed the limits applicable to a fund of funds as set forth in Conduct Rule 2830 of the National Association of Securities Dealers. 12. No VIPER Fund will acquire securities of any investment company, or of any company relying on Sections 3(c)(1) or 3(c)(7) of the Act, in excess of the limits contained in Section 12(d)(1)(A) of the Act, except to the extent permitted by an exemptive order that allows the VIPER Fund to purchase shares of an affiliated fund for short-term cash management purposes. 13. The board of any Investing Management Company and any VIPER Fund will satisfy the fund governance standards as defined in Rule 0-1(a)(7) under the Act by the date on which the Investing Non-Vanguard Management Company and the VIPER Fund execute an Investing Agreement. Amendment to Prior Orders Applicants agree to replace condition 2 of the Prior Orders with the following condition: 14. Each VIPER Shares Prospectus and Product Description will clearly disclose that, for purposes of the Act, VIPER Shares are issued by a VIPER Fund, which is a registered investment company, and that the acquisition of VIPER Shares by investment companies is subject to the restrictions of Section 12(d)(1) of the Act, except as permitted by an exemptive order that permits registered investment companies to invest in a VIPER Fund beyond the limits of Section 12(d)(1), subject to certain terms and conditions. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Nancy M. Morris, Secretary. [FR Doc. E6-7258 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53763; File No. 4-208] Intermarket Trading System; Notice of Filing and Immediate Effectiveness of the Twenty Third Amendment to the ITS Plan Relating to the Interaction of Chicago Stock Exchange, Inc. With ITS, the Change in Opening of Trading in a Halted Security, and the Change in Name from the New York Stock Exchange, Inc. to New York Stock Exchange LLC and From Pacific Exchange, Inc. to NYSE Arca, Inc. May 5, 2006. Pursuant to Section 11A of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 608 thereunder, 2 notice is hereby given that on April 24, 2006, the ITS Participants, through the ITS Operating Committee, submitted to the Securities and Exchange Commission (“Commission”) a proposed amendment (“Twenty Third Amendment”) to the restated ITS Plan. 3 The purpose of the Twenty Third Amendment is to recognize the manner in which Chicago Stock Exchange, Inc. (“CHX”) will interact with ITS, to allow Participant markets to open trading in a halted security after a shorter period of time after a re-indication, and to reflect the name changes from the New York Stock Exchange, Inc. to New York Stock Exchange LLC and from Pacific Exchange, Inc. to NYSE Arca, Inc. Pursuant to Rule 608(b)(3)(ii) under the Act, 4 the ITS Participants designated the amendment as concerned solely with the administration of the Plan. As a result, the Twenty Third Amendment has become effective upon filing with the Commission. 5 At any time within 60 days of the filing of the amendment, the Commission may summarily abrogate the amendment and require that such amendment be refiled in accordance with paragraph (a)(1) of Rule 608 and reviewed in accordance with paragraph (b)(2) of Rule 608, if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanisms of, a national market system or otherwise in furtherance of the purposes of the Act. The Commission is publishing this notice to solicit comments from interested persons. 1 15 U.S.C. 78k-1. 2 17 CFR 242.608. 3 The ITS Plan is a National Market System (“NMS”) plan, which was designed to facilitate intermarket trading in exchange-listed equity securities based on current quotation information emanating from the linked markets. See Securities Exchange Act Release No. 19456 (January 27, 1983), 48 FR 4938 (February 3, 1983). The ITS Participants currently include the American Stock Exchange LLC (Amex”), the Boston Stock Exchange, Inc. (“BSE”); the Chicago Boad Options Exchange, Inc. (“CBOE”); the Chicago Stock Exchange (“CHX”), Inc., the National Stock Exchange (“NSX”), the National Association of Securities Dealers, Inc. (“NASD”), NASDAQ Stock Market LLC (“NASDAQ”), the New York Stock Exchange, Inc. (“NYSE”), the Pacific Exchange, Inc. (“PCX”), and the Philadelphia Stock Exchange, Inc. (“Phlx”) (“Participants”). 4 17 CFR 242.608(b)(3)(ii). 5 CHX intends to give ITS Participants 10 days notice prior to implementation of the amended manner of CHX's interaction with ITS. I. Description and Purpose of the Proposed Amendment A. CHX's Interaction With ITS The ITS Participants propose to amend the restated ITS Plan to eliminate all references to CHX in Section 6(a)(ii)(A) and to add new subparagraph

(H)to section 6(a)(ii). Proposed new language is *italicized* : *(H) Description Applicable to CHX* *With respect to an ITS transaction that involves a CHX member, the commitment to trade or response thereto destined for or originating with the CHX will leave and enter the System at the CHX. A trade involving the CHX would take place as follows. In the example in section 6(a)(ii)(A) above, assume that the order is for 300 shares. Assume also that when the NYSE member checks the continuously updated quotation display at the appropriate NYSE trading post, he sees that the best offer is one of 40.15 for 300 shares from the CHX. Having learned this information, the NYSE member may decide to attempt to buy the 300 shares for his customer from the 40.15 offer. By using an ITS station located on the NYSE trading floor, the broker would send, or cause to be sent, to the CHX a commitment to buy 300 shares of the stock at 40.15.* * When the commitment to buy is entered into the System, the System will route the commitment to the CHX. If the 40.15 offer is still available when the commitment to buy reaches the CHX, or if a better offer is available and if the rules of the CHX permit an execution at that price, then the CHX would generate an acceptance of the commitment on behalf of the one or more CHX members responsible for the 40.15 offer (or the better offer) and route it to the System. The execution would occur at 40.15 (or at the better price) if the applicable time period had not expired. CHX would report the trade to the CTA Plan Processor for dissemination under the CTA Plan at 40.15 (or at the better price) with the same identifier that is assigned to CHX. * *If the example is reversed and a CHX member seeks to purchase 300 shares, the CHX member would send the NYSE a commitment to buy 300 shares of the stock at 40.15.* *When the commitment to buy is entered into the CHX, the CHX will route the commitment to the System, which will in turn route the commitment to the NYSE. If the 40.15 offer is still available when the commitment to buy reaches the NYSE, or if a better offer is available, and if the rules of the NYSE permit an execution at that price, then the NYSE offer would accept the commitment during the applicable time period and an execution at 40.15 (or at the better price) would take place. The NYSE would then report the trade to the CTA Plan Processor for dissemination under the CTA Plan at 40.15 (or at the better price) with the identifier assigned to the NYSE.* *This description shall take effect upon 10 days' written notice from the CHX to all Participants.* B. Opening of Trading in a Halted Security The ITS Participants propose to amend the restated ITS Plan to have Section (b)(i)(B) of Exhibit A (“Tape Indications”) read as follows. Proposed new language is *italicized* : In any such situation, the specialist shall not open or reopen the security until not less than three minutes after his transmission of the opening or reopening indication of interest. *However, where more than one indication is disseminated, a stock may re-open one minute after the last indication, provided that at least three minutes must have elapsed from the dissemination of the first indication.* For the purposes of paragraphs (b)(ii)(A), (b)(ii)(B), (b)(iii) and (c), “pre-opening notification” includes an indication of interest furnished to the consolidated last sale reporting service. C. Renumbering The ITS Participants propose to renumber former section 6(a)(ii)(H) as section 6(a)(ii)(I). D. Name Change The ITS Participants propose to reflect the name changes from the New York Stock Exchange, Inc. to New York Stock Exchange LLC and from Pacific Exchange, Inc. to NYSE Arca, Inc. to reflect the legal name changes that occurred on March 7, 2006. E. Additional Information 1. Governing or Constituent Documents Not applicable. 2. Implementation of Amendment The ITS Participants have manifested their approval of the proposed amendment by means of their execution of the Twenty Third Amendment. The Amendment has become effective upon filing. 6 6 *See id.* 3. Development and Implementation Phases Not applicable. 4. Analysis of Impact on Competition The Participants believe that the proposed amendment does not impose any burden on competition. 5. Written Understanding or Agreements Relating to Interpretation of, or Participation in, Plan Not applicable. 6. Approval by Sponsors in Accordance With Plan Under section 4(c) of the restated ITS Plan, the requisite approval of the amendment is achieved by execution of the amendment on behalf of each ITS Participant. The amendment is so executed. 7. Description of Operation of Facility Contemplated by the Proposed Amendment Not applicable. 8. Terms and Conditions of Access Not applicable. 9. Method of Determination and Imposition, and Amount of, Fees and Charges Not applicable. 10. Method of Frequency of Processor Evaluation Not applicable. 11. Dispute Resolution Not applicable. II. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed Plan amendment 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. 4-208 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 No. 4-208. 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 Plan amendment that are filed with the Commission, and all written communications relating to the proposed Plan amendment between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the ITS. 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. 4-208 and should be submitted on or before June 2, 2006. 7 17 CFR 200.30-3(a)(27). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 Nancy M. Morris, Secretary. [FR Doc. E6-7244 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53767; File No. SR-CBOE-2006-43] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Its Marketing Fee Program May 8, 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 28, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The CBOE has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the CBOE 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 persons. 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 CBOE proposes to amend its Fees Schedule and its marketing fee program. Below is the text of the proposed rule change. Proposed new language is in *italics* ; deleted language is in [brackets]. Chicago Board Options Exchange, Inc. Fees Schedule [March 1] May 1, 2006 1. No Change. 2. Marketing Fee (6)(16) $.65 3.-4. No Change. Footnotes: (1)-(5) No Change.

(6)The Marketing Fee will be assessed only on transactions of Market-Makers, RMMs, e-DPMs, DPMs, and LMMs resulting from orders for less than 1,000 contracts

(i)from payment accepting firms, or

(ii)that have designated a “Preferred Market-Maker” under CBOE Rule 8.13 at the rate of $.65 per contract on all classes of equity options, options on HOLDRs, options on SPDRs, [and] options on DIA, *options on NDX, and options on RUT* . The fee will not apply to: Market-Maker-to-Market-Maker transactions including transactions resulting from orders from non-member market-makers; transactions resulting from P/A orders; transactions resulting from accommodation liquidations (cabinet trades); and transactions resulting from dividend strategies, merger strategies, and short stock interest strategies as defined in footnote 13 of this Fees Schedule. This fee shall not apply to index options and options on ETFs (other than options on SPDRs, [and] options on DIA, *options on NDX, and options on RUT* ). A Preferred Market-Maker will only be given access to the marketing fee funds generated from a Preferred order if the Preferred Market-Maker has an appointment in the class in which the Preferred order is received and executed. If less than 80% of the marketing fee funds are paid out by the DPM/LMM or Preferred Market-Maker in a given month, then the Exchange would refund such surplus at the end of the month on a pro rata basis based upon contributions made by the Market-Makers, RMMs, e-DPMs, DPMs and LMMs. However, if 80% or more of the accumulated funds in a given month are paid out by the DPM/LMM or Preferred Market-Maker, there will not be a rebate for that month and the funds will carry over and will be included in the pool of funds to be used by the DPM/LMM or Preferred Market-Maker the following month. At the end of each quarter, the Exchange would then refund any surplus, if any, on a pro rata basis based upon contributions made by the Market-Makers, RMMs, DPMs, e-DPMs and LMMs. CBOE's marketing fee program as described above will be in effect until June 2, 2006. Remainder of Fees Schedule—No change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change, and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The CBOE 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 CBOE states that, currently, its marketing fee is assessed upon DPMs, LMMs, e-DPMs, RMMs, and Market-Makers at the rate of $.65 per contract on transactions of Market-Makers, RMMs, e-DPMs, DPMs, and LMMs resulting from orders for less than 1,000 contracts

(i)from payment accepting firms, or

(ii)that have designated a “Preferred Market-Maker” under CBOE Rule 8.13. The Exchanges notes that this fee does not apply to: Market-Maker-to-Market-Maker transactions (which includes all transactions between any combination of DPMs, e-DPMs, RMMs, LMMs, and Market-Makers, and transactions resulting from orders from non-member market-makers); transactions resulting from inbound P/A orders; transactions resulting from accommodation liquidation (cabinet trades); or transactions resulting from dividend strategies, merger strategies, and short stock interest strategies. CBOE states that the marketing fee is assessed on all equity option classes and options on HOLDRs®, options on SPDRs®, and options on DIA. CBOE now proposes to amend its marketing fee program to assess the fee on options on the Nasdaq-100® (NDX TM ) Index and options on the Russell 2000®

(RUT)Index. The fee would commence in NDX and RUT options on May 1, 2006. CBOE states that it is not amending its marketing fee program in any other respect. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 5 in general, and furthers the objectives of Section 6(b)(4) of the Act, 6 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. 5 15 U.S.C. 78f(b). 6 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 inappropriate 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 The foregoing proposed rule change has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 7 and Rule 19b-4(f)(2) 8 thereunder, 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 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. 7 15 U.S.C. 78s(b)(3)(A)(ii). 8 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-CBOE-2006-43 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-CBOE-2006-43. 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 CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2006-43 and should be submitted on or before June 2, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-7245 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53771; File No. SR-CBOE-2006-39] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Regarding the e-DPM Membership Ownership Requirement May 8, 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 20, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” 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 CBOE. 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 Exchange proposes to clarify the application of the e-DPM membership ownership requirement. The text of the proposed rule change is set forth below. New text is in *italics.* Chicago Board Options Exchange, Incorporated Rule 8.92. Electronic DPM Program (a)-(c) No change.

(d)Membership Requirement. Until July 12, 2007, each e-DPM organization is required to

(i)own one Exchange membership for every 30 products allocated to the e-DPM; or

(d)if its parent company owns or leases seats that are used solely for the e-DPM organization's e-DPM activities.*

(e)No change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE 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. CBOE 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 Exchange proposes to clarify the application of CBOE Rule 8.92(d) relating to the e-DPM membership ownership requirement. That rule currently provides that, until July 12, 2007, each e-DPM organization is required to

(i)own one Exchange membership for every 30 products allocated to the e-DPM; or

(ii)lease one Exchange membership for every 20 products allocated to the e-DPM. After July 12, 2007, each e-DPM organization is required to own one Exchange membership for every 30 products allocated to the e-DPM. The rule currently also makes clear that an Exchange “membership” includes a transferable regular membership or a Chicago Board of Trade full membership that has effectively been exercised pursuant to Article Fifth(b) of the Certificate of Incorporation, and that memberships used to satisfy the requirement may not be used for any other purpose including being leased to another member, to comply with the DPM membership ownership requirement of CBOE Rule 8.85(e), or for trading on the Exchange's trading floor. The proposed rule change proposes to make clear that a parent company of an e-DPM entity may own or lease the required memberships on behalf of the e-DPM entity provided such memberships are dedicated solely to the e-DPM organization's e-DPM activity. For example, corporation XYZ owns multiple CBOE memberships and wholly owns e-DPM firm ABC. If some or all of the memberships owned by XYZ are used by ABC in connection with its e-DPM activity, those memberships would satisfy the requirements of CBOE Rule 8.92(d). 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of section 6(b) of the Act. 3 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 4 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. 3 15 U.S.C. 78f(b). 4 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE 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 solicited or received with respect to the proposed rule change. 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 CBOE consents, the Commission will:

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

(1)it will notify its participants that they should notify the Exchange if they believe that an Exchange system does not permit them to enter all of the information required by the proposed rule, as permitted by Interpretation and Policy .05;

(2)it will consider further changes to CHX Rule 24 in response to changes to Commission or Exchange rules; and

(3)it believes that with respect to immediately executed orders, it receives all of the information necessary to conduct surveillance through the information required under Interpretation and Policy .07 and other Exchange systems. II. Description of the Proposal Under the proposed rule change, the Exchange proposes to require its floor participants to provide particular data about all orders originating on or off the floor of the Exchange for execution on the Exchange, as well as all orders issued from the floor of the Exchange to any other market or trading venue. 8 Specifically, the Exchange proposes to require floor participants to record, in electronic systems designated by the Exchange, the following details about each covered order:

(1)The symbol of the security;

(2)the clearing participant;

(3)an order identifier that uniquely identifies the order; 9

(4)the identity of the participant recording the order details;

(5)the number of shares or quantity of the security;

(6)the side of the market;

(7)a designation of the order type ( *e.g.* , market, limit, stop, stop limit);

(8)whether the order is agency or professional; 10

(9)whether the order is being handled pursuant to Section 11(a)(1)(G) of the Act and any applicable rules thereunder;

(10)whether the order is short or short exempt;

(11)whether the order is a bona fide arbitrage order;

(12)any limit price and/or stop price;

(13)the date and time of order receipt or transmission (as applicable);

(14)the market, off-floor firm, or on-floor participant to which the order was transmitted or from which the order was received (if applicable);

(15)the order's time in force;

(16)designation as held or not held;

(17)any special conditions or instructions ( *e.g.* , any customer display or do-not-display instructions or any all-or-none conditions);

(18)any modifications that are made to the details set out in

(1)through

(17)above or

(20)below, for all or part of the order, or any cancellation of all or part of the order;

(19)the date and time of receipt or transmission of any modifications to, or cancellation of, the order;

(20)the date and time of any order expiration;

(21)the identity of the party cancelling or modifying the order;

(22)the transaction price, if applicable;

(23)the number of shares executed, if applicable;

(24)the date and time of execution, if applicable;

(25)the contra party to the execution (if applicable);

(26)the settlement instructions associated with the order, if applicable;

(27)system-generated time(s) of recording required information; and

(28)any other information that may be required by the Exchange from time to time. 11 Floor participants would be required to record this information immediately after that information is received or becomes available. 12 8 The Exchange represents that this proposal is consistent with recommendations made by the independent consultant retained by the Exchange under its recent settlement agreement with the Commission. *See* Securities Exchange Act Release No. 48566 (September 30, 2003), Administrative Proceeding File No. 3-11282. *See also* Notice, *supra* note 5, at note 13. The Commission notes that the Exchange recently amended CHX Article V, Rule 4 to prohibit Exchange participants from using any communications means to send orders to another market for execution (“layoff service”), unless that layoff service has established a process for providing the Exchange with specific information about the orders and the executions that participants receive. *See* Securities Exchange Act Release No. 52534 (September 29, 2005), 70 FR 58500 (October 6, 2005) (SR-CHX-2004-25). In addition, the Exchange has represented that the Exchange's staff will present to the Exchange's Board of Directors a separate rule that confirms the record-keeping obligations of its off-floor participants. *See* Notice, *supra* note 5, at note 16. 9 This order identifier does not change when modifications are made to the order, or when it is cancelled, allowing any changes to be tracked back to the original order. 10 The Exchange's rules define a “professional” order as one that is for the account of a broker-dealer, the account of an associated person of a broker-dealer, or any account in which a broker-dealer or an associated person of a broker-dealer has any direct or indirect interest. *See* CHX Article XXX, Rule 2, Interpretation and Policy .04. 11 *See* CHX Article XX, Proposed Rule 24(b). 12 *See* CHX Article XX, Proposed Rule 24(c). In addition, proposed new Interpretations and Policies .01 to .09 to CHX Article XX, Rule 24 contain additional guidance on the information that participants would be required to record and preserve. Among other things, the interpretations establish the scope of the proposed rule and specify the exclusion from the proposed rule for principal trading by a co-specialist, market maker, or floor broker. 13 In addition, the interpretations note that participants will not be required to record information with respect to orders sent or received through the Exchange's MAX® system 14 or through any other electronic systems that the Exchange recognizes as providing the required information in an acceptable format, and further sets out limited exceptions to the data-recording requirements. 15 13 *See* CHX Article XX, Proposed Rule 24, Interpretation and Policy .02; and Amendment No. 4, *supra* note 7 (Interpretation and Policy .02 states that “Except for orders delivered orally or telephonically to a specialist at the post, a decision by a co-specialist, market maker or floor broker to buy or sell securities for his or her own account on the Floor of the Exchange shall not constitute an order for which a record much be made under this Rule.”). The Exchange has represented that this exception is designed to recognize that all necessary information about a floor participant's own trading is already captured by the Exchange's reporting systems. *See* Notice, *supra* note 5, at note 11. 14 MAX® is the Exchange's electronic execution system. 15 *See* Proposed Interpretations and Policies .04 (regarding orders sent and received through certain systems), .05 (regarding orders that the Exchange expressly recognizes as incompatible for entry into an Exchange system), .06 (regarding bona fide arbitrage orders and orders to offset a transaction made in error); and .07 (regarding cross orders that are immediately executed). Proposed Interpretation and Policy .09, however, reminds participants that the provisions of proposed CHX Rule 24 do not replace any record retention obligations to which a participant may be subject under the Act. III. Discussion and Commission Findings 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. 16 In particular, the Commission believes that the proposal is consistent with section 6(b)(5) of the Act, 17 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 16 In approving this proposed rule change, as amended, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 17 15 U.S.C. 78f(b)(5). The purpose of the Exchange's proposed rule change is to require the Exchange's floor participants to enter order-related information into an electronic data capture system to facilitate automated surveillance of market activity by the Exchange. 18 For example, CHX floor brokers have traditionally accepted orders from a variety of sources, some of which may not involve the creation of an electronic audit trail ( *e.g.* , orders taken over the telephone). In these cases, only the execution information would be captured electronically, and thus be able to be searched in an electronic form by the Exchange's market regulation personnel. Non-execution information relating to the original order ( *e.g.* , time of order receipt) is available currently only from the paper order ticket. By requiring the electronic capture of this information, the Exchange would be able to use the data obtained from the proposed rule change in surveillance reports relating to, for example, best execution, front-running surveillance, order execution priority, manipulative activity, and trade reporting. 18 *See* Letter from David C. Whitcomb, Jr., Senior Vice President and Chief Regulatory Officer, CHX, to Sharon Lawson, Senior Special Counsel, Division of Market Regulation, Commission, dated June 27, 2005. Further, the Exchange's proposed rule change is intended to address recommendations made in the Exchange's 2003 settlement agreement with the Commission. 19 In the settlement agreement, the Commission cited the Exchange's failure, with respect to its specialist firms, “to detect and prevent a large number of trading rule violations, in part, because [the Exchange] did not have adequate surveillance systems to detect possible violations.” 20 In addition, the Commission found that the CHX had “relied on ineffective and often flawed manual processes to detect violations * * *” 21 Pursuant to the settlement agreement, the Exchange undertook to engage a consultant to conduct a comprehensive review of, among other things, its trading floor surveillance to ascertain whether its trading floor surveillance is appropriately designed and implemented to promote and enforce compliance with the federal securities laws and CHX and Commission rules. 19 *See* Securities Exchange Act Release No. 48566 (September 30, 2003) (Administrative Proceeding File No. 3-11282), available at: *http://www.sec.gov/litigation/admin/34-48566.htm.* 20 *Id* . 21 *Id* . The Commission believes that the Exchange's proposed rule change, as amended, to require Exchange participants to enter order-related information into an electronic data capture system is consistent with the Exchange's settlement agreement with the Commission. Specifically, the Commission believes that the proposed rule change, as amended, should allow the Exchange to maintain a more automated process for receiving a comprehensive set of audit trail data on its floor participants' trading activity and thereby allow the Exchange to integrate more audit trail data into its surveillance systems. Increased automation with respect to the receipt of order details should, in turn, allow the Exchange to perform more automated surveillance and generate better surveillance reports. In addition, the Commission believes that the proposal will improve the Exchange's ability to review its participants' order-handling activities and to determine their compliance with applicable trading rules, including, for example, short sale position marking and tick test requirements, 22 best execution, 23 and trading ahead prohibitions. 24 22 *See* 17 CFR 240.10a-1. 23 *See, e.g.* , CHX Article XX, Rule 10. 24 *See* CHX Article XXX, Rules 2 and 3. Further, the Commission notes that proposed Interpretation and Policy .05, which would allow the Exchange to identify specific types of orders that might be exempt from the data-recording requirements when they are incompatible for entry into Exchange systems, is designed to cover only those rare situations where, due to unexpected consequences of unrelated systems changes or a software failure, CHX participants cannot enter data about a particular type of order into the Exchange's systems for a limited period of time. The Commission notes that this exception is not intended to allow participants to avoid the recording requirements of the rule, and does not relieve a participant from its recordkeeping obligations under the Exchange's rules and applicable federal securities laws. The Commission notes that the Exchange has represented that it would work with participants to correct quickly any software or systems problems that precipitated the system incompatibility. 25 Furthermore, the Exchange will notify its participants that the participants should notify Exchange personnel when a system incompatibility arises that is covered by proposed Interpretation and Policy .05. 26 25 *See* Notice, *supra* note 5, at note 14. 26 *See* Amendment No. 4, *supra* note 7. With respect to proposed Interpretation and Policy .04, which recognizes that participants are not required to record information that is already captured by the Exchange's systems or by other systems that the Exchange expressly recognizes as providing the required data in an acceptable format, the Commission notes that the Exchange has represented that its MAX® system already captures all of the information required by the proposed rule change. 27 The Commission also notes that the Exchange has represented that it retains records associated with its MAX® system for the applicable record retention period. 27 *See* Notice, *supra* note 5, at note 14. With respect to proposed Interpretation and Policy .07, which permits a participant to record only certain information for orders to buy and sell the same security that are executed in full immediately upon receipt, the Commission notes that the Exchange has represented that Interpretation and Policy .07 to the proposed rule change reflects the Exchange's belief that it will receive all of the information necessary to conduct surveillance with respect to orders to buy and sell the same security that are executed in full immediately upon receipt through a combination of Interpretation and Policy .07 and other information captured within the Exchange's system. 28 In particular, the Commission notes that the Exchange's order management systems utilize an account-based approach in which principal transactions are entered through a principal trading account that is separate from the broker's agency account, and that the Exchange's surveillance reports are able to distinguish between a broker's principal and agency trades. 29 Further, the Exchange has the ability to request information from its clearing participants in the event that the Exchange requires information about the customers involved in a certain transaction where a customer did not serve as the clearing participant to its own order. 30 28 *See* Amendment No. 4, *supra* note 7. 29 *See* Letter from David C. Whitcomb, Jr., Senior Vice President and Chief Regulatory Officer, CHX, to Sharon Lawson, Senior Special Counsel, Division of Market Regulation, Commission, dated April 26, 2006. 30 Telephone conversation between Ellen J. Neely, President and General Counsel, CHX, and Richard Holley III, Special Counsel, Division of Market Regulation, Commission, on May 3, 2006. Based on the above, the Commission finds that the Exchange's proposed rule change is consistent with the Exchange's settlement agreement with the Commission. 31 Further, the Commission finds that the Exchange's proposal to require the electronic capture of audit trail data in order to enhance surveillance for compliance with CHX's rules, the Act, and the rules thereunder is consistent with the requirements of Section 6(b)(5) of the Act, 32 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The Commission believes that approving the proposal will help to enhance and strengthen the Exchange's surveillance program by providing the Exchange with the data necessary to conduct more thorough and efficient surveillance of its participants' trading activities, and should thereby promote just and equitable principles of trade and further the protection of investors and the public interest. The Commission notes that the detailed information required to be obtained will not replace any record retention obligations already required of CHX participants under the Act and the rules thereunder. 31 *See* *supra* note 19. 32 15 U.S.C. 78f(b)(5). Accelerated Approval of Amendment Nos. 3 and 4 The Commission finds good cause for approving Amendment Nos. 3 and 4 to the proposed rule change prior to the thirtieth day after the amendment is published for comment in the **Federal Register** pursuant to Section 19(b)(2) of the Act. 33 In Amendment No. 3, the Exchange merely clarified that

(1)participants could develop their own systems for collecting and recording required data in a format acceptable to the Exchange;

(2)Brokerplex® is available to any participant; and

(3)the Exchange is implementing changes to the Brokerplex® system to incorporate the requirements of this proposed rule change. In Amendment No. 4, the Exchange merely modified its proposed rule change to accommodate an order designation currently used by its floor brokers that permits a floor broker to attach a special designation to a cross order when, on account of the customer's instructions and to the extent permitted by the Exchange's rules, the cross order cannot be immediately executed, as well as set May 8, 2006 as the compliance date. 34 In addition, the Exchange made, in part, certain clarifications and representations regarding the operation and implementation of the proposed rule, and the ability of the Exchange to gather sufficient surveillance information. 33 15 U.S.C. 78s(b)(2). 34 The special designation would be attached to the side of the market identifier. *See* proposed CHX Article XX, Rule 24(b)(6). The floor broker would be required to complete all other fields required by proposed CHX Article XX, Rule 24. In addition, this special designation does not alter a participant's obligations with respect to the execution of orders; if a cross transaction can be immediately executed in accordance with a customer's instructions and applicable rules, it should be immediately executed. *See* Amendment No. 4, *supra* note 7. The Commission believes that Amendment No. 3 appropriately reflects that changes to the Brokerplex® system are being implemented in connection with the proposed rule change. In addition, the Commission believes that Amendment No. 4 implements a reasonable compliance date for the proposed rule change, as amended, since the Exchange has been holding biweekly meetings with its participants to educate them about the requirements of the proposed rule change. Furthermore, the Commission believes that the other changes made to the proposed rule change in Amendment No. 4, as described above, merely accommodate the functionality currently employed by floor brokers, acknowledge the ability of the Exchange to obtain surveillance information, clarify that records must be kept pursuant to the proposed rule for orders delivered orally or telephonically to a specialist at the post, and describe other responsibilities of the Exchange under the proposed rule change, as amended. Accordingly, the Commission believes that good cause exists, consistent with Section 19(b) and Section 6(b)(5) of the Act, to accelerate approval of Amendment Nos. 3 and 4 in order to allow the Exchange to implement the proposal immediately. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment Nos. 3 and 4 to 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-CHX-2004-38 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-CHX-2004-38. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CHX-2004-38 and should be submitted on or before June 2, 2006. V. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 35 that the proposed rule change (SR-CHX-2004-38) and Amendment Nos. 1 and 2 thereto are approved, and that Amendment Nos. 3 and 4 thereto are approved on an accelerated basis. 35 15 U.S.C. 78s(b)(2). 36 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 36 Nancy M. Morris, Secretary. [FR Doc. E6-7257 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53770; File No. SR-NASD-2006-030] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Establish an Annual Administrative Fee for Market Data Distributors That Are Recipients of Nasdaq Proprietary Data Products May 8, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on February 27, 2006, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), 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 Nasdaq. Nasdaq filed Amendment No. 1 to the proposed rule change on April 17, 2006. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to establish an annual administrative fee for market data distributors that are recipients of Nasdaq proprietary data products. The text of the proposed rule change is below. Proposed new language is in *italics.* 3 3 Changes are marked to the rule text that appears in the electronic NASD Manual found at *www.nasd.com* . No pending rule filings would affect the text of this rule. Because of the nature of this rule, no conforming change will be made to the rules of The NASDAQ Stock Market LLC. *See* Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006). 7010 System Services (a)-(w) No change.

(x)Nasdaq Annual Administrative Fee *The Nasdaq Annual Administrative Fee shall be assessed to market data distributors that receive any proprietary Nasdaq data feed product. Each such distributor shall, on an annual basis, be assessed the higher of the applicable Nasdaq Annual Administrative Fees:* *Delayed Nasdaq distributor* — *$500.* *Real-Time Nasdaq distributor (includes delayed fee, if applicable)* — *$1,000.* *The Association may waive the foregoing fee for colleges and universities for devices used by students and professors in performing university or college research or classroom-related activities.* 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. 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 As market data administration becomes more automated, Nasdaq has strived to ensure that its systems lead the industry in ease of use and effectiveness. In the past few years, Nasdaq has implemented a multitude of systems to improve vendor communication. This trend is likely to continue, as market data distributors demand greater automation of the process to subscribe to market data feeds, increased electronic access to information regarding their market data usage, and shorter processing times to approve requests for changes in service. To further Nasdaq's proactive approach to improving market data administration, Nasdaq proposes to introduce an annual administrative fee for all distributors receiving proprietary Nasdaq data feed products. This fee will allow Nasdaq to recover the ongoing fixed market data administrative costs, such as the costs of establishing and maintaining new market data distributors, as well as the costs to maintain and improve the administrative tools distributors utilize to subscribe to and monitor their data products usage. Currently, Nasdaq market data distributors are not assessed an annual administrative fee for the use of proprietary Nasdaq data feed products. 4 The amount of the new fee, which will be assessed on an annual basis, will vary based on whether a distributor uses Nasdaq data on a delayed or a real-time basis. A distributor that only receives delayed data will pay the Delayed Nasdaq Annual Administrative Fee of $500; a distributor that receives real-time data will pay the Real-Time Nasdaq Annual Administrative Fee of $1,000, and a distributor that receives both real-time and delayed data feeds will pay the Real-Time Nasdaq Annual Administrative Fee of $1,000. 4 Distributors pay an annual administrative fee regarding their usage of UTP data feed products. *See* NASD Rule 7010(l)(1). Consistent with the current practice of the American Stock Exchange, 5 Nasdaq is proposing that accredited colleges and universities that can establish that they are using proprietary data for research and classroom-related activities may receive a waiver of the administrative fee. This fee waiver recognizes the high value that Nasdaq places on research and educational instruction at the university level. To be considered for an academic waiver, the university's program sponsor should submit to Nasdaq a written request stating the name and description of the academic program, the company and contact name of the external distributor to provide the data, the number of devices with access to real-time data, an approximate number of students and faculty in the program, and a brief description of how market data will be used in the program. 5 *See* Amex Academic Waiver Policy at *www.amex.com/amextrader* . 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 15A of the Act, 6 in general and with Section 15A(b)(5) of the Act, 7 in particular, in that the revised and updated fee schedule provides for the equitable allocation of reasonable charges among the persons distributing and purchasing Nasdaq market center data. Nasdaq believes the proposed fees will enable Nasdaq to provide a lower total cost of market data ownership, given the reduced network and processing expenses associated with receiving only the data actually needed. Nasdaq believes that facilitating more efficient redistribution of real-time market data will improve transparency and thereby benefit the investing public. 6 15 U.S.C. 78 *o* -3. 7 15 U.S.C. 78 *o* -3(b)(5). 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, as amended. 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 Nasdaq 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 No. SR-NASD-2006-030 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-NASD-2006-030. 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 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 Number SR-NASD-2006-030 and should be submitted on or before June 2, 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. E6-7256 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53769; File No. SR-NASD-2006-041] 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 Eliminate From The Nasdaq Stock Market Inc.'s Corporate Organizational Documents Certain Series of Preferred Stock May 8, 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 March 31, 2006, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), 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 Nasdaq. On April 24, 2006, Nasdaq filed Amendment No. 1 to the proposed rule change. 3 Nasdaq filed this proposal pursuant to section 19(b)(3)(A) of the Act 4 and Rule 19b-4(f)(3) thereunder 5 as concerned solely with the administration of the self-regulatory organization, and, therefore, this proposal is effective immediately upon filing. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, Nasdaq made clarifying changes to the proposal and attached as Exhibit 5 to the filing a copy of the Certificate of Elimination of the Series A Cumulative Preferred Stock, Series B Preferred Stock and Series C Cumulative Preferred Stock of The Nasdaq Stock Market, Inc. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b-4(f)(3). I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq proposes to proposal to eliminate from Nasdaq's corporate organizational documents references to Series A Cumulative Preferred Stock, Series B Preferred Stock, and Series C Cumulative Preferred Stock, as there are no shares of any such series outstanding. 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, as amended, 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 wishes to eliminate its Certificate of Designations, Preferences and Rights of Series A Cumulative Preferred Stock, its Certificate of Designations, Preferences and Rights of Series B Preferred Stock, its Certificate of Designations, Preferences and Rights of Series C Cumulative Preferred Stock, and all matters set forth therein. Nasdaq's Series A and Series B preferred stock were both created in 2002; the Series C preferred stock was created in 2004. In 2004, all outstanding shares of the Series A preferred were exchanged for the shares of Series C preferred. In 2005, the sole outstanding share of Series B preferred was exchanged for a share of Nasdaq's Series D preferred stock. 6 Finally, in 2006, Nasdaq acquired all outstanding shares of the Series C preferred stock. As a result, today there remains only one share of Nasdaq's preferred stock outstanding—a share of Series D preferred. 6 *See* Securities Exchange Act Release No. 53022 (December 23, 2005); 70 FR 77433 (December 30, 2005). Under Delaware law, both a certificate of designations (designating a series of preferred stock) and a certificate of elimination (eliminating a previously adopted designation) are deemed to be amendments to Nasdaq's Restated Certificate of Incorporation. Therefore, Nasdaq is making this filing with the Commission. Nasdaq is not, at this time, restating its Restated Certificate of Incorporation. 7 7 *See* Amendment No. 1. 2. Statutory Basis Nasdaq believes that the proposed rule change, as amended, is consistent with the provisions of section 15A of the Act, 8 in general and with section 15A(b)(6) of the Act, 9 in particular. The proposal is ministerial in nature and will not affect the rights of market participants. 8 15 U.S.C. 78 *o* -3. 9 15 U.S.C. 78 *o* -3(b)(6). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change, as amended, will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. 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 This proposal, as amended, has become effective pursuant to section 19(b)(3)(A) of the Act 10 and subparagraph (f)(3) of Rule 19b-4 thereunder 11 because the proposal is concerned solely with the administration of the self-regulatory organization. 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(3). 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NASD-2006-041 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-NASD-2006-041. 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, as amended, 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 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 Number SR-NASD-2006-041 and should be submitted on or before June 2, 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. E6-7269 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53764; File No. SR-PCX-2006-16] Self-Regulatory Organizations; Pacific Exchange, Inc. (n/k/a NYSE Arca, Inc.); Notice of Filing of Proposed Rule Change and Amendments No. 1 and No. 2 Thereto To Revise Fees for Equity Securities Issued by Operating Companies Listed on the Archipelago Exchange May 5, 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 March 1, 2006, the Pacific Exchange, Inc. (n/k/a NYSE Arca, Inc.) (“NYSE Arca” or “Exchange”), through its wholly owned subsidiary PCX Equities, Inc. (n/k/a NYSE Arca Equities, Inc.), 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 NYSE Arca. 3 On March 17, 2006, the Exchange filed Amendment No. 1 to the proposed rule change. 4 On May 5, 2006, the Exchange filed Amendment No. 2 to the proposed rule change. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 On March 6, 2006, the Pacific Exchange, Inc. (“PCX”) filed a rule proposal, which was effective upon filing, that amended its rules to reflect these name changes: from PCX to NYSE Arca; from PCX Equities, Inc. to NYSE Arca Equities, Inc.; from PCX Holdings, Inc., to NYSE Arca Holdings, Inc.; and from the Archipelago Exchange, L.L.C. to NYSE Arca, L.L.C. * See* File No. SR-PCX-2006-24 (March 6, 2006). 4 * See* Amendment No. 1. 5 *See* Amendment No. 2. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The NYSE Arca proposes to amend its Schedule of Fees and Charges (“Fee Schedule”) to revise the application, initial, annual and additional shares listing fees for equity securities issued by operating companies listed on the Archipelago Exchange, the equities facility of the Exchange. The Exchange also proposes related modifications to the Fee Schedule. 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 NYSE Arca included statements concerning the purpose of, and basis for, the proposed rule change as amended 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 In connection with the recently completed acquisition of the NYSE Arca and Arca Equities by Archipelago Holdings, Inc.—the parent of NYSE Arca, L.L.C. (“NYSE Arca Marketplace”)—and the now completed merger between Archipelago Holdings, Inc. and the New York Stock Exchange (“NYSE”), NYSE Arca undertook a review of its listings business and competitive position in a rapidly changing industry. 6 As a result of this review, the NYSE Arca determined to make significant changes to the fees associated with its listings program. Accordingly, the NYSE Arca proposes to revise, and in some cases increase, the application, initial, annual and additional share listing fees for equity securities issued by operating companies listed on NYSE Arca Marketplace. This filing also proposes a number of related modifications to the Fee Schedule. 7 6 For instance, on December 8, 2005, Nasdaq announced that it had completed its acquisition of Instinet Group Incorporated, including INET ECN. In addition, on August 24, 2005, the Boston Stock Exchange, along with Citigroup, Credit Suisse First Boston, Fidelity Brokerage Company and Lehman Brothers, announced the formation of a new joint venture that will launch an electronic stock exchange, the Boston Equities Exchange. Further, on August 16, 2005, the Philadelphia Stock Exchange announced that Citigroup, Credit Suisse First Boston, Morgan Stanley and UBS have each acquired equity stakes in that exchange, with provisions that allow for each firm to obtain additional equity based on specific performance criteria. 7 These proposed fee changes apply only to equity securities issued by operating companies. They do not apply to other types of listed issues, including but not limited to open and closed-end funds, exchange-traded funds, commodity-based trusts, trust issued receipts, portfolio depositary receipts, structured products and investment company units. For these issues, the Fee Schedule remains unchanged. The NYSE Arca believes this proposal would enable it to compete effectively for listings, while supporting the ongoing costs of issuer services, including regulatory oversight and product and service offerings. This proposal further seeks to streamline and clarify the fees applicable to operating companies, making them more transparent and easier to understand and apply. a. *Application Fee.* Currently, the NYSE Arca levies a non-refundable application processing fee of $500, credited towards the applicable initial listing fee if the application is approved. The Exchange proposes to eliminate the application fee. b. *Maximum Total Fees Paid by an Issuer Each Year.* The NYSE Arca proposes a maximum cap of $250,000 on the total fees paid each year by an issuer. Currently, the Exchange does not have such an issuer cap. c. *Listing Fee.* 8 Currently, the Listing Fee applicable to common stock upon first listing depends on whether the stock is listed in conjunction with an initial public offering (“IPO”) or not, and whether it is classified as a Tier I or Tier II listing. 9 For IPOs listed exclusively on Tier I, 10 the Listing Fee is based on the issuer's total shares outstanding (“TSO”), as follows: 8 There are two types of fees applicable to issuers—Listing Fees and Annual Fees. Previously, NYSE Arca referred to Listing Fees as Initial Listing Fees and Additional Share Listing Fees. For ease of application, in light of the completed merger between Archipelago Holdings, Inc. and the NYSE, NYSE Arca proposes to conform its fee nomenclature to the NYSE's nomenclature. 9 Tier I is designed for larger capitalization, mature issuers; Tier II is for smaller issuing companies. Both Tiers have their own set of listing criteria. 10 *See* NYSE Arca Equities Rule 5.2(c). TSO Listing fee Less than 10,000,000 $25,000 10,000,001 to 30,000,000 75,000 30,000,000 to $75,000,000 100,000 Greater than $75,000,000 125,000 For IPOs listed exclusively on Tier II, 11 the current Listing Fee is fixed at $25,000. For IPOs which dually list, there is no Listing Fee, regardless of Tier classification. There is also no Listing Fee for already publicly-traded companies which transfer their listings from another marketplace, regardless of whether such issuers are exclusively or dually listed, their Tier classification, or TSO. 11 * See* NYSE Arca Equities Rule 5.2(k). To simplify and streamline these fees, the NYSE Arca proposes to adopt new Listing Fees based on TSO at the time a security is listed on NYSE Arca Marketplace, as follows: 12 12 For purposes of Listing Fee calculations, NYSE Arca would include treasury stock, restricted stock and shares issued in conjunction with the exercise of an overallotment option, if applicable, in the number of shares for which an issuer is billed at the time a security is first listed. TSO Listing fee Up to and including 30 million $100,000 30,000,001 up to and including 50 million 125,000 Over 50 million 150,000 These proposed fees also would apply to each class of preferred stock or warrant listed, whether or not the issuer has common shares also listed. 13 Further, these fees would apply regardless of Tier classification or whether the issue is exclusively or dually listed. These proposed Listing Fees also would apply to foreign private issuers, but only to the extent their securities are issued and outstanding in the United States. 14 However, in light of the recently completed merger between Archipelago Holdings, Inc. and the NYSE, issuers that transfer their listing to the NYSE Arca Marketplace from the NYSE would not be subject to Listing Fees upon initial listing. 13 As discussed below, for additional classes of common stock when the issuer has a class of common stock already listed, the Exchange would levy a flat Listing Fee for initial listing of $5,000. 14 *See* 17 CFR 240.3b-4 (defining “foreign private issuer”). For additional classes of common stock, preferred stock, debt instruments, purchase rights and warrants, the current initial listing fee is $2,500, regardless of whether such securities are also listed elsewhere. These fees apply to each additional issue listed, regardless of shares outstanding or Tier classification. For additional classes of common stock, the NYSE Arca proposes a flat Listing Fee of $5,000 in lieu of the per share schedule above. The Listing Fee for debt instruments and purchase rights remains $2,500. d. *Technical Original Listing Fee.* 15 Currently, the NYSE Arca charges a fee for technical original listing applications of $2,500. Under the current rule, a technical original listing occurs as a result of, for example: 15 To conform to NYSE fee nomenclature, NYSE Arca proposes to adopt the term “Technical Original Listing” in place of “Substitute Initial Listing.” • Change in the issuer's state of incorporation; • Reincorporation under the laws of the same state; • Recapitalization; • Creation of a holding company or a new company by operation of law or through an exchange offer; 16 or 16 The proposed new rule text regarding the application of the fee in these circumstances codifies the Exchange's existing practice. • Similar events, which, in effect, create a new security or which alters any of its rights, preferences, privileges or terms. Additionally, this fee currently applies if the change in the company's status is technical in nature and the shareholders of the original company receive or retain a share-for-share interest in the new company without any change in their equity position or rights. 17 By the proposed rule change, the NYSE Arca proposes to rename the fee, 18 to codify its current practice regarding applying the fee, 19 and to increase the amount of the fee to $5,000 per application. 17 The proposed new rule text regarding the application of the fee in these circumstances codifies the Exchange's existing practice. 18 *See supra* at n.15. 19 *See supra* at n.16 and n.17. e. *Annual Fee.* Currently, the Annual Fee depends on whether a security was listed in conjunction with an IPO, whether the security is listed exclusively or dually, and Tier classification. For Tier I exclusive IPO listings, the current Annual Fee is based on TSO, as follows: TSO Annual fee Less than 10,000,000 $15,000 10,000,001 to 50,000,000 20,000 50,000,001 to 100,000,000 35,000 Greater than 100,000,000 50,000 For Tier II exclusive IPO listings, the current annual Fee is $12,500, regardless of TSO. For dual listings in conjunction with IPOs, and exclusive and dual listings of already publicly-traded companies, the Exchange does not levy an Annual Fee for the first 12-calendar months following listing. At the end of this 12-month period, NYSE Arca proposes to assess, on a pro-rated basis, the applicable Annual Fee for the balance of the then current calendar year, as follows: • For exclusive IPO Listings, the Annual Fee is based on the fees set forth above for exclusive IPOs, depending on Tier classification; • For dual IPO and exclusive and dual non-IPO Listings, the Annual Fee is $10,000, regardless of Tier classification or shares outstanding. The current maximum Annual Fee payable by a single issuer for all issues listed is $90,000. Annual Fees are not pro-rated or reduced for securities that delist for any reason. The Exchange proposes an Annual Fee for listed issuers listing common or preferred securities as follows: A minimum of $30,000 for issuers with up to and including 10 million TSO plus, for each share over 10 million TSO up to and including 100 million TSO, issuers would be subject to an additional per share charge of $0.000375. For all issuers with TSO above 100 million, the Annual Fee would be a flat $85,000 per issue listed. For example, an issuer with 54.5 million TSO would pay an Annual Fee of $46,687.50 ($30,000 plus $0.000375 times 44.5 million), an issuer with 100 million TSO would pay an Annual Fee of $63,750 ($30,000 plus $0.000375 times 90 million), and an issuer with 110 million TSO would pay the maximum Annual Fee of $85,000 per issue. These proposed Annual Fees would also apply to foreign private issuers, but only to the extent securities are issued and outstanding in the United States. The NYSE Arca would calculate the Annual Fee for foreign private issuers based on a four-quarter average of the securities issued and outstanding in the United States during the preceding year. 20 20 The purpose of utilizing a four-quarter average is to recognize the possibility of flow-back and flow-in of securities to and from the home country market and more reasonably reflect the number of securities in the United States over the course of the year. To the extent that an issuer that is billed by NYSE Arca as a foreign private issuer has a change in status that requires the issuer to commence filing U.S. periodic and annual reports with the Commission during the course of a year, NYSE Arca would bill that issuer Listing and Annual Fees as a domestic issuer at the beginning of the first calendar year following the issuer's change in status. An issuer that changes its status would not be subject to new Listing Fees for worldwide securities already issued and outstanding. For additional classes of common stock, preferred stock, debt instruments, purchase rights and warrants, the NYSE Arca's current Annual Fee is $500, regardless of whether they are also listed elsewhere. These fees apply to each such issue listed, regardless of shares outstanding or Tier classification. For issuers with more than one class of common stock listed, the Exchange proposes an Annual Fee of $20,000 or $0.000375 per share listed, whichever is greater, for each additional class of common stock. 21 21 For purposes of Annual Fee calculation when an issuer has multiple classes of common stock listed, the NYSE Arca would assess the class of common stock with the highest TSO the Annual Fee proposed above for listed issuers, that is, a minimum Annual Fee of $30,000 for up to and including 10 million TSO plus, if applicable, a per share charge of $0.000375 on each share over 10 million up to and including 100 million TSO, subject to the $85,000 maximum Annual Fee per issue. For each additional class of common stock listed, the NYSE Arca would assess Annual Fees as proposed above for additional classes, that is, an Annual Fee of $20,000 or $0.000375 per share listed, whichever is greater. For additional classes of preferred stock where the issuer has a class of common or preferred stock already listed, the Exchange proposes an Annual Fee of $5,000 or $0.000375 per share, whichever is greater. Further, the NYSE Arca proposes an Annual Fee for each class of warrant listed of $5,000 or $0.000375 per warrant, whichever is greater. The Annual Fee for debt instruments and purchase rights would remain $500. Issues would be subject to the Annual Fee in the year of listing, pro-rated based on days listed that calendar year. However, issuers that transfer their listing from the NYSE to the NYSE Arca Marketplace would, for the year of transfer, be subject only to the applicable NYSE Annual Fee billed for that year and, in subsequent years, such issuers would pay the applicable NYSE Arca Marketplace Annual Fee; similarly, issuers that transfer their listings from NYSE Arca Marketplace to the NYSE would, for the year of transfer, be subject only to the applicable NYSE Arca Marketplace Annual Fee billed for that year and, in subsequent years, such issuers would pay applicable NYSE Annual Fees. f. *Subsequent Listing of Additional Securities.* 22 Currently, the fee applicable to all issuers for Subsequent Listing of Additional Securities is $.0025 per additional share listed, assessed beginning with the 100,000th additional share listed per application. There is no charge per application for the first 99,999 additional shares listed. For domestic issuers, the minimum and a maximum charge per application currently depends on whether an issue is exclusively or dually listed, as follows: 22 Previously, the NYSE Arca referred to Subsequent Listing of Additional Securities as Additional Shares Listing. • For all exclusive listings, the maximum charge per application is $15,000 and the annual maximum charge is $30,000; • For all dual listings, the maximum charge per application is $7,500 and the maximum annual charge is $14,000; and • For all applications to list additional shares, the current minimum charge is $500. In addition, for American Depositary Receipts (“ADRs”) and American Depositary Shares (“ADSs”) only, NYSE Arca's current maximum additional shares listing charge per year is $10,000, the minimum charge per application is $500, and the maximum per application charge at $7,500. These fees are assessed only on the ADRs and ADSs that are issued and outstanding in the United States. For an issuer to list additional shares of a class of previously listed securities, NYSE Arca proposes to adopt the following schedule, subject to a minimum fee of $5,000 per application: Number of securities issued Fee per share Up to and including 75 million $0.0048 75,000,001 to 300 million 0.00375 Over 300 million 0.0019 The Listing Fees for subsequent listings of additional shares are calculated starting at the rate applicable to the number of shares already listed and outstanding (including treasury stock and restricted stock). This schedule applies to subsequent issuances of common stock, preferred stock and warrants. These fees would be assessed as follows, subject to any maximum on fees paid by an issuer per year: • To the extent that an issuer submits a supplemental listing application for shares that are immediately issued, such as in connection with a merger or acquisition, stock split or stock dividend, Listing Fees for those shares would be billed at the time the supplemental listing application is processed. • However, to the extent an issuer submits a supplemental listing application for shares that are not issued at the time of listing, such as for an equity compensation plan or for convertible securities where the listed securities will be issued over time, only the $5,000 minimum supplemental listing application fee would be billed at the time the supplemental listing application is processed. Listing Fees would accrue on these securities as of the date of issuance and the accrued Listing Fees would be billed at the beginning of the following year along with the issuer's Annual Fees. These fees would also apply to foreign private issuers, but only to the extent securities are issued and outstanding in the United States, subject to any maximum on fees paid by an issuer per year. In addition, issuers that transfer their listing to the NYSE Arca Marketplace from the NYSE would be subject to these fees. g. *Miscellaneous Administrative Fees.* Currently, NYSE Arca charges $250 to administer certain modifications to NYSE Arca records. The Exchange, stating that this fee has not been increased in many years, proposes to increase this fee to $2,500 per modification, which includes changes in company name, symbol, par value, and title of security or designation. The fee would also apply to poison pill plans (also known as shareholder rights plans). h. *Maximum Listing Fee for Stock Splits and Stock Dividends.* The NYSE Arca proposes that Listing Fees on shares issued in conjunction with stock splits and stock dividends be capped at $150,000 per split or issuance, subject to the $250,000 maximum on total fees paid each year by an issuer. Currently, the Exchange does not have such a cap. i. *Listing Fee Discounts.* In the case of transactions such as a consolidation between two or more listed issuers that result in the formation of a new issuer that immediately lists upon consummation of the consolidation, or a merger between a listed issuer and an unlisted issuer that results in the unlisted issuer surviving or the creation of a new issuer (which lists within 12 months from the consummation of the transaction), Listing Fees for that newly listed issuer would be 25% of the Listing Fee for each class of securities being listed, up to 25% of the maximum applicable to the issue(s) listed. No discount would be applied, however, where a listed issuer survives the merger or consolidation, or in the case of a backdoor (or “reverse”) merger. j. *Rule Change Implementation.* The NYSE Arca proposes to implement these revised fees, as applicable, for all currently listed issuers upon effectiveness of this proposal, except as follows: • For calendar year 2006, NYSE Arca proposes that issuers listed on NYSE Arca Marketplace, and issuers with listing applications pending as of the effective date of this proposal, would continue to be subject to the current Fee Schedule. As of January 1, 2007, however, all such issuers would be subject to the Fee Schedule as proposed to be revised. • Further, NYSE Arca proposes, for the period through December 31, 2007, that all issuers which transfer their listings from Nasdaq or the American Stock Exchange, or apply to list during that time, would not be subject to Listing Fees upon initial listing. Such issuers, however, would be subject to Annual Fees and Fees for Subsequent Listing of Additional Securities, as proposed above. Going forward, NYSE Arca would consider whether to extend this period beyond December 31, 2007, and would make any necessary proposals under Rule 19b-4 prior to that date. 2. Statutory Basis The NYSE Arca believes that the proposal is consistent with Section 6(b) of the Act 23 in general, and Section 6(b)(4) of the Act 24 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among its ETP Holders, issuers, and other persons using its facilities. 23 15 U.S.C. 78f(b). 24 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change would 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 The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule 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 self-regulatory organization 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 No. SR-PCX-2006-16 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-PCX-2006-16. 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 Commissions Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE Arca. 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-PCX-2006-16 and should be submitted by June 2, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 25 25 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-7270 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53761; File No. SR-Phlx-2006-20] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 2 Thereto Establishing a Pilot Option Transaction Charge Credit for Specialists That Send Certain Principal Acting as Agent Orders for Execution Via the Intermarket Option Linkage May 5, 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 March 31, 2006, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. On April 25, 2006, the Exchange filed Amendment No. 1 to the proposed rule change, and withdrew Amendment No. 1 on May 4, 2006. On May 5, 2006, the Exchange filed Amendment No. 2. 3 The Exchange has designated this proposal as one establishing or changing a due, fee, or other charge imposed by a self-regulatory organization pursuant to Section 19(b)(3)(A)(ii) of the Act 4 and Rule 19b-4(f)(2) thereunder, 5 which renders the proposal effective upon filing with the Commission. 6 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 2, the Exchange clarified that the proposed rule change is a pilot that will expire on July 31, 2006. In Amendment No. 2, the Exchange also clarified the purpose of the proposed rule change and made technical changes to the proposed rule change, including the proposed rule text. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). 6 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change the Commission considers the period to commence on May 5, 2006, the date on which the Exchange filed Amendment No. 2. *See* 15 U.S.C. 78s(b)(3)(C). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to establish an option transaction charge credit of $0.21 per contract for Exchange options specialist units 7 that incur Phlx option transaction charges when a customer order is delivered to the limit order book via the Exchange's Options Floor Broker Management System (“FBMS”) 8 and is then sent to an away market and executed via the Intermarket Option Linkage (“Linkage”) under the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage ( “Plan”) 9 as a Principal Acting as Agent Order (“P/A Order”). 10 7 The Exchange uses the terms “specialist” and “specialist unit” interchangeably in its proposed rule change. 8 The FBMS is a component of the Exchange's Automated Options Market (AUTOM) System designed to enable Floor Brokers and/or their employees to enter, route and report transactions stemming from options orders received on the Exchange. The Options FBMS also is designed to establish an electronic audit trail for options orders represented and executed by Floor Brokers on the Exchange, such that the audit trial provides an accurate, time-sequenced record of electronic and other orders, quotations and transactions on the Exchange, beginning with the receipt of an order by the Exchange, and further documenting the life of the order through the process of execution, partial execution, or cancellation of that order. *See* Phlx Rule 1080, Commentary .06. 9 *See* Securities Exchange Act Release Nos. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000); and 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000) (order approving Phlx as a participant in the Plan). 10 A P/A Order is an order for the principal account of a specialist (or equivalent entity on another participant exchange that is authorized to represent public customer orders), reflecting the terms of a related unexecuted public customer order for which the specialist is acting as agent. *See* Phlx Rule 1083(k)(i). This proposal is a pilot that will expire on July 31, 2006, is in connection with an existing pilot program that is currently scheduled to expire on July 31, 2006, 11 and applies to transactions settling on or after April 3, 2006. 11 Fees for Linkage P and P/A orders are currently subject to a pilot program scheduled to expire on July 31, 2006. *See, e.g.* , Securities Exchange Act Release No. 52095 (July 21, 2005), 70 FR 43733 (July 28, 2005) (SR-Phlx-2005-46). The text of the proposed rule change is available at the Commission's Public Reference Room, at the Office of the Secretary of the Exchange, and on the Exchange's Web site at *http://www.Phlx.com.* 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 IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to alleviate the potential economic burden of multiple transaction charges imposed on Exchange specialist units by establishing a credit for Exchange option transaction charges incurred by an Exchange specialist unit when a customer limit order placed on the limit order book by a Floor Broker 12 results in an execution of a P/A Order that is sent to another exchange via Linkage. 12 A Floor Broker who wishes to place a limit order on the limit order book must submit such a limit order electronically through the FBMS. *See* Exchange Rule 1063, Commentary .01. *See also,* Exchange Rule 1080, Commentary .02(b). Currently, when an Exchange specialist sends a P/A Order through Linkage to an away market, the specialist unit ultimately pays fees to execute the order at both the Exchange and the away market center. The Exchange believes that the imposition of both fees may place an economic burden on Exchange specialist units. The purpose of this proposal is to credit the specialist for the fee that is charged by the Exchange. The Exchange believes that an options transaction charge credit of $0.21 per contract should encourage the use of the Linkage and reduce the potential economic burden of multiple fees that may be incurred by specialist units when a customer order is delivered to the limit order book via the FBMS and is then sent and executed via the Linkage. In addition, this proposal should allow the Exchange to remain competitive with other exchanges with respect to the assessment of Linkage-related fees. 13 13 *See* Securities Exchange Act Release Nos. 53526 (March 21, 2006), 71 FR 15794 (March 29, 2006) (SR-PCX-2006-19) (rebate of the transaction fees charged to Market Makers when they use the Linkage to send a P/A Order to another options exchange); and 53372 (February 24, 2006), 71 FR 11003 (March 3, 2006) (SR-CBOE-2006-10) (rebate of certain transaction fees to Designated Primary Market Makers related to the execution of outbound P/A Orders). This proposal is a pilot that will expire on July 31, 2006, is in connection with an existing pilot program that is currently scheduled to expire on July 31, 2006, 14 and applies to transactions settling on or after April 3, 2006. 14 *See supra* at note 11. 2. Statutory Basis The Exchange believes that its proposal to amend its schedule of fees is consistent with Section 6(b) of the Act 15 in general, and furthers the objectives of Section 6(b)(4) of the Act 16 in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members and issuers and other persons using its facilities. 15 15 U.S.C. 78f(b). 16 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 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 The foregoing proposed rule change establishes or changes a due, fee, or other charge applicable only to a member pursuant to Section 19(b)(3)(A)(ii) of the Act 17 and Rule 19b-4(f)(2) thereunder. 18 Accordingly, the proposal took effect upon filing with the Commission. 17 15 U.S.C. 78s(b)(3)(A)(ii). 18 17 CFR 240.19b-4(f)(2). 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. 19 19 *See supra* at note 6. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Phlx-2006-20 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-2006-20. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2006-20 and should be submitted on or before June 2, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 20 20 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-7246 Filed 5-11-06; 8:45 am] BILLING CODE 8010-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Public Notice of Intent To Release Grant Acquired Property at the Opa-Locka Airport, Miami-Dade County, FL AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Request for public comment. SUMMARY: The Federal Aviation Administration is requesting public comment on the Miami-Dade Aviation Department

(MDAD)request to release a portion of airport property, ±4,314 square feet, for other than aeronautical purposes. The Property Location South of Tract 13 along the northern boundary of Opa-Locka Airport across the Biscayne Drainage Canal that parallel Runway 9L/27R. It is more specifically located on the west side of NW 4th Court approximately 350 feet south of NW 157th Street and 170 feet north of theoretical NW 155 Terrace. The Property is part of Parcel 4 and is currently vacant. It was acquired by the MDAD with Federal participation under Federal aid projects (FAAP 9-08-054-D2014-D603) to satisfy airport development and runway protection requirements for current Runway 9L/27R. The property will be disposed of for the purpose of selling it to the adjacent property owner who desires to increase his residential lot size. The fair market value of the property has been determined by appraisal to be $17,000,00. The airport will receive fair market value for the property, and will subsequently reinvest it in an eligible airport improvement project at the Opa-Locka Airport and/or returned to the Trust fund. Documents reflecting the Sponsor's request are available, by appointment only, for inspection of the Miami-Dade Aviation Department (MDAD), Office of the Manager for Development and at the Orlando FAA Airports District Office. DATES: Comments must be received on or before June 12, 2006. ADDRESSES: Documents are available for review, at the MDAD Manager of Development, Miami International Airport, Miami-Dade County Aviation Department, Mr. Sunil Harman, 4200 NW. 36th Street, Building 5A, Suite 400, Miami, Florida 33122, telephone

(305)876-7090 and at the FAA Orlando Airports District Office, Ilia A. Quinones, 5950 Hazeltine National Drive, Suite 400, Orlando, Florida 32822 and telephone number

(407)812-6331. Written comments on the Sponsor's request must be delivered or mailed, in duplicate to *Ilia A. Quinones, Program Manager, 5950 Hazeltine National Drive, Suite 400, Orlando, Florida 32822, telephone number

(407)812-6331* . SUPPLEMENTARY INFORMATION: Section 125 of The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) requires the FAA to provide an opportunity for public notice and comment prior to the “waiver” or “modification” of a sponsor's Federal obligation to use certain airport land for non-aeronautical purposes. Items to address: • Property location. Begin at the southeast corner of the North 320 feet of the East 1/2 of Tract 13, Venetian Gardens, as recorded in Plat Book 31 at Page 37 of the public records of Miami-Dade County, Florida; thence run S00°48′15″W along the East line of said Tract 13 and the Opa-Locka Airport property line for 39.97 feet; thence run N89°10′55″W along the westerly extension of the South line of the North 360 feet of Tract 15 of said Venetian Gardens for 108.68 feet; thence run N00°49′49″E along the West line of the East 1/2 of said Tract 13 for 39.84 feet; thence run S89°14′33″E along the South line of the North 320 feet of the East 1/2 of said Tract 13 and the Opa-Locka Airport property line for 107.54 feet to the point of beginning. Containing 4.314 SF or 0.10 acre. • Property's existing aeronautical use. The subject property is part of a larger parcel of land (Parcel 4) that was acquired with Federal participation under Federal-aid Projects (FAAP-9-08-054-D2014-D603) for airport development and runway protection requirements. The land is vacant and appears to be a remnant located outside of the airport building restriction line of Runway 9L/27R. • Sponsor's proposed non-aeronautical use. The purpose for this release of land is to facilitate the transfer of this property to the adjacent property owner who desires to increase his residential lot size. FOR FURTHER INFORMATION CONTACT: Ilia A. Quinones, Program Manager, Orlando Airports District Office, 5950 Hazeltine National Drive, Suite 400, Orlando, FL 32822-5024. Bart Vernace, Acting Manager, Orlando Airports District Office, Southern Region. [FR Doc. 06-4476 Filed 5-11-06; 8:45 am]

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CFR

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20 CFR 209
17 CFR 240.19
17 CFR 240.10
15 USC 78
17 CFR 240.3

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Notices

Notice of application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (“Act”) for an exemption from sections 12(d)(1)(A) and (B) of the Act and under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act

Cite20 CFR 209

Cite17 CFR 240.19

Cite17 CFR 240.10

Cite15 USC 78

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