Notices. Notice of an altered system of records

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BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. PA-36; File No. S7-09-06] Privacy Act of 1974: System of Records: Office of Inspector General Investigative Files (SEC-43) AGENCY: Securities and Exchange Commission. ACTION: Notice of an altered system of records. SUMMARY: In accordance with the requirements of the Privacy Act of 1974, as amended, 5 U.S.C. 552a, the Securities and Exchange Commission proposes to alter a Privacy Act system of records: “Office of Inspector General Investigative Files (SEC-43)”, originally published at 55 FR 1744, January 18, 1990.

Revisions to this system were last published at 63 FR 11936, March 11, 1998. DATES: The changes will become effective July 11, 2006 unless further notice is given. The Commission will publish a new notice if the effective date is delayed to review comments or if changes are made based on comments received. To be assured of consideration, comments should be received on or before July 3, 2006. ADDRESSES: Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/other.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number S7-09-06 on the subject line.

Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number S7-09-06. This file number should be included on the subject line if e-mail is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/other.shtml* ).

Comments are also available for public inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. FOR FURTHER INFORMATION CONTACT: Barbara A. Stance, Chief Privacy Officer, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-7, Alexandria, VA 22312-2413,

(202)551-7209. SUPPLEMENTARY INFORMATION: The Commission proposes to alter a system of records, “Office of Inspector General Investigative Files (SEC-43).” As described in the original notice, the system contains investigatory material compiled for law enforcement purposes. This notice changes the system location address and the address of the system manager; clarifies the categories of individuals covered by the system; and expands the categories of records in the system to include incoming complaints and complaint logs, preliminary inquiry files and indexes, and declarations from witnesses. This notice also eliminates or consolidates some routine uses, and adds a routine use to disclose information to the Integrity Committee of the President's Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency, another Federal Office of Inspector General, or other Federal law enforcement office in connection with an investigation, inquiry or review conducted pursuant to Executive Order 12993, or at the request of the SEC Inspector General. The Commission has submitted a report of the altered system of records to the Senate Committee on Homeland Security and Governmental Affairs, the House Committee on Government Reform, and the Office of Management and Budget, pursuant to 5 U.S.C. 552a(r) of the Privacy Act of 1974, as amended, and Appendix I to OMB Circular A-130, “Federal Agency Responsibilities for Maintaining Records About Individuals,” as amended on February 20, 1996 (61 FR 6435). Accordingly, the Commission is altering the system of records to read as follows: SEC-43 SYSTEM NAME: Office of Inspector General Investigative Files. SYSTEM LOCATION: Office of Inspector General, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-2376. CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM: This system of records contains records on individuals who are or have been subjects of the Office of Inspector General's investigations or inquiries relating to programs and operations of the Commission. CATEGORIES OF RECORDS IN THE SYSTEM: Incoming complaints and complaint logs; preliminary inquiry files and indexes; all correspondence relevant to the investigation; all internal staff memoranda; copies of all subpoenas issued during the investigation; affidavits, declarations and statements from witnesses; transcripts of testimony taken in the investigation and accompanying exhibits; documents and records or copies obtained during the investigation; working papers of the staff and other documents and records relating to the investigation; opening reports, investigative plans, progress reports, and closing reports; and investigative peer review files. AUTHORITY FOR MAINTENANCE OF THE SYSTEM: Inspector General Act of 1978, as amended, Pub. L. 95-452, 5 U.S.C. App. PURPOSE(S): The purpose of this system of records is to enable the Commission's Office of Inspector General to carry out its mandate under the Inspector General Act Amendments of 1988. The system will consist of files and records compiled by the Commission's Office of Inspector General on Commission employees or other persons who have been part of an investigation for fraud and abuse with respect to the Commission's programs and operations. ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES OF USERS AND THE PURPOSE OF SUCH USES: Information in the system may be disclosed:

(1)Where there is an indication of a violation or a potential violation of law, whether civil, criminal or regulatory in nature, whether arising by general statute or particular program statute, or by regulation, rule or order issued pursuant thereto, to the appropriate agency, whether Federal, foreign, state, or local, or to a securities self-regulatory organization, charged with enforcing or implementing the statute, or rule, regulation or order.

(2)To Federal, foreign, state, or local authorities in order to obtain information or records relevant to an Office of Inspector General investigation or inquiry.

(3)To Federal, foreign, state, or local governmental authorities in response to their request in connection with the hiring or retention of an employee, disciplinary or other administrative action concerning an employee, the issuance of a security clearance, the reporting of an investigation of an employee, the letting of a contract, or the issuance of a license, grant or other benefit by the requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision in the matter.

(4)To non-governmental parties where those parties may have information the Office of Inspector General seeks to obtain in connection with an investigation or inquiry.

(5)To independent auditors or other private firms or individuals with which the Office of Inspector General has contracted to carry out an independent audit, or to provide support for audits, reviews, investigations or other inquiries. These contractors will be required to maintain Privacy Act safeguards with respect to such records.

(6)To respond to subpoenas in any litigation or other proceeding.

(7)To the Department of Justice and/or the Office of General Counsel of the Commission when the defendant in litigation is:

(a)Any component of the Commission or any employee of the Commission or any employee of the Commission in his or her official capacity;

(b)the United States where the Commission determines that the claim, if successful, is likely to directly affect the operations of the Commission; or

(c)any Commission employee in his or her individual capacity where the Department of Justice and/or the Office of General Counsel of the Commission agree to represent such employee.

(8)To a Congressional office in response to an inquiry from the Congressional office made at the request of an individual but only from the record of that individual.

(9)To inform complainants, victims, and witnesses of the results of an investigation or inquiry.

(10)To qualified individuals or organizations in connection with the performance of a peer review or other study of the Office of Inspector General's audit or investigative functions.

(11)To a Federal agency responsible for considering debarment or suspension action if the record would be relevant to such action.

(12)To the Department of Justice for the purpose of obtaining its advice on Freedom of Information Act matters.

(13)To the Office of Management and Budget for the purpose of obtaining its advice on Privacy Act matters.

(14)To a public or professional licensing organization if the record indicates, either by itself or in combination with other information, a violation or potential violation of professional standards, or reflects on the moral, educational, or professional qualifications of an individual who is licensed or who is seeking to become licensed.

(15)To the Office of Government Ethics

(OGE)to comply with agency reporting requirements established by OGE in 5 CFR part 2638, subpart F.

(16)To the news media and the public when there exists a legitimate public interest ( *e.g.* , to provide information on events in the criminal process, such as an indictment).

(17)To the Integrity Committee of the President's Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency, another Federal Office of Inspector General, or other Federal law enforcement office in connection with an investigation, inquiry or review conducted pursuant to Executive Order 12993, or at the request of the SEC Inspector General. POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, AND DISPOSING OF RECORDS IN THE SYSTEM: STORAGE: The Office of Inspector General Investigative Files consists of paper records maintained in folders, binders and logbooks; various records in electronic form; and an automated data base. The folders, binders and logbooks are stored in the Office of Inspector General's file cabinets and offices. The automated data base and electronic records are maintained on a file server and backup tapes in encrypted form. RETRIEVABILITY: The records are retrieved by the name of the subject of the investigation or inquiry, or by a unique control number assigned to each investigation or inquiry. SAFEGUARDS: These records are available only to those persons whose official duties require such access. The records are kept in limited access areas during duty hours and in locked file rooms or locked offices at all other times. RETENTION AND DISPOSAL: The Investigative Files are kept in accordance with the Office of Inspector General's record retention schedule. SYSTEM MANAGER(S) AND ADDRESS: Inspector General, Office of Inspector General, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-2736. NOTIFICATION PROCEDURES: All requests to determine whether this system of records contains a record pertaining to the requesting individual may be directed to the Privacy Act Officer, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-7, Alexandria, VA 22312-2413. RECORD ACCESS AND CONTESTING PROCEDURES: Persons wishing to obtain information on the procedures for gaining access to or contesting the contents of this record may contact the Privacy Act Officer, U.S. Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-7, Alexandria, VA 22312-2413. RECORD SOURCE CATEGORIES: Information in these records is supplied by: Individuals including, where practicable, those to whom the information relates; witnesses, corporations and other entities; records of individuals and of the Commission; records of other entities; Federal, foreign, state or local bodies and law enforcement agencies; documents and correspondence relating to litigation; transcripts of testimony; and miscellaneous other sources. EXEMPTIONS CLAIMED FOR THE SYSTEM: Pursuant to 5 U.S.C. 552a(j)(2), this system of records, to the extent it pertains to the enforcement of criminal laws, is exempted from all provisions of the Privacy Act of 1974, 5 U.S.C. 552a, except subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i). Pursuant to 5 U.S.C. 552a(k)(2), this system of records to the extent it consists of investigatory material compiled for law enforcement purposes, is exempted from the following provisions of the Privacy Act of 1974, 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and

(f)other than material within the scope of the exemption at 5 U.S.C. 552a(j)(2). These exemptions are contained in 17 CFR 200.313. Dated: May 24, 2006. By the Commission. Nancy M. Morris, Secretary. [FR Doc. E6-8472 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53858; File No. SR-Amex-2006-53] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the DB Commodity Index Tracking Fund May 24, 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 May 23, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Amex filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) 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). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to revise the manner in which the Deutsche Bank Liquid Commodity Index TM —Excess Return (the “DBLCI” or “Index”) is maintained in connection with the listing and trading of the DB Commodity Index Tracking Fund (the “Trust” or “Fund”). The Commission previously approved the listing and trading of the shares of the Fund on the Exchange. 5 The Exchange has designated this proposal as non-controversial and has requested that the Commission waive the 30-day operative delay contained in Rule 19b-4(f)(6)(iii) under the Act. 6 The text of the proposed rule change is available on the Amex's Web site ( *http://www.amex.com* ), at the Amex's Office of the Secretary, and at the Commission's Public Reference Room. 5 *See* Securities Exchange Act Release Nos. 53105 (January 11, 2006), 71 FR 3129 (January 19, 2006) (approving the listing and trading of the DB Commodity Index Tracking Fund). 6 17 CFR 240.19b-4(f)(6)(iii). 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 Amex 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 Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposal is to clarify the manner in which the DBLCI is maintained. In particular, the proposal seeks to provide that the replacement of expiring futures contracts will be based on “Optimal Yield” roll rules for the DBLCI, which are described in detail below. The effect of this change will be to maximize the benefits of rolling in backwardated 7 markets and minimize the loss from rolling in markets in contango. 8 The Exchange proposes that the proposed change be operative June 1, 2006. 7 “Backwardation” refers to a condition in which commodity deliveries in the near future have a higher price than those made later on. This occurs when demand for the commodity is greater in the near term. 8 “Contango” refers to a condition in which distant delivery prices for futures exceed spot prices, often due to the costs of storing and insuring the underlying commodity. The Exchange believes that adoption of this change to futures replacement will mitigate losses associated with contango conditions and maximize gains associated with backwardated conditions, thereby benefiting investors. 9 A contango condition erodes investor returns/yields because the price of the futures contract being sold, *i.e.* , the nearby futures contract, is less than the price of the futures contract being purchased, *i.e.* , a futures contract expiring in a later month than the nearby futures contract. Conversely, a backwardated condition benefits investors by increasing returns/yields because the price of the futures contract being sold, *i.e.* , the nearby futures contract, is greater than the price of the futures contract being purchased, *i.e.* , a futures contract expiring in a later month than the nearby futures contract. 9 A contango market will tend to cause a drag on the Index while a backwardated market will tend to cause a push on the Index. Currently, the expiring futures contracts are replaced monthly (other than in November) during the first week of the month in the case of futures contracts relating to crude oil and heating oil and annually in November in the case of futures contracts relating to aluminum, gold, corn and wheat. Crude oil and heating oil futures contracts are always replaced with the contract expiring in the next month; aluminum, gold, corn and wheat contracts are always replaced with a contract expiring in one year. The Index Sponsor and the Exchange believe that instituting “Optimal Yield” roll rules for the Index futures contracts, which require the Index Sponsor to replace expiring contracts in the Index with the highest yielding or “optimal” futures contract that will expire in no more than thirteen

(13)months, will provide greater flexibility for the Index Sponsor to reduce the effects of contango conditions and increase the benefits of backwardation for the benefit of investors and the marketplace. Under this proposal, an existing contract must be replaced with a longer-dated contract if the existing contract is within a predetermined number of months of its expiration depending on the particular commodity and based on the historical liquidity of the particular commodity as it approached expiration. The new futures contract will be the contract with the maximum implied roll yield over the next 13 months. The maximum implied roll yield is determined by inputting the prices of the contracts expiring in future months and the price of the existing contract into a formula that compares the prices and accounts for the time value associated with those prices based on the time-to-expiration of each contract. If two

(2)contracts for a particular commodity have the same maximum implied roll yield, the contract with the maximum yield and minimum time to expiration will be selected. Once the contract is selected, the monthly index roll will unwind the old futures contract and enter a position in the new contract. This will occur between the 2nd and 6th business days of the month. The Exchange in this proposal solely seeks to permit the listing and trading of the shares of the Fund based on the revised Index replacement mechanism. This revision will be fully disclosed to the marketplace and investors through a regulatory filing by the Fund, as well as information on the Fund's Web site at *www.dbcfund.db.com* . 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 10 in general, and furthers the objectives of Section 6(b)(5) of the Act, 11 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:

(i)Significantly affect the protection of investors or the public interest;

(ii)impose any significant burden on competition; and

(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b-4(f)(6) thereunder. 13 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b-4(f)(6). A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 14 However, Rule 19b-4(f)(6)(iii) 15 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. 14 17 CFR 240.19b-4(f)(6)(iii). As required by Rule 19b-4(f)(6)(iii), the Amex provided the Commission with written notice of its intent to file this proposed rule change, along with a brief description and text of the proposed change, at least five business days prior to the date of filing of the proposed rule change. 15 *Id.* The Amex has requested that the Commission waive the 30-day operative delay so that the proposed rule change is operative on June 1, 2006. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal seeks to change the manner in which futures contracts comprising the DBLCI are replaced or “rolled” so that the effects of contango are reduced while the benefits of backwardation are increased to the advantage of investors and the marketplace. For this reason, the Commission designates the proposal to be operative on June 1, 2006, as requested by the Exchange. 16 16 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 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. 17 17 *See* Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C). IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Amex-2006-53 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2006-53. 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-Amex-2006-53 and should be submitted on or before June 22, 2006. 18 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 18 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-8438 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53867; File No. SR-Amex-2006-50] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Regarding Options Quote Size Mitigation May 25, 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 May 18, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Amex. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and to approve the proposal on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the operation of the options market data size mitigation pilot program (“Options Size Mitigation” or “Pilot Program”) from March 5, 2006 through March 5, 2007. The text of the proposed rule change is available on the Amex's Web site ( *http://www.amex.com* ), at the Office of the Secretary, the Amex, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Amex included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Amex is proposing to extend the operation of Options Size Mitigation from March 5, 2006 through March 5, 2007. The Commission approved Options Size Mitigation on a four

(4)month pilot basis on November 4, 2005. 3 The Pilot Program terminated on March 5, 2006 without extension. 3 *See* Securities Exchange Act Release No. 52741 (November 4, 2005), 70 FR 69369 (November 15, 2005). The purpose of the proposal is to continue the effectiveness of the Pilot Program until March 5, 2007. According to the Exchange, continuation of the Pilot Program will benefit the Exchange and the marketplace by helping to enhance the Exchange's ability to process an ever increasing volume of incoming options quotes. The Exchange believes that the continuation of Options Size Mitigation will help to prevent potential data delays and enhance the Exchange's ability to manage market data traffic. Under Options Size Mitigation, incoming market data is filtered prior to being forwarded to Exchange floor trading systems. When in effect, Options Size Mitigation filters market data by not processing incoming quotes ( *i.e.* , away market quotes) with size changes below a variable percent. However, Amex systems always maintain and display Amex quotations with accurate size regardless of whether Options Size Mitigation is in effect. The Exchange submits that the initial Options Size Mitigation filtering level was set at 10% and has remained the same since the introduction of the Pilot Program. As set forth in the Approval Order, the Exchange has the ability to increase the filtering level in 10% level increments as warranted. The appropriate filtering level is determined by the head of the Exchange's Floor Operations (or his designee), in conjunction with two

(2)Senior Floor Officials. As was the case in the original Pilot Program, the Exchange believes that Options Size Mitigation offers greater ability and flexibility to manage inbound quote traffic. Given the exponential increase in options quote traffic rates in recent years, the Exchange believes that the continuation of Options Size Mitigation is a necessary tool in connection with the processing of quote traffic. Based on the Exchange's experience to date, the Amex believes that continuation of the Pilot Program from March 5, 2006 through March 5, 2007 is appropriate. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with section 6(b) of the Act 4 in general and furthers the objectives of section 6(b)(5) 5 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 4 15 U.S.C. 78f(b). 5 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form at *http://www.sec.gov/rules/sro.shtml;* or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-Amex-2006-50 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-Amex2006-50. 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 at *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, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the 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 No. SR-Amex-2006-50 and should be submitted on or before June 22, 2006. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change. After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the section 6 of the Act 6 and the rules and regulations thereunder applicable to a national securities exchange. 7 In particular, the Commission believes that the proposed rule change is consistent with section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 8 6 15 U.S.C. 78f. 7 In approving this proposed rule change, the Commission has considered its impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 8 15 U.S.C. 78f(b)(5). The Commission believes that the Options Size Mitigation should continue to enhance the Amex's ability to process an increasing volume of incoming options quotes during high option quote volume periods and peaks. The Commission notes that Options Size Mitigation operated on a pilot basis for four months and the Amex believes it is functioning as intended. The Amex has requested that the Commission find good cause for approving the proposed rule change prior to the thirtieth day after publication of the notice thereof in the **Federal Register** . The Commission believes that granting accelerated approval of the proposal will allow the Amex to continue to operate the Options Size Mitigation program without interruption and thus, should facilitate the processing of incoming options quotes. The Commission notes that no comments were received in connection with the approval of the temporary Pilot Program and no comments have been received during the operation of the temporary Pilot Program. Accordingly, the Commission finds good cause, pursuant to section 19(b)(2) of the Act, 9 for approving the proposed rule change prior to the thirtieth day after publication of the notice thereof in the **Federal Register** . 9 15 U.S.C. 78s(b)(2). V. Conclusion *It is therefore ordered* , pursuant to section 19(b)(2) of the Act, 10 that the proposed rule change, as amended (SR-Amex-2006-50), is hereby approved on an accelerated basis for a period to expire on March 5, 2007. 10 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-8477 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53871; File No. SR-Amex-2006-42] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to a Retroactive Suspension of Transaction Charges for Specialist Orders in the Nasdaq-100 Tracking Stock®

(QQQQ)May 25, 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 May 2, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On May 12, 2005, Amex filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1, which replaced and superseded the original filing in its entirety, is incorporated in this notice. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to retroactively apply a suspension of transaction charges for specialist orders in connection with the trading of the Nasdaq-100 Index Tracking Stock® (Symbol: QQQQ) from March 1, 2006, through April 5, 2006. The text of the proposed rule change is available on Amex's Web site at *http://www.amex.com,* at Amex's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposed rule change, as amended. The text of these statements may be examined at the places specified in Item IV below, and is set forth in Sections A, B, and C below. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange, in a companion filing (File No. SR-Amex-2006-30), adopted a suspension of transaction charges for specialist orders in the Nasdaq-100 Tracking Stock (“QQQQ”) from April 6, 2006, through June 30, 2006. 4 In order to waive transaction fees for specialist orders in the QQQQ from March 1, 2006, through June 30, 2006, the Exchange has proposed to retroactively suspend transaction fees for specialist transactions from March 1, 2006, through April 5, 2006. 4 *See* Securities Exchange Act Release No. 53701 (April 21, 2006), 71 FR 25253 (April 28, 2006). The Exchange previously adopted the suspension of specialist transaction charges in connection with the QQQQ from July 1, 2005, through December 31, 2005. *See* Securities Exchange Act Release Nos. 52268 (August 15, 2005), 70 FR 49336 (August 23, 2005); 52267 (August 15, 2005), 70 FR 49338 (August 23, 2005); 52460 (September 16, 2005), 70 FR 55639 (September 22, 2005); 52516 (September 27, 2005), 70 FR 58247 (October 5, 2005); and 52736 (November 4, 2005), 70 FR 69171 (November 14, 2005) (proposals previously introducing and extending this specialist transaction fee waiver). However, from January 1, 2006, through April 5, 2006, the specialist fee suspension for the QQQQ lapsed; therefore, the QQQQ specialists have been subject to transaction fees in connection with QQQQ executions during that time period. Specialist orders currently are charged $0.0034 ($0.34 per 100 shares), capped at $300 per trade (88,235 shares). Effective December 1, 2004, the Nasdaq-100 Index Tracking Stock® (formerly “QQQ”) transferred its listing from Amex to The Nasdaq Stock Market, Inc (“Nasdaq”). It now trades on Nasdaq under the symbol QQQQ. After the transfer, Amex began trading QQQQ on an unlisted trading privileges basis. The Exchange believes that the retroactive suspension of transaction charges for specialist transactions in the QQQQ from March 1, 2006, through April 5, 2006, is consistent with the adoption of the proposal to suspend transaction charges for specialist orders generally in the QQQQ through June 30, 2006. The Exchange further believes that a retroactive suspension of transaction fees on specialist orders in the QQQQ is appropriate to enhance the competitiveness of executions on Amex. The Exchange proposes to amend the Amex Fee Schedule to indicate that transaction charges for specialist orders in the QQQQ have been suspended from March 1, 2006, through June 30, 2006. As detailed in File No. SR-Amex-2006-30, the Exchange submits that a suspension of transaction fees for specialist orders in connection with the QQQQ is consistent with section 6(b)(4) of the Act. 5 Specifically, the Exchange believes that suspending transaction charges for QQQQ specialist orders is an equitable allocation of reasonable fees among Exchange members. The Exchange believes that the fact that specialists have greater obligations than other members and are also subject to other Exchange fees, in addition to transaction fees, supports this proposal to retroactively apply the fee suspension. 5 Section 6(b)(4) states that the rules of a national securities exchange must provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. The Exchange notes that specialists are subject to a variety of Exchange fees other than transaction charges, such as a floor clerk fee, a floor facility fee, a post fee, and a registration fee. 6 In addition, specialists and other floor members of the Exchange are subject to technology and membership fees. 7 Certain market participants, such as customers, non-member broker-dealers and market-makers and member broker-dealers are not subject to the majority of these fees. In addition, a specialist unit, in order to adequately “make a market” in assigned securities, must be sufficiently staffed 8 and have adequate technology resources to handle the volume of orders (especially in the QQQQ) that are sent to the Exchange. The Exchange believes that these operational costs borne by a specialist further support the proposal to temporarily suspend QQQQ transaction fees on specialist orders. 6 The floor clerk, floor facility, post, and registration fees, on an annual basis, are $900, $2,400, $1,000, and $800, respectively. 7 A technology fee of $3,000 per year is assessed on all specialists and other floor participants at the Exchange. Annual membership dues of $1,500 must be paid by all members while annual membership fees are payable depending on the type of membership and circumstances. Non-members are not subject to these fees. 8 *See* Securities Exchange Act Release No. 53386 (February 28, 2006), 71 FR 11250 (March 6, 2006). Specialists have certain obligations under Exchange rules, as well as the Act, that do not exist for other market participants. For example, a specialist, pursuant to Amex Rule 170, is required to maintain a fair and orderly market in his or her assigned securities. Other members of the Exchange, as well as non-member market participants, do not have this obligation. As a result, the Exchange believes that the proposed retroactive suspension of transaction charges for specialist orders in the QQQQ is reasonable and equitable, given the obligations that specialists must adhere to in making markets. The Exchange further submits that the fee suspension will provide greater incentive to the specialist to continue to provide market liquidity, rendering the Exchange an attractive venue for market participants to execute orders. 2. Statutory Basis The Exchange believes that the proposed fee change is consistent with section 6(b) of the Act, 9 in general, and furthers the objectives of section 6(b)(4) of the Act, 10 in particular, in that it is an equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. 11 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4). 11 At the request of the Exchange, the Commission staff conformed this sentence to the statement made by the Exchange in the statutory basis section of the Exchange's Form 19b-4 for this filing (Section 3(b)). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the 1934 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 the Exchange consents, the Commission will:

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

(i)Increase the communication review fee; and

(ii)amend the DPM Linkage Fees Credit Program (“Program”). The text of the proposed rule change is available on the Exchange's Web site ( *http://www.cboe.com* ), at the Exchange's Office of the Secretary and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fees Schedule to:

(i)Increase the communication review fee, and

(ii)amend the Program. The Exchange implemented the proposed Fee changes on May 18, 2006. 5 5 *See* telephone conversation between Jamie Galvan, Senior Attorney, CBOE, and Christopher Chow, Senior Counsel, Commission, on May 24, 2006. a. Communication Review Fee CBOE's Department of Member Firm Regulation reviews member firm options-related advertisements, educational material and sales literature for compliance with applicable rules of CBOE, the SEC and the Securities Investor Protection Corporation. 6 These public communications include, for example, print, television and radio advertisements, and electronic communications such as Web sites. 6 CBOE member firms may seek review of their options-related communications by other SROs of which they are members. CBOE assesses a fee for this service (“Communication Review Fee”) as follows:

(i)Regular review—for printed material reviewed, $75 per submission, plus $10 for each page reviewed in excess of 10 pages; and for video and audio media reviewed, $75 per submission, plus $10 per minute for each minute of tape reviewed in excess of 10 minutes;

(ii)Expedited review—for printed material reviewed, $500 per submission, plus $25 for each page reviewed in excess of 10 pages; and for video and audio media reviewed, $500 per submission, plus $25 per minute for each minute of tape reviewed in excess of 10 minutes. This fee was adopted in December of 2004. 7 7 *See* Securities Exchange Act Release No. 50903 (December 21, 2004), 69 FR 78070 (December 29, 2004). CBOE proposes to increase the Communication Review Fee as follows:

(i)Regular review—for printed material reviewed, $150 per submission, plus $25 for each page reviewed in excess of five pages; and for video and audio media reviewed, $150 per submission, plus $25 per minute for each minute of tape reviewed in excess of five minutes; and

(ii)Expedited review—for printed material reviewed, $1,000 per submission, plus $50 for each page reviewed in excess of five pages; and for video and audio media reviewed, $1,000 per submission, plus $50 per minute for each minute of tape reviewed in excess of five minutes. Expedited review would be completed within five business days, instead of three business days, not including the date the item is received by the Department of Member Firm Regulation, unless a shorter or longer period is agreed to by the Department of Member Firm Regulation. The Department of Member Firm Regulation may, in its sole discretion, refuse requests for expedited review. b. DPM Linkage Fees Credit The Exchange, pursuant to Section 21 of the CBOE Fees Schedule, credits DPMs for transaction fees they incur related to the execution of:

(i)Outbound principal acting as agent (“P/A”) orders; and

(ii)outbound Principal orders on behalf of orders that are for the account of a broker-dealer (“P orders”). 8 The purpose of the Program is to assist DPMs in offsetting the additional costs they incur in routing orders to other exchanges in order to obtain the National Best Bid or Offer. 8 Broker-dealer orders are orders marked with either a “B” or “F” origin code. The Program is accomplished via a rebate and a credit:

(i)The Exchange rebates transaction fees that DPMs incur when they trade against a customer order that underlies a P/A order the DPM sent through the Intermarket Options Linkage (“Linkage”), and when they trade against a broker-dealer order that underlies a P order the DPM sent through the Linkage; and

(ii)the Exchange credits DPMs up to an additional $.20 per contract to help offset some of the fees the DPMs incur for submitting such P/A and P orders through the Linkage. In addition, for P orders only, the Exchange credits DPMs up to an additional $.09 per contract on both the CBOE transaction against the broker-dealer order underlying the outbound P order and the P order transaction at another exchange, to help offset the Options Clearing Corporation (“OCC”) and clearing firm fees DPMs incur on those transactions. 9 9 *See* Securities Exchange Act Release No. 53372 (February 24, 2006), 71 FR 11003 (March 3, 2006). The Exchange proposes to amend the Program to provide that the Exchange will credit DPMs to cover completely (to the extent possible) the costs incurred by DPMs in executing such outbound P/A and P orders. Specifically, the Exchange proposes to amend Section 21 of the Fees Schedule to provide that the Exchange will credit DPMs with an amount per contract to offset the fees incurred by DPMs when they execute P/A and P orders at other exchanges. The amount of such credit would be a weighted average of the Linkage transaction fees assessed by other exchanges calculated based on outbound Linkage contract volume sent to each of the other exchanges. The references in the Fees Schedule to a $.20 per contract credit would be deleted. In addition, the Exchange proposes to credit DPMs an amount per contract on CBOE transactions against customer and broker-dealer orders underlying P/A and P orders, and on P/A and P order transactions at other exchanges, to offset the OCC and clearing firm fees DPMs incur on those transactions. 10 The amount of such credit would be comprised of the OCC per contract fee applicable to market-makers and specialists set forth on the OCC Schedule of Fees and an estimated average clearing firm per contract fee. The reference in the Fees Schedule to the $.09 per contract credit would be deleted. 10 Currently, the credit to offset OCC and clearing firm fees applies only to P orders. Also, the Exchange proposes to credit DPMs an amount per contract on CBOE transactions against customer and broker-dealer orders underlying P/A and P orders, and on P/A and P order transactions at other exchanges, to offset the Sales Value Fee DPMs may incur on those transactions. 11 11 The Sales Value Fee is assessed by CBOE to each member for sales of securities on CBOE with respect to which CBOE is obligated to pay a fee to the SEC under Section 31 of the Exchange Act. Other exchanges refer to this fee by different names. *See* Section 6 of the CBOE Fees Schedule. Under the current Program, the Exchange caps the amount of the credits at the amount of total fees received by the Exchange from inbound linkage transaction fees. Because the Exchange proposes to completely cover (to the extent possible) the costs incurred by DPMs in executing such transactions, the Exchange proposes to delete this cap. 12 12 The Exchange notes that a Linkage Plan amendment has been separately submitted to the Commission to permit an Exchange account, instead of the DPM's account, to be used by the Exchange to send and respond to P/A orders (“Linkage Account Plan Amendment”). Pursuant to Section 21 of the Fees Schedule, the DPM Linkage Fee Credit Program with respect to P/A orders will expire upon the earlier of:

(i)30 days after Commission approval of the Linkage Account Plan Amendment; or

(ii)July 31, 2006, which is the expiration date of the Linkage fees pilot program. As under the current Program, a DPM would be expected to reimburse the Exchange to the extent that the funds received by the DPM via the Program exceed the DPM's actual costs incurred in executing Linkage-related transactions. 13 13 The Exchange intends to monitor on a regular basis to ensure that no DPM receives funds via the Program in amounts that exceed the DPM's actual costs in executing Linkage-related transactions. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act 14 in general, and furthers the objectives of Section 6(b)(4) of the Act 15 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. 14 15 U.S.C. 78f(b). 15 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 will 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 neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act, 16 and paragraph (f)(2) of Rule 19b-4 thereunder 17 because it establishes or changes a due, fee, or other charge applicable only to members of the Exchange. 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. 16 15 U.S.C. 78s(b)(3)(A)(ii). 17 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-2006-44 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-2006-44. 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 Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2006-44 and should be submitted on or before June 22, 2006. 18 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 18 Nancy M. Morris, Secretary. [FR Doc. E6-8476 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53869; File No. SR-CBOE-2006-38] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Regarding Transfer of Designated Primary Market Maker Appointments May 25, 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 17, 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 CBOE. On May 11, 2006, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superseded the original filing in its entirety. In Amendment No. 1, CBOE corrected a reference in the rule text and elaborated on the purpose of and rationale for the proposed rule change. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend its rules relating to the transfer of Designated Primary Market Maker (“DPM”) appointments. The text of the proposed rule change, as amended, is available on CBOE's Web site ( *http://www.cboe.com* ), at CBOE's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it had received on the proposed rule change. The text of these statements may be examined at the places specified in Item 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 amend Exchange rules applicable to the transfer of DPM appointments between CBOE members, which is governed by CBOE Rule 8.89. Generally, any DPM proposing a sale, transfer, or assignment of any ownership interest or a change to the DPM's capital structure, voting authority, or distribution of profits or losses (collectively, a “transfer proposal”) must provide the appropriate Exchange committee with the specifics and terms of the transfer proposal in a form and manner specified under CBOE Rule 8.89(c). The appropriate Exchange committee then will undergo a review process, which includes a publication of notice of the transfer proposal and a subsequent publication of the notice of the decision by the committee on the transfer proposal. 4 Currently, the appropriate Exchange committee that reviews transfer proposals under CBOE Rule 8.89 is the Allocation Committee. 4 *See* CBOE Rules 8.89(d) and (e). The Exchange proposes to eliminate section

(f)of CBOE Rule 8.89, which subjects any transfer proposal decision made by the appropriate Exchange committee (“transfer proposal decision”) to a 10-day review period in which any transfer proposal decision may be directly reviewed by the Board of Directors upon:

(1)A written application by a party claiming to be aggrieved 5 by the DPM transfer decision, or

(2)a request for review by any five Directors. 5 Under CBOE Rule 8.89, a person must be “aggrieved” as described in Chapter XIX of Exchange Rules. The Exchange believes that, with the expiration of the DPM appointment transfer fee in June 2004 6 and the fact that DPM transfers, in general, have become more routine, the Board review process under CBOE Rule 8.89(f) is no longer necessary. The Exchange also believes that the elimination of CBOE Rule 8.89(f) will improve the efficiency of the Exchange's decision-making processes. Currently, because of the review process under CBOE Rule 8.89(f), a memo is forwarded to the Board of Directors after each decision regarding a transfer proposal is made. This requires Directors to take time to review each of these matters so that they can determine whether to make a request for review of the decision by the Board. Because transfer proposal decisions have become more routine, the Exchange no longer sees a need to have Directors devote special attention to these decisions or for there to be a special review process for these decisions that is different from the review processes and procedures that are generally applicable to other Exchange decisions. 6 Until it expired on June 30, 2004, Interpretation and Policy .02 of CBOE Rule 8.89 applied a transfer fee to certain types of DPM transfers. Further, any member aggrieved by a decision regarding a transfer proposal decision could still seek a review of the decision through the hearing and review process provided for under Chapter XIX of CBOE's rules. 7 In any such appeal proceeding under Chapter XIX, the decision regarding a transfer proposal by the appropriate Exchange committee under CBOE Rule 8.89 would be subject to review by the CBOE Appeals Committee. Additionally, the Appeals Committee decision in the matter would be subject to review by the CBOE Board of Directors on its own motion, or could be appealed to the Board of Directors, pursuant to CBOE Rule 19.5. 7 Chapter XIX of CBOE Rules governs the process by which persons, including members, claiming to be economically aggrieved by Exchange action may seek a review of such a decision. Finally, as a matter of housekeeping, the Exchange proposes to delete Interpretation and Policy .02 of CBOE Rule 8.89, which provided for the application of a transfer fee on any DPM appointment transfer. As this provision expired on June 30, 2004, continued inclusion in CBOE Rules is unnecessary. 2. Statutory Basis Because it believes that the proposed rule change, as amended, will make the review process for DPM appointment transfer proposals more efficient, the Exchange believes that the proposed rule change, as amended, is consistent with section 6(b) of the Act, 8 in general, and furthers the objectives of section 6(b)(5), 9 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market, and to protect investors and the public interest. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change, as amended, will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change, as amended. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

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

(B)Institute proceedings to determine whether the proposed rule change, as amended, should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *http://www.sec.gov/rules/sro.shtml)* ; or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2006-38 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-CBOE-2006-38. 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 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 publicly available. All submissions should refer to File Number SR-CBOE-2006-38 and should be submitted on or before June 22, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-8480 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53859; File No. SR-CHX-2006-18] Self-Regulatory Organization; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Waiving a Notice Provision Relating to the Renewal of Trading Permits May 24, 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 May 10, 2006, the Chicago Stock Exchange, Inc. (“CHX” 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 CHX. 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 amend its rules to waive for 2006 the 60-day notice requirement relating to the cancellation of trading permits that were issued as a result of the Exchange's demutualization. The text of this proposed rule change is available on the Exchange's Web site at *http://www.chx.com/rules/proposed_rules.htm* and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the CHX included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in Item IV below. The CHX 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 At the time of the Exchange's demutualization on February 9, 2005, the Exchange issued trading permits to each member that held a CHX membership on the previous day. Pursuant to CHX Article II, Rule 3, each of these trading permits had a one-year term (through February 8, 2006) and was to be automatically renewed at the end of that term for another year (through February 8, 2007), unless the participant 3 gave the Exchange at least 60 days' notice that the trading permit should be allowed to expire. 3 *See* CHX Article I, Rule 1(l) for the definition of a “participant.” Although some Exchange participants that wanted certain trading permits to expire provided the 60 days' notice contemplated by the Exchange's rules, a few participants did not. Because this is the first year of this new requirement and it appears to have created confusion among some of the Exchange's participants, the Exchange believes that it would be appropriate to waive the 60-day notice requirement in 2006. Therefore, the Exchange proposes Interpretation and Policy .01 to CHX Article II, Rule 3, which would allow for 2006 a trading permit to expire if a participant provided notice of waiver of renewal with respect to such trading permit during the 60 days preceding February 9, 2006, even though the participant did not provide the full 60 days' prior notice required by the Exchange's rules. 2. Statutory Basis The CHX believes that the proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act. 4 The CHX believes that the proposal is consistent with Section 6(b)(5) of the Act 5 in that it is 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 by permitting the Exchange to waive, on a one-time basis, a rule provision relating to the renewal of trading permits that caused confusion among some of the Exchange's participants. 4 15 U.S.C. 78(f)(b). 5 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

(ii)as to which the 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 proposal 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-2006-18 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-CHX-2006-18. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule changes between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the CHX. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-CHX-2006-18 and should be submitted on or before June 22, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-8437 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53868; File No. SR-CHX-2006-13] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Participant Fees and Credits May 25, 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 24, 2006, the Chicago Stock Exchange, Inc. (“CHX” 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 CHX. 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 CHX proposes to amend its Participant Fee Schedule (“Fee Schedule”) to reduce, retroactively to March 1, 2006, the assignment fees charged to specialist firms seeking the right to trade securities to $500 per assignment, when the securities are assigned in competition with other firms. 3 The text of this proposed rule change is available on the Exchange's Web site at *http://www.chx.com/rules/proposed_rules.htm* and at the Commission's Public Reference Room. 3 The Exchange filed with the Commission a separate filing proposing an identical assignment fee reduction (SR-CHX-2006-12) on April 24, 2006, which was immediately effective as of that date under section 19(b)(3)(A) of the Act and Rule 19b-4(f)(2) thereunder. Because the Exchange seeks to apply the assignment fee reduction to its Fee Schedule on a retroactive basis as of March 1, 2006, the Exchange is submitting this proposal to the Commission under section 19(b)(2) of the Act, to be published for notice and comment. The Commission notes that the discussion in the Purpose section below reflects the Fee Schedule as it existed prior to the immediately effective changes made pursuant to SR-CHX-2006-12. 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 CHX 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 CHX 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 Under the Exchange's rules, the Committee on Specialist Assignment and Evaluation is responsible for appointing participant firms to act as specialists on the Exchange. 4 When more than one firm competes for the right to be the specialist in a particular security, the Exchange charges assignment fees of $1,000 or $4,000 for the assignment, depending on the number of firms competing for that right. 5 4 *See* CHX Article IV, Rule 6. 5 For “dual trading system” securities, a group of securities which includes securities listed on the New York Stock Exchange or American Stock Exchange, the Exchange currently charges a $1,000 assignment fee if the security (or a group of securities) was assigned in competition with at least one other participant and up to one-third of all participants that trade these issues. The fee for the assignment of this type of security is increased to $4,000 if the security (or a group of securities) was assigned in competition with more than one-third of the participants that trade these issues. For Nasdaq/NM securities, the Exchange currently charges a $1,000 assignment fee if the security was assigned in competition with one other participant firm; the fee is increased to $4,000 if two or more firms compete for the assignment. In a separate filing, the Exchange has submitted a proposal to implement a new trading model, which features an automated Matching System into which orders may be sent for execution, but which does not involve the use of specialists to handle customer orders. 6 Instead, in this new model, off-Exchange market makers may choose to handle customer orders, sending those orders to the Exchange or to other venues for execution. Because the Exchange hopes to be able to implement its new model in the second quarter of 2006, the Exchange believes that the right to trade securities as an Exchange specialist has only a short-term benefit. For that reason, the Exchange has filed another proposal to reduce the assignment fees to $500 per security, regardless of the number of participants competing for the assignments and regardless of the type of security that is being assigned. 7 Through this proposed rule change, the Exchange seeks to make the assignment fee reduction effective, on a retroactive basis, to March 1, 2006. The Exchange believes that this retroactive effectiveness will appropriately allow the Exchange to apply the fee reduction to assignments that have been made in recent weeks, when the Exchange's management began talking with specialist firms about the reasons for, and possibility of, this type of fee reduction. 6 *See* SR-CHX-2006-05. 7 *See supra* note 3. The Exchange believes that it is appropriate to maintain at least a $500 assignment fee to help defray the costs of the assignment process. The Exchange will continue to charge no fee when securities are assigned without competition. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b)(4) of the Act 8 in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and creates an appropriate (and limited) incentive for a firm to agree to act as specialist on a temporary basis. 8 15 U.S.C. 78(f)(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

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

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CHX-2006-13 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-CHX-2006-13. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CHX-2006-13 and should be submitted on or before June 22, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-8482 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53863; No. SR-FICC-2006-06] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Eligibility To Become a Funds-Only Settling Bank Member May 24, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on April 6, 2006, the Fixed Income Clearing Corporation (“FICC”) 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 primarily by FICC. FICC filed the proposed rule change pursuant to section 19(b)(3)(A)(i) of the Act 2 and Rule 19b-4(f)(1) 3 thereunder so that the proposal was 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 15 U.S.C. 78s(b)(3)(A)(i). 3 17 CFR 240.19b-4(f)(1). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change will clarify the types of entities that are eligible to become a funds-only settling bank member. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 4 4 The Commission has modified the text of the summaries prepared by FICC. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule change is to modify Rules 1 and 4(b)(ii) of FICC's Government Securities Division's (“GSD”) rulebook to clarify that an entity that is neither a bank nor a trust company but does have direct access to a Federal Reserve Bank and the National Settlement System of the Federal Reserve is eligible to become a GSD funds-only settling bank member. 5 5 As of the date of this rule filing, this situation applies to one GSD member that plans to act as a settling bank for itself. FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 6 and the rules thereunder because it makes a necessary technical change to the membership provisions for funds-only settling banks. 6 15 U.S.C. 78q-1. B. Self-Regulatory Organization's Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments it receives. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(i) 7 of the Act and Rule 19b-4(f)(1) 8 thereunder because it constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. 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. 7 15 U.S.C. 78s(b)(3)(A)(i). 8 17 CFR 240.19b-4(f)(1). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-FICC-2006-06 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-FICC-2006-06. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at FICC's principal office and on FICC's Web site at *http://www.ficc.com/gov/gov.docs.jsp?NS-query=* . 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 submission should refer to File No. SR-FICC-2006-06 and should be submitted on or before June 22, 2006. 9 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-8439 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53862; File No. SR-ISE-2006-23] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Cancellation Fee Changes May 24, 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 May 1, 2006, the International Securities Exchange, Inc. (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change concerning the Exchange's cancellation fee as described in Items I, II, and II below, which Items have been prepared by the ISE. On May 18, 2006, the ISE submitted an amendment to the proposed rule change (“Amendment No. 1”). 3 The ISE has filed the proposed rule change as one establishing or changing a due, fee, or other charge imposed by the ISE under 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. 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 The purpose of Amendment No. 1 was to clarify the application of the proposed cancellation fee in the Notes section of the Exchange's Schedule of Fees and to include in that section an exception for the cancellation of orders that improved the Exchange's disseminated quotes at the time the orders were entered. This exception, described below, was discussed in the purpose section of the filing, but was not set forth in the text of the Schedule of Fees. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to amend its Schedule of Fees regarding its cancellation fee. The text of the proposed rule change is available on the Exchange's Internet Web site ( *http://www.iseoptions.com/legal/proposed_rule_changes.asp* ), at the principal office of the ISE, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the ISE 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 ISE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to amend the ISE's cancellation fee. Through June 2005, the Exchange charged Electronic Access Members (“EAMs”) $1 per order canceled in excess of the number of orders executed. In File No. SR-ISE-2005-31 (“Fee Amendment”), the Exchange amended that fee in a rule change effective on filing pursuant to Section 19(b)(3)(A) of the Act. 6 To address problems the Exchange encountered in applying the cancellation fee, the Fee Amendment applied the fee:

(1)On the cancellation activity of each of an EAM's customers (including itself when it self-clears), rather than the aggregate activity of all of an EAM's customers; and

(2)on a per-contract, rather than a per-order basis. 6 *See* Securities Exchange Act Release No. 52177 (July 29, 2005), 70 FR 45457 (August 5, 2005) (File No. SR-ISE-2005-31). Upon the Exchange's filing of the Fee Amendment, the Commission received a number of comment letters raising objections to the proposal. According to the Exchange, based on those comment letters, the Commission staff informed the ISE that it believed that the proposed fee should be subject to formal comment pursuant to Section 19(b)(2) of the Act. Accordingly, the Exchange submitted File No. SR-ISE-2005-36, which reinstated the cancellation fee as it was in effect prior to the submission of the Fee Amendment. The Exchange thereafter submitted File No. SR-ISE-2005-37 (the “19(b)(2) Fee Amendment”), a proposed rule change pursuant to Section 19(b)(2) of the Act to implement the same change that had previously been adopted in the Fee Amendment. The Exchange is withdrawing the 19(b)(2) Fee Amendment filing and submitting the instant filing. Since the inception of the cancellation fee (except during the month of July 2005), the Exchange has charged EAMs $1 per order canceled in excess of the number of orders executed. 7 Recognizing that order cancellations often happen in large numbers, the purpose of the fee was to ease congestion in the ISE Order Routing System (“IORS”) and to fairly allocate costs among members according to system use. According to the Exchange, experience shows that two limitations are preventing the fee from fully achieving its intended effect. First, the ISE applies the fee to the aggregate number of orders a clearing EAM cancels on behalf of itself and its customers, which tends to mask the activity of the EAM's particular customers who are responsible for the cancellations. Second, because the Exchange applies the fee on a per order basis, firms have adjusted trading activity solely to avoid this fee by executing small orders to offset the cancellation of larger orders. ISE states that, if anything, this increases message traffic as firms enter more small orders to mask their order cancellations. 7 *See* Securities Exchange Act Release No. 46189 (July 11, 2002), 67 FR 47587 (July 19, 2002) (File No. SR-ISE-2002-16). To address these concerns, the ISE first proposes to charge a clearing EAM based on the cancellation activity of each of its customers (including itself when it self-clears). The Exchange has enhanced its systems so that it now can identify the specific broker-dealer customers of a clearing EAM who enters and cancels orders. This will allow the Exchange to identify and charge for cancellation activity beyond aggregate numbers. The ISE similarly will be able to provide clearing EAMs with the information necessary for them to pass through resulting cancellation charges to their customers. 8 8 The Exchange notes that this is similar to how the NYSE Arca, Inc. now imposes its cancellation fee. *See* Securities Exchange Act Release No. 49802 (June 3, 2004), 69 FR 32391 (June 9, 2004) (File No. SR-PCX-2004-31). Further, for purposes of calculating the number of trades that may offset cancellations, the Exchange proposes to consider all orders executed by the same firm in the same series on the same side of the market at the same price within 30 seconds as only one execution. The Exchange believes that this will remove the incentive for an EAM to enter multiple orders in rapid succession. To ensure that the Exchange covers only activity that is truly excessive and inappropriately uses bandwidth and system capacity, the Exchange proposes to exclude from the cancellation fee orders that improve ISE's disseminated quotation at the time the orders were entered. 2. Statutory Basis The basis for the proposed rule change is the requirement under Section 6(b)(4) of the Act 9 that an exchange have an equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The ISE states that, in particular, these fees would permit the Exchange to recover capacity costs more equitably from among its members. 9 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change, as amended, establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(2) 11 thereunder. At any time within 60 days of the filing of the proposed rule change the Commission may summarily abrogate such proposed 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. 12 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 19b-4(f)(2). 12 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of Act, the Commission considers the period to commence on May 18, 2006, the date on which the ISE submitted Amendment No. 1. *See* 15 U.S.C. 78s(b)(3)(C). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-ISE-2006-23 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-ISE-2006-23. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-ISE-2006-23 and should be submitted on or before June 22, 2006. 13 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-8434 Filed 5-31-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53857; File No. SR-ISE-2006-24] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto To Permit the Listing and Trading of Quarterly Options Series May 24, 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 May 2, 2006, the International Securities Exchange, Inc. (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been substantially prepared by the Exchange. The Exchange filed Amendment No. 1 to the proposed rule change on May 17, 2006. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, a partial amendment, the Exchange made minor modifications to the proposed rule text. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to amend its rules in order to list option series that expire at the close of business on the last business day of a calendar quarter. This rule change is being proposed on a pilot basis for one year. The text of the proposed rule change, as amended, is set forth below. Proposed new language is in *italics* ; deletions are in [brackets]. Rule 100. Definitions

(a)The following terms, when used in these Rules, shall have the meanings specified in this Chapter 1, unless the context indicates otherwise. Any term defined in Article I of the Constitution and not otherwise defined in this Chapter shall have the meaning assigned in Article I of the Constitution.

(1)through

(34)No change. *(35) The term “Quarterly Options Series” means a series in an options class that is approved for listing and trading on the Exchange in which the series is opened for trading on any business day and that expires at the close of business on the last business day of a calendar quarter.*

(35)through

(44)Renumbered as

(36)through (45). Rule 504. Series of Options Contracts Open for Trading

(a)After a particular class of options has been approved for listing and trading on the Exchange, the Exchange from time to time may open for trading series of options in that class. Only options contracts in series of options currently open for trading may be purchased or written on the Exchange. Prior to the opening of trading in a given series, the Exchange will fix the expiration month, year and exercise price of that series. For Short Term Option Series, the Exchange will fix a specific expiration date and exercise price, as provided in Supplementary Material .02. *For Quarterly Options Series, the Exchange will fix a specific expiration date and exercise price, as provided in Supplementary Material .03.*

(b)through

(h)No change. Supplementary Material to Rule 504 .01 No change. .02 No change. *.03 Quarterly Options Series Pilot Program: For a one-year pilot period, the Exchange may list and trade options series that expire at the close of business on the last business day of a calendar quarter (“Quarterly Options Series”). The Exchange may list Quarterly Options Series for up to five

(5)currently listed options classes that are either index options or options on exchange traded funds. In addition, the Exchange may also list Quarterly Options Series on any options classes that are selected by other securities exchanges that employ a similar pilot program under their respective rules. The one-year pilot will commence the day the Exchange first initiates trading in a Quarterly Options Series, which shall be no later than July 24, 2006.* *

(a)The Exchange will list series that expire at the end of the next consecutive four

(a)through

(k)No change. *(l) The term “Quarterly Options Series” means, for the purposes of Chapter 20, a series in an index options class that is approved for listing and trading on the Exchange in which the series is opened for trading on any business day and that expires at the close of business on the last business day of a calendar quarter.*

(l)through

(n)Renumbered as

(m)through (o). Rule 2004. Position Limits for Broad-Based Index Options

(a)through

(c)No change.

(d)Positions in Short Term Option Series *and Quarterly Options Series* shall be aggregated with positions in options contracts on the same index. Rule 2005. Position Limits for Industry Index Options

(a)through

(c)No change.

(d)Positions in Short Term Option Series *and Quarterly Options Series* shall be aggregated with positions in options contracts on the same index. Rule 2009. Terms of Index Options Contracts

(a)through

(e)No change. Supplementary Material to Rule 2009 .01 No change. *.02 Quarterly Options Series Pilot Program: Notwithstanding the restriction in Rule 2009(a)(3), for a one-year pilot period, the Exchange may list and trade options series that expire at the close of business on the last business day of a calendar quarter (“Quarterly Options Series”). The Exchange may list Quarterly Options Series for up to five

(4)calendar quarters, as well as the fourth quarter of the next calendar year. For example, if the Exchange is trading Quarterly Options Series in the month of May 2006, it will list series that expire at the end of the second, third and fourth quarters of 2006, as well as the first and fourth quarters of 2007. Following the second quarter 2006 expiration, the Exchange will add series that expire at the end of the second quarter of 2007.* *(b) The Exchange will not list a Short Term Option Series on an options class whose expiration coincides with that of a Quarterly Options Series on that same options class.* *(c) Quarterly Options Series shall be P.M. settled.* *(d) The strike price of each Quarterly Options Series will be fixed at a price per share, with at least two strike prices above and two strike prices below the value of the underlying security at about the time that a Quarterly Options Series is opened for trading on the Exchange. The Exchange may open for trading additional Quarterly Options Series of the same class if the current index value of the underlying index moves substantially from the exercise price of those Quarterly Options Series that already have been opened for trading on the Exchange. The exercise price of each Quarterly Options Series opened for trading on the Exchange shall be reasonably related to the current index value of the underlying index to which such series relates at or about the time such series of options is first opened for trading on the Exchange. The term “reasonably related to the current index value of the underlying index” means that the exercise price is within thirty percent (30%) of the current index value. The Exchange may also open for trading additional Quarterly Options Series that are more than thirty percent (30%) away from the current index value, provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate, or individual customers or their brokers. Market-makers trading for their own account shall not be considered when determining customer interest under this provision.* *(e) The interval between strike prices on Quarterly Options Series shall be the same as the interval for strike prices for series in that same options class that expire in accordance with the normal monthly expiration cycle.* 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 Exchange proposes to amend its rules to accommodate the listing of option series that would expire at the close of business on the last business day of a calendar quarter (“Quarterly Options Series”). Specifically, Quarterly Options Series could be opened in any approved option class 4 on a business day (“Quarterly Options Opening Date”) and would expire at the close of business on the last business day of a calendar quarter (“Quarterly Options Expiration Date”). Specifically, the Exchange would list series that expire at the end of the next four consecutive calendar quarters, as well as the fourth quarter of the next calendar year. For example, if the Exchange were trading Quarterly Options Series in the month of May 2006, it would list series that expire at the end of the second, third and fourth quarters of 2006, as well as the first and fourth quarters of 2007. Following the second quarter 2006 expiration, the Exchange would add series that expire at the end of the second quarter of 2007. 4 Quarterly Options Series may be opened in options on indexes or options on Exchange Traded Fund (“ETFs”) that satisfy the applicable listing criteria under ISE rules. Quarterly Options Series listed on currently approved option classes would be P.M. settled and, in all other respects, would settle in the same manner as do the monthly expiration series in the same option class. The proposed rule change would allow the Exchange to open up to five currently listed option classes that are either index options or options on ETFs. The strike price for each series would be fixed at a price per share, with at least two strike prices above and two strike prices below the value of the underlying security at about the time that a Quarterly Options Series is opened for trading on the Exchange. The proposal would permit the Exchange to open for trading additional Quarterly Options Series of the same class if the current index value of the underlying index moves substantially from the exercise price of those Quarterly Options Series already opened for trading on the Exchange. The exercise price of each Quarterly Options Series opened for trading on the Exchange would be required to be reasonably related to the current index value of the underlying index to which such series relates at or about the time such series of options were first opened for trading on the Exchange. The term “reasonably related to the current index value of the underlying index” means that the exercise price is within thirty percent of the current index value. The Exchange would also be permitted to open for trading additional Quarterly Options Series that are more than thirty percent away from the current index value, provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate, or individual customers or their brokers. Market-makers trading for their own account would not be considered when determining customer interest under this provision. Because monthly option series expire on the third Friday of their expiration month, a Quarterly Options Series, which would expire on the last business day of the quarter, could never expire in the same week in which a monthly option series in the same class expires. The same, however, is not the case for Short Term Option Series. Quarterly Options Series and Short Term Option Series on the same option class could potentially expire concurrently under the proposal. 5 Therefore, to avoid any confusion in the marketplace, the proposal stipulates that the Exchange may not list a Short Term Option Series that expires at the end of the day on the same day as a Quarterly Options Series in the same option class expires. In other words, the proposed rules would not permit the Exchange to list a P.M.-settled Short Term Option Series on an ETF or an index that would expire on a Friday that is the last business day of a calendar quarter if a Quarterly Options Series on that ETF or index were scheduled to expire on that day. 5 The Exchange currently does not have any Short Term Option Series listed for trading. However, the proposed rules would permit the Exchange to list an A.M.-settled Short Term Option Series and a P.M.-settled Quarterly Options Series in the same option class that both expire on the same day ( *i.e.* , on a Friday that is the last business day of the calendar quarter). The Exchange believes that the concurrent listing of an A.M.-settled Short Term Option Series and a P.M.-settled Quarterly Options Series on the same underlying ETF or index that expire on the same day would not tend to cause the same confusion as would P.M.-settled short term and quarterly series in the same option class, and would provide investors with an additional hedging mechanism. Finally, the interval between strike prices on Quarterly Options Series would be the same as the interval for strike price for series in the same option class that expires in accordance with the normal monthly expiration cycles. The Exchange believes that Quarterly Options Series would provide investors with a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events affecting the securities that underlie options contracts. At the same time, the Exchange is cognizant of the need to be cautious in introducing a product that can increase the number of outstanding strike prices. For that reason, the Exchange proposes to employ a limited pilot program (“Pilot Program”) for Quarterly Options Series. Under the terms of the Pilot Program, the Exchange could select up to five option classes on which Quarterly Options Series may be opened on any Quarterly Options Opening Date. The Exchange would also be allowed to list those Quarterly Options Series on any option class that is selected by another securities exchange with a similar Pilot Program under its rules. The Exchange believes that limiting the number of option classes in which Quarterly Options Series may be opened would help to ensure that the addition of the new series through this Pilot Program would have only a negligible impact on the Exchange's and Option Price Reporting Authority's (“OPRA”) quoting capacity. Also, limiting the term of the Pilot Program for a period of one year will allow the Exchange and the Commission to determine whether the Pilot Program should be extended, expanded, and/or made permanent. If the Exchange were to propose an extension or an expansion of the Pilot Program, or were the Exchange to propose to make the Pilot Program permanent, the Exchange would submit, along with any filing proposing such amendments to the Pilot Program, a Pilot Program Report (“Report”) that will provide an analysis of the Pilot Program covering the entire period during which the Pilot Program was in effect. The Report would include, at a minimum:

(1)Data and written analysis on the open interest and trading volume in the classes for which Quarterly Options Series were opened;

(2)an assessment of the appropriateness of the option classes selected for the Pilot Program;

(3)an assessment of the impact of the Pilot Program on the capacity on ISE, OPRA and on market data vendors (to the extent data from market data vendors is available);

(4)any capacity problems or other problems that arose during the operation of the Pilot Program and how ISE addressed such problems;

(5)any complaints that ISE received during the operation of the Pilot Program and how ISE addressed them; and

(6)any additional information that would assist the Commission in assessing the operation of the Pilot Program. The Exchange must submit the Report to the Commission at least sixty days prior to the expiration date of the Pilot Program. Alternately, at the end of the Pilot Program, if the Exchange determines not to propose an extension or an expansion of the Pilot Program, or if the Commission determines not to extend or expand the Pilot Program, the Exchange would no longer list any additional Quarterly Options Series and would limit all existing open interest in Quarterly Options Series to closing transactions only. Finally, the Exchange represents that it has the necessary systems capacity to support the new option series that would result from the introduction of Quarterly Options Series. The Exchange has provided to the Commission information in a confidential submission that supports its system capacity representations. 2. Statutory Basis The Exchange believes that the introduction of Quarterly Options Series will attract order flow to the Exchange, increase the variety of listing options available to investors, and provide investors with a valuable hedging tool. Accordingly, the Exchange believes the proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(5) of the Act 7 in particular, in that it is designed to promote just and equitable principles of trade and, in general, to protect investors and the public interest. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would 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 comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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