Tap any paragraph to write a margin note. Your notes collect in the Desk below the text and file under cases with @. The side-by-side margin rail opens on a larger screen.

§
Marginalia
Code · REGISTER · 2006-06-23 · National Aeronautics and Space Administration · Notices

Notices. Notice of meeting

28,687 words·~130 min read·/register/2006/06/23/06-5634

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

BILLING CODE 7020-02-P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice (06-040)] NASA Advisory Council; Meeting AGENCY: National Aeronautics and Space Administration. ACTION: Notice of meeting. SUMMARY: In accordance with the Federal Advisory Committee Act, Public Law 92-463, as amended, the National Aeronautics and Space Administration announces a meeting of the NASA Advisory Council. DATES: Thursday, July 20, 2006, 8 a.m.-5 p.m. ADDRESSES: Admiral A&B Conference Room, Hilton Houston NASA Clear Lake, 3000 NASA Road One, Houston, TX 77058-4322.
FOR FURTHER INFORMATION CONTACT: Mr. Christopher Blackerby, Designated Federal Official, National Aeronautics and Space Administration, Washington, DC 20546, 202/358-4688. SUPPLEMENTARY INFORMATION: The meeting will be open to the public up to the seating capacity of the room. The agenda for the meeting includes updates from each of the Council committees, including discussion and deliberation of potential recommendations. The Council Committees address NASA interests in the following areas:
Aeronautics, Audit and Finance, Space Exploration, Human Capital, and Science. It is imperative that the meeting be held on this date to accommodate the scheduling priorities of the key participants. P. Diane Rausch, Advisory Committee Management Officer, National Aeronautics and Space Administration. [FR Doc. E6-9964 Filed 6-22-06; 8:45 am] BILLING CODE 7510-13-P THE NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES Meetings of Humanities Panel AGENCY: The National Endowment for the Humanities.
ACTION: Notice of meetings. SUMMARY: Pursuant to the provisions of the Federal Advisory Committee Act (Pub. L. 92-463, as amended), notice is hereby given that the following meetings of Humanities Panels will be held at the Old Post Office, 1100 Pennsylvania Avenue, NW., Washington, DC 20506. FOR FURTHER INFORMATION CONTACT: Heather Gottry, Acting Advisory Committee Management Officer, National Endowment for the Humanities, Washington, DC 20506; telephone
(202)606-8322. Hearing-impaired individuals are advised that information on this matter may be obtained by contacting the Endowment's TDD terminal on
(202)606-8282. SUPPLEMENTARY INFORMATION: The proposed meetings are for the purpose of panel review, discussion, evaluation and recommendation on applications for financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including discussion of information given in confidence to the agency by the grant applicants. Because the proposed meetings will consider information that is likely to disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential and/or information of a personal nature the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, pursuant to authority granted me by the Chairman's Delegation of Authority to Close Advisory Committee meetings, dated July 19, 1993, I have determined that these meetings will be closed to the public pursuant to subsections (c)(4), and
(6)of section 552b of Title 5, United States Code. 1. *Date:* July 10, 2006. *Time:* 8:30 a.m. to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Fellowships in American History II, submitted to the Division of Research Programs at the May 5, 2006 deadline. 2. *Date:* July 10, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in American History III, submitted to the Division of Research Programs at the May 5, 2006 deadline. 3. *Date:* July 11, 2006. *Time:* 8:30 to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Fellowships in American Studies I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 4. *Date:* July 11, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in History of Art and Architecture I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 5. *Date:* July 12, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in European History I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 6. *Date:* July 13, 2006. *Time:* 8:30 to 5:30 p.m. *Room:* 420. *Program:* This meeting will review applications for Art and Other Public Programming, submitted to the Office of Challenge Grants at the May 1, 2006 deadline. 7. *Date:* July 14, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in Asian Studies I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 8. *Date:* July 14, 2006. *Time:* 8:30 to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Fellowships in American History and Studies I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 9. *Date:* July 17, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in Sociology, Anthropology, and Psychology, submitted to the Division of Research Programs at the May 5, 2006 deadline. 10. *Date:* July 18, 2006. *Time:* 8:30 to 5:30 p.m. *Room:* 420. *Program:* This meeting will review applications for Academic and Research Institutions, submitted to the Office of Challenge Grants at the May 1, 2006 deadline. 11. *Date:* July 18, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Faculty Research Awards in Humanities I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 12. *Date:* July 18, 2006. *Time:* 8:30 to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Faculty Research Awards in Humanities II, submitted to the Division of Research Programs at the May 5, 2006 deadline. 13. *Date:* July 19, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in British Literature I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 14. *Date:* July 19, 2006. *Time:* 8:30 to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Fellowships in British Literature II, submitted to the Division of Research Programs at the May 5, 2006 deadline. 15. *Date:* July 20, 2006. *Time:* 8:30 to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Fellowships in History of Art and Architecture II, submitted to the Division of Research Programs at the May 5, 2006 deadline. 16. *Date:* July 20, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in American History I, submitted to the Division of Research Programs at the May 5, 2006 deadline. 17. *Date:* July 24, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in Anthropology and Archaeology, submitted to the Division of Research Programs at the May 5, 2006 deadline. 18. *Date:* July 24, 2006. *Time:* 8:30 to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Fellowships in Asian Studies II, submitted to the Division of Research Programs at the May 5, 2006 deadline. 19. *Date:* July 25, 2006. *Time:* 8:30 to 5 p.m. *Room:* 415. *Program:* This meeting will review applications for Fellowships in Germanic and Slavic Studies, submitted to the Division of Research Programs at the May 5, 2006 deadline. 20. *Date:* July 25, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in Political Science and Jurisprudence, submitted to the Division of Research Programs at the May 5, 2006 deadline. 21. *Date:* July 31, 2006. *Time:* 8:30 to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Fellowships in African and Middle Eastern Studies, submitted to the Division of Research Programs at the May 5, 2006 deadline. Heather Gottry, Acting Advisory Committee, Management Officer. [FR Doc. E6-9914 Filed 6-22-06; 8:45 am] BILLING CODE 7536-01-P NUCLEAR REGULATORY COMMISSION Notice of Public Meeting for Fuel Cycle Facilities AGENCY: Nuclear Regulatory Commission. ACTION: Meeting notice and request for speakers. FOR FURTHER INFORMATION CONTACT: James Smith, Project Manager, Technical Support Section, Division of Fuel Cycle Safety and Safeguards, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20005-0001. Telephone:
(301)415-6459; fax number:
(301)415-5370; e-mail: *jas4@nrc.gov.* SUPPLEMENTARY INFORMATION: I. Introduction The Nuclear Regulatory Commission
(NRC)is hosting a seminar, The Fuel Cycle Information Exchange 2006 (FCIX 2006), on August 30 and 31, 2006, to provide an opportunity for licensees, NRC staff, and other stakeholders to exchange information and discuss issues of interest pertaining to the regulation of NRC-regulated fuel cycle facilities. The seminar will be held in Rockville, Maryland, at the Universities of Maryland at the Shady Grove Campus Auditorium and will be open to the public. Fuel Cycle licensees and other interested parties were previously notified of the possibility of this meeting in a letter from Robert Pierson, dated November 28, 2005, (ADAMS accession number ML053220226). In that letter, Mr. Pierson also solicited topics of discussion and volunteer speakers for the meeting. We are expecting that NRC staff, licensees and certificate holders, and other interested parties and stakeholders will be making presentations on varying subjects of interest, with opportunity for followup discussion on each subject. The proposed items of discussion are listed below; however, the NRC is seeking additional speakers to discuss topics of a broad nature, relative to the nuclear fuel cycle. If you would like an opportunity to discuss an issue, or to offer an additional topic of discussion, please contact the staff member listed below. II. Currently Proposed Topics of Discussion 10 CFR Part 70, Subpart H Implementation Issues. Databases and Items Relied on for Safety (IROFS) Tracking Systems. Boundaries of IROFS. Impact of Increased Use of Nuclear Energy in Domestic Electricity Generation. IAEA Safety Documents Related to Fuel Cycle Facilities. Status Report of Current NRC Fuel Cycle Related Initiatives. 360-Degree Feedback From the Industry and Public of Issues of Interest Pertaining to the Regulation of NRC-Regulated Fuel Cycle Facilities. Overview and Experience Under the NRC's New Hearing Process by Fuel Cycle Applicants and Licensees. III. Dates and Location Universities of Maryland at the Shady Grove Campus Auditorium, 9630 Gudelsky Drive, Rockville, MD 20850. *Dates:* August 30, 2006, 9 a.m.-4:30 p.m.; August 31, 2006, 9 a.m.-12 p.m. IV. Contact James Smith, Project Manager, Office of Nuclear Material Safety and Safeguards, Division of Fuel Cycle Safety and Safeguards, Special Projects Branch, Mail Stop: T8F42, 301-415-6459, Fax: 301-415-5370, e-mail: *jas4@nrc.gov.* V. Further Information The document related to this action is available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html.* From this site, you can access the NRC's Agencywide Documents Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The ADAMS ascension number for the document related to this notice is provided in the following table. If you do not have access to ADAMS or if there are problems in accessing the document located in ADAMS, contact the NRC Public Document Room
(PDR)Reference staff at 1-800-397-4209, 301-415-4737, or by e-mail to *pdr@nrc.gov.* Dated at Rockville, Maryland, this 15th day of June 2006. For the Nuclear Regulatory Commission. Dennis C. Morey, Acting Chief, Technical Support Section, Special Projects Branch, Division of Fuel Cycle Safety and Safeguards, Office of Nuclear Material Safety and Safeguards. [FR Doc. E6-9923 Filed 6-22-06; 8:45 am] BILLING CODE 7590-01-P RAILROAD RETIREMENT BOARD Agency Forms Submitted for OMB Review *Summary:* In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the Railroad Retirement Board
(RRB)has submitted the following proposal(s) for the collection of information to the Office of Management and Budget for review and approval. Summary of Proposal(s)
(1)*Collection title:* Repayment of Debt.
(2)*Form(s) submitted:* G-421f.
(3)*OMB Number:* 3220-0169.
(4)*Expiration date of current OMB clearance:* 8/31/2006.
(5)*Type of request:* Extension of a currently approved collection.
(6)*Respondents:* Individuals or households.
(7)*Estimated annual number of respondents:* 300.
(8)*Total annual responses:* 300.
(9)*Total annual reporting hours:* 25.
(10)*Collection description:* Section 2 of the Railroad Retirement Act provides for payment of annuities to retired or disabled railroad employees, their spouses, and eligible survivors. When the RRB determines that an overpayment of RRA benefits has occurred, it initiates prompt action to notify the claimant of the overpayment and to recover the amount owed. The collection obtains information needed to allow for repayment by the claimant by credit card, in addition to the customary form of payment by check or money order. Additional Information or Comments Copies of the forms and supporting documents can be obtained from Charles Mierzwa, the agency clearance officer (312-751-3363) or *Charles.Mierzwa@rrb.gov* . Comments regarding the information collection should be addressed to Ronald J. Hodapp, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092 or *Ronald.Hodapp@rrb.gov* and to the OMB Desk Officer for the RRB, at the Office of Management and Budget, Room 10230, New Executive Office Building, Washington, DC 20503. Charles Mierzwa, Clearance Officer. [FR Doc. E6-9953 Filed 6-22-06; 8:45 am] BILLING CODE 7905-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54004; File No. SR-CBOE-2005-63] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval of a Proposed Rule Change and Amendments Nos. 1 and 2 Thereto Relating to the Nullification and Adjustment of Equity Options Transactions June 16, 2006. I. Introduction On August 12, 2005, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to provide for an adjustment provision for transactions during opening rotation resulting from obvious errors between a non-broker-dealer customer and CBOE Market-Maker(s), as well as transactions during opening rotation between a non-broker-dealer customer and at least one non-CBOE Market-Maker. On October 28, 2005, the CBOE submitted Amendment No. 1 to the proposed rule change. 3 On April 7, 2006, the CBOE submitted Amendment No. 2 to the proposed rule change. 4 The proposed rule change and Amendments No. 1 and 2 were published for comment in the **Federal Register** on April 26, 2006. 5 The Commission received one comment letter on the proposal. 6 This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced the original filing in its entirety. 4 Amendment No. 2 clarified and revised the example set forth in the purpose section of the filing. 5 Securities Exchange Act Release No. 53672 (April 18, 2006), 71 FR 24767 (April 26, 2006). 6 *See* letter to Jonathan G. Katz, Secretary, Commission, from Matthew B. Hinerfeld, Managing Director and Deputy General Counsel, Citadel Investment Group, L.L.C. on behalf of Citadel Derivatives Group LLC (collectively “Citadel”) dated May 17, 2006 (“Citadel Letter”). II. Description of the Proposed Rule Change The CBOE proposes to revise CBOE Rule 6.25, the Exchange's obvious error rule. Under the proposal, non-broker-dealer customers would be permitted to request review for adjustment of an opening rotation transaction from Trading Officials until 3:30 p.m. Central Time (“CT”) on the day that the transaction occurred. 7 According to the Exchange, the purpose of the proposal is to protect non-broker-dealer customers from obvious errors during the opening rotation when they do not discover the error within 15 minutes of the execution of the transaction. The proposed rule change, however, would not affect the procedure set forth in CBOE Rule 6.25(b)(1), which permits a non-broker-dealer customer to request within 15 minutes of an obvious error transaction to have the transaction nullified by Trading Officials, unless both parties agree to an adjustment price within 30 minutes of being notified by Trading Officials of the obvious error. 7 The term “Trading Officials” means two Exchange members designated as Floor Officials and one member of the Exchange's trading floor liaison staff. *See* Interpretations and Policies .02 of CBOE Rule 6.25. For transactions during opening rotation between a non-broker-dealer customer and a CBOE Market-Maker, after 15 minutes have elapsed since the trade involving the obvious error occurred, but before 3:30 p.m. CT on the same trading day, the non-broker-dealer customer would be able to request an obvious error review. In determining the extent of any adjustment of the transaction, the Trading Officials would look to the competing exchange with the most liquidity in the option class for the two preceding months. The transaction would be adjusted to the competing exchange's disseminated price at the time the trade occurred (provided the adjustment does not violate the non-broker-dealer customer's limit price), but only up to the number of contracts that the competing exchange was displaying as its disseminated size at the time the trade occurred. For transactions during opening rotation between a non-broker-dealer and at least one non-CBOE Market-Maker, which could include (but is not limited to) an away specialist, an upstairs firm, or another non-broker-dealer customer, after the 15-minute notification period has passed, but before 3:30 p.m. CT on the same trading day, the non-broker-dealer customer would be able to request an obvious error review. In determining the extent of any adjustment to the transaction, the Trading Officials would look to the competing exchange with the most liquidity in the options class for the two preceding calendar months. The transaction would be adjusted to the competing exchange's disseminated price at the time the trade occurred, but it would not be adjusted beyond the non-CBOE Market-Maker's limit price, and not for a size greater than the disseminated size of the competing exchange. III. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 8 and, in particular, the requirements of section 6(b) of the Act 9 and the rules and regulations thereunder. Specifically, the Commission finds that the proposal is consistent with section 6(b)(5) of the Act, 10 in that the proposal promotes just and equitable principles of trade, removes impediments to and perfects the mechanism of a free and open market and a national market system, and protects investors and the public interest. 8 In approving this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). The Commission considers that in most circumstances trades that are executed between parties should be honored. On rare occasions, the price of the executed trade indicates an “obvious error” may exist, suggesting that it is unrealistic to expect that the parties to the trade had come to a meeting of the minds regarding the terms of the transaction. In the Commission's view, the determination of whether an “obvious error” has occurred should be based on specific and objective criteria and subject to specific and objective procedures. CBOE's proposal would permit a non-broker-dealer customer, whose order was executed during CBOE's opening rotation but who did not discover that its transaction may have involved an obvious error within 15 minutes of its execution, to request an obvious error review for adjustment of the transaction from Trading Officials until 3:30 p.m. CT on the date of the transaction. The Commission believes that permitting non-broker-dealer customers to request an obvious error review until 3:30 p.m. CT on the day of the transaction would give those customers a reasonable amount of time to discover an obvious error transaction that occurred during an opening rotation and to request an obvious error review. The Commission also believes that CBOE's proposal with respect to the price to which a transaction will be adjusted is consistent with the Act. Under the Exchange's proposal, an obvious error transaction during an opening rotation involving a non-broker-dealer customer would be adjusted to the Theoretical Price (provided that it does not violate the customer's limit price). The Theoretical Price of an option series is, for securities traded on at least one other options exchange, the last bid price with respect to an erroneous sell transaction and the last offer price with respect to an erroneous buy transaction, just prior to the trade, disseminated by the competing options exchange that has the most liquidity in that option class in the previous two calendar months. The Commission believes that this basis for determining Theoretical Price is consistent with the Linkage Plan, which requires the options exchanges to avoid trading through better prices available on all exchanges, not just the exchange that has the most liquidity, because the Linkage Plan does not apply to transactions effected during opening rotations. The Commission has carefully considered the comments raised in the Citadel Letter. 11 The Citadel Letter stated that the proposed rule change effectively would require CBOE Market Makers retroactively to trade during the opening rotation at prices at which they were not quoting and at which they did not want to trade. Citadel indicated that the price protections offered by the Linkage Plan do not apply to transactions during opening rotation. Citadel noted that, as a result, there is a risk that orders executed on one exchange as part of the opening rotation could receive a different price if executed as part of the opening rotation on another exchange. Citadel asserted that no “obvious error” is involved and that the proposal is an inappropriate punitive measure because the market maker has not done anything wrong. Citadel also stated that the proposal creates an irrational distinction between those customer orders that get the benefit of the adjustment and those that do not. 11 *See* Citadel Letter, *supra* note 6. The Exchange countered that its obvious error rule currently applies to transactions occurring as part of the opening rotation and provides for the adjustment of market maker to market maker transactions to prices that the market maker may not have been quoting at the opening. 12 The Exchange also noted that its obvious error rule currently provides for differing treatment with respect to obvious errors depending on the nature of the order and the parties involved. According to the Exchange, the proposed rule change is consonant with its obvious error rule, which currently addresses an error at the opening, adjustment of an opening transaction, and differing treatment of customers and market makers. 12 Telephone conference among Andrew Spiwak, Director, Legal Division, and Chief Enforcement Attorney, Jennifer Lamie, Managing Senior Attorney, and Nancy Sanow, Assistant Director, Division of Market Regulation, Commission on June 13, 2006. The Commission believes that the Citadel Letter does not raise any issues that would preclude approval of the proposed rule change. In the Commission's view, the proposed rule change strikes a reasonable balance by affording non-broker-dealer customers the opportunity to seek review of an opening rotation transaction until 3:30 CT on the day of the transaction, if the transaction occurred at a price that satisfies the threshold set forth in the Exchange's obvious error rule, while at the same time limiting the size and amount of any such adjustment. IV. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 13 that the proposed rule change (SR-CBOE-2005-63), as amended, is approved. 13 15 U.S.C. 78f(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9935 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54003; File No. SR-NASD-2006-056] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 To Establish a Package of Real-Time and Near-Real-Time Data Products Called the Market Analytics Data Package June 16, 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 National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by Nasdaq. On June 8, 2006, Nasdaq filed Amendment No. 1. Nasdaq has designated the proposed rule change as constituting a “non-controversial” rule change pursuant to section 19(b)(3)(A)(iii) 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, as amended, 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)(iii). 4 17 CFR 240.19-b4(f)(6). Nasdaq gave the Commission written notice of its intent to file the proposed rule change on March 24, 2006. For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on June 8, 2006, the day Nasdaq filed Amendment No. 1. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to establish a package of real-time and near-real-time data products that provide a new level of transparency to trading activity on Nasdaq trading systems to interested subscribers on a purely voluntary basis. The text of the proposed rule change is available at NASD, at the Commission, and at *http://www.nasdaq.com/about/ RuleFilings/Filings2006.stm.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq proposes to establish a package of real-time and near-real-time data products that provide a new level of transparency to trading activity on Nasdaq trading systems to interested subscribers on a purely voluntary basis. The Market Analytics Data Package will consist of one or more of the following products: *Market Velocity* —Market Velocity is akin to the audible noise and visible activity that traders use on a physical trading floor to detect changes in market direction, momentum, or liquidity. Nasdaq measures the frequency and size of orders submitted to the trading system, including under certain conditions shares not visible in the quote montage. Market Velocity can be expressed as a number of shares, for example, the current number of shares in market and aggressive limit orders that have arrived in the Nasdaq Market Center execution system. Market Velocity can also be expressed as a ratio of the current number of shares relative to what is expected in each stock for that time of day. Market Velocity may also be expressed as an alert when the underlying data exceeds a threshold. *Market Forces* —Market Forces uses the same order and share volume information used in Market Velocity, but categorizes the orders by whether they are buys or sells. Market Forces provides an indication of market direction and is expressed as a number of shares or a percentage of shares in buy versus sell orders. Market Forces may also be expressed as an alert when the underlying data exceeds a threshold. Market Velocity and Market Forces use pre-trade order information to signal changes in market liquidity. For example, Market Velocity will signal when there is unusually high or low share volume in limit orders in the Nasdaq Market Center execution system. Unusually high limit order share volume can signal an opportunity to make larger trades. Unusually low share volume can alert traders that large market orders are likely to have a larger than usual price impact. Market Forces complements the Market Velocity alerts by indicating which side of the market has the propensity of the limit order share volume. Market Velocity and Market Forces may include shares not visible in existing quote and order data feeds. For example, Market Velocity and Market Forces can signal changes in the share volume in orders routed through Nasdaq to other trading centers. Without Market Velocity and Market Forces, immediate or cancel orders that do not find the best price on the Nasdaq book will be routed to other trading centers without any information showing up in existing Nasdaq data feeds. Market Velocity and Market Forces will not include reserve or hidden orders. Market Velocity and Market Forces are real-time data products that will be distributed over a new real-time data feed. *Competitive VWAP Benchmark* —Competitive VWAP (CVWAP) Benchmark is a complement to the Volume Weighted Average Price (VWAP), a benchmark often used by institutional investors to determine whether they received a good price for a large trade. CVWAP Benchmark provides the best and worst average price performance by actual market makers trading on the Nasdaq Market Center execution system. Institutional investors can compare the price they received to the CVWAP Benchmark to determine how their trade compares with a range of actual trader performance. CVWAP Benchmark can also help investors identify stocks where broker selection is very important (those with a wide range between best and worst CVWAP performance). A CVWAP Benchmark is calculated as follows:
(1)A buy-side market participant would like to benchmark the price received for a large purchase of issue ABCD that they sent to their sell-side broker at 10 a.m. and was completed at 2 p.m.;
(2)the buy-side participant enters the issue, start time, end time, and minimum dollar volume into a Web site or other query facility;
(3)Nasdaq receives the query information and calculates individual volume weighted average prices for each market maker that bought ABCD between 10 a.m. and 2 p.m. using Nasdaq trading systems;
(4)Nasdaq filters out market makers that purchased amounts below the minimum dollar volume chosen (for example, a market maker that bought 100 shares during the time period does not provide a valid benchmark for a large order);
(5)Nasdaq ranks the individual buy VWAPs achieved by the market makers that remain and reports the best and worst VWAP prices (but not the identities of the market participants that achieved those prices);
(6)the buy-side market participant can then compare the best and worst performance to the price they received from their broker. CVWAP Benchmark is an intra-day, query-response product that will require vendors to send Nasdaq query parameters and Nasdaq to make calculations and reply with results. Nasdaq will not identify the market participants that achieved the best or worst CVWAP Benchmark for any trade or period of time. The only exception would be if Nasdaq built an opt-in facility for market participants to choose to advertise situations when they achieved the best performance. *CVWAP Leaders* —CVWAP Leaders is a periodic market maker leader board that enables institutional investors to identify the firms with the most experience trading a particular stock or type of stock. Unlike ordinary leader boards that rank market makers by traded volume alone, CVWAP Leaders ranks them by share volume weighted by execution quality (the difference between the market participant VWAP and the overall VWAP). The CVWAP Leader board is calculated as follows:
(1)Collect all Nasdaq Market Center execution system trades reported over a period of time, such as five days;
(2)divide all trades into buckets of records by issue, side (buying or selling), and half hour;
(3)for each bucket, calculate the overall volume weighted average price for all trades and an individual volume weighted average price for each market participant;
(4)compare each market participant's individual VWAP to the overall VWAP and allocate each market participant points equal to the difference in pennies between their individual VWAP and the overall VWAP multiplied by the number of shares they transacted during that period;
(5)add up all the points earned by each market participant in each issue (across all buckets for that issue);
(6)rank market participants within that issue by the number of points earned. CVWAP Leaders is a delayed list of issues and participants that is calculated from all trades over an extended period of time, such as a week. Detailed trade by trade information is masked by the price weighting that prevents anyone from being able to derive the number of shares traded or prices received by any particular participant. CVWAP Leaders is distributed periodically as a flat file using a standard file transfer protocol. Proposed Pricing Structure Nasdaq will offer a limited introductory period of one month during which new Market Analytics subscribers will receive the data for free. After the introductory period, organizations that receive Market Analytics directly or indirectly (through a retransmission vender) will have three options:
(i)*Monthly distributor fee with subscriber fees:* Organizations will, at least, pay a distributor fee of $2,000/month. They will receive 10 free subscriber licenses. Subsequent subscriber licenses will cost $1/month for non-professionals and $10/month for professionals.
(ii)*Monthly Enterprise License:* Organizations may choose to pay an enterprise license of $4,000/month. The enterprise license will include the distributor fee and unlimited subscriber fees.
(iii)*Annual Enterprise License:* Organizations that choose to sign on to receive the service for at least 12 months will pay an enterprise license of $36,000/year. The annual enterprise license will include the distributor fee and unlimited subscriber fees. For the new data products, Nasdaq will not distinguish between direct and indirect distributors or internal and external distributors as it does with its established data products. The decision not to distinguish firm types was made to encourage firms to maximize adoption of the new, unproven data products without consideration for how it is received and to whom it is provided. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with section 15A of the Act, 5 in general, and furthers the objectives of section 15A(b)(6) of the Act, 6 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, remove impediments to a free and open market and a national market system, and, in general, to protect investors and the public interest. B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 7 and Rule 19b 4(f)(6) thereunder. 8 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments 5 15 U.S.C. 78 *o* -3. 6 15 U.S.C. 78 *o* -3(b)(6). 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b-4(f)(6). Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASD-2006-056 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASD-2006-056. 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 NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to the File Number SR-NASD-2006-056 and should be submitted on or before July 14, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9929 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54002; File No. SR-NASD-2006-072] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by National Association of Securities Dealers, Inc. To Modify the Fees for Trading and Compliance Data and the Data Package Available to NASD Member Firms via NasdaqTrader.com June 16, 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 June 5, 2006, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by Nasdaq. Pursuant to section 19(b)(3)(A)(ii) of the Act, 3 and Rule 19b-4(f)(2) thereunder, 4 Nasdaq has designated this proposal as establishing or changing a due, fee, or other charge, which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq proposes to modify the fees for trading and compliance data available to NASD member firms via NasdaqTrader.com, as well as to update the information that the Nasdaq Trading and Compliance Data Package (“Data Package”) includes. 5 Nasdaq will implement the new fees on July 1, 2006. 5 March 31, 2005 was the last day that customers had access to the Daily Share Volume Report. Nasdaq notified customers via email on March 14, 2005, and posted a notice simultaneously on the NasdaqTrader.com Web site, regarding the removal of the Daily Share Volume Report from the Data Package. In addition to having no customer demand for the Daily Share Volume Report, Nasdaq received no complaints nor any customer inquiries before or after its removal from the Data Package. E-mail from Jonathan F. Cayne, Associate General Counsel, Nasdaq, to Joseph Morra, Special Counsel, Commission, dated June 14, 2006. The Commission notes that Nasdaq should have filed a proposed rule change at the time it decided to remove the Daily Share Volume Report from the Data Package. The text of the proposed rule change is below. Proposed new language is in italics; proposed deletions are in brackets. 6 6 Changes are marked to the rule text that appears in the electronic NASD Manual found at *http://www.nasd.com.* Prior to the date when The NASDAQ Stock Market LLC (“NASDAQ LLC”) commences operations, NASDAQ LLC will file a conforming change to the rules of NASDAQ LLC approved in Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131). Rule 7010. System Services (a)-(m) No Change
(n)NasdaqTrader.com Trading and Compliance Data Package Fee The charge to be paid by an NASD Member Firm for each entitled user receiving Nasdaq Trading and Compliance Data Package via NasdaqTrader.com is *$130* [$100] per month (monthly maximum of 25 Historical Research Reports) or *$160* [$130] per month (monthly maximum of 100 Historical Research Reports). The Nasdaq Trading and Compliance Data Package includes: [(1) Daily Share Volume Report for a Broker/Dealer (Member Firm's information only)] *(1)* [(2)] Monthly Compliance Report Cards (Member Firm's information only). *(2)* [(3)] Monthly Summaries. *(3)* [(4)] Historical Research Reports. [(i) Market Maker Price Movement Report]. [(ii) Equity Trade Journal (Member Firm's information only)]. The Association may modify the contents of the Nasdaq Trading and Compliance Data Package from time to time based on subscriber interest. (o)-(w) No Change II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq proposes to modify the fees for trading and compliance data available to NASD member firms via NasdaqTrader.com, as well as to update the information that is included in the Data Package. NasdaqTrader.com allows NASD member firms to obtain data regarding their own trading volume in securities in which they report volume, as well as information concerning their compliance with NASD rules. Specifically, NASD member firms that subscribe to the Data Package can obtain the following reports:
(1)Monthly Compliance Report Cards, which outline the firm's own compliance with various NASD rules;
(2)Monthly Summaries, which provide monthly trading volume statistics for the top 50 market participants broken down by industry sector, security or type of trading; and
(3)Historical Research Reports, which provide a variety of historical trading data such as a market maker's quote updates for a security on a specified date. Due to the lack of customer demand, Nasdaq removed the Daily Share Volume Report from the Data Package in March 2005. 7 7 *See* footnote 5 *supra.* Use of this service is voluntary and NASD member firms have the option of subscribing to two different levels of the Data Package. The “basic” level, which currently has a fee of $100 per month, allows access to a maximum of 25 Historical Research Reports per month. The “premium” level, which currently has a fee of $130 per month, allows access to a maximum of 100 Historical Research Reports per month. These fees have not increased since October 2003, even though several enhancements have been made since that time. Some of these enhancements include:
(1)New OATS Compliance Report Cards; and
(2)new historical research reports ( *e.g.* , Time and Sales with Inside Quotes and NASDAQ Market Center Activity Reports for Other Exchange-Listed Securities). In order to help cover the costs associated with the maintenance of the Data Package service, as well as the implementation of additional enhancements to the service in the near future, Nasdaq proposes to increase the subscription fee for the service. Specifically, Nasdaq proposes to increase the subscription fee for the “basic” level from $100 to $130 per month, and increase the fee for the “premium” level from $130 to $160 per month. These fee increases will commence on July 1, 2006. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of section 15A of the Act, 8 in general and with section 15A(b)(5) of the Act, 9 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the NASD operates or controls. Specifically, use of the Data Package service is voluntary and the subscription fees will be imposed on all member firms equally based on the level of service selected. In addition, the increase in fees will help cover the costs associated with maintaining and enhancing the Data Package service. 8 15 U.S.C. 78 *o* -3. 9 15 U.S.C. 78 *o* -3(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act 10 and subparagraph (f)(2) of Rule 19b-4 thereunder, 11 because it establishes or changes a member due, fee, or other charge imposed by NASD. 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. 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 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-NASD-2006-072 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 NASD-2006-072. 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 offices of NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number NASD-2006-072 and should be submitted on or before July 14, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9936 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54005; File No. SR-NASD-2006-030] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change and Amendment No. 1 Thereto To Establish an Annual Administrative Fee for Market Data Distributors That Are Recipients of Nasdaq Proprietary Data Products June 16, 2006. On February 27, 2006, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to establish an annual administrative fee for market data distributors that are recipients of Nasdaq proprietary data products. Nasdaq filed Amendment No. 1 to the proposed rule change on April 17, 2006. The proposed rule change, as modified by Amendment No. 1, was published for notice and comment in the **Federal Register** on May 12, 2006. 3 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 53770 (May 8, 2006), 71 FR 27762. The Commission finds that the proposed rule change is consistent with Section 15A of the Act 4 and the rules and regulations thereunder. Specifically, the Commission finds the proposal to be consistent with Section 15A(b)(5) of the Act, 5 in that it provides for the equitable allocation of reasonable fees among persons distributing and purchasing Nasdaq proprietary data products. The Commission believes the fees are reasonably tailored to allow Nasdaq to recover the fixed market data administrative costs, as well as the costs of maintaining and improving the administrative tools distributors use to subscribe to and monitor their data products usage. 4 15 U.S.C. 78 *o* -3. 5 15 U.S.C. 78 *o* -3(b)(5). *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 6 that the proposed rule change (SR-NASD-2006-030), be, and it hereby is, approved. 6 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9938 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53995; File No. SR-NYSEArca-2006-13] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change and Amendments No. 1 and 2 Thereto Establishing the OX Trading Platform June 15, 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, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. The Exchange filed Amendments No. 1 3 and 2 4 to the proposed rule change on June 6, 2006 and June 15, 2006, respectively. The Commission is publishing this notice, as amended, 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 Amendment No. 1, which replaced and superseded the original filing in its entirety, is incorporated in this notice. 4 Amendment No. 2 clarified the circumstances under which orders received by OX would be routed away using Linkage or Archipelago Securities. Amendment No. 2 also made minor changes to the proposed rule text. Amendment No. 2 is incorporated in this notice. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend its rules governing the trading of listed options on NYSE Arca. With this filing, the Exchange proposes to adopt new rules for the implementation of a new trading platform for options, OX. The text of the proposed rule change is available on the Exchange's Web site at *http://www.archipelago.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 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 A. Summary and Purpose of the Rule Changes Related to the Implementation of OX NYSE Arca proposes to establish rules for OX, a fully automated trading system for standardized equity options intended to replace NYSE Arca's current options trading platform, PCX Plus. 5 OX would provide automatic order execution capabilities in the options securities listed and traded on NYSE Arca. Market Makers would be able to stream quotes to OX from on the trading floor or remotely. 5 *See* NYSE Arca Rule 6.90. 1. *Description of OX* a. *Access.* OX would be available for the entry and execution of quotes and orders to OTP Holders, 6 OTP Firms 7 and, through Sponsoring OTP Firms, 8 certain non-OTP Firms and Holders, such as institutional investors (collectively, “Users”). 6 *See* NYSE Arca Rule 1.1(q). 7 *See* NYSE Arca Rule 1.1(r). 8 *See* proposed NYSE Arca Rule 6.1A(a)(17). b. *Method of Operation.* In general, Users would be able to enter market orders, marketable limit orders and limit orders. Only Market Makers would be permitted to enter quotes on OX. As Users enter bids and offers ( *i.e.* , orders and quotes) into the system, any non-marketable limit orders and quotes would be ranked in an electronic limit order file (the “OX Book”) according to price-time priority, such that within each price level, all bids and offers are organized by the time of entry. The OX Book (except for certain working orders with conditional prices or sizes) would be displayed to all Users. For market orders or marketable limit orders, like-priced bids and offers would be matched by OX for execution at prices equal to or better than the NBBO pursuant to the following algorithm, which is based on price-time priority: Step 1: All market orders and marketable limit orders would be matched against the displayed top of the OX Book. Step 2: If an order has not been executed in its entirety pursuant to Step 1, then OX would match the order against any working orders, which are orders with a conditional or undisplayed price and/or size. For example, a reserve order, an order with a portion of the size displayed and reserve portion of the size that is not displayed, is a working order. Step 3: If an order has not been executed in its entirety pursuant to Steps 1 and 2, the order would be routed to another Market Center 9 for execution, unless the User has indicated that the order must not be routed to another market ( *i.e.* , by designating an order as a “post no preference” or “PNP” order). If an order that is routed to another market is not executed in its entirety, the order would be ranked and displayed in the OX Book in accordance with the terms of such order pursuant to proposed NYSE Arca Rule 6.76A and such order would be eligible for execution pursuant to proposed NYSE Arca Rule 6.76B. 9 *See* proposed NYSE Arca Rule 6.1A(a)(6). 2. *Market Maker Participation.* OTP Holders and OTP Firms would be permitted to register as either Lead Market Makers (“LMMs”) or Market Makers in one or more securities traded on OX (unless specified, or unless the context requires otherwise, the term Market Maker as used herein refers to both Market Makers and LMMs). No more than one LMM would be appointed in each option class. If registered as Market Makers, the transactions of such OTP Firms and OTP Holders “should constitute a course of dealings reasonably calculated to contribute to the maintenance of a fair and orderly market, and no Market Maker should enter into transactions or make bids or offers that are inconsistent with such a course of dealings.” Specifically, a Market Maker would be required to, among other things, compete with other Market Makers to improve the market in all series of options classes to which the Market Maker is appointed, update market quotations in response to changed market conditions in all series of options classes within its appointed classes, honor its quotations, maintain continuous, two-sided quotes in a specified percentage of its appointed classes, submit quotations in accordance with maximum Exchange prescribed width requirements, and trade a minimum percentage of its contracts in its appointed classes. A Market Maker's failure to meet these obligations may lead to a suspension, termination or other restriction of the Market Maker's registration in one or more securities or the OTP Firm's or OTP Holder's right to act as a Market Maker. LMMs would continue to be responsible for Intermarket Option Linkage (“Linkage”) order handling obligations. B. Detailed Summary of Proposed Rule Change The proposed rule changes are located in NYSE Arca Rule 2 (Options Trading Permits) and NYSE Arca Rule 6 (Options Trading). 1. *NYSE Arca Rule 2—Options Trading Permits.* *Proposed amendment to NYSE Arca Rule 2.5.* Because NYSE Arca does not intend to make significant changes to membership requirements once OX is implemented, NYSE Arca proposes to amend NYSE Arca Rule 2.5 such that current members of the Exchange and their associated persons that have met the Exchange's membership requirements and passed the requisite examinations would automatically be qualified to engage in the same activities on OX for which they were previously approved by the Exchange. 2. *NYSE Arca Rule 6—Options Trading.* *Proposed amendments to NYSE Arca Rule 6.1(a).* Because option issues would be rolled-out on OX over a period of time, NYSE Arca proposes to amend NYSE Arca Rule 6.1(a) to clarify that rules related to option contracts traded on the existing PCX Plus trading platform would apply to options trading on PCX Plus and proposed new rules for option contracts that would trade on OX would apply only to such transactions. Existing and amended rules that do not specify a trading platform would apply to all relevant transactions made on NYSE Arca. Proposed NYSE Arca Rule 6.1A In connection with the implementation of OX, NYSE Arca proposes to adopt definitions applicable to activity on OX. The most significant of the proposed definitions are as follows: a. *Proposed NYSE Arca Rule 6.1A(a)(10).* NOW Recipients. As described further below, NYSE Arca proposes to add “NOW Order” as a new order type. Users would be permitted to designate orders entered on OX as “NOW Orders.” NOW Orders are limit orders that would be executed in whole or in part on OX. Any portion of such orders not executed on OX would be routed to one or more “NOW Recipients” for immediate execution. “NOW Recipients” would include any Market Center
(1)with which NYSE Arca maintains an electronic linkage, and
(2)that provides instantaneous responses to NOW Orders routed from OX. NYSE Arca would designate those Market Centers that qualify as NOW Recipients and periodically publish such information via its Web site. Any portion of a NOW Order not immediately executed by the NOW Recipient would be cancelled. If a NOW Order is not marketable when it is submitted to OX, it would be cancelled. NOW Orders would allow Users to have their orders executed as quickly as possible by allowing them to choose to have their orders sent only to those Market Centers that are automated, as that term is generally understood to mean, and that do not allow for manual intervention. Through the creation of “NOW Recipients” and “NOW Orders,” Users’ orders that are routed away would be executed as quickly as possible while the possibility that such orders would “miss” the away market would be reduced. b. *Proposed NYSE Arca Rule 6.1A(a)(15).* OX Routing Broker. NYSE Arca is proposing to add a definition for “OX Routing Broker,” NYSE Arca's broker-dealer affiliate, Archipelago Securities LLC (“Archipelago Securities”), which NYSE Arca intends to use to route orders, subject to NYSE Arca rules, to other Market Centers. The OX Routing Broker would offer Users a fast alternative for routing orders to other Market Centers for execution. Archipelago Securities is a wholly-owned subsidiary of Archipelago Holdings Inc. and is a registered broker-dealer and a member of NASD. Archipelago Securities is a “facility” of NYSE Arca as that term is defined in Section 3(a)(2) of Act. 10 Specifically, Section 3(a)(2) of the Act provides that, “[t]he term ‘facility’ when used with respect to an exchange includes its premises, tangible or intangible property whether on the premises or not, any right to use of such premises or property or any service thereof for the purpose of effecting or reporting a transaction on the exchange (including, among other things, any system of communication to or from the exchange, by ticket or otherwise maintained by or with the consent of the exchange), and any right of the exchange to the use of any property or service.” Accordingly, because Archipelago Securities functions as an order routing mechanism for NYSE Arca, it operates as a “system of communication” to and from NYSE Arca for purposes of effecting transactions on NYSE Arca. NYSE Arca would be responsible for regulating the OX order routing function of Archipelago Securities as an exchange facility, subject to Section 6 of the Act. 11 Archipelago Securities' order routing function would also be subject to the Commission's continuing oversight. In particular, under the Act, any proposed rule change relating to Archipelago Securities' order-routing function would be filed with the Commission and Archipelago Securities would be subject to exchange non-discrimination requirements. 10 15 U.S.C. 78c(a)(2). 11 15 U.S.C. 78f. OX would use either Archipelago Securities or Linkage to route orders to other Market Centers. Generally, non-customer orders ( *e.g.* , broker-dealer orders and Market Maker orders) and NOW Orders would be routed to other Market Centers via Archipelago Securities. P/A orders 12 would be routed to other Market Centers via Linkage. The OX system would not automatically generate Principal orders 13 on behalf of Market Makers; rather, Market Makers would be required to enter their own Principal orders if they want to have their proprietary orders routed to other Market Centers via Linkage. Certain order types, including Immediate or Cancel and PNP Orders, would not be eligible for routing away. Users, therefore, would be able to control whether certain orders may be routed away by these order designations. 12 *See* NYSE Arca Rule 6.92(a)(12)(i). 13 *See* NYSE Arca Rule 6.92(a)(12)(ii). OX would determine whether to route certain orders via Linkage or Archipelago Securities based on preset parameters in its automated routing algorithm. Accordingly, orders that would be eligible for routing over Linkage ( *e.g.* , public customer orders) could be routed to other Market Centers as P/A orders via Linkage or as customer orders via Archipelago Securities based on the automated routing algorithm parameters. c. *Proposed NYSE Arca Rules 6.1A(a)(16),
(17)and (18).* Sponsored Participant, Sponsoring OTP Firm and Sponsorship Provisions. As described further below, NYSE Arca is proposing to add the concept of Sponsored Participants and Sponsoring OTP Firms. Sponsored Participants would be able to access OX for purposes of order entry and execution. Proposed NYSE Arca Rule 6.2A NYSE Arca is proposing NYSE Arca Rule 6.2A to govern access to OX and the expected conduct of OTP Holders, OTP Firms and persons employed by or associated with an OTP Holder or OTP Firm. OTP Holders, OTP Firms and persons employed by or associated with any OTP Holder or OTP Firm, while using the facilities of NYSE Arca, would not be permitted to engage in conduct:
(i)Inconsistent with the maintenance of a fair and orderly market;
(ii)apt to impair public confidence in the operations of NYSE Arca; or
(iii)inconsistent with the ordinary and efficient conduct of business. Activities that may violate these provisions would include, but would not be limited to:
(a)Failure of a Market Maker to provide quotations in accordance with NYSE Arca Rules 6.37A and 6.37B;
(b)failure of a Market Maker to bid or offer within the ranges specified by NYSE Arca Rule 6.37A;
(c)failure of an OTP Holder or OTP Firm to adequately supervise a person employed by or associated with such OTP Holder or OTP Firm to ensure that person's compliance with NYSE Arca Rules;
(d)failure to abide by a determination of NYSE Arca; and
(e)refusal to provide information requested by NYSE Arca. In addition to the above, proposed NYSE Arca Rule 6.2A also outlines the requirements that Sponsored Participants and Sponsoring OTP Firms would be required to meet prior to engaging in a Sponsoring OTP Firm/Sponsored Participant relationship. A “Sponsored Participant” would be a person, such as an institutional investor, who has entered into a sponsorship arrangement with an OTP Firm for purposes of entering orders on OX. The following would be the requirements for access by Sponsored Participants: Sponsored Participants would be required to enter into a sponsorship arrangement with a “Sponsoring OTP Firm,” which is defined as an OTP Firm that has been designated by a Sponsored Participant to execute, clear and settle transactions on NYSE Arca. The sponsorship arrangement consists of three separate components. First, the Sponsored Participant would have to enter into and maintain a customer agreement with its Sponsoring OTP Firm, establishing a proper relationship and account through which the Sponsored Participant would be permitted to trade on NYSE Arca. Second, the Sponsored Participant and its Sponsoring OTP Firm would have to enter into a written agreement that incorporates the following Sponsorship Provisions:
(1)The Sponsoring OTP Firm acknowledges and agrees that:
(i)All orders entered by its Sponsored Participant and any person acting on behalf of or in the name of such Sponsored Participant and any executions occurring as a result of such orders are binding in all respects on the Sponsoring OTP Firm and
(ii)the Sponsoring OTP Firm is responsible for any and all actions taken by such Sponsored Participant and any person acting on behalf of or in the name of such Sponsored Participant.
(2)The Sponsored Participant agrees that it would comply with the NYSE Arca Certificate of Incorporation, Bylaws, Rules and procedures with regard to its activity on the Exchange as if the Sponsored Participant were an OTP Firm.
(3)The Sponsored Participant agrees that it would maintain, keep current and provide to the Sponsoring OTP Firm a list of its Authorized Traders 14 who would be permitted to obtain access to the Exchange on behalf of the Sponsored Participant(s). 14 *See* proposed NYSE Arca Rule 6.1A(a)(1).
(4)The Sponsored Participant agrees that it would familiarize its Authorized Traders with all of the Sponsored Participant's obligations under NYSE Arca Rules and would assure that they receive appropriate training prior to any use of or access to the Exchange.
(5)The Sponsored Participant agrees that it would not permit anyone other than Authorized Traders to use or obtain access to the Exchange.
(6)The Sponsored Participant agrees that it would take reasonable security precautions to prevent unauthorized use or access to the Exchange, including unauthorized entry of information into OX, or the information and data made available therein. The Sponsored Participant understands and agrees that it is responsible for any and all orders, trades and other messages and instructions entered, transmitted or received under identifiers, passwords and security codes of Authorized Traders, and for the trading and other consequences thereof.
(7)The Sponsored Participant acknowledges its responsibility for establishing adequate procedures and controls that permit it to effectively monitor its employees, agents and customers' use of and access to the Exchange for compliance with the terms of the Sponsorship Provisions.
(8)The Sponsored Participant agrees that it would pay when due all amounts, if any, payable to the Sponsoring OTP Firm, NYSE Arca or any other third parties that arise from the Sponsored Participant's access to and use of the Exchange. Such amounts would include, but would not be limited to, applicable exchange and regulatory fees. Third, the Sponsoring OTP Firm would have to provide NYSE Arca with a “Notice of Consent,” which acknowledges the Sponsoring OTP Firm's responsibility for the orders, executions and actions of its Sponsored Participant. As a further condition to access to the Exchange, each OTP Firm would be required to maintain an up-to-date list of persons who could obtain access to the Exchange on behalf of the OTP Firm or the OTP Firm's Sponsored Participants, *i.e.* , Authorized Traders, and provide the list to NYSE Arca upon request. In addition, each OTP Firm would have to have reasonable procedures to ensure that all of its Authorized Traders maintain the physical security of NYSE Arca and otherwise comply with NYSE Arca Rules. If NYSE Arca determines that an Authorized Trader has caused an OTP Firm to violate NYSE Arca Rules, NYSE Arca could direct the OTP Firm to suspend or withdraw the person's status as an Authorized Trader. The Sponsoring OTP Firm/Sponsored Participant relationship would allow a member firm to grant access to NYSE Arca to their customers while confirming that those customers who do have access to NYSE Arca have appropriate procedures in place to comply with NYSE Arca rules. Furthermore, the identity of all individuals with access ( *i.e.* , Authorized Traders) would have to be disclosed to the Exchange, giving the Exchange better information in the event that the Exchange determines to take action because its systems have been used inappropriately. *Proposed NYSE Arca Rule 6.32A.* Proposed NYSE Arca Rule 6.32A defines “Market Maker” on the OX platform. A Market Maker on OX would be an OTP Holder or OTP Firm registered with NYSE Arca for the purpose of submitting quotes electronically and making transactions as a dealer-specialist through the OX trading platform from on the trading floor or remotely from off the trading floor. A Market Maker submitting quotes remotely is not eligible to participate in trades effected in open outcry except to the extent that such Market Maker's quotation represents the best bid or offer on the Exchange (“BBO”). Market Makers would be designated as specialists on NYSE Arca for all purposes under the Act and the Rules and Regulations thereunder. A Market Maker on NYSE Arca would be either a Market Maker or an LMM. Unless specified, or unless the context requires otherwise, the term Market Maker in the NYSE Arca Rules refers to both Market Makers and LMMs. Proposed NYSE Arca Rule 6.32A does not contain the same restrictions outlined in the current NYSE Arca Rule 6.32. NYSE Arca proposes to make NYSE Arca Rule 6.32 applicable to classes that would continue to trade only on PCX Plus because current NYSE Arca Rule 6.32 outlines the different types of market makers presently on the Exchange and certain restrictions and limitations applicable to such market makers. Proposed NYSE Arca Rule 6.32A clarifies that there would be only two types of Market Makers on OX ( *i.e.* , LMMs and Market Makers) and that Market Makers would be permitted to stream quotes from on or off of the trading floor. Accordingly, proposed NYSE Arca Rule 6.32A does not direct where Market Makers have to be physically located when effecting transaction on NYSE Arca and eliminates “in-person” trading requirements applicable to market makers that trade on the floor. *Proposed NYSE Arca Rule 6.34A.* NYSE Arca is proposing NYSE Arca Rule 6.34A to limit Market Maker access to OX to those OTP Holders or officers, partners, employees or associated persons of OTP Firms that are registered with NYSE Arca as Market Makers (“Market Maker Authorized Traders” or “MMATs”). Persons would be required to pass an NYSE Arca conducted examination to demonstrate their knowledge of NYSE Arca rules prior to being approved by NYSE Arca as an MMAT. NYSE Arca also would be permitted to require a Market Maker to provide additional information NYSE Arca considers necessary to establish whether a person should be approved as an MMAT. A person would be permitted to be approved conditionally as an MMAT subject to any conditions NYSE Arca's Chief Regulatory Officer considers appropriate in the interests of maintaining a fair and orderly market. NYSE Arca Rule 6.34A would permit NYSE Arca to suspend or withdraw the registration of an MMAT if NYSE Arca determines that:
(i)The person has caused the Market Maker to fail to comply with the Rules of NYSE Arca;
(ii)the person is not properly performing the responsibilities of an MMAT;
(iii)the person has failed to meet the conditions described above ( *e.g.* , failed the Exchange-administered examination); or
(iv)NYSE Arca believes it is in the best interest of fair and orderly markets. If NYSE Arca suspends the registration of a person as an MMAT, the Market Maker must not allow the person to submit quotes and orders on OX. The registration of an MMAT also would be withdrawn upon the written request of the OTP Firm for which the MMAT is registered. Such written request must be submitted on the form prescribed by NYSE Arca. Proposed NYSE Arca Rule 6.34A would allow the Exchange to know the identities of individuals accessing NYSE Arca on behalf of Market Makers and performing the functions of Market Makers. Proposed NYSE Arca Rule 6.34A also would allow the Exchange, through the Exchange's examination process, to confirm that MMATs have sufficient knowledge of Exchange rules prior to their acting as MMATs on the Exchange. Furthermore, Proposed NYSE Arca Rule 6.34A would permit the Exchange to take prompt action against MMATs who are not compliant with Exchange Rules or who are not properly performing the functions of a Market Maker thereby limiting any negative consequences of such actions. *Proposed amendment to NYSE Arca Rule 6.35.* NYSE Arca is proposing changes to the manner in which Market Maker appointments are made. Consistent with current NYSE Arca Rule 6.35, Market Makers would be required to apply for an appointment in one or more options classes. NYSE Arca may appoint one LMM per option class and an unlimited number of Market Makers in each class unless NYSE Arca determines that the number of Market Makers appointed to a particular option class should be limited whenever, in NYSE Arca's judgment, system capacity limits the number of Market Makers who would be permitted to participate in a particular option class. However, NYSE Arca would not limit access to Market Makers until such time as it has submitted to the Commission for its review and approval objective criteria for limiting access to Market Makers. NYSE Arca is proposing to increase the number of classes per OTP that a Market Maker would be permitted to select for its appointment as follows:
(i)Market Makers with one OTP would have up to 100 option issues included in their appointment;
(ii)Market Makers with two OTPs would have up to 250 option issues included in their appointment;
(iii)Market Makers with three OTPs would have up to 750 option issues included in their appointment; and
(iv)Market Makers with four OTPs would have all option issues traded on NYSE Arca included in their appointment. Market Makers would be permitted to select from among any option issues traded on NYSE Arca for inclusion in their appointment, subject to the approval of NYSE Arca. NYSE Arca would continue to consider the following factors when determining whether to approve the appointment of a Market Maker in each security:
(i)The Market Maker's preference;
(ii)the financial resources available to the Market Maker;
(iii)the Market Maker's experience, expertise and past performance in making markets, including the Market Maker's performance in other securities;
(iv)the Market Maker's operational capability; and
(v)the maintenance and enhancement of competition among Market Makers in each security in which they are appointed. Consistent with current NYSE Arca Rule 6.35, Market Makers would be permitted to change the option issues that are included in their appointment, subject to the approval of NYSE Arca and provided that such request is made in a form and manner prescribed by NYSE Arca. In considering whether to approve Market Makers' request to change their appointment, NYSE Arca would consider the five factors set forth directly above. Market Makers would be permitted to withdraw from trading an option issue that is within their appointment by providing NYSE Arca with three business days' written notice of such withdrawal. Market Makers who fail to give advance written notice of withdrawal to NYSE Arca may be subject to formal disciplinary action pursuant to NYSE Arca Rule 10. Also consistent with current NYSE Arca Rule 6.35, NYSE Arca would be permitted to suspend or terminate any appointment of a Market Maker in one or more option issues under amended NYSE Arca Rule 6.35 whenever, in NYSE Arca's judgment, the interests of a fair and orderly market are best served by such action. A Market Maker would be able to seek review of any action taken by NYSE Arca pursuant to the proposed rule, including the denial of the appointment for, or the termination or suspension of, a Market Maker's appointment in an option issue or issues in accordance with NYSE Arca Rule 10. Market Makers would continue to be required to trade at least 75% of their contract volume per quarter in classes within their appointment. However, NYSE Arca is proposing to exclude from this calculation trades effected on the Trading Floor to accommodate cross trades executed pursuant to NYSE Arca Rule 6.47, regardless of whether the trades are in issues within or without a Market Maker's appointment. NYSE Arca periodically would conduct an evaluation of Market Makers to determine whether they have fulfilled performance standards relating to, among other things, quality of markets, competition among Market Makers, observance of ethical standards and administrative factors. In so doing, NYSE Arca would be permitted to consider any relevant information including, but not limited to, the results of a Market Maker evaluation, trading data, a Market Maker's regulatory history and such other factors and data as may be pertinent in the circumstances. If NYSE Arca finds any failure by a Market Maker to meet minimum performance standards, NYSE Arca would be permitted to take the following actions after written notice and after opportunity for hearing pursuant to NYSE Arca Rule 10:
(i)Restrict appointments to additional option issues in the Market Maker's primary appointment;
(ii)suspend, terminate or restrict an appointment in one or more option issues; or
(iii)suspension, termination, or restriction of the Market Maker's registration in general. If a Market Maker's appointment in an option issue or issues has been terminated because it failed to meet minimum performance standards, the Market Maker would not be re-appointed as a Market Maker in that option issue or issues for a period not to exceed six months. *Proposed NYSE Arca Rule 6.37A.* NYSE Arca is proposing new NYSE Arca Rule 6.37A to outline Market Maker obligations
(i)Generally,
(ii)within a Market Maker's appointed classes, and
(iii)outside of a Market Maker's appointed classes on OX. Proposed rule 6.37A generally is consistent with certain existing requirements contained in NYSE Arca Rule 6.37 ( *e.g.* , obligations within and outside of a Market Makers appointment, establishment of quotation width limitations). However, because there only would be two types of Market Makers on OX, proposed NYSE Arca Rule 6.37A eliminates requirements relevant to Remote Market Makers and Supplemental Market Makers and eliminates in person trading requirements because Market Makers would be permitted to choose the physical location from which they would submit quotes to OX. Furthermore, NYSE Arca is proposing to address Market Maker quoting obligations separately in proposed NYSE Arca Rule 6.37B. *Proposed NYSE Arca Rule 6.37B.* NYSE Arca is proposing new NYSE Arca Rule 6.37B to outline Market Maker quoting obligations on OX. Market Makers would be required to undertake a meaningful obligation to provide continuous two-sided markets in classes traded on OX. Proposed rule 6.37B generally is consistent with existing NYSE Arca Rule 6.37. Under proposed NYSE Arca Rule 6.37B, Market Makers would be permitted to enter quotations only in the classes included in their appointment. Proposed NYSE Arca Rule 6.37B also outlines the percentage of time that Market Makers must quote on the Exchange ( *i.e.* , 99% of the time the Exchange is open for trading for LMMs and 60% of the time the Exchange is open for trading for Market Makers). Market Makers quotes would be “firm” for all orders that are routed to OX ( *i.e.* , Market Makers would not specify different sizes for Customer orders and non-Customer orders; rather, Market Makers would disseminate one size and would be “firm” for any order type routed to the Exchange). *Proposed NYSE Arca Rule 6.37C.* NYSE Arca is proposing new NYSE Arca Rule 6.37C that would allow Market Makers to enter on OX all permitted orders types. *Proposed NYSE Arca Rule 6.40A.* NYSE Arca is proposing new NYSE Arca Rule 6.40A to provide a mechanism for limiting Market Maker risk during periods of increased and significant trading activity on OX in a Market Maker's appointment. Unlike current NYSE Arca Rule 6.40, however, NYSE Arca is proposing to set the “n” period at one second. Pre-setting the “n” period at one second would give NYSE Arca greater control over the functioning of the risk limitation mechanism and would reduce User confusion regarding how much time must pass before the risk limitation mechanism activates. In the proposed new rule, NYSE Arca also would no longer generate two-sided quotes on behalf of an LMM in the event that there are no Market Makers quoting in an issue. Rather, in the event that there are no Market Makers quoting in the issue, the best bids and offers of those orders residing in the OX Book in the issue would be disseminated as the BBO. If there are no Market Makers quoting in the issue and there are no orders in the OX Book in the issue, OX would disseminate a bid of zero and an offer of zero in that issue. Under current NYSE Arca Rule 6.40, the Exchange would disseminate a market on behalf of an LMM when there are no Market Makers quoting in a series and the Market Maker risk limitation mechanism is activated. This market is an artificial market generated by the Exchange that is not truly reflective of the LMM's market; however, the market is subject to firm quote requirements and must be honored by the LMM. NYSE Arca is proposing NYSE Arca Rule 6.40A to improve upon its current NYSE Arca Rule 6.40. Specifically, proposed NYSE Arca Rule 6.40A would disseminate a zero bid and zero offer when there are no Market Makers quoting in a series and there are no other bids or offers on the Exchange in the series. The zero bid, zero offer market is a true reflection of the market at that point in time and limits the risk exposure of Exchange Market Makers when necessary and appropriate during times of increased volatility. *Proposed Amendment to NYSE Arca Rule 6.47.* NYSE Arca is proposing to amend NYSE Arca Rule 6.47 governing crosses effected on the trading floor. Consistent with the existing version of NYSE Arca Rule 6.47, the proposed amendment provides for
(i)Non-facilitation (“Regular Way”) crosses,
(ii)facilitation crosses and
(iii)solicitation crosses. In all cases, orders must be announced to the trading crowd in open outcry and all terms of the orders must be disclosed to the trading crowd. Trading crowd participants would be given a reasonable time to respond with the prices and sizes at which they would be willing to participate in the cross. With respect to all crosses, a Trading Official would be available at each post on the trading floor to assist in the determination of what is a “reasonable time” when necessary. Trading crowd participants who make bids or offers equal to or better than the proposed cross price would be permitted to participate in a cross. With respect to facilitations, floor brokers still would be permitted to participate in up to 40% of the balance of an order to be facilitated, once bids or offers in the Book and non-member bids and offers in the trading crowd at or better than the proposed execution price have been satisfied. The Exchange believes that proposed allocation of contracts to non-members ahead of the facilitating member is consistent with Section 11(a) of the Act. 15 Section 11(a) of the Act prohibits a member of a national securities exchange from effecting transactions on that exchange for its own account, the account of an associated person or an account over which it or its associated person exercises discretion (collectively, “covered accounts”) unless an exception applies. Section 11(a)(1)(G) of the Act and Rule 11a1-1(T) therunder provide an exception to the general prohibition in Section 11(a) on an exchange member effecting transactions for its own account. Specifically, a member that “is primarily engaged in the business of underwriting and distributing securities issued by other persons, selling securities to customers, and acting as broker, or any one or more of such activities, and whose gross income normally is derived principally from such business and related activities” 16 and effects a transaction in compliance with the requirements in Rule 11a1-1(T)(a) may effect a transaction for its own account. 17 Among other things, Rule 11a1-1(T)(a) requires that an exchange member presenting a bid or offer for its own account or the account of another member must grant priority to any bid or offer at the same price for the account of a non-member of the exchange. 18 Because the proposed amendment would require the facilitating member to yield priority in the cross transaction to all non-member bids and offers, the Exchange believes that the proposed amendment is consistent with the requirements of Section 11(a) and Rule 11a1-1(T). 15 15 U.S.C. 78k(a). 16 15 U.S.C. 78k(a)(1)(G)(i). Paragraph
(b)of Rule 11a1-1(T) under the Act provides that the requirements of Section 11(a)(1)(G)(i) of the Act apply if during its preceding fiscal year more than 50% of its gross revenues were derived from one or more of the sources specified in that section. *See* 17 CFR 240.11a1-1(T). In addition to any revenue that independently meets the requirements of Section 11(a)(1)(G)(i), revenue derived from any transaction specified in paragraph (A), (B), or
(D)of Section 11(a)(1) of the Act or specified in Rule 11a1-4(T) will be deemed to be revenue derived from one or more of the sources specified in Section 11(a)(1)(G)(i). *See* 17 CFR 240.11a1-4(T). 17 15 U.S.C. 78k(a)(1)(G)(ii). 18 17 CFR 240.11a1-1(T)(a)(3). With respect to crossing solicited orders, NYSE Arca proposes to impose a notification requirement on floor brokers so that customers would be aware that a floor broker would be permitted to solicit liquidity to fill the customer's orders. The floor broker would be required to deliver to the customer a written notification informing the customer that its order would be permitted to be executed pursuant to proposed NYSE Arca Rule 6.47(c). Such written notification would have to disclose the terms and conditions contained in proposed NYSE Arca Rule 6.47 and be in a form approved by the Exchange. NYSE Arca also proposes to add a new category of cross order, the Mid-Point Crossing Order. A Floor Broker who holds orders to buy and sell an option contract(s) at the mid-point between the electronically disseminated BBO in the subject option series would be permitted to cross the Mid-Point Crossing Orders. Once the Mid Point Crossing Orders have been represented in the trading crowd by open outcry, and members of the trading crowd have been given a reasonable time to respond with the prices and sizes at which they would be willing to participate in the execution of the Mid-Point Crossing Orders, the Floor Broker would be permitted to execute the Mid-Point Crossing Orders in accordance with the procedures in proposed NYSE Arca Rule 6.47 for Regular Way, facilitation or solicitation crosses, as applicable. If a Market Maker is solicited and agrees to participate in a cross order, pursuant to NYSE Arca Rule 6.85, the Market Maker would not be permitted to be present in the trading crowd when such order is represented and executed. Proposed NYSE Arca Rule 6.62A In addition to certain existing order types ( *e.g.* , Limit Orders, Market Orders), NYSE Arca is proposing to add several new order types available for entry on OX. These would include the following: a. *Proposed NYSE Arca Rule 6.62A(c).* Inside Limit Order. An “Inside Limit Order” is a Limit Order, which, if routed away pursuant to NYSE Arca Rule 6.76B, would be routed to the market participant or participants with the best displayed price. Any unfilled portion of the order would not be routed to the next best price level until all quotes at the current best bid or offer are exhausted. If the order is no longer marketable it would be ranked in the OX Book pursuant to NYSE Arca Rule 6.76A. b. *Proposed NYSE Arca Rule 6.62A(e).* Working Order. Working Orders consist of several existing order types ( *i.e.* , All-or-None Orders, Stop Order) as well as several new order types ( *i.e.* , Reserve Orders, Stock Contingency Orders). Working orders are maintained in the OX Book Working Order Process, are not disseminated on OX and are executed in accordance with NYSE Arca Rule 6.76B. A Working Order is any order that has a conditional or undisplayed price and/or size designated as a “Working Order” by NYSE Arca, including, without limitation:
(1)Reserve Order. A limit order with a portion of the size displayed and with a reserve portion of the size (“reserve size”) that is not displayed on OX.
(2)All-or-None Order (“AON Order”). A Market or Limit Order that is to be executed in its entirety or not at all.
(3)Stop Order. A Stop Order is an order that becomes a Market Order when the market for a particular option contract reaches a specified price. A Stop Order to buy becomes a Market Order when the option contract trades at or above the stop price on OX or another Market Center or when the OX bid is quoted at or above the stop price. A Stop Order to sell becomes a Market Order when the option contract trades at or below the stop price on OX or another Market Center or when the OX offer is quoted at or below the stop price. Stop Orders (including Stop Limit Orders) would not have standing in any order process in the OX Book and would not be permitted to be displayed.
(4)Stop Limit Order. A Stop Limit Order is an order that becomes a Limit Order when the market for a particular option contract reaches a specified price. A Stop Limit Order to buy becomes a Limit Order when the option contract trades at or above the stop price on OX or another Market Center or when the OX bid is quoted at or above the stop price. A Stop Limit Order to sell becomes a Limit Order when the option contract trades at or below the stop price on OX or another Market Center or when the OX offer is quoted at or below the stop price.
(5)Stock Contingency Order. A Stock Contingency Order is an option order the execution of which is contingent upon the last sale price as specified by the User of the underlying stock traded at the primary marketplace. c. *Proposed NYSE Arca Rule 6.62A(i).* NOW Order. A “NOW Order” is a Limit Order that is to be executed in whole or in part on OX, and the portion not so executed would be routed pursuant to NYSE Arca Rule 6.76B only to one or more NOW Recipients for immediate execution as soon as the order is received by the NOW Recipient. Any portion not immediately executed by the NOW Recipient would be cancelled. If a NOW Order is not marketable when it is submitted to OX, it would be cancelled. As described above, NOW Recipients are those Market Centers that are automated and do not allow for manual intervention with respect to orders. d. *Proposed NYSE Arca Rule 6.62A(j).* PNP Order. A “PNP Order” (Post No Preference) is a Limit Order to buy or sell that is to be executed in whole or in part on NYSE Arca, and the portion not so executed is to be ranked in the OX Book, without routing any portion of the order to another Market Center; provided, however, NYSE Arca would be required to cancel a PNP Order that would lock or cross the NBBO. e. *NYSE Arca Rule 6.62A(k).* Mid-Point Crossing Order. A “Mid-Point Crossing Order” is an order to be crossed at the mid-point price or better of the electronically disseminated BBO 19 in the relevant option series pursuant to NYSE Arca Rule 6.47; provided, however, that the mid-point must fall on a minimum price variation (“MPV”). 20 If the mid-point does not fall on an MPV, the Mid-Point Crossing Order would be cancelled. 19 *See* proposed NYSE Arca Rule 6.1A(a)(2). 20 *See* proposed NYSE Arca Rule 6.1A(a)(10). The order types in Proposed NYSE Arca Rule 6.62A would provide greater flexibility to customers to control their orders. By offering order types such as the Reserve Order, customers would be able to determine how much of their order they want disseminated at any point in time and eliminates the need for customers to enter multiple orders in one series. Furthermore, NOW Orders and PNP Orders provide customers with flexibility with respect to where their orders would (or would not) be routed once they have been processed on the Exchange. Proposed NYSE Arca Rule 6.64A NYSE Arca is proposing new NYSE Arca Rule 6.64A to govern the opening process, which traditionally has been referred to as a “rotation,” and which would be referred to as an “auction” on the OX platform. A “Trading Auction” is a process by which trading is initiated in a specified options class. Trading Auctions may be employed at the opening of NYSE Arca each business day or to re-open trading after a trading halt. Trading Auctions would be conducted automatically by the OX trading platform. The OX system would accept Market and Limit Orders and quotes for inclusion in the opening auction process (“Auction Process”) until the Auction Process is initiated in that option series. Prior to the Auction Process (“pre-opening”), non-Market Makers would be able to submit orders to OX and Market Makers would be able to submit two-sided quotes and orders to OX. Contingency orders (except for “opening only” orders) would not participate in the Auction Process. Any eligible open orders residing in the OX Book from the previous trading session would be included in the Auction Process. After the primary market for the underlying security disseminates the opening trade or the opening quote, the related option series would be opened automatically based on the following principles and procedures: a. The OX system would determine a single price at which a particular option series would be opened. b. Orders would have priority over Market Maker quotes. Orders and quotes in the OX system would be matched up with one another based on price-time priority. c. Orders in the OX Book that were not executed during the Auction Process would become eligible for the Core Trading Session immediately after the conclusion of the Auction Process. To determine the opening price in a series, upon receipt of the first consolidated quote or trade of the underlying security, OX would compare the Options Price Reporting Authority (“OPRA”) NBBO market with the initial BBO market. OX would generate an opening trade if possible or open a series on the quoted market. OX then would send the OX BBO quote to OPRA. The opening price of a series would be the price, as determined by the OX system, at which the greatest number of contracts would trade at or nearest to the midpoint of the initial NBBO disseminated by OPRA, if any, or the midpoint of the best quote bids and quote offers in the OX Book. Midpoint pricing would not occur if that price would result in an order or part of an order being traded through. Instead the Trading Auction would occur at that limit price, or, if the limit price is superior to the quoted market, within the range of 75% of the best quote bid and 125% of the best quote offer. The same process would be followed to reopen an option class after a trading halt. Unmatched orders and Marker Maker quotes that are marketable against the initial NBBO would “sweep” through the OX Book and be executed in price/time priority. If the best price is at an away Market Center(s), orders would be routed away to the relevant Market Center(s). Proposed NYSE Arca Rule 6.64A would allow the maximum number of contracts to be executed on the opening while giving orders priority over Market Maker quotes on the open. Proposed NYSE Arca Rule 6.76A NYSE Arca would display all non-marketable Limit Orders in the Display Order Process of the OX Book. Except as otherwise permitted by NYSE Arca Rule 6.76A, all bids and offers at all price levels in the OX Book would be displayed on an anonymous basis. OX also would disseminate current consolidated quotations/last sale information, and such other market information as may be made available from time to time pursuant to agreement between NYSE Arca and other Market Centers, consistent with the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information. Bids and offers would be ranked and maintained in the Display Order Process and/or Working Order Process of the OX Book according to price-time priority. a. Within the Display Order Process Limit Orders, with no other conditions, and quotes would be ranked based on the specified price and the time of original order or quote entry. The displayed portion of Reserve Orders (not the reserve size) would be ranked in the Display Order Process at the specified limit price and the time of order entry. When the displayed portion of the Reserve Order is decremented completely, the displayed portion of the Reserve Order would be refreshed for:
(1)The displayed amount; or
(2)the entire reserve amount, if the remaining reserve amount is smaller than the displayed amount, from the reserve portion and would be submitted and ranked at the specified limit price and the new time that the displayed portion of the order was refreshed. b. Within the Working Order Process
(1)The reserve portion of Reserve Orders would be ranked based on the specified limit price and the time of original order entry. After the displayed portion of a Reserve Order is refreshed from the reserve portion, the reserve portion would remain ranked based on the original time of order entry, while the displayed portion would be sent to the Display Order Process with a new time-stamp.
(2)All-or-None Orders would be ranked based on the specified limit price and the time of order entry.
(3)Stop and Stop Limit Orders would be ranked based on the specified stop price and the time of order entry.
(4)Stock Contingency Orders would be ranked based on the specified limit price and the time of order entry. Consistent with Rule 602 under Regulation NMS, 21 the best-ranked displayed bids and offers to buy and the best ranked displayed bids and offers to sell in the OX Book and the aggregate displayed size of such bids and offers associated with such prices would be collected and made available to quotation vendors for dissemination. 21 17 CFR 242.602. The Display Order Process of the OX Book in proposed NYSE Arca Rule 6.76A provides the “traditional” book found on most options exchange. The Working Order Process, a new concept with respect to options exchanges, provides a method for booking contingency order as well as other new order types such as Reserve Orders. The Working Order Process provides greater flexibility to customers because of the different order types that would be permitted to be placed in the Working Order Process for future execution. Proposed NYSE Arca Rule 6.76B Proposed NYSE Arca Rule 6.76B outlines the applicable requirements for order execution and priority on the OX trading platform. Unless an LMM is entitled to a guaranteed participation because he is quoting at the NBBO, all orders would be matched based on strict price-time priority. For an execution to occur in any order process, the price must be equal to or better than the NBBO, unless OX has routed orders to away Market Centers at the NBBO. a. Proposed NYSE Arca Rule 6.76B is Consistent with Section 11(a) of the Act. The Exchange believes that the proposed allocation of orders based on strict price-time priority for orders executed via OX is consistent with Section 11(a) of the Act. As described earlier herein, Section 11(a) of the Act prohibits a member of a national securities exchange from effecting transactions on that exchange for its own account, the account of an associated person, or an account over which it or its associated person exercises discretion (collectively, “covered accounts”) unless an exception applies. First enacted as part of the Securities Acts Amendments of 1975, 22 Section 11(a) was intended by Congress to address trading advantages enjoyed by exchange members and conflicts of interest in money management. 23 In particular, as noted by the Commission, Congress was concerned about members benefiting in their principal transactions from special “time and place” advantages associated with floor trading—such as the ability to “execute decisions faster than public investors.” 24 22 *See* Pub. L. No. 94-29, 89 Stat. 110 (June 4, 1975). 23 * See* Securities Reform Act of 1975, Report of the House Comm. on Interstate and Foreign Commerce, H.R. Rep. No. 94-123, 94th Cong., 1st Sess.
(1975)(“House Report”); Securities Acts Amendments of 1975, Report of the Senate Comm. on Banking, Housing and Urban Affairs, S. Rep. No. 94-75, 94th Cong., 1st Sess. (1975). 24 *See* Securities Exchange Act Release No. 14563 (Mar. 14, 1978), 43 FR 11542, at 11543 (Mar. 17, 1978); Securities Exchange Act Release No. 14713 (Apr. 27, 1978), 43 FR 18557, at 18588 (May 1, 1978) (“1978 Release II”); Securities Exchange Act Release No. 15533 (Jan. 29, 1979), 44 FR 6084, at 6092 (Jan. 31, 1979) (“1979 Release”). The 1978 and 1979 Releases cite the House Report at 54-57. Where principal transactions contribute to the fairness and orderliness of exchange markets or do not reflect any time and place trading advantages, they are excepted from the prohibition. Among the transactions excepted under Section 11(a)(1) are those by a dealer acting in the capacity of a market maker, 25 bona fide arbitrage or hedge transactions, 26 and transactions made to offset errors. 27 Rule 11a2-2(T) under the Exchange Act provides an exception in addition to those delineated in the statute. 28 25 *See* Section 11(a)(1)(A), 15 U.S.C. 78k(a)(1)(A). In addition to the application of Rule 11a2-2(T), members of the Exchange who are registered as market makers may also take advantage of the market maker exemption from Section 11(a), at least for securities in which they make a market. 26 *See* Section 11(a)(1)(D) of the Act. 15 U.S.C. 78k(a)(1)(D). 27 *See* Section 11(a)(1)(F) of the Act. 15 U.S.C. 78k(a)(1)(F). 28 17 CFR 240.11a2-2(T). Commonly referred to as the “effect versus execute” rule, Rule 11a2-2(T) permits an exchange member, subject to certain conditions, to effect transactions for covered accounts by arranging for an unaffiliated member to execute the transactions directly on the exchange floor. To comply with the rule's conditions, a member
(1)Must transmit the order from off the exchange floor;
(2)may not participate in the execution of the transaction once it has been transmitted to the member performing the execution; 29
(3)may not be affiliated with the executing member; and
(4)with respect to an account over which the member or an associated person has investment discretion, neither the member nor the associated person may retain any compensation in connection with effecting the transaction without express written consent from the person authorized to transact business for the account in accordance with the rule. 29 The member may participate, however, in clearing and settling the transaction. As described by the Commission, these four requirements—off-floor transmission, non-participation in order execution, execution through an unaffiliated member and non-retention of compensation for discretionary accounts—were “designed to put members and non-members on the same footing, to the extent practicable, in light of the purposes of Section 11(a).” 30 If a transaction meets the requirements of the “effect versus execute” rule, it would be deemed to be “consistent with the purpose of Section 11(a)(1) of the Act, the protection of investors, and the maintenance of fair and orderly markets.” 31 30 *See* 1978 Release II at 18560. 31 *See* Rule 11a2-2(T)(e) under the Act. 17 CFR 240.11a2-2(T)(e). OX represents a new electronic trading platform that may be utilized by Exchange members and their customers to effect the purchase and sale of securities. OX would place all of its Users—both members and non-members of the Exchange—on the “same footing,” as intended by Rule 11a2-2(T). Given OX's automated matching and execution services, no Exchange member would enjoy any special control over the timing of execution or special order handling advantages for orders executed via OX, as all orders would be centrally processed for execution by computer, rather than being handled by a member through bids or offers made on the trading floor. Because OX's open, electronic structure is designed to prevent any Exchange members from gaining any time and place advantages, the Exchange believes that OX satisfies the four requirements of the “effect versus execute” rule as well as the general policy objectives of Section 11(a). Rule 11a2-2(T) requires the orders for a covered account transaction to be transmitted from off the exchange floor. In considering the application of this requirement to a number of automated trading and electronic order-handling facilities operated by national securities exchanges, the Commission has deemed the off-floor requirement to be met if the order is transmitted from off the floor directly to the exchange floor by electronic means. 32 Like these other automated systems, orders sent to OX would be transmitted from remote terminals directly to the system by electronic means. Therefore, the Exchange believes that Users' orders electronically received by OX satisfy the off-floor transmission requirement for the purposes of the “effect versus execute” rule. 32 Among the systems considered by the Commission are
(1)The Philadelphia Stock Exchange's (“Phlx”) VWAP Trading System;
(2)the Pacific Exchange's (“PCX”) Application of OptiMark;
(3)Chicago Match;
(4)the American Stock Exchange's Post Execution Reporting System and the Amex Switching System ( *see* 1979 Release at n. 25);
(5)the Intermarket Trading System;
(6)the Multiple Dealer Trading Facility of the Cincinnati Stock Exchange;
(7)the PCX's Communications and Execution System (“COMEX”); and
(8)the Phlx's Automated Communications and Execution System (“PACE”) ( *see* 1979 Release at nn. 19-35). The “effect versus execute” rule further provides that the exchange member and its associated person may not participate in the execution of the transaction once the order has been transmitted. The Exchange believes that orders submitted to OX meet the non-participation requirement. Upon submission to OX, an order would enter the queue and be executed against another order in the OX Book based on an established matching algorithm. The execution depends not on the Exchange member, but rather, upon what other orders are entered into OX at or around the same time as the subject order, what orders are resident in the OX Book and where the order is ranked based on the price-time priority ranking algorithm. Therefore, at no time following the submission of an order is an Exchange member able to acquire control or influence over the result or timing of orders generated. That is, unlike a floor broker who currently enjoys a trading advantage inherent to being present on an exchange floor for transactions being executed on that floor, no OTP Holder or OTP Firm would be permitted to take advantage of any non-member User through the use of OX. As a result, the Exchange believes the non-participation requirement is met where OTP Holder or OTP Firm orders are matched and executed automatically in OX. Although Rule 11a2-2(T) contemplates having an order executed by an exchange member who is unaffiliated with the member initiating the order, the Commission has recognized in the past that this requirement is not applicable where automated exchange facilities are used. For example, in considering the operation of COMEX and PACE, among other systems, the Commission noted that while there is no independent executing exchange member, the execution of an order is automatic once it has been transmitted into the systems. 33 Because the design of these systems ensures that members do not possess any special or unique trading advantages in handling their orders after transmitting them to the exchange floors, the Commission has stated that executions obtained through these systems satisfy the independent execution requirement of Rule 11a2-2(T). 34 The Exchange believes that this principle is directly applicable to OX; the design of OX ensures that OTP Holders and OTP Firms do not have any special or unique trading advantages in handling their orders after transmission. Accordingly, the Exchange believes that an OTP Holder or OTP Firm effecting a transaction by utilizing OX satisfies the requirement for execution through an unaffiliated member. 33 *See* 1979 Release. 34 *Id.* Finally, the exemption in Rule 11a2-2(T) states that, in the case of a transaction effected for an account for which the initiating member exercises investment discretion, in general, the member may not retain compensation for effecting the transaction. As a prerequisite to the use of OX, if an Exchange member is to rely on Rule 11a2-2(T) for a managed account transaction, the Exchange member must comply with the limitations on compensation as set forth in paragraph (a)(2)(iv) of the “effect versus execute” rule. b. Execution of Orders on OX OX first would attempt to match incoming marketable bids and offers against bids or offers in the Display Order Process at the display price of the resident bids or offers for the total amount of option contracts available at that price or for the size of the incoming order, whichever is smaller. For the purposes of proposed NYSE Arca Rule 6.76B(a), the size of an incoming Reserve Order would include the displayed and reserve size, and the size of the portion of the Reserve Order resident in the Display Order Process is equal to its displayed size. NYSE Arca proposes to allocate incoming marketable bids and offers as follows: c. The Display Order Process
(1)If there is an LMM quoting in the option series, an incoming marketable bid or offer would be matched against all Customer orders ranked ahead of the LMM, provided that such execution(s) must occur at a price equal to or better than the NBBO. The remaining balance of the incoming marketable bid or offer would be matched against the quote of the LMM for either:
(i)an amount equal to 40% of the remaining balance of the incoming bid or offer up to the LMM's disseminated quote size; or
(ii)the LMM's share in the order of ranking in the OX Book, whichever is greater. Any remaining balance of the incoming marketable bid or offer would be matched against remaining orders and quotes in the Display Order Process in the order of their ranking.
(2)If there is no LMM quoting in the option series, the incoming marketable bid or offer would be matched against orders and quotes in the Display Order Process based upon their rankings.
(3)If the incoming marketable bid or offer has not been executed in its entirety, the remaining part of the order would be routed to the Working Order Process. d. The Working Order Process An incoming bid or offer that is not marketable against the Display Order Process would be sent to the Working Order Process to be executed against any Working Orders at or better than the NBBO. An incoming marketable bid or offer would be matched for execution against orders in the Working Order Process in the following manner:
(1)An incoming marketable bid or offer would be matched against orders within the Working Order Process in the order of their ranking, at the price of the displayed portion (for Reserve Orders) or at the limit price (for all other Working Order types), for the total amount of option contracts available at that price or for the size of the incoming bid or offer, whichever is smaller.
(2)If an incoming marketable order has not been executed in its entirety on OX and it has been designated as an order type that is eligible to be routed away, the order would be routed for execution to another Market Center(s). If an order has been designated as an order type that is not eligible to be routed away, the order either would be placed in the OX Book or cancelled if such order would lock or cross the NBBO. e. Routing Away
(1)The order would be routed, either in its entirety or as component orders, to another Market Center(s) as a Limit Order equal to the price and up to the size of the quote published by the Market Center(s). The remaining portion of the order, if any, would be ranked and displayed in the OX Book in accordance with the terms of such order pursuant to NYSE Arca Rule 6.76A and such order would be eligible for execution pursuant to NYSE Arca Rule 6.76B.
(2)A marketable Reserve Order would be permitted to be routed serially as component orders, such that each component corresponds to the displayed size. An order that has been routed away (either via Linkage or the OX Routing Broker) would remain outside of OX for a prescribed period of time ( *i.e.* , based on current required response times for Linkage orders, the prescribed period of time would be no more than 20 seconds; NYSE Arca would use the same time standard for orders routed via the OX Routing Broker) and would be permitted to be executed in whole or in part subject to the applicable trading rules of the relevant Market Center. While an order remains outside of OX, it would have no time standing, relative to other orders received from Users at the same price that would be permitted to be executed against the OX Book. Requests from Users to cancel their orders while the orders are routed away to another Market Center and remain outside OX would be processed subject to the applicable trading rules of the relevant Market Center and relevant Linkage Plan rules. Where an order or portion of an order is routed away and is not executed either in whole or in part at the other Market Center ( *i.e.* , all attempts at the fill are declined or timed-out), the order would be ranked and displayed in the OX Book in accordance with the terms of such order under proposed NYSE Arca Rule 6.76A and such order would be eligible for execution under proposed NYSE Arca Rule 6.76B. *Proposed Amendments to NYSE Arca Rules 6.32, 6.37, 6.40, 6.47, 6.62, 6.64, 6.75, 6.76 and 6.82.* NYSE Arca is proposing to amend NYSE Arca Rules 6.32, 6.37, 6.40, 6.47, 6.62, 6.64, 6.75, 6.76 and 6.82 to indicate that they only apply to transactions executed on PCX Plus, or, in the case of NYSE Arca Rule 6.75, in open outcry. 2. Statutory Basis The proposed rule change, as amended, is consistent with Section 6(b) of the Act, 35 in general, and furthers the objectives of Section 6(b)(5) 36 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 35 15 U.S.C. 78f(b). 36 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change, as amended, will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 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 *rules-comments@sec.gov.* Please include File No. SR-NYSEArca-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, D.C. 20549-1090. All submissions should refer to File No. SR-NYSEArca-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 such filing will also be available for inspection and copying at the principal office of NYSE Arca. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-NYSEArca-2006-13 and should be submitted July 14, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 37 37 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9930 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54007; File No. SR-PCX-2006-16] Self-Regulatory Organizations; Pacific Exchange, Inc. (n/k/a NYSE Arca, Inc.); Order Granting Approval of a Proposed Rule Change as Amended by Amendments No. 1, No. 2 and No. 4, to Revise Fees for Equity Securities Issued by Operating Companies Listed on the Archipelago Exchange June 16, 2006. On March 1, 2006, the Pacific Exchange, Inc. (n/k/a NYSE Arca, Inc., “NYSE Arca” or “Exchange”), through its wholly owned subsidiary PCX Equities, Inc. (n/k/a NYSE Arca Equities, Inc.), filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change to revise its Schedule of Fees and Charges (“Fee Schedule”) to revise certain listing fees for equity securities issued by operating companies listed on the Archipelago Exchange. On March 17, 2006, the Exchange filed Amendment No. 1 to the proposed rule change, and on May 5, 2006, the Exchange filed Amendment No. 2 to the proposed rule change. The proposed rule change, as modified by Amendments No. 1 and No. 2, was published for comment in the **Federal Register** on May 12, 2006. 3 On June 16, 2006, the Exchange filed Amendment No. 4 to the proposed rule change. 4 The Commission received no comments on the proposal. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 53764 (May 5, 2006), 71 FR 27764 (“Notice”). 4 In Amendment No. 4, the Exchange made changes to conform the proposed rule text to its description in the filing to and correct typographical errors. Amendment No. 4 is a technical amendment and is not subject to notice and comment. The Exchange filed Amendment No. 3 to the proposed rule change on June 5, 2006 and withdrew it on June 16, 2006. The proposed rule change, described in the Notice, would amend the Fee Schedule to revise the application, initial, annual and additional shares listing fees for equity securities issued by operating companies listed on the Archipelago Exchange, the equities facility of the Exchange. The Exchange also proposed related modifications to the Fee Schedule. The Commission has reviewed carefully the proposed rule change and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 5 In particular, the Commission finds that the proposed rule change is consistent with section 6(b)(4) of the Act, 6 which requires that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Commission believes the fees are reasonably tailored to enable the Exchange to compete effectively for listings, while supporting the costs of issuer services provided by the Exchange. 5 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition and capital formation. *See* 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(4). *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 7 that the proposed rule change as amended be, and hereby is approved. 7 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9933 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53980; File No. SR-OCC-2006-04] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a Back-Up Communication Channel to Internet Access for Clearing Members June 14, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on April 27, 2006, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by OCC. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(i) of the Act 2 and Rule 19b-4(f)(1) thereunder 3 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 parties. 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 adopts a policy statement that requires each clearing member that uses the Internet as its primary means to access OCC information and data systems through a secure website to maintain a secure backup to Internet access in order to provide for business continuance should there be an Internet outage. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of these statements. 4 4 The Commission has modified the text of the summaries prepared by OCC. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In 1997, OCC introduced a system called ECMI (Enhanced Clearing Member Interface) for clearing members to access C/MACS, OCC's post-trade and collateral processing system. At the time, all clearing members were required to use ECMI either as their primary means of access or as a back-up to a dedicated T1 line. In 2002, with the deployment of ENCORE for positions processing, clearing members were able to access ENCORE for processing position-related post-trade transactions anytime from anywhere through OCC's secure website by using the Internet. With the deployment of ENCORE Release 4.5 (Collateral), all post-trade transactions, including collateral transactions, could be accomplished using an Internet connection to the secure Web site. Most clearing members have now adopted the Internet as their primary means of accessing the secure website, and although some clearing members continue to use ECMI as a back-up communication channel, the current ECMI dial-up access does not provide the high speed and performance level necessary for daily ENCORE activity. With so many clearing members relying on the Internet as their primary means of accessing OCC information and data systems, OCC has determined to adopt a policy statement that requires such clearing members to maintain
(i)separate service agreements with two independent internet service providers and
(ii)a back-up to Internet access through an approved communication channel. OCC will determine if a clearing member's selected back-up communication channel is applicable to that clearing member by reference to guidelines, set forth in the following chart, incorporated within the policy statement. Business profile Back-up communication channel Category A • Ranks in the top 25 Clearing Members with the highest cleared volume during a calendar year T1 Line. • Clears more than one account type as defined in OCC's By-Laws and Rules. • Clears two or more product types. • Conducts Clearing Member Trade Assignment (“CMTA”) business. • High volume of daily post-trade input. • Generally utilizes multiple forms of collateral. • Utilizes most ancillary services offered by OCC. • Currently uses Lease Line for data transmissions. Category B • Has mid-level volume T1 Line or ISDN. • Clears only one or more account types as defined in OCC's By-Laws and Rules. • Clears one or more product types. • Moderate to small volume of post-trade input. • Generally utilizes one or two forms of collateral. • May utilize Lease Line for data transmissions. Category C • Has low-level volume ISDN, OCC office 1 or fax input. • Clears no more than one account type as defined in OCC's By-Laws and Rules. • Clears no more than one product type. • Generally utilizes one or two forms of collateral. • Minimal post-trade input. 1 Smaller firms that rely solely on the Internet can utilize OCC equipment if the clearing member is located in or near a city where OCC maintains operational centers. OCC's purpose in adopting this policy statement is to ensure that clearing members maintain secure back-ups to Internet access in order to be able to perform critical business activities in a timely manner even in the event of an Internet outage 5 The Policy Statement, which became effective on May 1, 2006, was not incorporated into OCC's Rules but was implemented as a stand-alone document 6 Clearing members have already been notified about the adoption of this policy statement and its effective date. 5 In File No. SR-OCC-2006-03, OCC reduced the fixed monthly ancillary services fees charged to Tier I, II, and III clearing members to reflect the termination of the ECMI Interface and to partially offset the additional cost of establishing a back-up communication channel. This fee reduction became effective in April, 2006. 6 Conforming changes are also being made to the Supplement to Agreement for OCC Services for Internet Access (“Supplement”) to incorporate the Policy Statement into the terms of the Supplement. Copies of Amendment No. 1 to the Supplement to be executed by existing clearing members, as well as the Amended and Restated Supplement for new clearing members are attached to the proposed rule filing. Language proposed to be added to the Amended and Restated Supplement is underlined. Language proposed to be deleted is in brackets. See also Securities Exchange Act Release No. 46152 (July 1, 2002) 67 FR 45166 (July 8, 2002) [File No. SR-OCC-2001-09] for the text of the original Supplement. B. Self-Regulatory Organization's Statement on Burden on Competition OCC does not believe that the proposed rule change would 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 were not and are not intended to be solicited with respect to the proposed rule change, and none have been received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(i) of the Act 7 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 sixty days of the filing of such 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 Number SR-OCC-2006-04 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-OCC-2006-04. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of OCC and on OCC's Web site at *http://www.optionsclearing.com.* 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-OCC-2006-04 and should be submitted on or before July 14, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9694 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54011; File No. SR-Phlx-2005-65] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Accelerated Approval of Proposed Rule Change as Amended by Amendment No. 1 Relating to the Exchange's Business Conduct Committee and Disciplinary Rules June 16, 2006. I. Introduction On November 2, 2005, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 to amend the Exchange By-Law Article X, Section 10-11 (“Business Conduct Committee”) and Exchange Rules 960 and 970, the disciplinary rules. The Phlx filed Amendment No. 1 to the proposed rule change on May 16, 2006. The proposed rule change, as amended, was published for comment in the **Federal Register** on May 26, 2006 for a 15-day comment period, which ended on June 12, 2006. 3 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended, on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 53846 (May 19, 2006), 71 FR 30462. II. Description of the Proposed Rule Change The Phlx proposes to create the new staff position of a “Hearing Officer,” who, along with two other Hearing Panelists, would hear contested disciplinary matters that are currently heard by a Panel appointed by the Chairman of the Business Conduct Committee (“BCC” or “Committee”). In connection with creating the Hearing Officer position, the Phlx proposes to amend Exchange By-law Article X, Section 10-11, which governs the BCC, and Exchange Rules 960 and 970, the disciplinary rules. Background Pursuant to Exchange Rule 960.5(a), a hearing on a Statement of Charges is currently held before a Hearing Panel composed of three persons appointed by the Chairman of the BCC or the Chairman's designee. The presiding person of each Hearing Panel is a member of the Committee. The other two persons on the Hearing Panel are members of the Exchange, or general partners or officers of member organizations, or such other persons whom the Chairman of the BCC or the Chairman's designee considers to be qualified. Pursuant to Exchange Rule 960.5(a)(4), Hearing Panelists currently may be compensated in extraordinary cases, as determined by the Chairman of the BCC, in consultation with the Chairman of the Board of Governors. Exchange Rule 960.5(a)(4) provides factors to be considered when determining whether a case is extraordinary, which include but are not limited to the anticipated length of time of the hearing, the complexity and seriousness of the matter, and the magnitude of the potential penalty. Currently, pursuant to Exchange Rule 960.5(d), after the conclusion of the hearing, the Hearing Panel reviews the entire record of the proceeding and submits a written hearing report to the Committee containing proposed findings of fact concerning the allegations in the Statement of Charges, conclusions as to whether a violation within the disciplinary jurisdiction of the Exchange has occurred and an enumeration of such violations, and recommendations as to appropriate sanctions, to be considered by the Committee at the next Committee meeting after the report is completed. Pursuant to Exchange Rule 960.8, currently, after reviewing the entire record of the disciplinary proceeding, the BCC, by a majority of the members voting, determines whether the Respondent has committed violations and the appropriate sanctions, if any. The BCC then issues a written decision, including in its decision a statement of findings and conclusions, with the reasons therefor, upon all material issues presented in the record, and whether each violation within the disciplinary jurisdiction of the Exchange alleged in the Statement of Charges has occurred. Hearing Officer The Exchange proposes to establish a new permanent professional position of Hearing Officer. The responsibilities of the Hearing Officer would include, but not be limited to: presiding over hearings in contested disciplinary cases authorized by the Exchange's BCC, conducting pre-hearing conferences, ruling on procedural or discovery matters, scheduling hearing sessions, making all necessary evidentiary or other rulings (in consultation with the Hearing Panelists), regulating the conduct of the hearing, imposing appropriate sanctions for improper conduct by a party or a party's representative, drafting and issuing decisions on behalf of the Hearing Panel and rendering decisions in connection with Summary Disposition Proceedings. The Hearing Officer would not be permitted to be involved in any manner in the investigation of possible misconduct, to participate in the consideration by the BCC of whether to institute a disciplinary action, to render a decision following a hearing without the concurrence of a majority of the Hearing Panel, to rule upon requests to disqualify the Hearing Officer or any member of the Hearing Panel, or to issue citations for violations of Exchange rules or floor procedure advices. 4 4 In addition, in accordance with By-Law Article X, Section 10-11, the jurisdiction of the Hearing Officer and Hearing Panel shall not extend to the enforcement of rules and regulations of the Floor Procedure Committee or the Options Committee relating to order, decorum, health, safety and welfare on the trading floors, or to hearings held by and sanctions imposed by such committees relating to such matters, except as permitted by the rules of the Exchange or any interpretation thereof, and any regulations promulgated thereunder. The Hearing Officer would report to the Audit Committee for all performance and compensation purposes to help ensure that the Hearing Officer is completely neutral and accountable to the Audit Committee alone. The Hearing Officer would merely report to the General Counsel or his or her designee to comply with policies and procedures applicable to all employees of the Exchange, such as reporting vacation time or sick leave. Hearing Panelists The BCC Chair, or the Chair's designee, would select two Hearing Panelists for each matter from a pool of qualified individuals. 5 Consistent with current practice, the Hearing Panelists would be selected based on their background, experience and training, which should qualify them to consider and make determinations regarding the subject matter to be presented to the Hearing Panel. The Chair would also consider other factors, including the availability of the individual Hearing Panelists, the extent of their prior service on Hearing Panels and any relationship between such persons and the Respondent, which might make it inappropriate for such persons to serve on the Hearing Panel. 5 The Exchange intends to form a “pool” of pre-qualified Hearing Panelists for contested disciplinary cases. In order to form this pool, the staff intends to develop a questionnaire, using as a model the questionnaire currently used by the NASD for potential members of arbitration panels. Members of the BCC would not be eligible to serve as Hearing Panelists. However, as discussed in proposed Exchange Rule 960.5(a)(7), if the Hearing Officer is unable to preside over the hearing for any reason, the Chair of the BCC shall appoint a qualified replacement Hearing Officer for that hearing from a pre-screened pool of qualified candidates, which could possibly include a member of the BCC. After being designated as a qualified Hearing Panelist, the Exchange intends to have each prospective Hearing Panelist complete a mandatory training session to be conducted by the Hearing Officer. Qualified Hearing Panelists would serve for three-year terms. After that time, if a Hearing Panelist wished to continue serving, the Hearing Panelist would be required to submit an updated application for review and approval by the BCC. The Exchange proposes that Hearing Panelists be compensated for all hearing sessions and for one deliberation session per disciplinary proceeding for which a Hearing Panel renders a decision. A hearing session would be defined as any meeting between the parties and Hearing Panel, including pre-hearing conferences, but no compensation would be paid for “study time” ( *i.e.* , reviewing materials in preparation for a pre-hearing conference or hearing). Hearing Panelists would be compensated at a fixed and non-negotiable rate for each hearing session that lasts four hours or less and for one deliberation session. 6 For example, if a hearing on a given day lasted a total of six hours, Hearing Panelists would be compensated for two hearing sessions. If a case settled prior to a hearing, Hearing Panelists would not receive any compensation, unless a pre-hearing conference (which is included in the definition of a hearing session and for which compensation would be given) was held. If a hearing were cancelled, the Hearing Panelists would not be entitled to compensation, but would be reimbursed for any travel-related expenses incurred, if applicable. If a Hearing Panelist is also a member of the Board, any Board or Standing Committee meetings that are held on the same day as the hearing would be considered a single meeting for the purposes of compensation. 6 Compensation for Hearing Panelists would be subject to a cap amount per day, regardless of the number of hearing sessions (or Board or Committee meetings attended). Offers of Settlement and Issuance of Decisions If an Offer of Settlement (“Offer”) is submitted to the BCC before a hearing commences, even if the Hearing Panelists are selected, the Committee would still consider the Offer and, if accepted, issue a decision. The Exchange proposes that, if an Offer is submitted after a hearing commences, however, the Exchange staff would promptly submit its position with respect to such Offer. The Hearing Panel would then determine whether to consider the Offer and, if considered, whether to accept or reject the Offer. The Hearing Panel would review the entire record of the disciplinary proceeding (or the written submissions, if applicable) 7 and, by a majority vote, determine whether the Respondent has committed violations and the appropriate sanctions, if any. The Hearing Panel would then issue a written decision, including in its decision a statement of findings and conclusions, with the reasons therefor, upon all material issues presented in the record, and whether each violation within the disciplinary jurisdiction of the Exchange alleged in the Statement of Charges has occurred. The Hearing Panel would be required to prepare its decision, absent extraordinary circumstances, within 60 days after Exchange staff has served the Hearing Officer and/or members of the Hearing Panel with a copy of the transcript of the hearing. A decision issued by the Hearing Panel would be considered final. Any appeal of the decision would be taken directly to the Exchange's Board of Governors. 7 In lieu of requesting a hearing, a Respondent may request that the matter be decided upon written submissions. The Hearing Officer shall decide whether to grant the request and determine a schedule for each party to make its respective submissions. *See* proposed Exchange Rule 960.4. III. Discussion After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 8 In particular, the Commission finds that the proposed rule change, as amended, is consistent with section 6(b)(5) of the Act, 9 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. In addition, the Commission finds that the proposed rule change, as amended, is consistent with section 6(b)(6) of the Act, 10 which requires that the rules of the exchange provide that its members and persons associated with its members shall be appropriately disciplined for violation of the provisions of the Act, the rules and regulations thereunder, or the rules of the exchange, and with section 6(b)(7) of Act, 11 which requires that the rules of the exchange provide a fair procedure for the disciplining of members and persons associated with members. 8 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(5). 10 15 U.S.C. 78f(b)(6). 11 15 U.S.C. 78f(b)(7). The Commission believes that the proposed rule change should streamline and expedite the hearing process by having a permanent Hearing Officer and pre-screened, qualified Hearing Panelists, and by having the Hearing Panel issue a final decision itself, without having to go to the BCC for review and approval. In addition, the Commission notes that the Exchange proposes to place restrictions on the activities of the Hearing Officer, and to require a Hearing Officer or Hearing Panelist to remove himself from consideration of a matter if he cannot render a fair and impartial decision. The Commission believes that these measures should help to ensure to that the Hearing Officer and Hearing Panelists are completely neutral and that their decisions are fair and impartial. Furthermore, the Commission believes that having a single Hearing Officer preside over all hearings will increase the likelihood that more uniform sanctions will be imposed for similar misconduct by members, making the Exchange's disciplinary process more fair. The Commission finds good cause for accelerating approval of the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice of the filing in the **Federal Register** . The Commission published the proposed rule change for public comment on May 26, 2006 for a 15-day comment period and received no comments on the proposal. The Commission believes that accelerated approval should expedite the appointment of a hearing officer and allow the Exchange to implement a more efficient disciplinary process. 12 12 The Commission notes that the Exchange has represented that the BCC will hear any current matters through their completion if a hearing commenced prior to the date of this approval order. Thus, any ongoing hearing will be heard by the BCC through its completion and the BCC will issue a decision accordingly. IV. Conclusion *It is therefore ordered* , pursuant to section 19(b)(2) of the Act, 13 that the proposed rule change (SR-Phlx-2005-65), as amended, is approved. 13 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-9934 Filed 6-22-06; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10497 and # 10498] Kentucky Disaster # KY-00007 AGENCY: U.S. Small Business Administration. ACTION: Notice. SUMMARY: This is a notice of an Administrative declaration of a disaster for the Commonwealth of Kentucky dated 6/15/2006. *Incident:* Severe Storms and Tornadoes. *Incident Period:* 4/2/2006. *Effective Date:* 6/15/2006. *Physical Loan Application Deadline Date:* 8/14/2006. *Economic Injury
(EIDL)Loan Application Deadline Date:* 3/15/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, National Processing And Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator's disaster declaration applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: *Primary Counties:* Christian *Contiguous Counties:* Kentucky: Caldwell, Hopkins, Muhlenberg, Todd, Trigg Tennessee: Montgomery, Stewart The Interest Rates are: Percent Homeowners With Credit Available Elsewhere 5.750 Homeowners Without Credit Available Elsewhere 2.875 Businesses With Credit Available Elsewhere 7.408 Businesses & Small Agricultural Cooperatives Without Credit Available Elsewhere 4.000 Other (Including Non-Profit Organizations) With Credit Available Elsewhere 5.000 Businesses And Non-Profit Organizations Without Credit Available Elsewhere 4.000 The number assigned to this disaster for physical damage is 10497 C and for economic injury is 10498 0. The States which received an EIDL Declaration # are Kentucky, Tennessee. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Dated: June 15, 2006. Hector V. Barreto, Administrator. [FR Doc. E6-9957 Filed 6-22-06; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF STATE [Public Notice 5449] Culturally Significant Objects Imported for Exhibition Determinations: “Crossroads: Modernism in Ukraine, 1910-1930” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Crossroads: Modernism in Ukraine, 1910-1930,” imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at the Cultural Center of Chicago, Chicago, Illinois, from on or about July 21, 2006, until on or about October 15, 2006, at the Ukrainian Museum, New York, New York, from on or about November 4, 2006, until on or about March 15, 2007, and at possible additional venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Wolodymyr Sulzynsky, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State, (telephone: 202/453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: June 16, 2006. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E6-9961 Filed 6-22-06; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5450] Culturally Significant Objects Imported for Exhibition Determinations: “Holy Image Hallowed Ground: Icon From Sinai” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Holy Image Hallowed Ground: Icons from Sinai,” imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at The J. Paul Getty Trust, from on or about November 14, 2006, until on or about March 4, 2007, and at possible additional venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Paul Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: June 15, 2006. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E6-9960 Filed 6-22-06; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5448] Culturally Significant Objects Imported for Exhibition Determinations: “New Photography 2006: Jonathan Monk, Barbara Probst, and Jules Spinatsch” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “New Photography 2006: Jonathan Monk, Barbara Probst, and Jules Spinatsch ,” imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at The Museum of Modern Art, New York, New York, from on or about September 22, 2006, until on or about January 8, 2007, and at possible additional venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Wolodymyr Sulzynsky, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: June 16, 2006. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E6-9962 Filed 6-22-06; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5447] Determination and Certification Under Section 599E of The Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2006 (Pub. L. 109-102) Pursuant to the authority vested in me as Secretary of State, including under section 559E of the Foreign Operations, Export Financing, and Related Programs Appropriations Act (FOAA), 2006 (Pub. L. 109-102), I hereby determine and certify that:
(1)Assistance for the fiscal year will be provided only for individuals who have
(A)verifiably renounced and terminated any affiliation or involvement with FTOs or other illegal armed groups and
(B)are meeting all the requirements of the Colombian Demobilization Program, including having disclosed their involvement in past crimes and their knowledge of the FTOs structure, financing sources, illegal assets, and the location of kidnapping victims and bodies of the disappeared;
(2)The Government of Colombia is providing full cooperation to the Government of the United States to extradite the leaders and members of the FTOs who have been indicted in the United States for murder, kidnapping, narcotics trafficking, and other violations of United States law;
(3)The Government of Colombia is implementing a concrete and workable framework for dismantling the organizational structures of foreign terrorist organizations;
(4)Funds shall not be made available as cash payments to individuals and are available only for activities under the following categories: Verification, reintegration (including training and education), vetting, recovery of assets for reparations for victims, and investigations and prosecutions. This Determination shall be published in the **Federal Register** and copies shall be transmitted to the appropriate committees of Congress. Dated: June 15, 2006. Condoleezza Rice, Secretary of State, Department of State. [FR Doc. E6-9963 Filed 6-22-06; 8:45 am] BILLING CODE 4710-29-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Aviation Proceedings, Agreements Filed the Week Ending June 2, 2006 The following Agreements were filed with the Department of Transportation under the sections 412 and 414 of the Federal Aviation Act, as amended (49 U.S.C. 1382 and 1384) and procedures governing proceedings to enforce these provisions. Answers may be filed within 21 days after the filing of the application. *Docket Number:* OST-2006-24991. *Date Filed:* June 2, 2006. *Parties:* Members of the International Air Transport Association. *Subject:* CSC/28/Meet/005/06 dated June 1, 2006. Finally Adopted Resolutions: 621/622. Intended effective date: October 1, 2006. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E6-9954 Filed 6-22-06; 8:45 am] BILLING CODE 4910-9X-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Notice of Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits Filed Under Subpart B (Formerly Subpart Q) During the Week Ending June 2, 2006 The following Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits were filed under subpart B (formerly subpart Q) of the Department of Transportation's Procedural Regulations (See 14 CFR 301.201 et. seq.). The due date for Answers, Conforming Applications, or Motions to Modify Scope are set forth below for each application. Following the answer period DOT may process the application by expedited procedures. Such procedures may consist of the adoption of a show-cause order, a tentative order, or in appropriate cases a final order without further proceedings. *Docket Number:* OST-1996-1393. *Date Filed:* June 1, 2006. *Due Date for Answers, Conforming Applications, or Motion To Modify Scope:* June 22, 2006. *Description:* Application of American Airlines, Inc. requesting renewal of its certificate for Route 517, authorizing scheduled foreign air transportation of persons, property and mail between Dallas/Ft. Worth, TX and Tokyo, Japan. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E6-9955 Filed 6-22-06; 8:45 am] BILLING CODE 4910-9X-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Approval of Noise Compatibility Program; Southwest Florida International Airport, Fort Myers, FL AGENCY: Federal Aviation Administration, DOT. ACTION: Notice. SUMMARY: The Federal Aviation Administration
(FAA)announces its findings on the noise compatibility program submitted by the Lee County Port Authority under the provisions of 49 U.S.C. (the Aviation Safety and Noise Abatement Act, hereinafter referred to as “the Act”) and 14 CFR part 150. These findings are made in recognition of the description of Federal and nonfederal responsibilities in Senate Report No. 96-52 (1980). On February 11, 2005, the FAA determined that the noise exposure maps submitted by the Lee County Port Authority under Part 150 were in compliance with applicable requirements. On May 30, 2006, the FAA approved the Southwest Florida International Airport Noise Compatibility Program. Most of the recommendations of the program were approved. DATES: *Effective Date:* The effective date of the FAA's approval of the Southwest Florida International Airport noise compatibility program is May 30, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Lindy McDowell, Federal Aviation Administration, Orlando Airports District Office, 5950 Hazeltine National Dr., Suite 400, Orlando, Florida 32822,
(407)812-6331, Extension 130. Documents reflecting this FAA action may be reviewed at this same location. SUPPLEMENTARY INFORMATION: This notice announces that the FAA has given its overall approval to the noise compatibility program for Southwest Florida International Airport, effective May 30, 2006. Under section 47504 of the Act, an airport operator who has previously submitted a noise exposure map may submit to the FAA a noise compatibility program which sets forth the measures taken or proposed by the airport operator for the reduction of existing noncompatible land uses and prevention of additional non-compatible land uses within the area covered by the noise exposure maps. The Act requires such programs to be developed in consultation with interested and affected parties including local communities, government agencies, airport users, and FAA personnel. Each airport noise compatibility program developed in accordance with Federal Aviation Regulations
(FAR)Part 150 is a local program, not a Federal Program. The FAA does not substitute its judgment for that of the airport proprietor with respect to which measure should be recommended for action. The FAA's approval or disapproval of FAR Part 150 program recommendations is measured according to the standards expressed in Part 150 and the Act, and is limited to the following determinations: a. The noise compatibility program was developed in accordance with the provisions and procedures of FAR Part 150; b. Program measures are reasonably consistent with achieving the goals of reducing existing non-compatible land uses around the airport and preventing the introduction of additional non-compatible land uses; c. Program measures would not create an undue burden on interstate or foreign commerce, unjustly discriminate against types or classes of aeronautical uses, violate the terms of airport grant agreements, or intrude into areas preempted by the Federal government; and d. Program measures relating to the use of flight procedures can be implemented within the period covered by the program without derogating safety, adversely affecting the efficient use and management of the navigable airspace and air traffic control systems, or adversely affecting other powers and responsibilities of the Administrator prescribed by law. Specific limitations with respect to FAA's approval of an airport noise compatibility program are delineated in FAR Part 150, Section 150.5. Approval is not a determination concerning the acceptability of land uses under Federal, state, or local law. Approval does not by itself constitute an FAA implementing action. A request for Federal action or approval to implement specific noise compatibility measures may be required, and an FAA decision on the request may require an environmental assessment of the proposed action. Approval does not constitute a commitment by the FAA to financially assist in the implementation of the program nor a determination that all measures covered by the program are eligible for grant-in-aid funding from the FAA. Where Federal funding is sought, requests for project grants must be submitted to the FAA Airports District Office in Orlando, Florida. Lee County Port Authority submitted to the FAA on February 8, 2005, the noise exposure maps, descriptions, and other documentation produced during the noise compatibility planning study conducted from October 2002, through May 26, 2006. The Southwest Florida International Airport noise exposure maps were determined by FAA to be in compliance with applicable requirements on February 11, 2005. Notice of this determination was published in the **Federal Register** on February 11, 2005. The Southwest Florida International Airport study contains a proposed noise compatibility program comprised of actions designed for phased implementation by airport management and adjacent jurisdictions from May 26, 2006 to the year 2011. It was requested that FAA evaluate and approve this material as a noise compatibility program as described in section 47504 of the Act. The FAA began its review of the program on December 1, 2005, and was required by a provisions of the Act to approve or disapprove the program within 180-days (other than the use of new or modified flight procedures for noise control). Failure to approve or disapprove such program within the 180-day period shall be deemed to be an approval of such program. The submitted program contained five
(5)proposed actions for noise mitigation on and off the airport. The FAA completed its review and determined that the procedural and substantive requirements of the Act and FAR Part 150 have been satisfied. The overall program, therefore, was approved by the FAA effective May 30, 2006. Outright approval was granted for four of the specific program elements. The measure to modify the existing noise mitigation procedure #6, Runway 6 Departure Procedure was partially disapproved for purposes of FAR Part 150, pending submission of additional information to demonstrate noise benefits. The following describes the approved actions on and off airport: Operational Measures 1. Continue Existing Operational Noise Mitigation Procedures This measure is to continue nine of ten existing voluntary operational Noise Mitigation Procedures in place. Benefits of these existing measures are summarized at Table 11-3; 1. *Preferential Runway Use Program* —Runway 6 is the preferred runway when the wind, weather, and activity permit. 2. *Visual Approaches* —Turbojet aircraft will normally be vectored to intercept the extended runway centerline seven miles or more from the end of the runway (as activity levels permit). Aircraft on the right downwind leg to Runway 6 or left downwind to Runway 24 will normally be kept above 5000 feet until they are abeam the Airport. Aircraft arriving to Runway 6 and intercepting the extended centerline over the Gulf of Mexico west of Fort Myers Beach should remain above 3,000 feet, if able, to reduce the noise over Fort Myers Beach. 3. *“Keep ’em High”* —The Airport participates in the “Keep ’em High;” program, and turbojet aircraft are encouraged to keep as high as possible. 4. Properly equipped turbojet aircraft departing Runway 24 are encouraged to use the *MAPUL-1 Standard Instrument Departure (SID)* that is pending implementation by the FAA. 5. Runway 24 turbojet departures that are not properly equipped to follow the *MAPUL-1 SID* should request the *Alico Three Departure SID* . 6. Propeller aircraft should reference *AOPA's recommended noise abatement procedures* . 7. Turbojet business aircraft should use either *the aircraft manufacturer's recommended noise Abatement Procedures, the NBAA's Approach and Landing Procedure (VFR and IFR), or Standard Departure Procedure* . 8. Commercial aircraft should follow the *Distant Noise Abatement Departure Profile* as defined by FAA Advisory Circular AC91-53A. 9. At no time shall engines by *run up* for test or maintenance purposes between 2300 hours (11 p.m.) and 0600 hours (6 a.m.) without prior approval from the Executive Director or his/her representative. (NCP, pages 11-2 through 11-3; Exhibits 11-1; and Table 11-3) FAA Action: Approved as a continuation of the voluntary measures in place, subject to traffic, weather, and airspace safety and efficiency. The FAA approved these measures submitted in previous Part 150 studies (1990, 1995) as demonstrating noise mitigating benefits at the airport. They place aircraft over less noise-sensitive corridors and keep aircraft at higher altitudes over noise-sensitive sites. 2. Modify Existing Noise Mitigation Procedure #6; Runway 6 Departure Procedure This measure is to modify Existing Operational Noise Mitigation Procedure Number 6 (Runway 6 Departure Procedure). The existing measure 6 states “Runway 6 departures will be held on tower frequency until crossing departure end of runway and will be turned no further west than 350 degrees until they are five miles from the airport.” The NCP recommends that the noise abatement procedure be modified to use RSW 2.7 DME to demarcate the turn for northbound turbojet aircraft departing on Runway 6. The procedure would provide “For turbojet aircraft, no turns before RSW 2.7 DME unless directed by air traffic control”. A lighted sign would also be added to the Runway 6 departure end once FAA determines where the turning point is located. The modified procedure should be included in an updated pilot briefing handout. (NCP, pages 11-2 through 11-3). FAA Action: Continuation of the voluntary measure in place is approved. Modifications to the procedure are disapproved for purposes of part 150, pending submission of additional information to demonstrate noise benefits. The existing measure, approved by the FAA in earlier Part 150 studies, is intended to move overflights from the school. 3. Purchase and Install Flight Tracking Equipment In is recommended that a radar flight tracking system be implemented at the Airport to assist the Lee County Port Authority in monitoring the voluntary noise mitigation procedures and to assist in the development of modifications to these procedures that will benefit the citizens living in proximity to the Airport. The system will not be used for mandatory enforcement of the voluntary procedures. It is recommended that the flight tracking system output be used to review all recommended operational procedures during the next part 150 update (NCP, pages 11-8; and Tables 11-1, 11-2, 11-3, and 13-1 through 13-3). FAA Action: Approved. The flight tracking system must technically be able to interface with the FAA equipment and operations, and be done in compliance with FAA data download requirements. Eligibility for Federal funding and scope of the proposed project will be determined at the time of application. For purposes of aviation safety, this approval does not extend to the use of monitoring equipment for enforcement purposes by in-situ measurement of any pre-set noise thresholds and shall not be used for mandatory enforcement of any voluntary measure. 4. Support the Implementation/Funding for the Implementation of RNAV Procedures While Table 13-1, Summary of Recommended Measures, describes this as a single measure, the NCP describes this support in two ways. (NCP, pages 11-5 through 11-6; 11-8 and 11-9; Tables 11-1, 11-2, 11-3 and 13-1).
(a)Pages 11-5 and 11-6 suggest a curved RNAV approach to Runway 6, the “MAPUL 1 Instrument Departure Procedure
(IDP)in reverse” might be feasible in the future. The NCP states “This approach would also likely provide the most benefit if implemented primarily during nighttime hours. The NCP recommendation is to “continue to monitor the potential for this type of approach and further evaluate it when the technology is more readily available.” The airport sponsor recommends the FAA study advance technology navigational procedures to determine if they can be used for noise mitigation at RSW. FAA Action: Approved as to sponsor efforts to monitor and evaluate this RNAV approach.
(b)At pages 11-8 and 11-9, the NCP evaluates “Other actions or combinations of actions which would have a beneficial noise control or abatement impact on the public.” The NCP states in relevant part “* * * The MAPUL-1 RNAV procedures is currently pending publication and implementation. This procedure will help reduce the potential for drift as aircraft depart Runway 24 and climb out through the Alico corridor. The MAPUL-1 RNAV procedure will allow properly equipped aircraft to make adjustments to their course as may be required to * * * minimize the impacts on the surrounding residential communities.” In the NCP, it is recommended that the FAA continue with the planned implementation of the MAPUL-1 RNAV procedure and maintain support for the expansion of the RNAV program. FAA Action: No Action Required. Land Use Measures The analysis of recommendations in Chapter 11 refers to a single land use measure described in Chapter 12 of the NCP (page 11-6, Options Required for Consideration by FAR Part 150). That recommendation is to update overlay zones and the requirements therein for Lee County. 5. Update Noise Overlay Zones During the Noise Overlay Zone Land Development Code approval process (completed in 2000), the Lee County Commission directed the Lee County Port Authority to reevaluate the overlay zone in an Update to the FAR Part 150 study to be completed by 2006. The Commission recognized that quieter aircraft were being added to the air carrier and cargo fleet mix and felt that the update should occur to determine whether the extent of the overlay zone limits and associated controls should be maintained or modified Proposed overlay zones are shown on Exhibit 12-2 and are for the year 2020. This is to address potential long range noise impacts and expected growth in airport operations (page 12-6). A summary of the land uses of the land uses for the four zones depicted on Exhibit 12-2 is on page 12-4. Zone B encompasses the DNL 60 dB noise contour. No new noise-sensitive land uses would be allowed. Overflights and notice of potential noise associated with the airport would apply to all development, new and existing. Land uses in Zone B compare to previous Zone 3, with the addition of public notification. Due to the reduction in noise exposure since the last Part 150 study (approved in 1995), the zones and controls have been modified. Zones C and D (encompassing areas larger than Zone B), would include notification of potential noise and overflights. Notification will include reference to factual information about flight corridors, proposed long range airport development, and anticipated growth in operations at the airport for the 2020 timeframe (Zone C). Flight training notice would be provided for Zone D (page 12-9). The LCPA will be proactive about publishing notification and preparing a noise notification brochure for distribution as described on page 12-10. It will provide facts about corridors and discourage noise sensitive development in the corridors (page 12-11, Exhibit 12-10). Also, LCPA will have a record of flight corridors used, via passive radar (Measure 3 in this ROA). LCPA proposes to update forecasts in five years per Lee Plan Policy 1.7.1 or sooner if events occur to significantly alter the contours (pages 12-12 and 12-13). (NCP, pages 12-1 through 12-13; Exhibits 12-1, 12-2, 12-3, 12-4, 12-5, 12-6, 12-7, 12-8, 12-9, and 12-10; and Tables 12-1, 12-2, and 13-1) FAA Action: Approved. This is within the authority of the local land use jurisdictions; the Federal government does not control local land use. Outside the DNL 65 dB noise contour, FAA as a matter of policy encourages local efforts to prevent new noncompatible development immediately abutting the DNL 65 dB contour and to provide a buffer for possible growth in noise contours beyond the forecast period. These determinations are set forth in detail in a Record of Approval signed by the FAA on May 30, 2006. The Record of Approval, as well as other evaluation materials and the documents comprising the submittal, are available for review at the FAA office listed above and at the administrative office of the Lee County Port Authority. The Record of Approval also will be available on-line at *http:/www.faa.gov/arp/environmental/14cfr150/index14.cfm.* Issued in Orlando, Florida on June 15, 2006. Bart Vernace, Acting Manager, Orlando, Airports District Office. [FR Doc. 06-5634 Filed 6-22-06; 8:45 am]
Connectionstraces to 11
12 references not yet in our index
  • Pub. L. 92-463
  • 10 CFR 70
  • 17 CFR 240.19
  • 15 USC 78
  • 17 CFR 240.11
  • Pub. L. 94-29
  • 89 Stat. 110
  • 79 Stat. 985
  • Pub. L. 109-102
  • 49 USC 1382
  • 14 CFR 301.201
  • 14 CFR 150
Citation graph
cites case law
Notices
Notice of meeting
U.S.C.§ 78s
U.S.C.§ 78c
U.S.C.§ 78f
C.F.R.§ 200.30-3
U.S.C.§ 552
U.S.C.§ 78k
C.F.R.§ 242.602
U.S.C.§ 2459
Fed. Reg.Notices
Pub. L.Pub. L. 92-463
Cite10 CFR 70
Cite17 CFR 240.19
Cites 23 · showing 12Cited by 0 across 0 sources
★   the supreme law of the land   ★
Don't Tread on Me
E Pluribus Unum — out of many, one

"If you don't know your rights, you don't have any."

Marginalia · a citizen's law index
A research desk, not legal advice. Always read the cited source before relying on a summary.
Questions or an issue? support@self-law.org
disclaimerMarginalia is a research index, not a law firm. Nothing on this site is legal, tax, or financial advice and no attorney–client relationship is formed by using it. Statutes, regulations, and case law change; summaries, search results, AI output, and member posts may be incomplete, out of date, or wrong. Any interpretation drawn from material on this site should be validated by a licensed attorney in your jurisdiction before you act on it.