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 · 2006-08-04 · Office of the United States Trade Representative · Notices

Notices. Notice

23,047 words·~105 min read·/register/2006/08/04/06-6701

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

BILLING CODE 7555-01-M OFFICE OF THE TRADE REPRESENTATIVE Determinations Under the African Growth and Opportunity Act AGENCY: Office of the United States Trade Representative. ACTION: Notice. SUMMARY: The United States Trade Representative
(USTR)has determined that Burkina Faso has adopted an effective visa system and related procedures to prevent unlawful transshipment and the use of counterfeit documents in connection with shipments of textile and apparel articles and has implemented and follows, or is making substantial progress toward implementing and following, the customs procedures required by the African Growth and Opportunity Act (AGOA). Therefore, imports of eligible products from Burkina Faso qualify for the textile and apparel benefits provided under the AGOA. DATES: Effective August 4, 2006. FOR FURTHER INFORMATION CONTACT: Laurie-Ann Agama, Director for African Affairs, Office of the United States Trade Representative,
(202)395-9514. SUPPLEMENTARY INFORMATION: The AGOA (Title I of the Trade and Development Act of 2000, Pub. L. 106-200) provides preferential tariff treatment for imports of certain textile and apparel products of beneficiary sub-Saharan African countries. The textile and apparel trade benefits under the AGOA are available to imports of eligible products from countries that the President designates as beneficiary sub-Saharan African countries, provided that these countries:
(1)Have adopted an effective visa system and related procedures to prevent unlawful transshipment and the use of counterfeit documents; and
(2)have implemented and follow, or are making substantial progress toward implementing and following, certain customs procedures that assist U.S. Customs and Border Protection in verifying the origin of the products. In Proclamation 7853, the President designated Burkina Faso a “beneficiary sub-Saharan African country.” Proclamation 7350 (October 2, 2000) delegated to the USTR the authority to determine whether designated countries have met the two requirements described above. The President directed the USTR to announce any such determinations in the **Federal Register** and to implement them through modifications of the Harmonized Tariff Schedule of the United States (HTS). Based on actions that the Government of Burkina Faso has taken, I have determined that Burkina Faso has satisfied these two requirements. Accordingly, pursuant to the authority vested in the USTR by Proclamation 7350, U.S. note 7(a) to subchapter II of chapter 98 of the HTS and U.S. note 1 to subchapter XIX of chapter 98 of the HTS are each modified by inserting “Burkina Faso” in alphabetical sequence in the list of countries. The foregoing modifications to the HTS are effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after the date of publication of this notice. Importers claiming preferential tariff treatment under the AGOA for entries of textile and apparel articles should ensure that those entries meet the applicable visa requirements. *See Visa Requirements Under the African Growth and Opportunity Act* , 66 FR 7837 (2001). Susan C. Schwab, United States Trade Representative. [FR Doc. E6-12642 Filed 8-3-06; 8:45 am] BILLING CODE 3190-W6-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27442] Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 July 28, 2006. The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of July, 2006. A copy of each application may be obtained for a fee at the SEC's Public Reference Branch (tel. 202-551-5850). An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC's Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on August 22, 2006, and should be accompanied by proof of service on the applicant, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. *For Further Information Contact:* Diane L. Titus at
(202)551-6810, SEC, Division of Investment Management, Office of Investment Company Regulation, 100 F Street, NE., Washington, DC 20549-4041. The Thurlow Funds, Inc. [File No. 811-8219] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 17, 2006, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of approximately $16,500 incurred in connection with the liquidation were paid by Thurlow Capital Management, Inc., applicant's investment adviser. *Filing Date:* The application was filed on June 30, 2006. *Applicant's Address:* 3212 Jefferson St. #416, Napa, CA 94558. Retirement Income Trust [File No. 811-21320] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On April 27, 2006, applicant made a liquidating distribution to its shareholders, based on net asset value. Applicant incurred no expenses in connection with the liquidation. *Filing Date:* The application was filed on July 19, 2006. *Applicant's Address:* 5553 Woodmont St., Pittsburgh, PA 15217. WM Prime Income Fund [File No. 811-9122] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On August 17, 1998, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of approximately $4,000 incurred in connection with the liquidation were paid by WM Advisors, Inc., applicant's investment adviser. *Filing Date:* The application was filed on June 6, 2006. Applicant's Address: John T. West, c/o WM Advisors, Inc., 1201 Third Ave., Suite 2200, Seattle, WA 98101. Smith Barney Principal Return Fund [File No. 811-5678] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On August 31, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $27,000 incurred in connection with the liquidation will be paid by applicant using $13,372 in cash held by its custodian, State Street Bank and Trust Company, and remaining amounts will be paid by Smith Barney Fund Management LLC, applicant's investment adviser. *Filing Date:* The application was filed on June 27, 2006. *Applicant's Address:* 125 Broad St., 10th Floor, New York, NY 10004. Fidelity Qualified Dividend Fund [File No. 811-3071] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On September 30, 1991, applicant transferred its assets to Fidelity Utilities Income Fund, a series of Fidelity Devonshire Trust, based on net asset value. Expenses incurred in connection with the reorganization were paid by applicant. *Filing Dates:* The application was filed on March 9, 2006, and amended on July 17, 2006. *Applicant's Address:* 82 Devonshire St., Boston, MA 02109. The Nevis Fund, Inc. [File No. 811-8689] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On December 30, 2005, applicant transferred its assets to Brown Advisory Opportunity Fund, a series of Forum Funds, based on net asset value. Expenses of $164,891 incurred in connection with the reorganization were paid by Nevis Capital Management LLC and Brown Investment Advisory Incorporated, applicant's investment advisers. *Filing Date:* The application was filed on June 13, 2006. *Applicant's Address:* 2 Hamill Rd., Suite 272, Baltimore, MD 21210. Highland Institutional Floating Rate Income Fund [File No. 811-8955] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On May 5, 2006, applicant made a final liquidating distribution to its shareholders, based on net asset value. Applicant paid expenses of approximately $14,800 incurred in connection with the liquidation. *Filing Date:* The application was filed on June 15, 2006. *Applicant's Address:* c/o Highland Capital Management, L.P., Two Galleria Tower, 13455 Noel Rd., Suite 800, Dallas, TX 75240. CIM High Yield Securities [File No. 811-5328] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On April 28, 2006, applicant made a final liquidating distribution to its shareholders, based on net asset value. Applicant incurred $75,214 in expenses in connection with the liquidation. *Filing Date:* The application was filed on June 16, 2006. *Applicant's Address:* c/o Invesco Institutional (N.A.), Inc., 400 W Market St., Suite 3300, Louisville, KY 40202. Morgan Stanley KLD Social Index Fund [File No. 811-10353]; Morgan Stanley Biotechnology Fund [File No. 811-21040] *Summary:* Each applicant seeks an order declaring that it has ceased to be an investment company. On April 7, 2006, each applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of approximately $10,000 incurred in connection with each liquidation were paid by Morgan Stanley Investment Advisors Inc., investment adviser to each applicant. *Filing Date:* The applications were filed on July 18, 2006. *Applicants' Address:* Morgan Stanley Investment Advisors Inc., 1221 Avenue of the Americas, New York, NY 10020. ACM Government Securities Fund, Inc. [File No. 811-5402]; ACM Government Spectrum Fund, Inc. [File No. 811-5500] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On December 19, 2000, each applicant transferred its assets to ACM Income Fund, Inc. (formerly, ACM Government Income Fund, Inc.), based on net asset value. Each applicant paid $17,500 of the expenses incurred in connection with the reorganizations. *Filing Date:* The applications were filed on June 30, 2006. *Applicants' Address:* 1345 Avenue of the Americas, New York, NY 10105. Scudder Yieldwise Funds [File No. 811-8047] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On June 10, 2005, applicant transferred its assets to corresponding series of DWS Money Funds (formerly, Scudder Money Funds), based on net asset value. Expenses of $217,524 incurred in connection with the reorganization were paid by Deutsche Investment Management Americas, Inc., applicant's investment adviser. *Filing Date:* The application was filed on June 29, 2006. *Applicant's Address:* 222 South Riverside Plaza, Chicago, IL 60606. Scudder Focus Value Plus Growth Fund [File No. 811-7331] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On April 26, 2005, applicant transferred its assets to DWS Growth & Income Fund, a series of DWS Investment Trust, based on net asset value. Expenses of $238,121 incurred in connection with the reorganization were paid by Deutsche Investment Management Americas, Inc., applicant's investment adviser. *Filing Date:* The application was filed on June 29, 2006. *Applicant's Address:* 222 South Riverside Plaza, Chicago, IL 60606. Scudder Growth Trust [File No. 811-1365] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 14, 2005, applicant transferred its assets to DWS Capital Growth Fund, a series of DWS Investment Trust, based on net asset value. Expenses of $399,868 incurred in connection with the reorganization were paid by Deutsche Investment Management Americas, Inc., applicant's investment adviser. *Filing Dates:* The application was filed on July 6, 2006. *Applicant's Address:* 222 South Riverside Plaza, Chicago, IL 60606. Scudder Dynamic Growth Fund [File No. 811-1702]; Scudder Aggressive Growth Fund [File No. 811-7855] *Summary:* Each applicant seeks an order declaring that it has ceased to be an investment company. On December 20, 2004 and September 17, 2005, respectively, each applicant transferred its assets to corresponding series of DWS Advisor Funds (formerly, Scudder Advisor Funds), based on net asset value. Expenses of approximately $417,209 and $195,103, respectively, incurred in connection with the reorganizations were paid by Deutsche Investment Management Americas, Inc., applicants' investment adviser. *Filing Date:* The applications were filed on July 6, 2006. *Applicants' Address:* 222 South Riverside Plaza, Chicago, IL 60606. Scudder Investors Trust [File No. 811-9057] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On April 15, 2005, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $115,176 incurred in connection with the liquidation were paid by Deutsche Investment Management Americas, Inc., applicant's investment adviser. *Filing Date:* The application was filed on June 29, 2006. *Applicant's Address:* 222 South Riverside Plaza, Chicago, IL 60606. Scudder New Europe Fund, Inc. [File No. 811-5969] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On March 14, 2005, applicant transferred its assets to DWS Europe Equity Fund, a series of DWS International Fund, Inc. (formerly, Scudder International Fund, Inc.), based on net asset value. Expenses of approximately $283,745 incurred in connection with the reorganization were paid by Deutsche Investment Management Americas, Inc., applicant's investment adviser. *Filing Date:* The application was filed on July 6, 2006. *Applicant's Address:* 345 Park Ave., New York, NY 10154. For the Commission, by the Division of Investment Management, pursuant to delegated authority. J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-12634 Filed 8-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54239; File No. 4-524] Joint Industry Plan; Notice of Filing of the NMS Linkage Plan by the American Stock Exchange LLC, Boston Stock Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., The NASDAQ Stock Market LLC, National Stock Exchange, New York Stock Exchange LLC, and NYSE Arca, Inc. July 28, 2006. I. Introduction On July 17, 2006, pursuant to Rule 608 of the Securities Exchange Act of 1934 (“Act”), 1 the American Stock Exchange LLC, (“Amex”), the Boston Stock Exchange, Inc., the Chicago Board Options Exchange, Incorporated., the Chicago Stock Exchange, Inc., The NASDAQ Stock Market LLC, the National Stock Exchange, the New York Stock Exchange LLC, (“NYSE”), and NYSE Arca, Inc. (“Participants”) filed with the Securities and Exchange Commission (“Commission” or “SEC”) an executed copy of the NMS Linkage Plan (“Linkage Plan” or “Plan”), a national market system plan to create and operate an intermarket communications linkage pursuant to Section 11A(a)(3)(B) of the Act. 2 The Linkage Plan, as stated in section 13 of the Plan, is to become operative on October 1, 2006. The Linkage Plan was executed by the eight self-regulatory organizations listed above. According to the Plan Participants, the Philadelphia Stock Exchange, Inc. (“Phlx”) is in general agreement with the policy and rules associated with the proposed Linkage Plan and may become a Participant before the Plan's operative date of October 1, 2006. Pursuant to Rule 608(b)(1), 3 the Commission is publishing this notice of, and soliciting comments on, the Linkage Plan. 1 17 CFR 242.608. 2 This submission supersedes earlier submissions dated April 10, 2006 and June 12, 2006. 3 17 CFR 240.608(b)(1). II. NMS Linkage Plan In the following paragraphs, the Linkage Plan Participants respond to the requirements of Rule 608 under the Act. 1. Purpose of Linkage Plan The purpose of the proposed Linkage Plan is to enable the Plan Participants to act jointly in planning, developing, operating and regulating the NMS Linkage System (“Linkage” or “System”) that will electronically link the Participant Markets to one another, as described in the Linkage Plan, so as to further the objectives of Congress as set forth in Section 11A of the Act and to facilitate compliance by the Participants and their respective members with Rules 610 and 611 under Regulation NMS. 2. Governing or Constitutional Documents The governing document is the Linkage Plan. 3. Implementation of Plan The proposed Linkage Plan will become effective on October 1, 2006. 4 4 As the ITS Plan is still in effect, SROs may need exemptions from certain provisions of the ITS Plan, in conjunction with the implementation of the Linkage Plan. SROs should request, and the Commission will consider, appropriate exemptions from the provisions of the ITS Plan. 4. Development and Implementation Phases As provided in section 13 of the proposed Plan, the Plan will become effective on October 1, 2006. As provided in section 11 of the proposed Plan, the Plan will terminate on June 30, 2007. Participants that wish to extend the term may agree to do so, subject to Commission approval. During the term of the Plan, a Participant may withdraw on 30 days' notice if it continues to maintain connectivity to all other Participants and accepts orders through the Linkage until June 30, 2007. A withdrawing Participant's right to send orders through the Linkage would terminate on the date the withdrawal is effective. 5. Analysis of Impact on Competition According to the Participants, the Plan imposes no burden on competition. Rather, it enhances intermarket competition by providing a means, in addition to any private linkages established among Participants, by which orders entered in any Participant Market may access interest displayed in other Participant Markets electronically and in compliance with Rule 611. The Linkage Plan imposes no fees or charges in connection with order executions. Further, the Plan provides that any fee imposed by a Participant on its members in connection with use of or access to the System must not discourage use of the System. 6. Written Understandings or Agreements Relating to Interpretation of, or Participation in, Plan According to the Participants, other than the Plan itself, there are no written understandings or agreements between or among Plan Participants relating to interpretations of the Plan or conditions for becoming a participant in the Plan. 7. Approval of Amendment by Sponsors in Accordance With Plan Not applicable. 8. Description of Operation of Facility Contemplated by the Proposed Plan The System includes the data processing hardware, software and communications network that electronically links the Participant Markets to one another. The System accommodates only regular way trading. All System trades must be compared, cleared and settled through SEC-registered clearing corporations. The System is designed to accommodate trading in any Eligible Security, as defined in section VII of the Consolidated Tape Association (“CTA”) Plan. Section VII of the CTA Plan provides generally that Eligible Securities include equity securities registered on the NYSE, the Amex or another national securities exchange whose original listing requirements substantially meet those of NYSE or Amex. Eligible Securities do not include securities listed on the Nasdaq Stock Market. The Securities Industry Automation Corporation (“SIAC”) serves as the System's facilities manager and has responsibility for the operation and maintenance of the System. SIAC performs its function as facilities manager in accordance with Plan provisions and subject to the administrative oversight of the Supervisory Committee. (Section 5(d)). The System accepts immediate or cancel limit orders. Orders must be sent to a Participant Market through the auspices of a member of that Participant, known as a Sponsoring Member. 5 Section 6(a)(ii) states the minimum information that must be specified in an order, including the member of the destination market (the Sponsoring Member); the “give-up” in the originating Participant Market; the security; the side (buy or sell); the amount to be bought or sold (which must be for one unit of trading ( *i.e.* , 100 shares) or any multiple thereof); and the price. The price must be equal to the bid or offer then being furnished by the destination Participant Market. An order must specify a “time in force” of 5, 15 or 120 seconds, after which the order will expire if unexecuted. 5 The Sponsoring Member will be responsible for paying applicable transaction fees of the destination market. In the event that the Participants are unable to implement Sponsoring Member billing on October 1, 2006, the Participants have agreed to accept direct exchange-to-exchange billing. After February 5, 2007, all routed limit orders will be presumed by the executing market to be intermarket sweep orders sent in accordance with Rule 611(b) of Regulation NMS. (Section 6(a)(vi)). The trading rules applicable in destination Participant Markets will apply to orders received in the market and the execution of those orders in the market. (Section 6(b)). 9. Terms and Conditions of Access Section 3(c) of the Plan provides that any national securities exchange or national securities association may become a Plan Participant by agreeing, in an amendment to the Plan adopted in accordance with its provisions, to comply, and to enforce compliance, with the Plan as provided in section 3(b) of the Plan. An applicant for Plan participation is required to pay SIAC an amount estimated by SIAC to cover development costs to be incurred to accommodate the new Participant. In addition, before the SEC approves the applicant as a Plan Participant, the applicant must pay SIAC actual development costs in excess of estimated development costs, if any, or SIAC will reimburse the applicant estimated development costs that were paid and are in excess of actual development costs, if any. A new Participant shares in development costs incurred after it becomes a Participant in accordance with section 10(a)(iii)(A). (Section 10(a)(iii)(C)). As noted in Item 8, above, orders sent through the System must be sent through a Sponsoring Member in the executing market. There are no other limitations or conditions to access to the System. 10. Method of Determination and Imposition, and Amount of, Fees and Charges The Linkage Plan imposes no fees or charges in connection with orders executed through the Linkage. A Sponsoring Member is subject to applicable transaction charges imposed by the executing market. Section 10 (Financial Matters) provides for sharing by Participants of “development costs” and “production costs,” as defined in section 10(a). Development costs must be agreed to by all Participants. Each Participant must pay a fraction equal to its share of the “transactions base” (as defined in section 10(a)(i)(I)) for the calendar quarter preceding the calendar quarter during which the Participants agree to incur such cost. The Plan provides that any development costs incurred for the benefit of less than all Participants will be shared by the Participants that benefit from the costs as they mutually agree. Production costs are shared by Participants such that each Participant, except the NYSE, pays 50% of the fraction of production costs for a calendar quarter equal to its share of the “routed orders base” defined in section 10(a)(i)(F), as computed for the quarter, but subject to a cap (the “Production Costs Sharing Cap”, defined in section 10(a)(iv)(A)). The NYSE will pay the production costs in excess of the costs that section 10(a)(iv)(A) requires other Participants to pay. Each Participant is required to bear 100% of the costs to provide the communication connection from the Participant's facilities to the System's communications facilities maintained by SIAC. (Section 10(a)(v)). Each Participant is free to determine whether or not to impose, and the amount of, a fee or charge on its members in connection with use of its facilities to access the System. Any such fee or charge must not be of such size, or so structured, as to discourage use of the System. (Section 10(b)). 6 6 Any fees charged by Participants must be filed with the Commission pursuant to Section 19(b) of the Act. In consideration of the NYSE's making available a designated NYSE operating system to assume the functions of the System in the event of a disaster, Participants other than NYSE have agreed to pay the NYSE certain fees as set forth in section 12(d) of the Plan. 11. Method and Frequency of Processor Evaluation Not applicable. 12. Dispute Resolution The Linkage Plan does not include specific provisions regarding resolution of disputes between or among Participants. Section 4(d) of the Plan provides that no action or inaction by the Supervisory Committee shall prejudice any Participant's right to present its views to the SEC or any other person with respect to any matter relating to the System or to seek to enforce its views in any other forum it deems appropriate. In addition, section 6(b) provides that the destination market's trading rules apply to orders received in the destination market and executions of orders therein. Each Participant determines the extent to which its trading rules apply to members in its market insofar as such members' issuance of orders from such market and resulting executions are concerned. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the Linkage Plan 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 4-524 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 4-524. 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 Linkage Plan that are filed with the Commission, and all written communications relating to the Linkage Plan 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. A copy of the Linkage Plan is attached to this Release as Exhibit A. Copies of the Plan also will be available for inspection and copying at *http://www.itsplan.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 4-524 and should be submitted on or before August 25, 2006. 7 17 CFR 200.30-3(a)(27). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 Jill M. Peterson, Assistant Secretary. Exhibit A—Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage Pursuant to Section 11a(A)(3)(B) of the Securities Exchange Act of 1934 *Agreement* made as of June 12, 2006, among American Stock Exchange LLC, Boston Stock Exchange, Inc., Chicago Board Options Exchange, Inc., Chicago Stock Exchange, Inc., Nasdaq Stock Market LLC, National Stock Exchange, New York Stock Exchange LLC, and NYSE Arca, Inc. *Whereas,* the undersigned national securities exchanges are parties to the plan submitted to the Securities and Exchange Commission (the “SEC”) for the purpose of creating and operating an intermarket communications linkage pursuant to section 11A(a)(3)(B) of the Securities Exchange Act of 1934 (the “Act”). *Now, therefore,* in consideration of the premises and the mutual covenants and agreements contained herein, the parties agree to submit this Agreement called the NMS Linkage Plan to the SEC for approval pursuant to section 11A(a)(3)(B) of the Act and Rule 608 thereunder. Definitions
(1)“Application” means any use of the System to facilitate trades between Participant Markets that is described in the NMS Linkage Plan.
(2)“CTA Plan” means the plan filed with the SEC pursuant to SEC Rule 17a-15 (subsequently amended and redesignated as Rule 11Aa3-1, and subsequently amended and redesignated as Rule 601), approved by the SEC and declared effective as of May 17, 1974, as from time to time amended.
(3)“CTA Plan Processor” means the organization serving as recipient and processor of last sale prices under the CTA Plan.
(4)“Eligible Security” has the meaning assigned to that term in the CTA Plan.
(5)“NMS Linkage Plan” or “Linkage Plan” means the plan amended and restated in this instrument as from time to time amended in accordance with the provisions hereof.
(6)“NMS Linkage System” (“Linkage” or “Linkage System”) means the system described in section 5.
(7)“Network A Eligible Security” has the meaning assigned to that term in the CTA Plan.
(8)“Network B Eligible Security” has the meaning assigned to that term in the CTA Plan.
(9)“Participant” means a party to the Linkage Plan with respect to which such plan has become effective pursuant to section 13.
(10)“Participant('s) Market” means each Exchange Market.
(11)“System” means the data processing hardware, software and communications network that links electronically the Participant Markets to one another. The System includes
(a)computers that perform such functions as message validation, processing, logging and switching and
(b)from a functional standpoint,
(i)high speed communications lines that link such computers with the Participant Markets (either directly or through Participant Switches), and
(ii)Linkage System stations.
(12)“System security (stock)” means a security (stock) selected for trading through the Applications in accordance with section 5(b)(ii).
(13)“System trade” means any trade made through any Application. 2. Purpose of Linkage Plan The purpose of the Linkage Plan is to enable the Participants to act jointly in planning, developing, operating and regulating the system as described in the Linkage Plan so as to further the objectives of Congress as set forth in section 11A(a) of the Act and to facilitate compliance by the Participants and their respective members with SEC Rules 610 and 611. 3. Parties
(a)*List of Parties.* The parties to the Linkage Plan are as follows: American Stock Exchange LLC (“AMEX”), registered as a national securities exchange under the Act and having its principal place of business at 86 Trinity Place, New York, New York 10006. Boston Stock Exchange, Inc. (“BSE”), registered as a national securities exchange under the Act and having its principal place of business at as 100 Franklin Street, Boston, Massachusetts 02110. Chicago Board Options Exchange, Inc. (“CBOE”), registered as a national securities exchange under the Act and having its principal place of business at 400 South LaSalle Street, Chicago, Illinois 60605. Chicago Stock Exchange, Inc. (“CHX”), registered as a national securities exchange under the Act and having its principal place of business at One Financial Place, 440 South LaSalle Street, Chicago, Illinois 60605. Nasdaq Stock Market LLC (“Nasdaq”), registered as a national securities exchange under the Act and having its principal place of business at 1 Liberty Plaza, 165 Broadway, New York, NY 10006. National Stock Exchange (“NSX”), registered as a national securities exchange under the Act and having its principal place of business at 440 South LaSalle Street, Suite 2600, Chicago, Illinois 60605. New York Stock Exchange LLC (“NYSE”), registered as a national securities exchange under the Act and having its principal place of business at 11 Wall Street, New York, New York 10005. NYSE Arca , Inc. (“Arca”), registered as a national securities exchange under the Act and having its principal place of business at 100 S. Wacker Drive, Chicago, IL 60606.
(b)*Compliance Undertaking.* By subscribing to and submitting the Linkage Plan for filing with the SEC, each undersigned party agrees to comply to the best of its ability and, absent reasonable justification or excuse, to enforce compliance by its members in their use of the Linkage through its facilities with the provisions of the Linkage Plan.
(c)*New Participants.* The Participants agree that any other national securities exchange or national securities association may subscribe to the Linkage Plan and become a Participant by agreeing, in an amendment to the Linkage Plan adopted in accordance with its provisions, to comply and to enforce compliance with the provisions of the Linkage Plan as provided in section 3(b). 4. Administration of Linkage Plan
(a)*Supervisory Committee: Composition, Voting.* Each Participant shall select from its staff one individual to represent such Participant as a member of the Supervisory Committee under the Linkage Plan. Except as may be specifically otherwise provided herein, action taken pursuant to the vote of a majority of the members of the Supervisory Committee present at a meeting of the committee at which a majority of the full committee is present shall be deemed to be the action of the Supervisory Committee.
(b)*Supervisory Committee: Authority.* The Supervisory Committee shall not be a policy-making or a rule-making body, but shall, either directly or by delegating its functions to individuals, subcommittees established by it from time to time or others,
(i)oversee development of the System in accordance with the specifications therefore agreed upon by each Participant,
(ii)monitor the operation of the System and
(iii)advise the Participants with respect to any deficiencies, problems or recommendations as the Supervisory Committee may deem appropriate in its administration of the Linkage Plan. In this connection, the Supervisory Committee shall have authority to develop procedures and make administrative decisions necessary to facilitate the operation of the System in accordance with the provisions of the Linkage Plan.
(c)*Amendments to Linkage Plan.* Any proposed change in, addition to, or deletion from the Linkage Plan may be effected only by means of a written amendment to the Linkage Plan which sets forth the change, addition or deletion, is executed on behalf of each Participant and is approved by the SEC or otherwise becomes effective pursuant to section 11A of the Act and Rule 608(b).
(d)*Participant's Rights.* No action or inaction by the Supervisory Committee shall prejudice any Participant's right to present its views to the SEC or any other person with respect to any matter relating to the System or to seek to enforce its views in any other forum it deems appropriate. 5. The System
(a)*System Monitoring.*
(i)*Linkage Supervisory Stations.* Each Participant will maintain a Linkage supervisory station where supervisors appointed by such Participant will be able to coordinate trade adjustments.
(ii)*Linkage Control Center.* The System also includes the Linkage control center (“LCC”), which monitors and controls communications within the System, including the processing of error conditions. The LCC staff is able to display and, when authorized by any Participant, to modify the security and market records of that Participant's Market as such records relate to the System. The LCC staff is also able to indicate whether or not any Participant Market is open for System trades. In addition, the LCC may be used as “back-up” for the Linkage supervisory system-wide broadcasts. Finally, the LCC staff is able to enter adjustments of any trade pursuant to the procedures specified in section 6(a)(iv) and to perform data base control after trading hours.
(b)*General Operation.*
(i)*Registered Clearing Corporations.* The System accommodates only regular way trading, and all System trades must be compared, cleared and settled through clearing corporations registered with the SEC that maintain facilities through which such transactions may be compared and settled and that agree to supply each Participant with data reasonably requested in order to permit such Participant to enforce compliance by its members with its rules, the provisions of the Act, the rules and regulations thereunder, and the Linkage Plan.
(ii)*Selection of System Securities.* The System is designed to accommodate trading in any Eligible Security. The particular securities that may be traded through the System at any time (“System securities”) shall be selected by the Supervisory Committee. The Supervisory Committee may add or delete System securities as it deems appropriate and may delay the commencement of trading in any Eligible Security if capacity or other operational considerations shall require such delay.
(c)*Administrative Messages.* Administrative messages, as distinguished from orders, responses thereto and trade adjustment inputs (including names later information), may also be sent through the System. There are two categories of administrative messages that can be sent by Participant members: Single destination and security broadcast. Another category of administrative message, a “system-wide broadcast”, may be sent through the System only from the Linkage control center.
(d)*Facilities Manager.* The Securities Industry Automation Corporation (“SIAC”) serves as the System's facilities manager and has responsibility for the operation and maintenance of the System. SIAC performs its function as facilities manager in accordance with the provisions of the Linkage Plan and subject to the administrative oversight of the Supervisory Committee. 6. Linkage System
(a)*Technical Matters.*
(i)The System shall accept immediate or cancel (“IOC”) orders, provided however, that, upon the request of a Participant or Participants, and in accordance with Section 10(a)(iii)(A) relating to New Development Costs Sharing, the System shall accommodate additional order types to be utilized by such Participant or Participants. Orders must be sent to a Participant market through the auspices of a member of that Participant, known as a Sponsoring Member. Each market will maintain within SIAC a database of default Sponsoring Members (not to exceed 10) for after hours processing and billing for orders sent to a market where the originating firm is not a member of the destination market.
(ii)*Order Information.* An order shall, at a minimum, specify the following:
(A)The member of the destination market (either clearing member or Sponsoring Member); 8 8 The member of the destination market will be identified by a unique clearing number. If the clearing number provided by the originating Participant Market does not identify a member of the destination market, SIAC will identify the default Sponsoring Member of the originating market at the destination market for the security in question and that Sponsoring Member's identification information will be included on the order to the destination market on all reports sent to the destination market, including any report for billing purposes. The member identified on the order will be responsible for any fees in the destination market. SIAC will provide to Participants a key to match the clearing number to the member's name.
(B)Original Clearing member or Omnibus clearing account of the originating Participant Market, commonly referred to as the Give-Up,
(C)The receiving Participant Market,
(D)The security that is the subject of the order,
(E)Designation of the order as an order to buy or to sell,
(F)The amount of the security to be bought or sold, which amount shall be for one unit of trading or any multiple thereof,
(G)A price equal to the offer or bid price then being furnished by the destination Participant Market, which price shall represent the price at or below which the security is to be bought or the price at or above which the security is to be sold, respectively,
(H)To facilitate application of the short sale rule in effect in the destination Participant Market, a designation of the order as “short” or “short exempt” whenever it is a order to sell short, and
(I)Time in force as 5, 15 or 120 seconds. 9 9 A Participant Market may prevent the execution, through its facilities, of an otherwise marketable System order, prior to the 5, 15 or 120 second time in force parameter assigned to that order, if the time in force parameter would result in the issuance of an expiration notice to the sending market before execution of such order could be reported to SIAC. Any such procedure must be effective pursuant to a filing with the SEC. No order with a time in force parameter of 5 or 15 seconds shall be sent to AMEX, CBOE or CHX prior to the earlier of
(i)the date on which all automated trading centers intending to qualify their quotations for trade-through protection under Rule 611 of Regulation NMS must have achieved full operation of Regulation NMS-compliant trading systems or
(ii)the date on which AMEX, CBOE or CHX, as the case may be, has notified the Supervisory Committee in writing that it is capable of accepting and executing such orders. If an order with either of these time in force parameters is sent to AMEX, CBOE or CHX prior to such time, it will not be executed due to system limitations.
(iii)*Order Validation, Routing.* At the time of transmission, each order undergoes validation procedures. If the order passes the validation procedures, the System assigns a unique order identifier number (a “OID”) to the order, time stamps it and logs it on a mass storage device (the “daily log”). The System also sends a transmission acceptance message to the Participant Market that originated the order. The order is then routed to the destination Participant Market. If the order is accepted, in whole or in part, in the destination Participant Market, the execution is reported back through the System to the originating and receiving Participant Markets. The System rejects the transmission of a response that fails the validation check and sends an appropriate error message to the Participant Market that originated the response. The validation of a response causes the System to retrieve the related order from the daily log and update it with appropriate response information. This log forms the basis from which the after-hours reports described in section 7(a) are produced. Validation also causes the System to send a transmission acceptance message to the Participant Market that originated the response. The System then sends the response to the Participant Market that originated the order. When an order is only partially executed, the unexecuted shares are not filled, and the System generates a cancellation for the unexecuted quantity and appends the cancellation to the execution report that it sends to the Participant Market that originated the order.
(iv)*Trade Adjustments.* In accordance with section 5(a)(ii), supervisors monitoring the Participant Markets may request the LCC to enter adjustments to trades ( *i.e.* , to price, share size, buy or sell side, to cancel a trade or to insert a trade “as-of” a prior day). The following sets forth the procedures to facilitate trade adjustments and to authorize the LCC to make such adjustments. All requests among Participants and to the LCC for trade adjustments shall be in the form of administrative messages sent through the System. For the purposes of this section 6(a)(vi), administrative messages sent or received among Participant Markets, or sent to the LCC, shall be deemed to have been issued by supervisors of Participant Markets authorized by such Participant Markets to issue such administrative messages.
(A)*Adjustments on Trade Day.* The LCC shall make an adjustment to a trade entered into that same day based upon an administrative message request made from a supervisor of the Participant Market that received and executed the order (“executing market supervisor”). Such request shall not be made to the LCC unless an executing market supervisor has received from a supervisor in the Participant Market that issued the order (“issuing market supervisor”), in the form of an administrative message sent through the System, agreement as to the terms of, and authorization to make, the adjustment. The administrative message request to the LCC by the executing market supervisor shall specify the terms of, and authorization to the LCC to make, the adjustment. In the event that, notwithstanding the provisions of the prior paragraph, an executing market supervisor requests the LCC to make a trade adjustment without having received an administrative message from an issuing market supervisor, and the LCC has made such requested adjustment, then the LCC shall, at the request and direction of an issuing market supervisor, made prior to the settlement for such trade, readjust such trade to its terms as they existed prior to such adjustment.
(B)*Adjustments for Prior Trade Day.* Except as provided in the preceding paragraph, the LCC shall make an adjustment to a trade entered into on a prior day only upon administrative message requests made from both executing and issuing market supervisors, each message specifying the same terms of, and authorization to the LCC to make, the adjustment.
(C)The provisions of paragraphs
(A)and
(B)of this section 6(a)(iv) shall not restrict the ability of any Participant Market to unilaterally request the LCC to end adjustments to trades or to cancel or adjust any System trade executed in its market pursuant to its rules pertaining to clearly erroneous transactions or obvious errors, and system malfunctions. The sending market may invoke any appellate or review process provided by such rules on behalf of the Sponsoring Member. In the event of any cancellation or adjustment, the executing market shall notify the LCC and all affected Participants by administrative message specifying the terms of the cancellation or adjustment and authorizing the LCC to make the adjustments or cancel the trades.
(D)*LCC Confirmation.* The LCC shall, after making a trade adjustment, send an administrative message to both the executing and sending market supervisors confirming that the adjustment has been made and specifying the terms of the adjustment.
(v)*Intermarket Sweep Orders.* All routed limit orders shall be presumed by the executing market to be orders sent pursuant to the intermarket sweep order exception in SEC Rule 611(b).
(vi)*Other.* Each Participant shall also determine how orders received in the market for which it has responsibility are to be handled therein and agrees that any procedures it may adopt in this regard shall be consistent with the provisions of the Linkage Plan and the efficient operation of the System. Participants are required to execute orders at a minimum at the size of their displayed quotes. Each Participant shall insure that no communication shall be entered into the System from its market except
(A)on behalf of a member of such Participant who is permitted by the Linkage Plan and such Participant's rules to use the System with respect to the security or securities that are the subject of the communication or
(B)by employees of such Participant in performance of such Participant's obligations under the Linkage Plan.
(b)*Participant Trading Rules.* The trading rules applicable in destination Participant Markets shall apply to orders received in such market and executions of orders therein. Each Participant shall determine the extent to which its trading rules shall apply to members within its market insofar as such members' issuance of orders from such market and resulting executions are concerned. 7. Comparison and Settlement Comparison of a side of a System trade furnished by a Participant shall be the responsibility of such Participant.
(a)*After Hours Functions.* The functions of the System after the close of trading in all Participant Markets shall consist of the following:
(i)The System's daily log of messages will be put on tape for retention;
(ii)The System will generate four reports:
(A)An order/response report that will match orders to trade with the appropriate responses,
(B)An order/cancellation report that will list all orders to trade that were canceled,
(C)A trade adjustment report that will list all adjustments made to previously executed System trades, and
(D)A traffic summary report that will indicate the number of orders to trade, the number of responses and the number of administrative messages entered from each Participant Market during the trading day; and
(iii)The System will generate the clearing tape referred to in section 7(b).
(b)*Clearing Tape.* At the end of each trading day, the System generates a clearing tape as part of after-hours processing. This tape is in OID sequence, includes all of the day's System trades, and shows:
(i)The OID,
(ii)The originating Participant and clearing member(s), or the clearing corporation(s) through which such clearing member(s) shall settle the trade,
(iii)The destination Participant and destination clearing member(s), or the clearing corporation(s) through which such clearing member(s) shall settle the trade,
(iv)The type of trade action (buy or sell),
(v)The security symbol,
(vi)The executed quantity and price, and
(vii)The date and time of trade. Adjustments to any System trade made by agreement between both sides of the trade are included in the tape and shown as a separate “trade adjustment record”. If a trade has been adjusted, the original trade record is followed by trade adjustment record(s). The trade adjustment record(s) carry the same OID as the original trade record. There are two types of trade adjustments, System trade cancellations and System trade changes. For System trade cancellations, the adjustment record negates the original trade record. For example, a cancellation of a trade to buy is reflected on the adjustment record as a “negative buy”. For System trade changes, there are two adjustment records. The first adjustment record negates the original trade record. The second adjustment record logs the trade data as adjusted for, *e.g.* , a change in action, security, quantity and/or price. The adjustment records are generated from the trade adjustment file that is created during trading hours and from inputs from the Linkage control center pursuant to requests from the Participants' supervisors.
(c)*Comparison of System Trades.* The contra side of each System trade ultimately is the clearing interface account used to identify the clearing corporation through which the comparison of such side is completed. If both sides of a System trade are to settle through the same clearing corporation, the clearing corporation may, at its option, either book each side against the clearing member responsible for that side or offset each side against an internal omnibus account (in which case the omnibus account will net to zero). While sorting and format changes may be required, the various clearing corporations are able to use the System clearing tape as the basic input to their trade comparison operations. The clearing member(s) responsible for an Exchange-supplied side of a System trade shall follow routine comparison procedures. In instances where an uncompared transaction cannot be resolved through routine procedures, the Exchange-supplied side(s) of the trade discrepancy will be handled in accordance with the rules of the Participant(s) and clearing corporation(s) involved. Once comparison has been completed, clearance and settlement can proceed in a routine manner. System trades are processed with all other transactions through established clearing interfaces.
(d)*Participant Settlement Obligations.* The rules of each Participant shall be designed to assure that if a System trade reported on the clearing tape (as adjusted) at the close of any trading day, as such trade relates to such Participant, cannot be compared notwithstanding the use of routine comparison procedures, such Participant shall on the scheduled settlement date honor such uncompared trade; provided, however, that, if such a System trade as it relates to such Participant is rejected or excluded from the settlement operation conducted by the clearing corporation to which it was reported for settlement either because of the insolvency of the member(s) for whose account(s) it was to be settled or for any other reason (other than failure to compare), such Participant shall not be obligated to honor such trade and such trade shall be returned to such member(s). In the event that a System trade as it relates to any Participant is rejected or excluded from the settlement operation conducted by the clearing corporation to which it was reported for settlement for any reason other than failure to compare, neither the Participant from whose market the side of the trade that is rejected or excluded was supplied, the Participant from whose market the contra side of such trade was supplied nor any clearing corporation to which either side of the trade was submitted shall be obligated to honor the trade. Instead, the member(s) constituting the contra side of the rejected or excluded trade (the “contra party”) shall, without unnecessary delay after receipt of notice of such rejection or exclusion, close out such trade in the best available market, except insofar as the rules of the clearing corporation to which the contra side was submitted or of the Participant from whose market the contra side was supplied are applicable and provide an alternative method for closing. The rules of each Participant shall state the foregoing closing obligations of the contra party. 8. Pre-Opening Price Information The NYSE and AMEX will disseminate, through the System, pre-opening price information whenever a member in that Participant market, in arranging an opening transaction in his or her market in a System security, anticipates that the opening transaction will be at a price that represents a change from the “previous day's consolidated closing price” of more than the “applicable price change.” The “previous day's consolidated closing price” is the last price at which a transaction in the security was reported by the CTA Plan Processor on the last previous day on which transactions in the security were reported by the CTA Plan Processor. The “applicable price changes” are: 10 If the previous day's consolidated closing price of a Network A Eligible Security exceeded $100 and the security does not underlie an individual stock option contract listed and currently trading on a national securities exchange, the “applicable price change” is one dollar. 11 If the previous day's consolidated closing price of a Network B Eligible Security exceeded $75 and the security is not a Portfolio Depositary Receipt, Index Fund Share, or Trust Issued Receipt, or does not underlie an individual stock option contract listed and currently trading on a national securities exchange, the “applicable price change” is one dollar. Security Consolidated closing price Applicable price change ($) (more than) Network A Under $15 0.10 $15 or over 10 0.25 Network B Under $5 0.10 $5 or over 11 0.25 Prior to the opening of trading in a System security for which the NYSE or AMEX has disseminated pre-opening price information, orders in that security shall be sent to that Participant through the Participant's order delivery system and not the NMS Linkage. 9. Operating Hours Regular trading hours are from 9:30 a.m. to 4 p.m. eastern time. The normal operating hours of the System are 9 a.m. to 6:30 p.m. eastern time or such other period as the Supervisory Committee, by affirmative vote of all its members, may specify. Any period outside the normal operating hours of the System is herein referred to as an “additional period”. The System shall be operable during any additional period requested in writing by any two or more Participants; provided that such Participants have agreed to pay all costs and expenses attributable to the operation of the System during such additional period as agreed to by those Participants. 10. Financial Matters
(a)*Costs.* The Participants shall share the “development costs” and “production costs”, in accordance with the provisions of this section 10(a).
(i)*Costs Definitions* .
(A)“Computer software” includes all programs or routines developed by or at the direction of the System's facilities manager (including such development in connection with the Intermarket Trading System) to cause computers to perform tasks required for any one or more Applications and the documentation required to describe and maintain those programs. Computer programs of all classes, for example, operating systems, execution systems, monitors, compilers and translators, assembly routines, and utility programs are included.
(B)“Development costs” mean all costs incurred by the System's facilities manager in developing and improving the computer software and installing hardware as necessary to facilitate System functionality (including any testing conducted in connection with the System).
(C)“Installing hardware as necessary” includes, but is not limited to, installation and maintenance of all installations and computer facilities required to support the System.
(D)“New Participant” means any national securities exchange or national securities association that becomes a Participant in accordance with section 3(c) after SEC approval of this Linkage Plan.
(E)“Production costs” mean all operating expenses associated with the operation of the System, including all costs and expenses (including appropriate overhead costs and all applicable taxes however designated, exclusive of net income taxes) of the System's facilities manager associated with, relating to, or resulting from its operation or maintenance of the System, but excluding any cost or expense associated with any Participant's self-regulatory function. Production costs also include the costs and expenses of the facilities manager:
(i)In maintaining “hot lines” that permit conversations among broker-dealers and staff in different Participant Markets and with the Systems control center; and
(ii)associated with reports rendered by a firm of independent accountants pursuant to paragraph (a)(vi) of this section 10.
(F)“Routed orders base” for any calendar quarter means the total number of orders sent through the System.
(G)“Share of the routed orders base” of any Participant as computed for any calendar quarter means a fraction, the numerator of which is the total number of orders sent through the System by that Participant during the calendar quarter and the denominator of which is the routed orders base for the calendar quarter.
(H)“Share of the transactions base” for a calendar quarter means:
(1)For any Participant other than AMEX or NYSE, a fraction, the numerator of which is the total number of transactions in Network A Eligible Securities that the Participant reports to the CTA Plan Processor during that quarter and the denominator of which is the quarter's transactions base;
(2)For AMEX, a fraction, the numerator of which is the number of transactions in “Top Ten Network B Eligible Securities” (as clause
(2)of section 10(a)(i)(I) defines that term) that AMEX reports to the CTA Plan Processor during that quarter and the denominator of which is the quarter's transactions base; and
(3)For NYSE, the fraction derived by subtracting from 1
(one)the sum of all other Participants' shares of the transaction base for the quarter.
(I)“Transactions base” for any calendar quarter means the sum of
(1)the number of transaction reports in Network A Eligible Securities that the CTA Plan Processor disseminates during the quarter and
(2)the number of transaction reports in the “Top Ten Network B Eligible Securities” that the CTA Plan Processor disseminates during the quarter. A quarter's “Top Ten Network B Eligible Securities” refers to the ten Network B Eligible securities for which the CTA Plan Processor disseminates the greatest number of transaction reports during that quarter.
(ii)*Dispute Costs Excluded.* The development costs and production costs shall not include any cost or expense incurred by any Participant as a result of or in connection with the defense of any claim, suit or proceeding against the Supervisory Committee or any one or more of the Participants relating to the Linkage Plan or the operation of the System. All such costs and expenses incurred by any Participant shall be borne by such Participant without contribution or reimbursement.
(iii)*Development Costs.*
(A)*New Development Costs Sharing.* Development costs shall not be incurred except as agreed to by all Participants. Each Participant shall pay a fraction equal to its share of the transactions base for the calendar quarter preceding the calendar quarter during which the Participants agree to incur such cost. Any development costs that are incurred for the benefit of less than all Participants shall be shared by the Participant or Participants that benefit therefrom as they shall mutually agree.
(B)*Development Costs Payment.* Development costs will be computed by the System's facilities manager as soon as practicable following the close of the calendar month or, if relatively small, the calendar quarter during which they were incurred. Each Participant's share shall be billed to, and payable by, such Participant promptly thereafter.
(C)*New Participant's Share of Development Costs.* At the time any national securities exchange or national securities association applies to become a new Participant, such applicant shall be charged by, and shall pay to, the System's facilities manager an amount estimated by the System's facilities manager to cover development costs to be incurred to accommodate such applicant's status as a Participant. Prior to the effective date of the SEC's approval of such Participant status, the applicant shall pay to the System's facility manager actual development costs in excess of estimated development costs, if any, or the System's facility manager shall reimburse to the applicant estimated development costs that were paid and that are in excess of actual development costs. Each new Participant shall share in development costs incurred after it becomes a Participant in accordance with section 10(a)(iii)(A).
(D)*Title to Software.* The entire right, title and interest in and to all “computer software” (as defined in section 10(a)(i)(A)) developed prior to July 1, 1978 shall be vested in the Participants who share the cost of such computer software as joint owners. The entire right, title and interest in and to all computer software developed after June 30, 1978 shall be vested in the Participant who pays the cost thereof. If more than one Participant shares in the cost of computer software developed after June 30, 1978, then the entire right, title and interest in and to such computer software, the cost of which is so shared, shall be vested in the Participants who share such cost as joint owners. The System's facilities manager shall use computer software solely for the purpose of performing tasks required for the Applications as provided in the Linkage Plan.
(iv)*Production Costs.*
(A)*Production Costs Sharing.* The production costs attributable to any calendar quarter shall be shared by the markets that were Participants during any portion of the calendar quarter. Each such Participant, except the NYSE, shall pay 50% of the fraction of such production costs equal to its share of the routed orders base as computed for the calendar quarter. Notwithstanding the foregoing, the aggregate dollar amount of all of a Participant's quarterly payments shall not exceed its “Production Costs Sharing Cap.” A Participant's “Production Costs Sharing Cap” means total production costs for calendar year 2005 multiplied by 50 percent of the Participant's percentage of the routed order base for the period commencing January 1, 2005, and ending July 31, 2005. The NYSE shall pay those production costs that this Paragraph does not require the other Participants to pay.
(B)*Production Costs Payment.* Production costs will be computed by the System's facilities manager as soon as practicable following the close of each calendar month. Each Participant's (or former Participant's) estimated share thereof shall be billed by the System's facilities manager and shall be payable to the System's facilities manager promptly following receipt. Any appropriate adjustment will be made between the System's facilities manager and each Participant promptly following the close of each calendar quarter.
(v)*Communications Connection Costs.* Each Participant shall bear 100% of the costs to provide communication connection from a Participant's facilities to the System's communications facilities maintained by the facilities manager.
(vi)*Accounts.* The System's facilities manager and the independent public accountants hereinafter referred to shall furnish any information and/or documentation reasonably requested in writing by a majority of the Participants in support of or relating to any of the computations referred to in this section 10(a). All expenses, allocations and computations referred to or required by this section 10(a) shall be reported at least annually to the Participants. For even numbered years, (or such other yearly interval as the Supervisory Committee, by affirmative vote of all its members, may specify), such reports shall be rendered by a firm of independent public accountants (which may be the firm regularly employed by the NYSE or the System's facilities manager), and such accountants shall render their opinion that such expenses, allocations and computations have been reported in accordance with the understanding among the Participants as set forth in this section 10(a). For those years when a firm of independent public accountants is not engaged to render a report, the facilities manager's internal auditor shall review all expenses, allocations and computations referred to or required by this section 10(a) and that internal auditor shall report that such expenses, allocations and computations have been reported in accordance with the understanding among the Participants as set forth in this section 10(a).
(b)*User Charges.* Each Participant shall be free to determine whether or not to impose a fee or charge on some or all of its members in connection with use of its facilities to access the System and, if so, the amount of such fee or charge. Any fee or charge that may be imposed by any Participant shall not be of such size, and shall not be so structured, as to discourage use of the System.
(c)*Facilities Manager Liability Limits.* The System's facilities manager shall not be liable to any Participant or to any member of any Participant using or having access to the System or to any other person for any loss or damage resulting from any non-performance, or interruption in the operation of the System, from any inaccuracies, errors or omissions in any of the information conveyed or received through the System, or from any delays or errors in the transmission of any such information, or for making trade adjustments. 11. Termination; Withdrawal The Linkage Plan will terminate on June 30, 2007. Participants that wish to extend the term may agree to do so, subject to filing with and approval by the SEC. During the term of the Plan a Participant may withdraw with 30 days notice if it continues to maintain connectivity to all other Participants and accept orders through the Linkage until June 30, 2007. A withdrawing Participant's right to send orders through the Linkage shall terminate on the date the withdrawal is effective. In addition, a withdrawing Participant's obligation to share development and production costs shall terminate on the date the withdrawal is effective, provided, however, that such Participant shall remain liable for, and shall pay upon demand, its portion of the costs of developing and operating the System and any other amounts payable by it as determined pursuant to sections 10 and 12 of the Linkage Plan. 12. System Inoperability
(a)*General.* In the event of a disaster that renders the System inoperable, the NYSE has authorized the facilities manager to utilize a designated NYSE operating system (the “NYSE System”) on a preemptive and priority basis to function as detailed in section (c)(i), below.
(b)*Participants' Implementation Obligations.*
(i)At any time the NYSE System assumes the functions of the System, all Plan provisions not inconsistent with this section 12, and Participant rules and policies governing use of the System will continue to apply.
(ii)Each Participant's cost of maintaining communications connectivity to the NYSE System shall be borne by that Participant.
(c)*NYSE Implementation Obligations.* In consideration of the fees to be paid to the NYSE as specified in paragraph
(d)of this section 12, the NYSE agrees:
(i)To have and to make available the NYSE System to assume the functions of the System on a preemptive and priority basis in the event of a disaster which renders the System inoperable. Such system is composed of computers and peripheral equipment sufficient to operate the System at a minimum of 50% of the System's rated 150 messages per second capacity and 75% of the System's disk capacity.
(ii)That the facilities manager is authorized to take the actions necessary to make the NYSE System available to assume the functions of the System within two hours in the event of a limited disaster and on the next day in the event of a full site disaster. The facilities manager is authorized to make the determinations that, in its good faith judgment, there has been a limited disaster or full site disaster, the System is inoperable, and the NYSE System will assume the functions of the System.
(iii)That the NYSE System will be located at a site remote from the site where the System is located.
(d)*Implementation Obligations of Participants Other than NYSE (“Other Participants”).*
(i)*Fees.* In consideration of the NYSE's making available the NYSE System to assume the functions of the System in the event of a disaster, the Other Participants agree to pay to the NYSE:
(A)A preemptive and priority reserve fee totaling $24,800 per calendar quarter (such reserve fee shall be adjusted each January by the same percentage change as in the Consumer Price Index as calculated by the U.S. Department of Commerce for the preceding calendar year); and
(B)a *per diem* fee, if in the event of a disaster the NYSE System assumes the functions of the System, for each day in excess of five consecutive trading days that the NYSE System is so utilized. Such *per diem* fee shall equal 1/250 of the yearly dollar amount the facilities manager charges the NYSE to operate the NYSE System. This subsection (d)(i) shall become effective on the date that the facilities manager confirms in writing to the Supervisory Committee that it has taken all actions necessary to make the NYSE System available to assume the functions of the System as specified in subsection
(c)of this section 12. If such effective date is other than the first day of the calendar quarter, then the preemptive and priority reserve fee for such calendar quarter shall be calculated pro rata based upon the number of days in such calendar quarter that the NYSE System is so available.
(ii)*Fee Sharing.* Each of the Other Participants agrees to pay a share of the preemptive and priority reserve and per diem fees based upon a proportional share of its production costs excluding the NYSE's share.
(iii)*Fee Payment.* Fee payment will be computed by the System's facilities manager as soon as practicable following the close of each calendar month. Each Other Participant's (or former Participant's) estimated share thereof shall be billed by the System's facilities manager and shall be payable to the System's facilities manager promptly following receipt. Any appropriate adjustment will be made between the System's facilities manager and each Other Participant promptly following the close of each calendar quarter. The facilities manager shall forward such payments to the NYSE as the NYSE may from time to time instruct the facilities manager.
(e)*Liability Limits.* Neither the NYSE nor the facilities manager shall be liable to any Participant, to any member of any Participant using or having access to the NYSE system, or to any other person for any loss or damage resulting from any non-performance or interruption in the operation of the NYSE System, from any inaccuracies, errors or omissions in any of the information conveyed or received through the NYSE System, or from any delays, omissions, or errors in the transmissions, or errors in the transmission of any such information.
(f)*Termination.*
(i)In the event that the NYSE determines to withdraw the NYSE System from use by the Linkage, it shall so notify the Supervisory Committee, in writing, a minimum of six months prior to such withdrawal.
(ii)In the event of such withdrawal, this section 12 shall be terminated and the Participants must then determine whether they should provide for alternative procedures in the event of System inoperability. 13. Effective Date The Linkage Plan shall become operative on October 1, 2006. 14. Counterparts The Linkage Plan may be executed in any number of counterparts, no one of which need contain all signatures of all Participants, and as many of such counterparts as shall together contain all such signatures shall constitute one and the same instrument. By American Stock Exchange LLC By Boston Stock Exchange, Inc. By Chicago Board Options Exchange, Inc. By Chicago Stock Exchange, Inc. By NASDAQ Stock Market LLC By National Stock Exchange By New York Stock Exchange LLC By NYSE Arca, Inc. By Philadelphia Stock Exchange, Inc. [FR Doc. E6-12638 Filed 8-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54249; File No. SR-NASDAQ-2006-017] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Technical and Conforming Changes to Nasdaq's 1000 Series Rules July 31, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on July 24, 2006, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by Nasdaq. 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 proposed rule change effective upon filing with the Commission. 5 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)(iii). 4 17 CFR 240.19b-4(f)(6). 5 Nasdaq requested the Commission to waive the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to conform the Rule 1000 Series of Nasdaq's rules to certain changes made to the Rule 1000 Series of the rules of the National Association of Securities Dealers, Inc. (“NASD”) since approval of Nasdaq's rules by the Commission in January 2006 and to correct certain errors in the approved rules. Nasdaq proposes to implement the proposed rule change immediately. The text of the proposed rule change is available on Nasdaq's Web site ( *http://www.complinet.com/nasdaq* ), at Nasdaq's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 is modifying its 1000 Series Rules, which are based to a substantial extent on comparable NASD Rules, to conform them to certain changes made to the Rule 1000 Series of the rules of NASD since approval of Nasdaq's rules by the Commission in January 2006 and to correct certain errors in the approved rules. Specifically, Nasdaq is: • Amending Nasdaq IM-1002-2 (currently erroneously designated as IM-1000-2), to conform it to recent changes to comparable NASD Interpretive Material. The rule allows associated persons to be placed on inactive status, thereby preserving their registration, while serving in the Armed Forces of the United States. In SR-NASD-2005-135, 6 NASD tolled the two-year licensing expiration provisions under its Rule 1000 Series for a person previously registered with a member who commences active military duty within two years after he or she has ceased to be registered with the member, and also tolled the expiration provisions for a person placed upon “inactive” status pursuant to the Interpretive Material, who while serving in the Armed Forces of the United States, ceases to be registered with a member. Nasdaq is proposing to adopt the same tolling provisions as the NASD. 6 Securities Exchange Act Release No. 53182 (January 26, 2006), 71 FR 5391 (February 1, 2006) (SR-NASD-2005-135). • Amending Nasdaq Rule 1013 to reflect changes to the names of the forms used by NASD to authorize access to its Web CRD system. 7 7 *See* Securities Exchange Act Release No. 53564 (March 29, 2006), 71 FR 16847 (April 4, 2006) (SR-NASD-2006-038). Web CRD is an NASD system used by NASD and other SROs for maintenance of registration information concerning broker-dealers and their associated persons. Nasdaq members are required to use Web CRD. SR-NASD-2006-038 also adopted a uniform form for registration of NASD members, Form NMA. Nasdaq is not at this time formally adopting Form NMA, because of differences between the requirements of Nasdaq Rule 1013 and the comparable NASD Rule 1013. Applicants for Nasdaq membership may, however, use Form NMA to enhance their understanding of those aspects of Nasdaq Rule 1013 that directly parallel requirements of NASD Rule 1013. • Correcting an error in the description of the requirements for registration as a Limited Representative—Equity Trader. The comparable NASD Rule requires an associated person of an NASD member engaged in trading “otherwise than on a securities exchange” to register as an equity trader and pass the applicable qualifications examination, known as the Series 55 exam. Because the trading systems of The Nasdaq Stock Market, Inc. had historically been the primary systems for trading otherwise than on an exchange, the exam has been focused largely on the use of those systems. Nasdaq Rule 1032(f) had likewise been intended to focus registration and examination requirements on traders using Nasdaq systems, but the words “otherwise than on a securities exchange” were deleted from the rule without an appropriate substitution. Accordingly, Nasdaq is amending the rule to require registration “with respect to transactions in equity, preferred or convertible debt securities *on Nasdaq.* ” Thus, if an associated person of a Nasdaq member is engaged in trading securities on a venue other than Nasdaq, the Nasdaq Rule would not require the trader to register under this category. • Amending Nasdaq Rules 1011, 1012, 1013, 1032, and 1140 and IM-1002-4 to correct typographical errors. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 8 in general, and with Section 6(b)(5) of the Act, 9 in particular, in that the proposal 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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposed rule change conforms the Rule 1000 Series of Nasdaq's rules to certain changes made to the Rule 1000 Series of NASD rules since approval of Nasdaq's rules by the Commission in January 2006 and corrects certain errors in the approved rules. 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(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 foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(6) thereunder 11 because the proposed rule change:
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b-4(f)(6) 13 thereunder. 10 15 U.S.C. 78s(b)(3)(A). 11 CFR 240.19b-4(f)(6). 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b-4(f)(6). Nasdaq has requested that the Commission waive the 30-day operative delay. 14 The Commission believes that the waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Waiver of the 30-day operative period will allow Nasdaq to implement these changes immediately so that they can be in place prior to the time Nasdaq begins to operate as a national securities exchange. Accordingly, the Commission designates the proposal to be effective and operative upon filing with the Commission. 15 14 17 CFR 240.19b-4(f)(6)(iii). 15 For the purposes only of waiving the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change 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 NASDAQ-2006-017 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-NASDAQ-2006-017. 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 20549-1090. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2006-017 and should be submitted on or before August 25, 2006. 16 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 Jill M. Peterson, Assistant Secretary. [FR Doc. E6-12612 Filed 8-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54252; File No. SR-NASDAQ-2006-022] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding Technical and Conforming Changes to Nasdaq's 6000, 9000, and 11000 Series Rules July 31, 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 July 28, 2006, The NASDAQ Stock Market LLC (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by Nasdaq. Nasdaq has designated the proposed rule change as constituting a “non-controversial” rule change under Rule 19b-4(f)(6) under the Act, 3 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of Terms of the Substance of the Proposed Rule Change Nasdaq proposes to conform the Rule 6000, 9000, and 11000 Series of Nasdaq's rules to certain changes made to the corresponding rule series of the rules of the National Association of Securities Dealers, Inc. (“NASD”) since approval of Nasdaq's rules by the Commission in January 2006 and to correct certain errors in the approved rules. Nasdaq proposes to implement the proposed rule change immediately. The text of the proposed rule change is available on Nasdaq's Web site ( *http://www.nasdaq.com* ), at Nasdaq's principal office and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 is modifying its 6000, 9000 and 11000 Series Rules to conform them to certain changes made to the corresponding NASD rule series since approval of Nasdaq's rules by the Commission in January 2006 and to correct certain errors in the approved rules. Specifically, Nasdaq is: • Amending Nasdaq Rule 6951 to reflect the effectiveness of a change to the definition of “Reporting Member.” • Adding Nasdaq Rule 6958 to provide exemptive authority comparable to the authority provided to NASD by NASD Rule 6958. 4 4 Securities Exchange Act Release Nos. 53819 (May 17, 2006), 71 FR 29697 (May 23, 2006) (SR-NASD-2006-052); and 53580 (March 30, 2006), 71 FR 17529 (April 4, 2006) (SR-NASD-2006-040). • Amending Nasdaq Rule 9120 to reflect the deletion, effective August 28, 2006, of the Nasdaq Rule 5000 Series and to eliminate an erroneous reference to the Nasdaq Rule 7000 Series. 5 5 Securities Exchange Act Release No. 54155 (July 14, 2006), 71 FR 41291 (July 20, 2006) (SR-NASDAQ-2006-001). • Amending Nasdaq IM-11810 in accordance with changes to NASD IM-11810 made by SR-NASD-2005-087. 6 6 Securities Exchange Act Release No. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) (SR-NASD-2005-087). • Amending Nasdaq Rule 11890 to reflect changes made to NASD Rule 11890 by SR-NASD-2006-033. 7 7 Securities Exchange Act Release No. 53541 (March 22, 2006), 71 FR 15792 (March 29, 2006) (SR-NASD-2006-033). • Amending Nasdaq Rules 6250, 6800, 6954, 9110, 11310, and 11840 and Nasdaq IM-9216 and IM-11110 to correct typographical errors. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 8 in general, and with Section 6(b)(5) of the Act, 9 in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(5). Nasdaq believes that the proposed rule change conforms the Nasdaq Rules 6000, 9000, and 11000 Series of Nasdaq's rules to certain changes made to the corresponding rule series of the rules of NASD since approval of Nasdaq's rules by the Commission in January 2006 and corrects certain errors in the approved rules. 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 Nasdaq has designated the foregoing rule change as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(6) thereunder 11 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 if consistent with the protection of investors and the public interest. 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). Nasdaq has requested that the Commission waive the 30-day pre-operative period requirement for “non-controversial” proposals, based upon a representation that such waiver will allow Nasdaq to implement the rule changes, which have either recently been made effective as changes to NASD rules or are technical in nature, prior to the time when Nasdaq begins to operate as a national securities exchange. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Waiver of the 30-day operative period will allow Nasdaq to implement these changes immediately so that they can be in place prior to the time Nasdaq begins to operate as a national securities exchange. Accordingly, the Commission has determined to waive the operative delay, and the proposed rule change has become effective upon filing with the Commission. 12 12 For purposes only of waiving the operative date of this proposal, he Commission has considered the proposed rule's impact on efficiency, competition and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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-NASDAQ-2006-022 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-NASDAQ-2006-022. 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 the Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2006-022 and should be submitted on or before August 25, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E6-12613 Filed 8-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54231; File No. SR-NYSEArca-2006-19] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Trading of the Index-Linked Securities of Barclays Bank PLC Linked to the Performance of the GSCI® Total Return Index Pursuant to Unlisted Trading Privileges July 27, 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 16, 2006, NYSE Arca, Inc. (“Exchange”), through its wholly owned subsidiary NYSE Arca Equities, Inc. (“NYSE Arca Equities” or “Corporation”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. On July 20, 2006, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice and order to solicit comments on the proposed rule change from interested persons and is approving the proposal, as amended, on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange clarified certain aspects of its proposal regarding trading rules and surveillance. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Through NYSE Arca Equities, the Exchange proposes to amend its rules governing NYSE Arca, L.L.C. (also referred to as the “NYSE Arca Marketplace”), the equities trading facility of NYSE Arca Equities. Pursuant to NYSE Arca Equities Rule 5.2(j)(6), the Exchange proposes to trade pursuant to unlisted trading privileges (“UTP”) the Index-Linked Securities (“Securities”) of Barclays Bank PLC (“Barclays”), which are linked to the performance of the GSCI® Total Return Index (“Index”). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Pursuant to NYSE Arca Equities Rule 5.2(j)(6), the Exchange proposes to trade pursuant to UTP the Securities of Barclays, which are linked to the performance of the Index. Barclays intends to issue the Securities under the name “iPath SM Exchange-Traded Notes.” A rule proposal for the original listing and trading of the Securities was filed with the Commission by the New York Stock Exchange LLC (“NYSE”) 4 and approved by the Commission. 5 In SR-NYSEArca-2006-17, the Exchange proposed new Commentary .01 to NYSE Arca Equities Rule 5.2(j)(6) to accommodate trading in the Securities. 6 4 *See* Securities Exchange Act Release No. 53658 (April 14, 2006), 71 FR 21064 (April 24, 2006) (SR-NYSE-2006-20) (the “NYSE Proposal”). 5 *See* Securities Exchange Act Release No. 53849 (May 22, 2006), 71 FR 30706 (May 30, 2006) (SR-NYSE-2006-20) (the “NYSE Order”). 6 *See* Securities Exchange Act Release No. 54189 (July 21, 2006) (SR-NYSEArca-2006-17).
(a)*The Securities and the Index*
(i)*The Securities* In August 2005, the Commission approved NYSE Arca Equities Rule 5.2(j)(6), which provides general standards for the listing and trading of “Index-Linked Securities.” 7 Index-Linked Securities are securities that provide for the payment at maturity of a cash amount based on the performance of an underlying index or indexes. Such securities may or may not provide for the repayment of the original principal investment amount. As permitted in NYSE Arca Equities Rule 5.2(j)(6), the Exchange is submitting this rule proposal to the Commission pursuant to Section 19(b)(2) of the Act, to obtain Commission approval to trade the Securities pursuant to UTP. 7 *See* Securities Exchange Act Release No. 52204 (August 3, 2005), 70 FR 46559 (August 10, 2005) (SR-PCX-2005-63). A description of the Securities and the Index is set forth in the NYSE Proposal. 8 The Securities are a series of medium-term debt securities of Barclays that provide for a cash payment at maturity or upon earlier exchange at the holder's option, based on the performance of the Index subject to the adjustments described below. 8 *See supra* note 4. The Securities will not have a minimum principal amount that will be repaid and, accordingly, payment on the Securities prior to or at maturity may be less than the original issue price of the Securities. In fact, the value of the Index must increase for the investor to receive at least the $50 principal amount per Security at maturity or upon exchange or redemption. If the value of the Index decreases or does not increase sufficiently to offset the investor fee, 9 the investor will receive less, and possibly significantly less, than the $50 principal amount per Security. In addition, holders of the Securities will not receive any interest payments from the Securities. The Securities will have a term of 30 years. 9 The investor fee is equal to 0.75% per year times the principal amount of a holder's Securities times the index factor, calculated on a daily basis in the following manner. The investor fee on the date of issuance of the Securities will equal zero. On each subsequent calendar day until maturity or early redemption, the investor fee will increase by an amount equal to 0.75% times the principal amount of a holder's Securities times the index factor on that day (or, if such day is not a trading day, the index factor on the immediately preceding trading day) divided by 365. The investor fee is the only fee holders will be charged in connection with their ownership of the Securities. Holders who have not previously redeemed their Securities will receive a cash payment at maturity equal to the principal amount of their Securities times the index factor 10 on the Final Valuation Date 11 minus the investor fee on the Final Valuation Date. 10 The “index factor” on any given day will be equal to the closing value of the Index on that day divided by the initial index level. The index factor on the Final Valuation Date will be equal to the final index level divided by the initial index level. The “initial index level” is the closing value of the Index on the date of issuance of the Securities (the “Trade Date”) and the “final index level” is the closing value of the Index on the Final Valuation Date. Telephone conference between John Carey, Assistant General Counsel, NYSE Group, Inc., and Florence Harmon, Senior Special Counsel, Division, Commission, on July 14, 2006. 11 The “Final Valuation Date” is the last Thursday before maturity of the Securities. Prior to maturity, holders may, subject to certain restrictions, 12 redeem their Securities on any Redemption Date 13 during the term of the Securities provided that they present at least 50,000 Securities for redemption, or they act through a broker or other financial intermediaries (such as a bank or other financial institution not required to register as a broker-dealer to engage in securities transactions) that are willing to bundle their Securities for redemption with other investors' Securities. If a holder chooses to redeem such holder's Securities, the holder will receive a cash payment on the applicable Redemption Date equal to the principal amount of such holder's Securities times the index factor on the applicable Valuation Date minus the investor fee on the applicable Valuation Date. To redeem their Securities, holders must instruct their broker or other person through whom they hold their Securities to follow certain procedures as described in the NYSE Proposal. 14 12 Telephone conference between John Carey, Assistant General Counsel, NYSE Group, Inc., and Florence Harmon, Senior Special Counsel, Division of Market Regulation (“Division”), Commission, on July 13, 2006. 13 A “Redemption Date” is the third business day following a Valuation Date (other than the Final Valuation Date). A “Valuation Date” is each Thursday from the first Thursday after issuance of the Securities until the last Thursday before the Final Valuation Date inclusive (or, if such date is not a trading day, the next succeeding trading day). 14 If holders elect to redeem their Securities, Barclays may request that Barclays Capital Inc. (a broker-dealer) purchase the Securities for the cash amount that would otherwise have been payable by Barclays upon redemption. In this case, Barclays will remain obligated to redeem the Securities if Barclays Capital Inc. fails to purchase the Securities. Any Securities purchased by Barclays Capital Inc. may remain outstanding. If an event of default occurs and the maturity of the Securities is accelerated, Barclays will pay the default amount in respect of the principal of the Securities at maturity. More information regarding default procedures, including a quotation period and an objection period, is set forth in the NYSE Proposal.
(ii)*The Index* The Index was established in May 1991 and is designed to be a diversified benchmark for physical commodities as an asset class. The Index reflects the excess returns that are potentially available through an unleveraged investment in the contracts comprising the GSCI® plus the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts. 15 The value of the Index, on any given day, reflects:
(i)The price levels of the contracts included in the GSCI® (which represents the value of the GSCI®;
(ii)the “contract daily return,” which is the percentage change in the total dollar weight of the GSCI® from the previous day to the current day; and
(iii)the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts. 15 The Treasury Bill rate of interest used for purposes of calculating the index on any day is the 91-day auction high rate for U.S. Treasury Bills, as reported on Telerate page 56, or any successor page, on the most recent of the weekly auction dates prior to such day. The GSCI,® upon which the Index is based, is a proprietary index on a production-weighted basket of futures contracts on physical commodities traded on trading facilities in major industrialized countries. The value of the GSCI® has been normalized such that its hypothetical level on January 2, 1970 was 100. Futures contracts on the GSCI®, and options on such futures contracts, are currently listed for trading on the Chicago Mercantile Exchange. More information regarding the operation, calculation methodology, weighting, and historical performance of the Index is set forth in the NYSE Proposal.
(b)*Dissemination and Availability of Information*
(i)*The Intraday Indicative Value* According to the NYSE Proposal, an “Intraday Indicative Value” (or “IIV”) meant to approximate the intrinsic economic value of the Securities will be calculated and published via the facilities of the Consolidated Tape Association (“CTA”) at least every 15 seconds from 9:30 a.m. to 4 p.m. Eastern Time (“ET”) on each day on which the Securities are traded on the NYSE. 16 Additionally, Barclays or an affiliate will calculate and publish the closing IIV of the Securities on each trading day at *http://www.ipathetn.com.* In connection with the Securities, the term “IIV” refers to the value at a given time determined based on the following equation: IIV = Principal Amount per Unit ($50) multiplied by (Current Index Level divided by Initial Index Level) 17 minus Current Investor Fee. 18 16 The IIV calculation will be provided for reference purposes only. 17 The Current Index Level is the most recent published level of the Index as reported by the Index Sponsor, whereas the Initial Index Level is the Index level on the initial trade date for the Securities. 18 The Current Investor Fee is the most recent daily calculation of the investor fee with respect to the Securities, determined as described above (which, during any trading day, will be the investor fee determined on the preceding calendar day). The IIV will not reflect price changes to the price of an underlying commodity between the close of trading of the futures contract at the relevant futures exchange and 4 p.m. ET. The value of the Securities may accordingly be influenced by non-concurrent trading hours between the Exchange and the various futures exchanges on which the futures contracts based on the Index commodities are traded. While the market for futures trading for each of the Index commodities is open, the IIV can be expected to closely approximate the redemption value of the Securities. However, during NYSE Arca Marketplace trading hours when the futures contracts have ceased trading, spreads and resulting premiums or discounts may widen, and therefore, increase the difference between the price of the Securities and their redemption value. The IIV should not be viewed as a real-time update of the redemption value.
(ii)*The Index* According to the NYSE Proposal, the Index Sponsor makes the official calculations of the GSCI®. At present, this calculation is performed continuously and is reported on Reuters page GSCI® (or any successor or replacement page) and is updated on Reuters 19 at least every 15 seconds 20 during business hours on each day on which the offices of the Index Sponsor in New York City are open for business (a “GSCI Business Day”). 21 The settlement price for the Index is also reported on Reuters page GSCI® (or any successor or replacement page) on each GSCI Business Day between 4 p.m. and 6 p.m., New York time. 19 The intraday information with respect to the Index reported on Reuters is derived solely from trading prices on the principal trading markets for the various Index components. For example, the Index currently includes contracts traded on the Intercontinental Exchange (formerly known as the International Petroleum Exchange, which now operates its futures business through ICE Futures) and the London Metal Exchange (“LME”), both of which are located in London and consequently have trading days that end several hours before those of the U.S.-based markets on which the rest of the Index components are traded. During the portion of the New York trading day when ICE Futures and LME are closed, the last reported prices for Index Components traded on ICE Futures or LME are used to calculate the intraday Index information disseminated on Reuters. 20 Telephone conference between John Carey, Assistant General Counsel, NYSE Group, Inc., and Florence Harmon, Senior Special Counsel, Division, Commission, on July 27, 2006 (clarifying that the Index value will be disseminated at least every 15 seconds, not every 3 minutes, during the time the Securities trade on the Exchange). 21 NYSE, as the listing exchange, will not permit trading in the Securities if certain information about the Index value is not disseminated on, for example, a date that is not a GSCI Business Day. In such event, NYSE Arca would not permit trading in the Securities. *See supra.*
(c)*UTP Trading Criteria* The Exchange will cease trading in the Securities if:
(1)The listing market stops trading the Securities because of a regulatory halt similar to a halt based on NYSE Arca Equities Rule 7.12 or a halt because the IIV or the value of the underlying Index is no longer available on at least a 15-second delayed basis; or
(2)the listing market delists the Securities. 22 In the event that the Exchange is open for business on a day that is not a GSCI Business Day, the Exchange will not permit trading of the Securities on that day. Additionally, the Exchange may cease trading the Securities if such other event shall occur or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. 22 E-mail between Janet Kissane, Assistant General Counsel, NYSE Group, Inc., and Florence Harmon, Senior Special Counsel, Division, Commission, dated July 31, 2006 (clarifying that the Securities will cease trading during all trading hours).
(d)*Trading Rules* The Exchange deems the Securities to be equity securities, thus rendering trading in the Securities subject to the Exchange's rules governing the trading of equity securities. Trading in the Securities on the NYSE Arca Marketplace will occur from 4 a.m. to 8 p.m. ET in accordance with NYSE Arca Equities Rule 7.34(a). 23 The Exchange has appropriate rules to facilitate transactions in the Securities during all trading sessions. The minimum trading increment for Securities on the Exchange will be $0.01. 23 During all NYSE Arca Equities trading sessions, the Exchange represents that if the official Index Sponsor calculates an updated Index value, then such value will be updated and disseminated at least every 15 seconds during such trading session, and always will be so during the Exchange's core trading session (although during this session, the Exchange may rely on the listing exchange to monitor such calculation and dissemination). The Exchange represents that the official Index Sponsor calculates and disseminates the Index value from 8 a.m. to 4 p.m. ET. Because this product is not in continuous distribution, an IIV is not required to be disseminated at least every 15 seconds in all trading sessions; however, because of the weekly redemption process for this product, such dissemination of the IIV is required during the Exchange's core trading session. The Exchange may rely on the listing market to monitor such dissemination of the IIV during the Exchange's core trading session. Telephone conference between John Carey, Assistant General Counsel, NYSE Group, Inc., and Florence Harmon, Senior Special Counsel, Division, Commission, on July 12, 2006. Further, Commentary .01 to NYSE Arca Equities Rule 5.2(j)(6) sets forth certain restrictions on ETP Holders acting as registered Market Makers in the Securities to facilitate surveillance. 24 Commentary .01(b)-(c) to NYSE Arca Equities Rule 5.2(j)(6) will require that the ETP Holder acting as a registered Market Maker in the Securities provide the Exchange with necessary information relating to its trading in the Index components, the commodities underlying the Index components, or options, futures or options on futures on the Index, or any other derivatives (collectively, “derivative instruments”) based on the Index or based on any Index component or any physical commodity underlying an Index component. Commentary .01(d) to NYSE Arca Equities Rule 5.2(j)(6) will prohibit the ETP Holder acting as a registered Market Maker in the Securities from using any material nonpublic information received from any person associated with an ETP Holder or employee of such person regarding trading by such person or employee in the Index components, the commodities underlying the Index components, or any derivative instruments based on the Index or based on any Index component or any physical commodity underlying an Index component (including the Securities). In addition, Commentary .01(a) to NYSE Arca Equities Rule 5.2(j)(6) will prohibit the ETP Holder acting as a registered Market Maker in the Securities from being affiliated with a market maker in the Index components, the commodities underlying the Index components, or any derivative instruments based on the Index or based on any Index component or any physical commodity underlying an Index component unless adequate information barriers are in place, as provided in NYSE Arca Equities Rule 7.26. 24 *See* Securities Exchange Act Release No. 54189 (July 21, 2006) (SR-NYSEArca-2006-17). With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Securities. Trading in the Securities may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Securities inadvisable. These may include:
(1)The extent to which trading is not occurring in the Index components or
(2)whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in Securities will be subject to trading halts caused by extraordinary market volatility pursuant to the Exchange's “circuit breaker” rule 25 or by the halt or suspension of the trading of the Index components. 26 25 *See* NYSE Arca Equities Rule 7.12. 26 *See* “UTP Trading Criteria” above for specific instances when the Exchange will cease trading the Securities. The Securities will be deemed “Eligible Listed Securities,” as defined in NYSE Arca Equities Rule 7.55, for purposes of the Intermarket Trading System (“ITS”) Plan and therefore will be subject to the trade through provisions of NYSE Arca Equities Rule 7.56, which require that ETP Holders avoid initiating trade-throughs for ITS securities.
(e)*Surveillance* The Exchange's surveillance procedures will incorporate and rely upon existing Exchange surveillance procedures governing equities. The Exchange believes that these procedures are adequate to monitor Exchange trading of the Securities in all trading sessions and to detect violations of Exchange rules, thereby deterring manipulation. The Exchange's current trading surveillance focuses on detecting securities trading outside their normal patterns. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations. The Exchange is able to obtain information regarding trading in the Securities and the Index components through ETP Holders in connection with such ETP Holders' proprietary or customer trades which they affect on any relevant market. In addition, with regard to the Index components, the Exchange can obtain market surveillance information, including customer identity information, with respect to transactions occurring on the New York Mercantile Exchange (“NYMEX”), the Kansas City Board of Trade, ICE Futures, and the LME, pursuant to its comprehensive information sharing agreements with each of those exchanges. All of the other trading venues on which current Index components are traded are members of the Intermarket Surveillance Group (“ISG”), and the Exchange therefore has access to all relevant trading information with respect to those contracts without any further action being required on the part of the Exchange.
(f)*Information Bulletin* Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Securities. Specifically, the Information Bulletin will discuss the following:
(1)The procedures for redemptions of Securities (and that Securities are not individually redeemable but are redeemable only in aggregations of at least 50,000 Securities);
(2)NYSE Arca Equities Rule 9.2(a), 27 which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Securities;
(3)how information regarding the IIV is disseminated;
(4)the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Securities prior to or concurrently with the confirmation of a transaction; and
(5)trading information. 27 The Exchange recently amended NYSE Arca Equities Rule 9.2(a) (“Diligence as to Accounts”) to provide that ETP Holders, before recommending a transaction, must have reasonable grounds to believe that the recommendation is suitable for the customer based on any facts disclosed by the customer as to his other security holdings and as to his financial situation and needs. Further, the proposed rule amendment provides that prior to the execution of a transaction recommended to a non-institutional customer, the ETP Holders should make reasonable efforts to obtain information concerning the customer's financial status, tax status, investment objectives and any other information that they believe would be useful to make a recommendation. *See* Securities Exchange Act Release No. 54045 (June 26, 2006), 71 FR 37971 (July 3, 2006) (SR-PCX-2005-115). The Information Bulletin will also reference the fact that there is no regulated source of last sale information regarding physical commodities, and that the Commission has no jurisdiction over the trading of physical commodities such as aluminum, gold, crude oil, heating oil, corn, and wheat, or the futures contracts on which the value of the Securities is based. The Information Bulletin will also discuss terms of no-action or exemptive relief by the Commission staff in connection with the Securities under the Act. 2. Statutory Basis The Exchange believes that the basis under the Act for this proposed rule change is consistent with the requirements under Section 6(b)(5) 28 that an exchange have rules that are 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 transaction in securities, to remove impediments and perfect the mechanisms of a free and open market, and, in general, to protect investors and the public interest. 28 15 U.S.C. 78s(b)(5). In addition, the Exchange believes that the proposal is consistent with Rule 12f-5 under the Act 29 because it deems the Securities to be equity securities, thus rendering the Securities subject to the Exchange's rules governing the trading of equity securities. 30 29 17 CFR 240.12f-5. 30 Telephone conference between John Carey, Assistant General Counsel, NYSE Group, Inc., and Florence Harmon, Senior Special Counsel, Division, Commission, on July 12, 2006 (the Exchange requested that the Commission delete the word “existing” to clarify that the Securities will be subject to all applicable Exchange rules governing the trading of equity securities for the Securities). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSEArca-2006-19 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-NYSEArca-2006-19. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2006-19 and should be submitted on or before August 25, 2006. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 31 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 32 which requires that an exchange have rules designed, among other things, 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. 31 In approving this 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). 32 15 U.S.C. 78f(b)(5). In addition, the Commission finds that the proposal is consistent with Section 12(f) of the Act, 33 which permits an exchange to trade, pursuant to UTP, a security that is listed and registered on another exchange. 34 The Commission notes that it previously approved the listing and trading of the Securities on the NYSE. 35 The Commission also finds that the proposal is consistent with Rule 12f-5 under the Act, 36 which provides that an exchange shall not extend UTP to a security unless the exchange has in effect a rule or rules providing for transactions in the class or type of security to which the exchange extends UTP. NYSE Arca Equities rules deem the Securities to be equity securities, thus trading in the Securities will be subject to the Exchange's rules governing the trading of equity securities and the specific rules set forth herein for this product class. 33 15 U.S.C. 78 *l* (f). 34 Section 12(a) of the Act, 15 U.S.C. 78 *l* (a), generally prohibits a broker-dealer from trading a security on a national securities exchange unless the security is registered on that exchange pursuant to Section 12 of the Act. Section 12(f) of the Act excludes from this restriction trading in any security to which an exchange “extends UTP.” When an exchange extends UTP to a security, it allows its members to trade the security as if it were listed and registered on the exchange even though it is not so listed and registered. 35 *See* NYSE Order, *supra* note 5. 36 17 CFR 240.12f-5. The Commission further believes that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act, 37 which sets forth Congress's finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. 37 15 U.S.C. 78k-1(a)(1)(C)(iii). In support of the portion of the proposed rule change regarding UTP of the Securities, the Exchange has made the following representations: 1. NYSE Arca Equities has appropriate rules to facilitate transactions in this type of security in all trading sessions. 2. NYSE Arca Equities surveillance procedures are adequate to properly monitor the trading of the Securities on the Exchange. 3. NYSE Arca Equities will distribute an Information Bulletin to its members prior to the commencement of trading of the Securities on the Exchange that explains the terms, characteristics, and risks of trading such securities. 4. NYSE Arca Equities will require a member with a customer who purchases newly issued Securities on the Exchange to provide that customer with a product prospectus and will note this prospectus delivery requirement in the Information Bulletin. 5. The Exchange will cease trading in the Securities if:
(1)The primary market stops trading the securities because of a regulatory halt similar to a halt based on NYSE Arca Equities Rule 7.12 and/or a halt because the updated IIV or Index value are not disseminated at least every 15 seconds; or
(2)if such other event occurs or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable; or
(3)the primary market delists the Securities. This approval order is conditioned on NYSE Arca Equities' adherence to these representations. The Commission finds good cause for approving this proposed rule change, as amended, before the thirtieth day after the publication of notice thereof in the **Federal Register** . As noted previously, the Commission previously found that the listing and trading of these Securities on the NYSE is consistent with the Act. 38 The Commission presently is not aware of any issue that would cause it to revisit that earlier finding or preclude the trading of these funds on the Exchange pursuant to UTP. Therefore, accelerating approval of this proposed rule change should benefit investors by creating, without undue delay, additional competition in the market for these Securities. 38 *See* NYSE Order, *supra* note 5. V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, that the proposed rule change (NYSEArca-2006-19), as amended, is hereby approved on an accelerated basis. 39 39 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 40 40 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-12635 Filed 8-3-06; 8:45 am] BILLING CODE 8010-01-P UNITED STATES SENTENCING COMMISSION Sentencing Guidelines for United States Courts AGENCY: United States Sentencing Commission. ACTION: Notice of proposed priorities; request for public comment. SUMMARY: As part of its statutory authority and responsibility to analyze sentencing issues, including operation of the Federal sentencing guidelines, and in accordance with Rule 5.2 of its Rules of Practice and Procedure, the Commission is seeking comment on possible priority policy issues for the amendment cycle ending May 1, 2007. DATES: Public comment should be received on or before September 1, 2006. ADDRESSES: Send comments to: United States Sentencing Commission, One Columbus Circle, NE., Suite 2-500, South Lobby, Washington, DC 20002-8002, Attention: Public Affairs-Priorities Comment. FOR FURTHER INFORMATION CONTACT: Michael Courlander, Public Affairs Officer, Telephone:
(202)502-4590. SUPPLEMENTARY INFORMATION: The United States Sentencing Commission is an independent agency in the judicial branch of the United States Government. The Commission promulgates sentencing guidelines and policy statements for Federal sentencing courts pursuant to 28 U.S.C. 994(a). The Commission also periodically reviews and revises previously promulgated guidelines pursuant to 28 U.S.C. 994(o) and submits guideline amendments to the Congress not later than the first day of May each year pursuant to 28 U.S.C. 994(p). The Commission provides this notice to identify tentative priorities for the amendment cycle ending May 1, 2007. The Commission recognizes, however, that other factors, such as the enactment of any legislation requiring Commission action, may affect the Commission's ability to complete work on any of the tentative priorities by the statutory deadline of May 1, 2007. Accordingly, it may be necessary to continue work on some of these issues beyond the amendment cycle ending on May 1, 2007. As so prefaced, the Commission has identified the following tentative priorities:
(1)Implementation of crime legislation enacted during the 109th Congresses warranting a Commission response, including
(A)the Stop Counterfeiting in Manufactured Goods Act, Pub. L. 109-181;
(B)the USA PATRIOT Improvement and Reauthorization Act of 2005, Pub. L. 109-177;
(C)the Violence Against Women and Department of Justice Reauthorization Act of 2005, Pub. L. 109-162;
(D)the Trafficking Victims Protection Reauthorization of 2005, Pub. L. 109-164;
(E)the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, Pub. L. 109-59; and
(F)other legislation authorizing statutory penalties, creating new offenses, or pertaining to victims, that requires incorporation into the guidelines;
(2)Continuation of its work with the congressional, executive, and judicial branches of the government and other interested parties on appropriate responses to *United States* v. *Booker* , including any appropriate guideline changes in light of the Commission's 2006 report to Congress, *Final Report on the Impact of United States* v. *Booker on Federal Sentencing* , as well as its continued analysis of post- *Booker* data, case law, and other feedback, including reasons for departures and variances stated by sentencing courts;
(3)Continuation of its policy work regarding immigration offenses, specifically, offenses sentenced under 2L1.1 (Smuggling, Transporting, or Harboring an Unlawful Alien) and 2L1.2 (Unlawfully Entering or Remaining in the United States) and implementation of any immigration legislation that may be enacted;
(4)Continuation of its work with the congressional, executive, and judicial branches of the government and other interested parties on cocaine sentencing policy, to possibly include a hearing on this issue and a reevaluation of the Commission's 2002 report to Congress, *Cocaine and Federal Sentencing Policy* ;
(5)Consideration and possible development of guideline simplification options that might improve the operation of the sentencing guidelines;
(6)Continuation of its policy work, in light of the Commission's prior research on criminal history, to develop and consider possible options that might improve the operation of Chapter Four (Criminal History);
(7)Continuation of its policy work to implement 28 U.S.C. 994(t), specifically regarding the development of further commentary to 1B1.13 (Reduction in Term of Imprisonment as a Result of Motion by Director of Bureau of Prisons); and
(8)Resolution of a number of circuit conflicts, pursuant to the Commission's continuing authority and responsibility, under 28 U.S.C. 991(b)(1)(B) and *Braxton* v. *United States* , 500 U.S. 344 (1991), to resolve conflicting interpretations of the guidelines by the Federal courts. The Commission hereby gives notice that it is seeking comment on these tentative priorities and on any other issues that interested persons believe the Commission should address during the amendment cycle ending May 1, 2007, including short- and long-term research issues. To the extent practicable, comments submitted on such issues should include the following:
(1)A statement of the issue, including scope and manner of study, particular problem areas and possible solutions, and any other matters relevant to a proposed priority;
(2)citations to applicable sentencing guidelines, statutes, case law, and constitutional provisions; and
(3)a direct and concise statement of why the Commission should make the issue a priority. Authority: 28 U.S.C. 994(a), (o); USSC Rules of Practice and Procedure 5.2. Ricardo H. Hinojosa, Chair. [FR Doc. E6-12649 Filed 8-3-06; 8:45 am] BILLING CODE 2211-01-P DEPARTMENT OF STATE [Public Notice 5483] Bureau of International Security and Nonproliferation; Imposition of Nonproliferation Measures Against Foreign Entities, Including a Ban on U.S. Government Procurement AGENCY: Department of State. ACTION: Notice. SUMMARY: A determination has been made that seven entities have engaged in activities that require the imposition of measures pursuant to Section 3 of the Iran Nonproliferation Act of 2000, which provides for penalties on entities for the transfer to Iran since January 1, 1999, of equipment and technology controlled under multilateral export control lists (Missile Technology Control Regime, Australia Group, Chemical Weapons Convention, Nuclear Suppliers Group, Wassenaar Arrangement) or otherwise having the potential to make a material contribution to the development of weapons of mass destruction
(WMD)or cruise or ballistic missile systems. The latter category includes
(a)items of the same kind as those on multilateral lists, but falling below the control list parameters, when it is determined that such items have the potential of making a material contribution to WMD or cruise or ballistic missile systems,
(b)other items with the potential of making such a material contribution, when added through case-by-case decisions, and
(c)items on U.S. national control lists for WMD/missile reasons that are not on multilateral lists. DATES: *Effective Date:* July 28, 2006. FOR FURTHER INFORMATION CONTACT: On general issues: Pamela K. Durham, Office of Missile Threat Reduction, Bureau of International Security and Nonproliferation, Department of State (202-647-4931). On U.S. Government procurement ban issues: Gladys Gines, Office of the Procurement Executive, Department of State (703-516-1691). SUPPLEMENTARY INFORMATION: Pursuant to Sections 2 and 3 of the Iran Nonproliferation Act of 2000 (Pub. L. 106-178), the U.S. Government determined on July 25, 2006 that the measures authorized in Section 3 of the Act shall apply to the following foreign entities identified in the report submitted pursuant to Section 2(a) of the Act: Korean Mining and Industrial Development Corporation (KOMID) (North Korea) and any successor, sub-unit, or subsidiary thereof; Korea Pugang Trading Corporation (North Korea) and any successor, sub-unit, or subsidiary thereof; Center for Genetic Engineering and Biotechnology
(Cuba)and any successor, sub-unit, or subsidiary thereof; Balaji Amines (India) and any successor, sub-unit, or subsidiary thereof; Prachi Poly Products (India) and any successor, sub-unit, or subsidiary thereof; Rosoboronexport (Russia) and any successor, sub-unit, or subsidiary thereof; and Sukhoy (Russia) and any successor, sub-unit, or subsidiary thereof. Accordingly, pursuant to the provisions of the Act, the following measures are imposed on these entities: 1. No department or agency of the United States Government may procure, or enter into any contract for the procurement of, any goods, technology, or services from these foreign persons; 2. No department or agency of the United States Government may provide any assistance to the foreign persons, and these persons shall not be eligible to participate in any assistance program of the United States Government; 3. No United States Government sales to the foreign persons of any item on the United States Munitions List (as in effect on August 8, 1995) are permitted, and all sales to these persons of any defense articles, defense services, or design and construction services under the Arms Export Control Act are terminated; and 4. No new individual licenses shall be granted for the transfer to these foreign persons of items the export of which is controlled under the Export Administration Act of 1979 or the Export Administration Regulations, and any existing such licenses are suspended. These measures shall be implemented by the responsible departments and agencies of the United States Government and will remain in place for two years from the effective date, except to the extent that the Secretary of State may subsequently determine otherwise. A new determination will be made in the event that circumstances change in such a manner as to warrant a change in the duration of sanctions. Dated: July 31, 2006. Francis C. Record, Acting Assistant Secretary of State for International Security and Nonproliferation, Department of State. [FR Doc. E6-12641 Filed 8-3-06; 8:45 am] BILLING CODE 4710-27-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Reports, Forms and Recordkeeping Requirements: Notice of Request for Extension of a Previously Approved Collection AGENCY: Office of the Secretary, DOT. ACTION: Notice. SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended) this notice announces the Department of Transportation's
(DOT)intention to request an extension of a currently approved information collection. Before submitting this information collection to OMB for renewal, DOT is soliciting comments on whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; the accuracy of the Department's estimate of the burden of the proposed information collection; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of collection of information on respondents, including the use of automated collection techniques or other forms of information technology. DATES: Comments to this notice must be received by October 3, 2006. ADDRESSES: You may submit comments by any of the following methods: • *Web site: http://dms.dot.gov.* Follow the instructions for submitting comments on the DOT electronic docket site. • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. • *Fax:* 1-202-493-2251. • *Mail:* Docket Management System; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *Hand Delivery:* To the Docket Management System; Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC between 9 a.m. and 5 p.m., Monday through Friday, except Federal Holidays. *Instructions:* You must include the agency name and docket number *[OST-2006-25550]* of this notice at the beginning of your comment. Note that all comments received will be posted without change to *http://dms.dot.gov* including any personal information provided. Please see the Privacy Act section of this document. *Docket:* You may view the public docket through the Internet at *http://dms.dot.gov* or in person at the Docket Management System office at the above address. FOR FURTHER INFORMATION CONTACT: Bohdan Baczara, Office of Drug and Alcohol Policy and Compliance, 400 Seventh Street, SW., Washington, DC 20590; 202-366-3784 (voice), 202-366-3897 (fax), or *bohdan.baczara@dot.gov* (e-mail). SUPPLEMENTARY INFORMATION: Office of the Secretary, Office of Drug and Alcohol Policy and Compliance *Title:* Procedures for Transportation Drug and Alcohol Testing Program. *OMB Control Number:* 2105-0529. *Expiration Date:* October 31, 2006. *Type of Request:* Extension without change of a previously approved collection. *Abstract:* Under the Omnibus Transportation Employee Testing Act of 1991, DOT is required to implement a drug and alcohol testing program in various transportation-related industries. This specific requirement is elaborated in 49 CFR part 40, Procedures for Transportation Workplace Drug and Alcohol Testing Programs. Included in this program are the U.S. Department of Transportation Alcohol Testing Form
(ATF)and the DOT Drug and Alcohol Testing Management Information System
(MIS)Data Collection Form. The ATF includes the employee's name, the type of test taken, the date of the test, and the name of the employer. Custody and control is essential to the basic purpose of the alcohol testing program. Data on each test conducted, including test results, are necessary to document tests conducted and actions taken to ensure safety in the workplace. The MIS form includes employer specific drug and alcohol testing information such as the reason for the test and the cumulative number of positive, negative and refusal test results. The MIS data is used by each of the affected DOT Agencies ( *i.e.* , Federal Aviation Administration, Federal Transit Administration, Federal Railroad Administration, Federal Motor Carrier Safety Administration, and the Pipeline and Hazardous Materials Safety Administration) and the United States Coast Guard when calculating their random testing rates. *Affected Entities:* Transportation Industry. *Estimated Number of Respondents:* 8,733,483. *Estimated Total Number Burden on Respondents:* The estimated annual burden is 8,053,257. Included in this number are 10,799 burden hours for the MIS form and 267,787 burden hours for the ATF form. *Comments are invited on:*
(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility;
(b)the accuracy of the Department's estimate of the burden of the proposed information collection;
(c)ways to enhance the quality, utility and clarity of the information to be collected; and
(d)ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology. All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Authority and Issuance. Jim Swart, Deputy Director, Office of Drug and Alcohol Policy and Compliance, United States Department of Transportation. [FR Doc. E6-12605 Filed 8-3-06; 8:45 am] BILLING CODE 4910-9X-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Availability of Draft Written Reevaluation and Request for Comments AGENCY: Federal Aviation Administration, DOT. ACTION: Notice. SUMMARY: The Federal Aviation Administration
(FAA)announces the availability of a Draft Written Reevaluation of environmental impacts of a proposed centerfield taxiway at Boston-Logan International Airport, Boston, Massachusetts. FAA also announces that it will consider comments on the Draft Written Reevaluation until August 21, 2006. FOR FURTHER INFORMATION CONTACT: John C. Silva, Federal Aviation Administration, New England Region, Airports Division, ANE-600, 12 New England Executive Park, Burlington, Massachusetts 01803. SUPPLEMENTARY INFORMATION: On August 2, 2002, FAA issued *Record of Decision; Airside Improvements Planning Project; Logan International Airport; Boston, Massachusetts.* This Record of Decision covered projects proposed by the Massachusetts Port Authority and environmentally assessed in an Environmental Impact Statement of the Airside Improvements Planning Project. FAA approved the following projects:
(1)Construction and operation of unidirectional Runway 14-32,
(2)reconfiguration of the southwest corner taxiway system,
(3)extension of Taxiway Delta, and
(4)realignment of Taxiway November. FAA deferred a decision concerning the Centerfield Taxiway until FAA conducted an additional evaluation of potential beneficial operational procedures that would preserve or improve the operational and environmental benefits of the Centerfield Taxiway shown in the Final EIS. This additional evaluation was completed with the publication of *Logan International Airport; Additional Taxiway Evaluation Report; Per FAA, August 2, 2002, Record of Decision;* May 2006; and this draft written reevaluation. The taxiway evaluation report and Draft Written Reevaluation are available on request (781-238-7602) or on FAA's public Web site ( *http://www.faa.gov/airports_airtraffic* ). FAA is accepting comments on the Draft Written Reevaluation until August 21, 2006. Comments should be mailed to FAA at the above address under the heading: for further information contact . Questions may be directed to this address or by telephoning John Silva at 781-238-7602. Issued in Burlington, Massachusetts, on July 6, 2006. LaVerne F. Reid, Manager, Airports Division. [FR Doc. 06-6701 Filed 8-3-06; 8:45 am]
Connectionstraces to 9
14 references not yet in our index
  • Pub. L. 106-200
  • 17 CFR 240.608(b)(1)
  • 17 CFR 240.19
  • 11 CFR 240.19
  • 17 CFR 240.12
  • 15 USC 78
  • Pub. L. 109-181
  • Pub. L. 109-177
  • Pub. L. 109-162
  • Pub. L. 109-164
  • Pub. L. 109-59
  • 500 U.S. 344
  • Pub. L. 106-178
  • 49 CFR 40
Citation graph
cites case law
Notices
Notice
C.F.R.§ 242.608
U.S.C.§ 552
C.F.R.§ 200.30-3
U.S.C.§ 78s
U.S.C.§ 78f
U.S.C.§ 78c
U.S.C.§ 78k–1
U.S.C.§ 994
U.S.C.§ 991
SCOTUS500 U.S. 344
Pub. L.Pub. L. 106-200
Cite17 CFR 240.608(b)(1)
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.