Notices. SECURITIES AND EXCHANGE COMMISSION

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BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54357; File No. SR-MSRB-2006-06] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to the Series 51 Examination Program August 24, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on August 11, 2006, the Municipal Securities Rulemaking Board (“MSRB” or “Board”), filed with the Securities and Exchange Commission (“Commission” or “SEC”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the MSRB.

The MSRB has designated the proposed rule change as constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule of the self-regulatory organization pursuant to Section 19(b)(3)(A)(i) of the Act, 3 and Rule 19b-4(f)(1) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(i). 4 17 CFR 240.19b-4(f)(1).

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The MSRB is filing with the Commission revisions to the study outline for the Municipal Fund Securities Limited Principal Qualification Examination (Series 51) program. 5 The proposed revisions update the material to reflect changes to the rules and regulations covered in the examination, and to provide more explicit references to these rules and regulations. The MSRB is not proposing any textual changes to its rules. 5 The MSRB is also proposing corresponding revisions to the Series 51 question bank, but based upon instructions from the Commission staff, the MSRB is submitting SR-MSRB-2006-06 for immediate effectiveness pursuant to Section 19(b)(3)(A)(i) of the Act and Rule 19b-4(f)(1) thereunder, and is not filing the question bank for Commission review. *See* letter to Diane G.

Klinke, General Counsel, MSRB, from Belinda Blaine, Associate Director, Division of Market Regulation, SEC, dated July 24, 2000. The question bank is available for Commission review. The revised study outline is available on the MSRB's Web site ( *http://www.msrb.org* ), at the MSRB's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change.

The text of these statements may be examined at the places specified in Item IV below. The MSRB 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 Section 15B(b)(2)(A) of the Act 6 authorizes the MSRB to prescribe standards of training, experience, competence, and such other qualifications as the Board finds necessary or appropriate in the public interest or for the protection of investors.

The MSRB has developed examinations that are designed to establish that persons associated with brokers, dealers and municipal securities dealers that effect transactions in municipal securities have attained specified levels of competence and knowledge. The MSRB periodically reviews the content of the examinations to determine whether revisions are necessary or appropriate in view of changes pertaining to the subject matter covered by the examinations. 6 15 U.S.C. 78o-4(b)(2)(A).

MSRB Rule G-3(b)(iv) states that the municipal fund securities limited principal has responsibility to oversee the municipal securities activities of a securities firm or bank dealer solely as such activities relate to transactions in municipal fund securities. In this capacity, the municipal fund securities limited principal manages, directs or supervises one or more of the following activities relating to municipal fund securities: Underwriting, trading or selling municipal fund securities; rendering financial advisory or consultant services to issuers of municipal fund securities; research or investment advice, or communications with customers, about any of the activities named heretofore; maintaining records on activities in municipal fund securities; processing, clearing, and (in the case of securities firms) safekeeping of municipal fund securities; and training of principals and representatives. 7 The only examination that qualifies a municipal fund securities limited principal is the Municipal Fund Securities Limited Principal Qualification Examination. 7 A municipal securities principal (Series 53) is also qualified to bear these responsibilities.

A committee of industry members and MSRB staff recently completed a review of the study outline for the Series 51 examination program. As a result of this review, the MSRB is proposing to update the content of the examination to cover certain rules or provisions of rules that were promulgated since the date that the outline was initially published (MSRB Rule G-21 and new Rule G-38 on solicitation of municipal securities business), and to delete coverage of rules or rule provisions that are obsolete (old Rule G-38 on consultants).

Technical changes have been made to correct the citations for the rules that have been amended. The number of questions on each section of the examination will not change. The revised examination continues to cover areas of knowledge required for effective supervision of municipal fund securities activities. A summary of the changes to the study outline is provided below. Part Two—Product Knowledge • A reference to taxes imposed on withdrawals for non-qualified uses relating to 529 college savings plans was added. • The description on deductibility of contributions relating to 529 college savings plans was expanded. • A reference to the federal sunset provisions relating to 529 college savings plans was removed.

Part Three—General Supervision • A reference to any recently enacted MSRB interpretations was added to the reference to any recently enacted rules governing general supervision. Part Four—Fair Practice and Conflicts of Interest • References to old Rule G-38, on consultants, were removed. • New Rule G-38, on solicitation of municipal securities business, was added. • A technical change was made to revise the title of Rule G-20. • A rule cite was revised to Rule G-21(f). • Rule G-21(e) regarding advertisements for municipal fund securities was added. • A reference to any recently enacted MSRB interpretations was added to the reference to any recently enacted rules governing fair practice and conflicts of interest.

Part Five—Sales Supervision • A reference to any recently enacted MSRB interpretations was added to the reference to any recently enacted rules governing sales supervision. Part Six—Underwriting and Disclosure Obligations • A reference to any recently enacted MSRB interpretations was added to the reference to any recently enacted rules governing underwriting and disclosure obligations. Part Seven—Operations • A reference to any recently enacted MSRB interpretations was added to the reference to any recently enacted rules governing operations.

The examination will continue to consist of 60 multiple-choice questions assigned to the seven areas of the examination as follows: Percent Regulatory Structure 5 Product Knowledge 20 General Supervision 20 Fair Practice and Conflicts of Interest 15 Sales Supervision 20 Underwriting and Disclosure Obligations 10 Operations 10 Candidates will continue to be allowed one and one-half hours for each testing session. Each question will continue to count one point, and each candidate must correctly answer 70 percent of the questions in order to receive a passing grade.

Also, each candidate must have previously or concurrently qualified as a general securities principal or investment company/variable contracts limited principal in addition to passing the Series 51 Examination in order to gain qualification as a municipal fund securities limited principal. 2. Statutory Basis The MSRB believes that the proposed revisions to the Series 51 examination program are consistent with the provisions of Section 15B(b)(2)(A) of the Act, 8 which authorizes the MSRB to prescribe standards of training, experience, competence, and such other qualifications as the Board finds necessary or appropriate in the public interest or for the protection of investors.

Section 15B(b)(2)(A) of the Act also provides that the Board may appropriately classify municipal securities brokers and municipal securities dealers and their associated personnel and require persons in any such class to pass tests prescribed by the Board. 8 15 U.S.C. 78o-4(b)(2)(A). B. Self-Regulatory Organization's Statement on Burden on Competition The MSRB 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, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change has become effective pursuant to Section 19(b)(3)(A)(i) of the Act 9 and Rule 19b-4(f)(1) thereunder, 10 in that the proposed rule change constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule of the self-regulatory organization.

MSRB proposes to implement the revised Series 51 examination program on September 15, 2006. 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. 11 9 15 U.S.C. 78s(b)(3)(A)(i). 10 17 CFR 240.19b-4(f)(1). 11 See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).

IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml);* or • Send an e-mail to rule-comments@sec.gov. Please include File Number SR-MSRB-2006-06 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M.

Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-MSRB-2006-06. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room.

Copies of such filing also will be available for inspection and copying at the principal office of the MSRB. 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-MSRB-2006-06 and should be submitted on or before September 21, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12).

Nancy M. Morris, Secretary. [FR Doc. E6-14495 Filed 8-30-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54360; File No. SR-NASD-2006-088] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change Relating to Motions To Decide Claims Before a Hearing on the Merits August 24, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that the National Association of Securities Dealers, Inc.

(“NASD” or “Association”), through its wholly owned subsidiary, NASD Dispute Resolution, Inc. (“NASD Dispute Resolution”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) on July 21, 2006, the proposed rule change as described in Items I, II, and III below, which Items have been prepared by NASD Dispute Resolution. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing new Rule 12504 and new Rule 13504 of the NASD Code of Arbitration Procedure to address motions to decide claims before a hearing on the merits (“dispositive motions”). Below is the text of the proposed rule change. Proposed new language is *Italic* ; proposed deletions are in brackets. 12504. Motions To Decide Claims Before a Hearing on the Merits *(a) Except as provided in Rule 12206, motions to decide a claim before a hearing are discouraged and may only be granted in extraordinary circumstances.* *(b) Motions under this rule must be made in writing.

Unless the parties agree or the panel determines otherwise, motions under this rule must be served at least 60 days before a scheduled hearing, and parties have 45 days to respond to the motion.* *(c) Motions under this rule will be decided by the full panel. The panel may not grant a motion under this rule unless a prehearing conference on the motion is held, or waived by the parties. Prehearing conferences to consider motions under this rule will be tape-recorded.* *(d) The panel may issue sanctions under Rule 12212 if it determines that a party filed a motion under this rule in bad faith.* 13504.

Motions To Decide Claims Before a Hearing on the Merits *(a) Except as provided in Rule 13206, motions to decide a claim before a hearing are discouraged and may only be granted in extraordinary circumstances.* *(b) Motions under this rule must be made in writing. Unless the parties agree or the panel determines otherwise, motions under this rule must be served at least 60 days before a scheduled hearing, and parties have 45 days to respond to the motion.* *(c) Motions under this rule will be decided by the full panel.

The panel may not grant a motion under this rule unless a prehearing conference on the motion is held, or waived by the parties. Prehearing conferences to consider motions under this rule will be tape-recorded.* *(d) The panel may issue sanctions under Rule 13212 if it determines that a party filed a motion under this rule in bad faith.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD 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. NASD has prepared summaries, set forth in Sections (A), (B), and

(C)below, of the most significant aspects of such statements.

(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

(1)Purpose

(a)Background NASD has filed a series of proposed rule changes with the SEC to amend the NASD Code of Arbitration Procedure (“current Code”). The proposed rule changes would revise the current Code language in accordance with the SEC's Plain English initiative, codify current practices, implement several substantive changes, and reorganize the current Code into three separate procedural codes: one relating to customer disputes (“Customer Code”), one relating to industry disputes (“Industry Code”), and one relating to mediations (“Mediation Code,” and collectively with the Customer and Industry Codes, the “Code Rewrite”). Proposed Rules 12504 and 13504 initially were proposed as part of the Code Rewrite. On June 23, 2005, the SEC published the Code Rewrite for comment in the **Federal Register.** 3 The SEC received 51 comment letters on the Customer Code, one comment letter on the Industry Code, and one comment letter on the Mediation Code. 4 3 *See* Securities Exchange Act Rel. No. 51856 (Jun. 15, 2005); 70 FR 36442 (Jun. 23, 2005) (Customer Code); Securities Exchange Act Rel. No. 51857 (Jun 15, 2005); 70 FR 36430 (Jun. 23, 2005) (Industry Code); and Securities Exchange Act Rel. No. 51855 (Jun. 15, 2005); 70 FR 36440 (Jun. 23, 2005); (Mediation Code). 4 The SEC approved the Mediation Code on October 31, 2005, and it became effective on January 30, 2006. *See* Securities Exchange Act Rel. No. 52705 (Oct. 31, 2005); 70 FR 67525 (Nov. 7, 2005) (SR-NASD-2004-013). On May 4, 2006, NASD filed a Response to Comments and Amendment No. 5 (“Amendment”) to address the commenters' concerns with the Customer Code. 5 The Amendment summarized the commenters' concerns and, where appropriate, responded to their concerns by proposing to clarify the meaning of some of the rules and to explain arbitration procedure under some of the proposed rules. The Amendment also requested that the proposal be approved on an accelerated basis. 5 *See* Reorganization and Revision of NASD Rules Relating to Customer Disputes (visited Aug. 2, 2006); *http://www.nasd.com/RulesRegulation/RuleFilings/2003RuleFilings/NASDW_009306.* A similar amendment was filed to address the comment letter on the Industry Code. *See* Reorganization and Revision of NASD Arbitration Rules Relating to Industry Disputes (visited Aug. 2, 2006) *http://www.nasd.com/RulesRegulation/RuleFilings/2004RuleFilings/NASDW_009295.* While none of the 51 commenters addressed specifically the Industry Code, many of the issues raised apply to the Industry Code, because the two codes contain similar rules and procedures. Thus, based on these comments, NASD made similar changes to the Industry Code, where applicable. NASD posted the Amendment on its Web site shortly after it was filed. As of July 19, 2006, the SEC had received 105 comment letters opposing some aspects of the Amendment, and asking the SEC to deny NASD's request for accelerated approval. 6 Several of the 105 comment letters objected to the Amendment because it proposed to include in the narrative section of the rule filing additional guidance relating to proposed rules 12504 and 13504, including examples of “extraordinary circumstances” in which a dispositive motion could be granted. 6 *See* Comments on NASD File No. SR-NASD-2003-158, Notice of Filing of Proposed Rule Change and Amendments Nos. 1, 2, 3, and 4 Thereto to Amend NASD Arbitration Rules for Customer Disputes (visited Jul. 19, 2006) *http://www.sec.gov/rules/sro/nasd/nasd2003158.shtml.*

(b)Comments Received on the Description of Proposed Rules 12504 and 13504 NASD states that, based on some of the 51 comment letters received on the Customer Code 7 and meetings with various constituents, it initially believed that the term “extraordinary circumstances” needed to be explained to clarify when Proposed Rules 12504 and 13504 would apply, and to provide more guidance to arbitrators on the standards to use when deciding a dispositive motion. NASD states that it raised this issue with its public and industry constituents and suggested that they develop language jointly to explain the term “extraordinary circumstances.” NASD was unable to obtain consensus among its constituents. Thus, NASD proposed to insert the following narrative language in the Dispositive Motions section of the rule filing: 7 The comment letter received on the Industry Code did not address dispositive motions. For purposes of this rule, if a party demonstrates affirmatively the legal defenses of, for example, accord and satisfaction, arbitration and award, settlement and release, or the running of an applicable statute of repose, the panel may consider these defenses to be extraordinary circumstances. In such cases, the panel may dismiss the arbitration claim before a hearing on the merits if the panel finds that there are no material facts in dispute concerning the defense raised, and there are no determinations of credibility to be made concerning the evidence presented. The proposed narrative language has engendered substantial controversy. Of the 105 comment letters received on the Amendment, 22 specifically opposed the proposed narrative language. In general, these commenters contended that the proposed narrative language encourages, rather than discourages, the making of dispositive motions. The commenters also argued that the proposed language could increase investors' costs in defending against these types of motions, and could result in a loss of the major benefits of the arbitration process—cost effectiveness and expediency. As noted, NASD has been unable to obtain a consensus among its constituents as to what constitutes “extraordinary circumstances” for purposes of Proposed Rules 12504 and 13504. Therefore, NASD is re-filing the original text of Proposed Rules 12504 and 13504 and the associated narrative language separately from the Customer and Industry Codes, but without the above narrative language that was proposed in the Amendment. NASD believes that addressing these provisions separately will give the public additional time to provide its input without delaying the Commission's review and final action on the remaining provisions of the Customer and Industry Codes.

(c)Proposed Rules 12504 and 13504: Motions To Dismiss a Claim Before a Hearing on the Merits One recurring question in NASD arbitrations is whether, and to what extent, arbitrators should decide dispositive motions before a hearing on the merits. In its *Follow-up Report on Matters Relating to Securities Arbitration,* the General Accounting Office (“GAO”) noted that while NASD's arbitration rules do not specifically provide for dispositive motions, case law generally supports the authority of arbitrators to grant motions to dismiss claims prior to the hearing on the merits. 8 8 U.S. General Accounting Office, Follow-up Report on Matters Relating to Securities Arbitration (April 11, 2003). GAO has since been renamed Government Accountability Office. Generally, NASD believes that parties have the right to a hearing in arbitration. However, NASD also acknowledges that in certain extraordinary circumstances, it would be unfair to require a party to proceed to a hearing. Thus, the proposed rules would: • Provide that, except for motions relating to the eligibility of claims under the current Code's six year time limit, motions that would resolve a claim before a hearing on the merits are discouraged, and may only be granted in extraordinary circumstances; • Require that a prehearing conference before the full panel must be held to discuss the motion before the panel could grant it; and • Allow the panel to issue sanctions against a party for making a dispositive motion in bad faith. NASD believes that this rule proposal, which was developed over several years with input from industry and public members of the NAMC, will provide necessary guidance to parties and arbitrators, and make the administration of arbitrations more uniform and transparent. NASD believes that the rule strikes the appropriate balance between allowing the dismissal of claims in limited, extraordinary circumstances and reinforcing the general principle that parties are entitled to a hearing in arbitration.

(2)Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, which requires, among other things, that the Association's rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD believes that the proposed rules will provide some guidelines for arbitrators and users of the forum concerning dispositive motions practice and will, thereby, make administration of arbitrations more uniform and transparent.

(B)Self-Regulatory Organization's Statement on Burden on Competition NASD 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 NASD did not solicit written comments. Comments received by the Commission prior to this filing are discussed above. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

(ii)as to which the self-regulatory organization consents, the Commission will: A. By order approve such proposed rule change, or B. Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. In particular, the Commission solicits comment on whether the proposed rule change provides for arbitration procedures that are fair and consistent with the protection of investors for the resolution of their disputes. In addition, the Commission solicits comment on the questions included below.

(A)*Need for a Dispositive Motions Rule:* NASD has stated that, because the current Code provides no guidance with respect to whether arbitrators have the authority to grant dispositive motions, arbitrator decisions with respect to these motions lack uniformity. Should the current Code, or the Customer and Industry Codes, if adopted, contain a dispositive motions rule? Is the absence or presence of such a rule detrimental to the arbitration process, and if so, how? Assuming that arbitrator decisions with respect to dispositive motions lack uniformity, are there ways, other than through the proposed rule, to address this issue? Commenters are specifically invited to share quantifiable costs and benefits that they believe may result should the Commission approve or disapprove the proposed rules.

(B)*Proposed Rules:* NASD believes that Proposed Rules 12504 and 13504 strike the appropriate balance between the parties' right to have a hearing and the authority of arbitrators to dismiss claims in limited, extraordinary circumstances. Do the proposed rules strike an appropriate balance, or would they tend to favor one party over another?

(C)*Explanatory Language Regarding “Extraordinary Circumstances”:* In connection with Proposed Rules 12504 and 13504, as initially filed with the Code Rewrite, some commenters stated that the absence of a definition for “extraordinary circumstances” would promote, rather than limit, abusive litigation tactics in arbitration. 9 Others stated that the “extraordinary circumstances” standard is too vague, 10 and/or recommended that the term be defined or described in the Code Rewrite. 11 As described in Section II.A.1.b, above, NASD proposed in Amendment No. 5 to provide explanatory language in the narrative portion of the Code Rewrite filing to clarify the rule language. Since Amendment No. 5 was filed, some commenters have opposed providing examples of “extraordinary circumstances” if the rule is approved. 12 Should additional guidance be provided for what constitutes “extraordinary circumstances”? Why or why not? If so, what type of additional guidance would be beneficial? Should a term other than “extraordinary circumstances” be used? If so, what would be a more useful term? 9 *See, e.g.,* Letter from Jeff Sonn, Esq., Sonn & Erez (Jul. 14, 2005) (“Sonn letter”); Letter from Steven A. Stolle, Rohde & Van Kampen PLLC (Jul. 8, 2005); Letter from Rebecca Davis, Esquire, Tate, Lazarini & Beall, PLC (Jul. 14, 2005); and Letter from Mark A. Tepper (Jul. 14, 2005). 10 * See, e.g.* , Letter from Barry D. Estell (May 15, 2006) and Letter from Daniel A. Ball, Selzer Gurvitch Rabin & Obecny, Chtd. (July 14, 2005). 11 *See, e.g.* , Letter from Tim Canning, Law Offices of Timothy A. Canning (Jul. 14, 2005); Letter from Scott C. Ilgenfritz (Jul. 14, 2005); Letter from Richard A. Karoly, Vice President and Senior Corporate Counsel, Charles Schwab & Co., Inc. (Jul. 14, 2005); and Sonn Letter. 12 *See, e.g.* , Letter from David E. Robbins, Kaufmann, Feiner, Yamin, Gildin & Robbins LLP (May 29, 2006) and Letter from Robert S. Banks, Jr., Public Investors Arbitration Bar Association (May 26, 2006).

(D)*Standard of Pleading:* Some commenters have expressed concerns about dispositive motions being granted when statements of claim do not meet pleading requirements under civil procedure rules. NASD Rule 10314, however, requires only that the statement of claim specify “the relevant facts and the remedies sought.” 13 Should the proposed rule provide additional guidance in the context of dispositive motions concerning the relevant pleading standard in NASD arbitration? 13 *See* Letters from Jill I. Gross and Barbara Black, Directors of Advocacy, Pace Investor Rights Project (Jul. 14, 2005 and Jun. 6, 2006) (“Pace Letters”) and Letter from Brian Lantagne, Chair, NASAA Broker-Dealer Arbitration Project Group (Jul. 19, 2006) (“NASAA Letter”).

(E)*Authority of Arbitrators to Limit Filing of Dispositive Motions:* The proposed rules provide that dispositive motions are “discouraged.” One commenter suggested that the arbitration panel be given the authority to manage the arbitration proceeding by denying leave to make dispositive motions. Should NASD grant arbitrators this authority in the proposed rule?

(F)*Additional Suggestions:* Are there other ways in which the proposed rule could balance cost effectiveness and efficiency with the general principle that parties are entitled to a hearing in arbitration? Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASD-2006-088 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASD-2006-088. The 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 will also be available for inspection and copying at the principal office of NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to SR-NASD-2006-088 and should be submitted on or before September 21, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-14493 Filed 8-30-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Release No. 34-54359; File No. SR-NYSE-2006-53] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Use of the Revised Uniform Application for Securities Industry Registration or Transfer (Form U4) and Revised Uniform Termination Notice for Securities Industry Registration (Form U5) August 24, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on August 4, 2006, the New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 5 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). 5 Certain additions and technical corrections were made throughout the discussion of the proposed rule change pursuant to conversations with NYSE staff. Telephone conversations between Cory Figman, Senior Special Counsel, Rule and Interpretive Standards, NYSE, and Kate Robbins, Attorney, Division of Market Regulation, Commission, on August 10, 2006. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange submits to the Commission, for use by the Exchange, the recently revised Uniform Application for Securities Industry Registration or Transfer (Form U4) and revised Uniform Termination Notice for Securities Industry Registration (Form U5). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to adopt, for use by the Exchange, recently revised Forms U4 and U5 6 (collectively, the “Forms”). These Forms are identical to those filed with the Commission by the National Association of Securities Dealers (“NASD”) in 2005. 7 6 Form U4 is the “Uniform Application for Securities Industry Registration or Transfer” and Form U5 is the “Uniform Termination Notice for Securities Industry Registration.” Form U4 has historically been the vehicle for the reporting of events that may reveal that a person is subject to a statutory disqualification. *See* Section 3(a)(39) of the Act, 15 U.S.C. 78c(a)(39). 7 *See* Securities Exchange Act Release No. 52544 (September 30, 2005), 70 FR 58764 (October 7, 2005) (SR-NASD-2005-030) and NASD Notice to Members 05-66. The revised Forms, which are to be used by the Exchange as part of its registration and oversight of persons associated with member organizations, have been enhanced to provide more meaningful and detailed disclosure with respect to registration-related functions processed through the Central Registration Depository (“CRD”) system. The CRD is an industry-wide automated system which allows for the efficient review and tracking of registered persons in the securities industry, such as changes in their work and disciplinary histories. Further, use of the revised Forms allows for integration of Form U4 and Form U5 information into branch office registration and reporting functions processed through the CRD system by linking registered persons to their designated branch office. 2. Statutory Basis The Exchange believes that, insofar as Forms U4 and U5 and the CRD system are used by the various self-regulatory organizations, including the Exchange, their use is consistent with Section 6(b)(5) of the Act 8 in fostering cooperation and coordination with persons engaged in regulating transactions in securities. Additionally, the Exchange believes that the information reported on the Forms will assist the Exchange in its responsibilities under Section 6(c) of the Act 9 in evaluating whether an individual subject to a statutory disqualification or who cannot meet such standards of training, experience, and competence as are prescribed by the rules of the Exchange or those who have engaged in acts or practices inconsistent with just and equitable principles of trade should be denied membership. 8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78f(c). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:

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

(ii)impose any significant burden on competition; and

(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(6) thereunder. 11 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 12 However, Rule 19b-4(f)(6)(iii) 13 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange provided the Commission with written notice of its intent to file this proposed rule change at least five business days prior to the date of filing of the proposed rule change. In addition, the Exchange has requested that the Commission waive the 30-day operative delay to allow the Exchange to utilize the U4 and U5 Forms without any undue delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow the Exchange to immediately use the revised Forms U4 and U5, which are currently being used by NASD. 14 For this reason, the Commission designates the proposal to be effective and operative upon filing with the Commission. 15 12 *Id.* 13 17 CFR 240.19b-4(f)(6)(iii). 14 *See* SR-NASD-2005-030, *supra* note. 15 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such proposed rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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-NYSE-2006-53 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2006-53. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE. 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-NYSE-2006-53 and should be submitted on or before September 21, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. 06-7301 Filed 8-30-06; 8:45 am]

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