Notices. Notice
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BILLING CODE 4410-02-M NATIONAL SCIENCE FOUNDATION No FEAR Act Notice AGENCY: National Science Foundation. ACTION: Notice. SUMMARY: Notice is hereby given of the National Science Foundation's notification of employee rights and protections under Federal Antidiscrimination Laws and Whistleblower Protection Laws (No FEAR Act). DATES: Effective immediately. ADDRESSES: National Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230. FOR FURTHER INFORMATION CONTACT: Ronald Branch, Director, Office of Equal Opportunity Programs,
(703)292-8020. SUPPLEMENTARY INFORMATION: 5 CFR part 724, implementing the notice provisions of the Notification and Federal Employees Antidiscrimination and Retaliation Act of 2002 (No FEAR Act), requires that each agency provide public notification of its initial No FEAR Act Notice to employees. This notice provides employees, former employees and applicants notification of their rights and applicable remedies available to them under the Antidiscrimination Laws and Whistleblower Protection Laws. Authority: Public Law 107-174. Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No FEAR Act). On May 15, 2002, Congress enacted the “Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002,” which is now known as the No FEAR Act. One purpose of the Act is to “require that Federal agencies be accountable for violations of antidiscrimination and whistleblower protection laws.” Public Law 107-174, Title I, General Provisions, section 101(1). In support of this purpose, Congress found that “agencies cannot be run effectively if those agencies practice or tolerate discrimination.” *Id* . The Act also requires this agency to provide this notice to Federal employees, former Federal employees and applicants for Federal employment to inform you of the rights and protections available to you under Federal antidiscrimination and whistleblower protection laws. Antidiscrimination Laws A Federal agency cannot discriminate against an employee or applicant with respect to the terms, conditions or privileges of employment on the basis of race, color, religion, sex, national origin, age, disability, marital status or political affiliation. Discrimination on these bases is prohibited by one or more of the following statutes: 5 U.S.C. 2302(b)(1), 29 U.S.C. 206(d), 29 U.S.C. 631, 29 U.S.C. 633a, 29 U.S.C. 791 and 42 U.S.C. 2000e-16. If you believe that you have been the victim of unlawful discrimination on the basis of race, color, religion, sex, national origin or disability, you must contact the Office of Equal Opportunity Programs
(OEOP)and request a counselor within 45 calendar days of the alleged discriminatory action, or, in the case of a personnel action, within 45 calendar days of the effective date of the action, before you can file a formal discrimination complaint with the Foundation. See, *e.g.* , 29 CFR Part 1614. If you believe that you have been the victim of unlawful discrimination on the basis of age, you must either contact an EEO counselor as noted above or give notice of intent to sue to the Equal Employment Opportunity Commission
(EEOC)within 180 calendar days of the alleged discriminatory action. If you are alleging discrimination based on marital status or political affiliation, you may file a written complaint with the U.S. Office of Special Counsel [OSC] (see contact information below). In the alternative (or in some cases, in addition), you may pursue a discrimination complaint by filing a grievance through the Foundation's administrative or negotiated grievance procedures, if such procedures apply and are available. Whistleblower Protection Laws A Federal employee with authority to take, direct others to take, recommend or approve any personnel action must not use that authority to take or fail to take, or threaten to take or fail to take, a personnel action against an employee or applicant because of disclosure of information by that individual that is reasonably believed to evidence violation of law, rule or regulation; gross mismanagement; gross waste of funds; an abuse of authority; or a substantial and specific danger to public health or safety, unless disclosure of such information is specifically prohibited by law and such information is specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs. Retaliation against an employee or applicant for making a protected disclosure is prohibited by 5 U.S.C. 2302(b)(8). If you believe that you have been the victim of whistleblower retaliation, you may file a written complaint [Form OSC-11] with the U.S. Office of Special Counsel at 1730 M Street, NW., Suite 218, Washington, DC 20036-4505 or online through the OSC Web site— *http://www.osc.gov.* Retaliation for Engaging in Protected Activity A Federal agency cannot retaliate against an employee or applicant because that individual exercises his or her rights under any of the Federal antidiscrimination or whistleblower protection laws listed above. If you believe that you are the victim of retaliation for engaging in protected activity, you must follow, as appropriate, the procedures described in the Antidiscrimination Laws and Whistleblower Protection Laws sections or, if applicable, the administrative or negotiated grievance procedures in order to pursue any legal remedy. Disciplinary Actions Under the existing laws, each agency retains the right, where appropriate, to discipline a Federal employee for conduct that is inconsistent with Federal Antidiscrimination and Whistleblower Protection Laws up to and including removal. If OSC has initiated an investigation under 5 U.S.C. 1214, however, according to 5 U.S.C. 1214(f), agencies must seek approval from the Special Counsel to discipline employees for, among other activities, engaging in prohibited retaliation. Nothing in the No FEAR Act alters existing laws or permits an agency to take unfounded disciplinary action against a Federal employee or to violate the procedural rights of a Federal employee who has been accused of discrimination. Additional Information For further information regarding the No FEAR Act regulations, refer to 5 CFR part 724, as well as the appropriate offices within the Foundation ( *e.g.* , Office of Equal Opportunity Programs, Division of Human Resource Management or the Office of the General Counsel). Additional information regarding Federal antidiscrimination, whistleblower protection and retaliation laws can be found at the EEOC Web site— *http://www.eeoc.gov* and the OSC Web site— *http://www.osc.gov.* Existing Rights Unchanged Pursuant to section 205 of the No FEAR Act, neither the Act nor this notice creates, expands or reduces any rights otherwise available to any employee, former employee or applicant under the laws of the United States, including the provisions of law specified in 5 U.S.C. 2302(d). Ronald Branch, Director, Office of Equal Opportunity Programs. [FR Doc. E6-18981 Filed 11-8-06; 8:45 am] BILLING CODE 7555-01-P NUCLEAR REGULATORY COMMISSION Notice of Issuance of Director's Decision Under 10 CFR 2.206 Notice is hereby given that the Director, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission (NRC or Commission) has issued a Director's Decision with regard to a Petition dated January 25, 2006, filed pursuant to Section 2.206 of Title 10 of the *Code of Federal Regulations* (10 CFR) by the Union of Concerned Scientists and numerous other organizations and individuals, hereinafter referred to as the “Petitioners.” The Petition concerns leaks of radioactively contaminated water into the ground around NRC-licensed facilities. The Petition requested that the NRC take immediate action to issue Demands for Information
(DFIs)to research, test, and power reactors to obtain responses to specific questions regarding leaks or potential leaks of radioactively contaminated water into the ground. As the basis for their request, the Petitioners pointed to radioactive leaks found during the last few years at several nuclear power plants. By teleconference on April 5, 2006, the Petitioners discussed the Petition with the NRC's Petition Review Board. This teleconference gave the Petitioners an opportunity to provide additional information and to clarify issues raised in the Petition. The NRC staff sent a copy of the proposed Director's Decision to the Petitioners and to the Nuclear Energy Institute for comment by letters dated June 28, 2006. The Petitioners submitted comments by letter dated July 20, 2006, and these comments are addressed in the final Director's Decision. The Director of the Office of Nuclear Reactor Regulation has determined that the Petitioners' request to obtain information on groundwater contamination is granted, in part. The request to obtain the information by issuing DFIs is denied. The reasons for this decision are explained in the Director's Decision pursuant to 10 CFR 2.206 (DD-06-03), the complete text of which is available for inspection at the Commission's Public Document Room, located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, Maryland, or electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the NRC Web site at *http://www.nrc.gov/reading-rm/adams.html.* A copy of the Director's Decision will be filed with the Secretary of the Commission for the Commission's review in accordance with 10 CFR 2.206 of the Commission's regulations. As provided for by this regulation, the Director's Decision will constitute the final action of the Commission 25 days after the date of the decision, unless the Commission, on its own motion, institutes a review of the Director's Decision in that time. Dated at Rockville, Maryland, this 2nd day of November, 2006. For the Nuclear Regulatory Commission. J.E. Dyer, Director, Office of Nuclear Reactor Regulation. [FR Doc. E6-18980 Filed 11-8-06; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Notice of Availability of Draft Interim Staff Guidance Document HLWRS-ISG-02, “Preclosure Safety Analysis—Level of Information and Reliability Estimation”; Extension of Comment Period AGENCY: Nuclear Regulatory Commission. ACTION: Extension of comment period. SUMMARY: On September 29, 2006 (71 FR 57584), the U.S. Nuclear Regulatory Commission
(NRC)published, for public comment, a Notice of Availability of Draft Interim Staff Guidance
(ISG)document HLWRS-ISG-02, “Preclosure Safety Analysis—Level of Information and Reliability Estimation.” On October 26, 2006, the U.S. Department of Energy requested a 30-day extension to the public comment period for HLWRS-ISG-02, from November 13, 2006, to December 13, 2006. In response to this request, NRC is granting a 30-day extension to the public comment period for HLWRS-ISG-02, to December 13, 2006. DATES: The comment period has been extended and now expires on December 13, 2006. ADDRESSES: Mail written comments to: Robert Johnson, Senior Project Manager, Licensing and Inspection Directorate, High-Level Waste Repository Safety Division of the Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Comments can also be submitted by telephone, fax, or e-mail, which are as follows: *telephone:*
(301)415-6900; *fax number:*
(301)415-5399; or *e-mail: rkj@nrc.gov* . FOR FURTHER INFORMATION, CONTACT: Jon Chen, Project Manager, Licensing and Inspection Directorate Division of High-Level Waste Repository Safety, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, *Telephone:*
(301)415-5526; *fax number:*
(301)415-5399; *e-mail: jcc2@nrc.gov.* Dated at Rockville, Maryland, this 2nd day of November, 2006. For the Nuclear Regulatory Commission. N. King Stablein, Chief, Project Management Branch B, Division of High-Level Waste Repository Safety, Office of Nuclear Material Safety and Safeguards. [FR Doc. E6-18976 Filed 11-8-06; 8:45 am] BILLING CODE 7590-01-P RAILROAD RETIREMENT BOARD Agency Forms Submitted for OMB Review, Request for Comments SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Railroad Retirement Board
(RRB)will be sending an Information Collection Request
(ICR)to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget
(OMB)to request a revision to the following collection of information: 3220-0042, Application for Spouse Annuity Under the Railroad Retirement Act, consisting of RRB Form(s) AA-3, Application for Spouse/Divorced Spouse Annuity and AA-3cert, Application Summary and Certification. Our ICR describes the information we seek to collect from the public. Review and approval by OIRA ensures that we impose appropriate paperwork burdens. The RRB invites comments on the proposed collection of information to determine:
(1)The practical utility of the collection;
(2)the accuracy of the estimated burden of the collection;
(3)ways to enhance the quality, utility and clarity of the information that is the subject of collection; and
(4)ways to minimize the burden of collections on respondents, including the use of automated collection techniques or other forms of information technology. Comments to RRB or OIRA must contain the OMB control number of the ICR. For proper consideration of your comments, it is best if RRB and OIRA receive them within 30 days of publication date. *Previous Requests for Comments:* The RRB has already published the initial 60-day notice (71 FR 44727 on August 7, 2006) required by 44 U.S.C. 3506(c)(2). That request elicited no comments. Information Collection Request
(ICR)*Title:* Application for Spouse Annuity Under the Railroad Retirement Act. *OMB Control Number:* 3220-0042. *Form(s) submitted:* AA-3, Application for Spouse/Divorced Spouse Annuity, AA-3cert, Application Summary and Certification. *Type of request:* Revision of a currently approved collection. *Affected public:* Individuals or households. *Obligation to Respond:* Required to obtain or retain benefits. *Abstract:* The Railroad Retirement Act provides for the payment of annuities to spouses of railroad retirement annuitants who meet the requirements under the Act. The application obtains information supporting the claim for benefits based on being a spouse of an annuitant. The information is used for determining entitlement to and amount of the annuity applied for. *Changes Proposed:* The RRB proposes to add new items to Form(s) AA-3cert and AA-3 to further document an applicant's most recent nonrailroad work. The items ask for the applicant's most recent job title and whether their employer is a seasonal employer. Non-burden impacting changes are proposed to the certification statements of Form(s) AA-3cert and AA-3 that are intended to provide additional specificity regarding post-application events that require an applicant to contact the RRB. Other non-burden impacting, editorial (clarification) and formatting changes to Form AA-3cert and Form AA-3 are also proposed. The burden estimate for this ICR is unchanged as follows: *Estimated annual number of respondents:* 8,500. *Total annual responses:* 8,500. *Total annual reporting hours:* 4,297. FOR FURTHER INFORMATION CONTACT: Copies of the form and supporting documents can be obtained from Charles Mierzwa, the agency clearance officer at (312-751-3363) or *Charles.Mierzwa@rrb.gov.* *Comments:* Comments regarding the information collection should be addressed to Ronald J. Hodapp, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092 or *Ronald.Hodapp@rrb.gov* and to the OMB Desk Officer for the RRB, Karen Matsuoka at *kmatsuoka@omb.eop.gov* , fax
(202)395-6974. Charles Mierzwa, RRB Clearance Officer. [FR Doc. E6-18961 Filed 11-8-06; 8:45 am] BILLING CODE 7905-01-P RAILROAD RETIREMENT BOARD Agency Forms Submitted for OMB Review, Request for Comments SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Railroad Retirement Board
(RRB)is forwarding an Information Collection Request
(ICR)to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget
(OMB)to request an extension of the following collection of information: 3220-0193, Job Information Report, consisting of RRB Form(s) G-251a, Employer Job Information (job description) and G-251b, Employer Job Information (general). Our ICR describes the information we seek to collect from the public. Review and approval by OIRA ensures that we impose appropriate paperwork burdens. The RRB invites comments on the proposed collection of information to determine
(1)The practical utility of the collection;
(2)the accuracy of the estimated burden of the collection;
(3)ways to enhance the quality, utility and clarity of the information that is the subject of collection; and
(4)ways to minimize the burden of collections on respondents, including the use of automated collection techniques or other forms of information technology. Comments to RRB or OIRA must contain the OMB control number of the ICR. For proper consideration of your comments, it is best if RRB and OIRA receive them within 30 days of publication date. *Previous Requests for Comments:* The RRB has already published the initial 60-day notice (71 FR 44054 and 44055 on August 3, 2006) required by 44 U.S.C. 3506(c)(2). That request elicited no comments. Information Collection Request
(ICR)*Title:* Job Information Report. *OMB Number:* 3220-0193. *Form(s) submitted:* G-251a, Employer Job Information (position description). G-251b, Employer Job Information (general). *Type of request:* Extension of a currently approved collection. *Respondents:* Business or other for-profit. *Obligation to respond:* Voluntary. *Abstract:* The collection obtains information used by the Railroad Retirement Board
(RRB)to assist in determining whether a railroad employee is disabled from his or her regular occupation. It provides, under certain conditions, railroad employers with the opportunity to provide information to the RRB regarding the employee applicant's job duties. *The proposed estimated annual burden for this collection is unchanged as follows:* *Estimated annual number of respondents:* 430. *Total annual responses:* 430. *Total annual reporting hours:* 144. FOR FURTHER INFORMATION CONTACT: Copies of the form and supporting documents can be obtained from Charles Mierzwa, the agency clearance officer at (312-751-3363) or *Charles.Mierzwa@rrb.gov.* *Comments:* Comments regarding the information collection should be addressed to Ronald J. Hodapp, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611-2092 or *Ronald.Hodapp@rrb.gov* and to the OMB Desk Officer for the RRB, Karen Matsuoka at *kmatsuoka@omb.eop.gov* , Fax
(202)395-6974. Charles Mierzwa, RRB Clearance Officer. [FR Doc. E6-18962 Filed 11-8-06; 8:45 am] BILLING CODE 7905-01-P RAILROAD RETIREMENT BOARD 2007 Railroad Experience Rating Proclamations, Monthly Compensation Base and Other Determinations AGENCY: Railroad Retirement Board. ACTION: Notice. SUMMARY: Pursuant to section 8(c)(2) and section 12(r)(3) of the Railroad Unemployment Insurance Act
(Act)(45 U.S.C. 358(c)(2) and 45 U.S.C. 362(r)(3), respectively), the Board gives notice of the following: 1. The balance to the credit of the Railroad Unemployment Insurance
(RUI)Account, as of June 30, 2006, is $114,826,602.43; 2. The September 30, 2006, balance of any new loans to the RUI Account, including accrued interest, is zero; 3. The system compensation base is $3,338,677,272.65 as of June 30, 2006; 4. The cumulative system unallocated charge balance is ($279,893,399.81) as of June 30, 2006; 5. The pooled credit ratio for calendar year 2007 is zero; 6. The pooled charged ratio for calendar year 2007 is zero; 7. The surcharge rate for calendar year 2007 is 1.5 percent; 8. The monthly compensation base under section 1(i) of the Act is $1,230 for months in calendar year 2007; 9. The amount described in section 1(k) of the Act as “2.5 times the monthly compensation base” is $3,075 for base year (calendar year) 2007; 10. The amount described in section 2(c) of the Act as “an amount that bears the same ratio to $775 as the monthly compensation base for that year as computed under section 1(i) of this Act bears to $600” is $1,589 for months in calendar year 2007; 11. The amount described in section 3 of the Act as “2.5 times the monthly compensation base” is $3,075 for base year (calendar year) 2007; 12. The amount described in section 4(a-2)(i)(A) of the Act as “2.5 times the monthly compensation base” is $3,075 with respect to disqualifications ending in calendar year 2007; 13. The maximum daily benefit rate under section 2(a)(3) of the Act is $59 with respect to days of unemployment and days of sickness in registration periods beginning after June 30, 2007. DATES: The balance in notice
(1)and the determinations made in notices
(3)through
(7)are based on data as of June 30, 2006. The balance in notice
(2)is based on data as of September 30, 2006. The determinations made in notices
(5)through
(7)apply to the calculation, under section 8(a)(1)(C) of the Act, of employer contribution rates for 2007. The determinations made in notices
(8)through
(12)are effective January 1, 2007. The determination made in notice
(13)is effective for registration periods beginning after June 30, 2007. ADDRESSES: Secretary to the Board, Railroad Retirement Board, 844 Rush Street, Chicago, Illinois 60611-2092. FOR FURTHER INFORMATION CONTACT: Marla L. Huddleston, Bureau of the Actuary, Railroad Retirement Board, 844 Rush Street, Chicago, Illinois 60611-2092, telephone
(312)751-4779. SUPPLEMENTARY INFORMATION: The RRB is required by section 8(c)(1) of the Railroad Unemployment Insurance Act
(Act)(45 U.S.C. 358(c)(1)) as amended by Public Law 100-647, to proclaim by October 15 of each year certain system-wide factors used in calculating experience-based employer contribution rates for the following year. The RRB is further required by section 8(c)(2) of the Act (45 U.S.C. 358(c)(2)) to publish the amounts so determined and proclaimed. The RRB is required by section 12(r)(3) of the Act (45 U.S.C. 362(r)(3)) to publish by December 11, 2006, the computation of the calendar year 2007 monthly compensation base (section 1(i) of the Act) and amounts described in sections 1(k), 2(c), 3 and 4(a-2)(i)(A) of the Act which are related to changes in the monthly compensation base. Also, the RRB is required to publish, by June 11, 2007, the maximum daily benefit rate under section 2(a)(3) of the Act for days of unemployment and days of sickness in registration periods beginning after June 30, 2007. Surcharge Rate A surcharge is added in the calculation of each employer's contribution rate, subject to the applicable maximum rate, for a calendar year whenever the balance to the credit of the RUI Account on the preceding June 30 is less than the greater of $100 million or the amount that bears the same ratio to $100 million as the system compensation base for that June 30 bears to the system compensation base as of June 30, 1991. If the RUI Account balance is less than $100 million (as indexed), but at least $50 million (as indexed), the surcharge will be 1.5 percent. If the RUI Account balance is less than $50 million (as indexed), but greater than zero, the surcharge will be 2.5 percent. The maximum surcharge of 3.5 percent applies if the RUI Account balance is less than zero. The system compensation base as of June 30, 1991 was $2,763,287,237.04. The system compensation base for June 30, 2006 was $3,338,677,272.65. The ratio of $3,338,677,272.65 to $2,763,287,237.04 is 1.20822665. Multiplying 1.20822665 by $100 million yields $120,822,665. Multiplying $50 million by 1.20822665 produces $60,411,333. The Account balance on June 30, 2006, was $114,826,602.43. Accordingly, the surcharge rate for calendar year 2007 is 1.5 percent. Monthly Compensation Base For years after 1988, section 1(i) of the Act contains a formula for determining the monthly compensation base. Under the prescribed formula, the monthly compensation base increases by approximately two-thirds of the cumulative growth in average national wages since 1984. The monthly compensation base for months in calendar year 2007 shall be equal to the greater of
(a)$600 or
(b)$600 [1 + {(A − 37,800)/56,700}], where A equals the amount of the applicable base with respect to tier 1 taxes for 2007 under section 3231(e)(2) of the Internal Revenue Code of 1986. Section 1(i) further provides that if the amount so determined is not a multiple of $5, it shall be rounded to the nearest multiple of $5. The calendar year 2007 tier 1 tax base is $97,500. Subtracting $37,800 from $97,500 produces $59,700. Dividing $59,700 by $56,700 yields a ratio of 1.05291005. Adding one gives 2.05291005. Multiplying $600 by the amount 2.05291005 produces the amount of $1,231.75, which must then be rounded to $1,230. Accordingly, the monthly compensation base is determined to be $1,230 for months in calendar year 2007. Amounts Related to Changes in Monthly Compensation Base For years after 1988, sections 1(k), 2(c), 3 and 4(a-2)(i)(A) of the Act contain formulas for determining amounts related to the monthly compensation base. Under section 1(k), remuneration earned from employment covered under the Act cannot be considered subsidiary remuneration if the employee's base year compensation is less than 2.5 times the monthly compensation base for months in such base year. Multiplying 2.5 by the calendar year 2007 monthly compensation base of $1,230 produces $3,075. Accordingly, the amount determined under section 1(k) is $3,075 for calendar year 2007. Under section 2(c), the maximum amount of normal benefits paid for days of unemployment within a benefit year and the maximum amount of normal benefits paid for days of sickness within a benefit year shall not exceed an employee's compensation in the base year. In determining an employee's base year compensation, any money remuneration in a month not in excess of an amount that bears the same ratio to $775 as the monthly compensation base for that year bears to $600 shall be taken into account. The calendar year 2007 monthly compensation base is $1,230. The ratio of $1,230 to $600 is 2.05000000. Multiplying 2.05000000 by $775 produces $1,589. Accordingly, the amount determined under section 2(c) is $1,589 for months in calendar year 2007. Under section 3, an employee shall be a “qualified employee” if his/her base year compensation is not less than 2.5 times the monthly compensation base for months in such base year. Multiplying 2.5 by the calendar year 2007 monthly compensation base of $1,230 produces $3,075. Accordingly, the amount determined under section 3 is $3,075 for calendar year 2007. Under section 4(a-2)(i)(A), an employee who leaves work voluntarily without good cause is disqualified from receiving unemployment benefits until he has been paid compensation of not less than 2.5 times the monthly compensation base for months in the calendar year in which the disqualification ends. Multiplying 2.5 by the calendar year 2007 monthly compensation base of $1,230 produces $3,075. Accordingly, the amount determined under section 4(a-2)(i)(A) is $3,075 for calendar year 2007. Maximum Daily Benefit Rate Section 2(a)(3) contains a formula for determining the maximum daily benefit rate for registration periods beginning after June 30, 1989, and after each June 30 thereafter. Legislation enacted on October 9, 1996, revised the formula for indexing maximum daily benefit rates. Under the prescribed formula, the maximum daily benefit rate increases by approximately two-thirds of the cumulative growth in average national wages since 1984. The maximum daily benefit rate for registration periods beginning after June 30, 2007, shall be equal to 5 percent of the monthly compensation base for the base year immediately preceding the beginning of the benefit year. Section 2(a)(3) further provides that if the amount so computed is not a multiple of $1, it shall be rounded down to the nearest multiple of $1. The calendar year 2006 monthly compensation base is $1,195. Multiplying $1,195 by 0.05 yields $59.75, which must then be rounded down to $59. Accordingly, the maximum daily benefit rate for days of unemployment and days of sickness beginning in registration periods after June 30, 2007, is determined to be $59. Dated: November 2, 2006. By authority of the Board. Beatrice Ezerski, Secretary to the Board. [FR Doc. E6-18960 Filed 11-8-06; 8:45 am] BILLING CODE 7905-01-P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. Rule 17a-5; SEC File No. 270-155; OMB Control No. 3235-0123. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the Securities and Exchange Commission (“Commission”) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. Rule 17a-5 (17 CFR 240.17a-5) is the basic financial reporting rule for brokers and dealers. 1 The Rule requires the filing of the Financial and Operational Combined Uniform Single Report (“FOCUS Report”) on Form X-17A-5 (17 CFR 240.15c3-1e), which was the result of years of study and comments by representatives of the securities industry through advisory committees and through the normal rule proposal methods. The FOCUS Report was designed to eliminate the overlapping regulatory reports required by various self-regulatory organizations and the Commission and to reduce reporting burdens as much as possible. The Rule also requires the filing of an annual audited report of financial statements. 1 Rule 17a-5(c) requires a broker or dealer to furnish certain of its financial information to customers and is subject to a separate PRA filing (OMB Control Number 3235-0199). The FOCUS Report consists of:
(1)Part I, which is a monthly report that must be filed by brokers or dealers that clear transactions or carry customer securities;
(2)one of three alternative quarterly reports: Part II, which must be filed by brokers or dealers that clear transactions or carry customer securities; Part IIA, which must be filed by brokers or dealers that do not clear transactions or carry customer securities; and Part IIB, which must be filed by specialized broker-dealers registered with the Commission as OTC derivatives dealers; 2
(3)supplemental schedules, which must be filed annually; and
(4)a facing page, which must be filed with the annual audited report of financial statements. Under the Rule, a broker or dealer that computes certain of its capital charges in accordance with Appendix E to Exchange Act Rule 15c3-1 (17 CFR 240.15c3-1e) must file additional monthly, quarterly, and annual reports with the Commission. 2 Part IIB of Form X-17A-5 must be filed by OTC derivatives dealers under Exchange Act Rule 17a-12 and is subject to a separate PRA filing (OMB Control Number 3235-0498). The variation in the size and complexity of brokers and dealers subject to Rule 17a-5 and the differences in the FOCUS Report forms that must be filed under the Rule make it difficult to calculate the cost of compliance. However, we estimate, on average, that each report will require approximately 12 hours. At year-end 2005, the Commission estimates that there were approximately 6,200 brokers or dealers, and that of those firms there were approximately 600 brokers or dealers that clear transactions or carry customer securities. In addition, approximately 400 firms filed annual reports. The Commission therefore estimates that approximately 600 firms filed monthly reports, approximately 5,600 firms filed quarterly reports, and approximately 400 firms filed annual reports. In addition, approximately 6,200 firms filed annual audited reports. As a result, there were approximately 36,200 total annual responses ((600 × 12) + (5,600 × 4) + 400 + 6,200 = 36,200). This results in an estimated annual burden of 434,400 hours (36,200 annual responses × 12 hours = 434,400). In addition, we estimate that approximately 11 brokers or dealers will elect to use Appendix E to Rule 15c3-1 to compute certain of their capital charges (as of June 2006, five brokers or dealers have elected to use Appendix E). We estimate that the average amount of time necessary to prepare and file the additional monthly reports that must be filed by these firms is about 4 hours per month, or approximately 48 hours per year; the average amount of time necessary to prepare and file the additional quarterly reports is about 8 hours per quarter, or approximately 32 hours per year; and the average amount of time necessary to prepare and file the additional supplemental reports with the annual audit required is approximately 40 hours per year. Consequently, we estimate that the total additional annual burden for these 11 brokers or dealers is approximately 1,320 hours ((48 + 32 + 40) × 11 = 1,320). The Commission therefore estimates that the total annual burden under Rule 17a-5 is approximately 435,700 hours (434,400 + 1,320 = 435,720, rounded to 435,700). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. Comments regarding the estimated burden hours should be directed to:
(i)The Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or by e-mail to *David_Rostker@omb.eop.gov* ; and
(ii)R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312, or by e-mail to *PRA_Mailbox@sec.gov* . Comments must be submitted to the Office of Management and Budget within 30 days of this notice. November 3, 2006. Nancy M. Morris, Secretary. [FR Doc. E6-18950 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54691; File No. SR-Amex-2006-103] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Eliminating the Post-Trade Allocation Feature in ANTE November 2, 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 October 27, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) submitted to the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by Amex. The Exchange filed the proposal as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders it 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)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to eliminate the concept of post-trade allocation codified in Amex Rule 935-ANTE(b). The text of the proposed rule change is available on the Amex's Web site at *http://amex.com* , the Amex's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Amex included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to eliminate Amex Rule 935-ANTE (b), governing ANTE post-trade allocation. Amex Rule 935-ANTE
(b)currently provides for the post-trade allocation of contracts executed as the result of the submission of orders to trade with orders in the ANTE Central Book. Amex Rule 935-ANTE (b)(2) provides that if more than one ANTE Participant 5 and/or a floor broker representing a customer order submits an order to trade with an order in the ANTE Central book, within a period not to exceed five seconds after the initial ANTE Participant has submitted its order, all those ANTE Participants and the floor broker's customer will be entitled to participate in the allocation of any executed contracts. Amex Rule 935-ANTE (b)(2) provides that the ANTE Participant to first submit the order to trade would be allocated executed contracts up to a size established on a class-by-class basis by the Options Trading Committee and referred to as the “Take Size.” The initial ANTE Participant receives the lesser of the number of executed contracts in his indicated order size or the “Take Size.” The Options Trading Committee considers the option's liquidity and the size of the trading crowd in determining the appropriate “Take Size” for each option class. They are responsible for reviewing and in some cases revising the assigned “Take Size” on a periodic basis, but do not change a “Take Size” during the course of a trading day. 5 Amex Rule 900-ANTE (b)(45) defines ANTE Participant as either the specialist, registered options trader(s), Remote Registered Options Trader or Supplemental Registered Options Trader, assigned to trade a specific options class on the ANTE System. Other Exchanges have moved towards electronic trading, where the notion of “Take-Size” does not exist. 6 The Exchange believes that eliminating the concept of “Take-Size” at the Amex will further encourage competition with the liquidity providers on the Exchange's Floor. Accordingly, the Exchange proposes that ANTE Participants will no longer be limited by the post-trade allocation process. 6 *See* ISE Rule 714 and NYSEArca Rule 6.76B. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6 of the Act 7 in general and furthers the objectives of Section 6(b)(5) 8 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 7 15 U.S.C. 78f. 8 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 9 and subparagraph (f)(6) of Rule 19b-4 10 thereunder because it 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; and the Exchange has given the Commission written notice of its intention to file the proposed rule change at least five business days prior to filing. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 9 15 U.S.C. 78s(b)(3)(A)(iii). 10 17 CFR 240.19b-4(f)(6). Under Rule 19b-4(f)(6) of the Act, 11 the proposal does not become operative for 30 days after the date of its filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Amex has requested that the Commission waive the 30-day operative delay so that it may implement the proposal as quickly as possible. The Commission believes that the proposal raises no issues of regulatory concern. Therefore, the Commission, consistent with the protection of investors and the public interest, has determined to waive the 30-day operative date so that the proposal may take effect upon filing. 12 11 *Id.* 12 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Amex-2006-103 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-Amex-2006-103. 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 Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2006-103 and should be submitted on or before November 30, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18952 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54698; File No. SR-Amex-2006-104] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Eliminate Certain Licensing Fees November 2, 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 October 30, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. Amex has designated this proposal as one establishing or changing a due, fee, or other charge imposed by a self-regulatory organization pursuant to Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Amex proposes to modify its Options Fee Schedule and its Exchange-Traded Fund (“ETF”) and Trust Issued Receipts Fee Schedule to eliminate certain licensing fees. The text of the proposed rule change is available on the Exchange's Internet Web site ( *http://www.amex.com* ), at the Exchange's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend its Options Fee Schedule to eliminate the licensing fee of $0.10 a contract which is currently charged on
(1)options on the S&P 500 Index Tracking Stock® (“SPY®”) and
(2)options on the Nasdaq-100 Index Tracking Stock® (“QQQQ®”). The Exchange is proposing to retroactively eliminate the licensing fee applicable to the SPY options as of the close of business on September 29, 2006. The Exchange is also proposing to retroactively eliminate the licensing fee applicable to the QQQQ options as of the close of business on October 11, 2006. The Exchange is proposing the termination of these licensing fees because said licensing fees are no longer being imposed on the Amex. 5 5 The Exchange has represented that the licensing agreements for the SPY options and the QQQQ options were eliminated on September 29, 2006 and October 11, 2006, respectively. Email communication from Nyieri Nazarian, Assistant General Counsel, Amex, to Leah Mesfin, Special Counsel, Division of Market Regulation, Commission, on November 1, 2006. The Exchange is further proposing to eliminate the licensing fee of $0.10 a contract on the options on the SPDR O-Strip ETF. The Exchange further proposes to modify its Exchange-Traded Fund and Trust Issued Receipts Fee Schedule to eliminate the references to the SPDR O-Strip ETF, which has been delisted. The Exchange asserts that the proposal is equitable as required by Section 6(b)(4) of the Act. 2. Statutory Basis The Exchange believes that the proposed fee change is consistent with Section 6(b)(4) of the Act 6 regarding the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. 6 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 7 and Rule 19b-4(f)(2) thereunder 8 because it establishes or changes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 7 15 U.S.C. 78s(b)(3)(A)(ii). 8 17 CFR 19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-Amex-2006-104 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-Amex-2006-104. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commissions Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2006-104 and should be submitted on or before November 30, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18953 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54696; File No. SR-Amex-2006-93] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Revise the Equities and Exchange Traded Fund Shares (“ETFs”) Fee Schedule November 2, 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 September 29, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Exchange designated the proposed rule change as one establishing or changing a due, fee, or other charge, pursuant to Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to revise the equities and Exchange Traded Fund Shares (“ETFs”) Fee Schedule to provide for various fees related to the routing of orders to other market centers. The text of the proposed change is available on Amex's Web site at *http://www.amex.com,* at the principal office of Amex, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the 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 Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose On July 17, 2006, the Amex, the Boston Stock Exchange, Inc., the Chicago Board Options Exchange, Inc., the Chicago Stock Exchange, Inc., the Nasdaq Stock Market LLC, the National Stock Exchange, the New York Stock Exchange LLC, and the NYSE Arca, Inc., executed and filed with the Commission a “Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage Pursuant to Section 11A(a)(3)(B) of the Act. The Philadelphia Stock Exchange, Inc. (“Phlx”) subsequently executed the Linkage Plan on August 1, 2006. 5 This “Linkage Plan” was filed with the Commission pursuant to Rule 608 of Regulation NMS under the Act. 6 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”) that will electronically link the Linkage Plan Participant Markets to one another, as described in the Linkage Plan. The Linkage Plan became operative on October 1, 2006. 5 *See* Securities Exchange Act Release No. 54551 (Sept. 29, 2006), 71 FR 59148 (Oct. 6, 2006) (approving the Linkage Plan). 6 17 CFR 242.608. Historically, ITS Participants have not imposed transaction charges for executions of commitments delivered through ITS, although the ITS Plan does not prohibit such charges. Under the Linkage Plan, each Participant is accessed through its own members and could charge for orders executed in their market through the Linkage. Therefore, the Exchange now proposes to amend its Fee Schedule to provide:
(1)For transactions resulting from equities and ETF orders routed through the Linkage to the Amex, members will be assessed a transaction charge based on the transaction charges currently in place for transactions resulting from other orders; and
(2)for transactions resulting from equities and ETF orders routed through the Linkage to an away market, the Amex will pass through to its members fees charged by the other market centers for such transactions. 7 To determine the amount of these fees members will need to consult the fee schedules published by each market center. It is anticipated that, at least initially the transaction charges imposed by other market centers for the execution of orders routed to them through the Linkage will be the same as the transaction charges imposed on executions of orders for their own members. 7 *See* Securities Exchange Act Release Nos. 54548 (September 29, 2006), 71 FR 59159 (October 6, 2006) (SR-Amex 2006-85); and 54480 (September 21, 2006), 71 FR 57596 (September 29, 2006) (SR-NYSE 2006-75). 2. Statutory Basis The Exchange believes that its proposal to revise its schedule of fees is consistent with Section 6(b) of the Act 8 in general, and furthers the objectives of Section 6(b)(4) of the Act 9 in particular, in that it is an equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities. Specifically, the Exchange is proposing to establish transaction charges for order routed to the Amex through the Linkage and pass through charges assessed by other market centers for orders routed from the Amex through the Linkage. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 10 and subparagraph (f)(2) of Rule 19b-4 thereunder. 11 At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 C.F.R. 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Amex-2006-93 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-1090. All submissions should refer to File Number SR-Amex-2006-93. 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 Room. Copies of the filing also will be available for inspection and copying at the principal office of the Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2006-93 and should be submitted on or before November 30, 2006. 12 17 CFR 200.30-3(a)(12). For the Commission by the Division of Market Regulation, pursuant to delegated authority. 12 Nancy M. Morris, Secretary. [FR Doc. E6-18954 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54709; File No. SR-Amex-2006-72] Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving a Proposed Rule Change and Amendment No. 1 Thereto, and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 3, To Adopt New Rules To Implement on a Pilot Basis an Initial Version of AEMI, Its Proposed New Hybrid Market Trading Platform For Equity Products and Exchange Traded Funds November 3, 2006. I. Introduction On August 8, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to implement an initial version of its Auction & Electronic Market Integration (“AEMI”) system, a new hybrid market trading platform for equity products and exchange-traded funds (“ETFs”). On September 7, 2006, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The proposed rule change, as amended, was published for comment in the **Federal Register** on September 14, 2006. 4 The Commission received four comments on the proposal. 5 On October 31, 2006, Amex filed Amendment No. 3 to the proposal. 6 This notice and order solicits comments from interested persons on Amendment No. 3 and approves the amended proposal on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaces and supersedes the original filing in its entirety. 4 *See* Securities Exchange Act Release No. 54413 (September 7, 2006), 71 FR 54318 (“Notice”). 5 *See* Letter to Nancy M. Morris, Secretary, Commission, from Michael A. Barth, Senior Vice President, Exchange and Market Centers, Order Execution Services, Inc., dated September 22, 2006 (“OES Letter”); Letter to Nancy M. Morris, Secretary, Commission, from Mary Yeager, Assistant Secretary, New York Stock Exchange LLC, dated September 29, 2006 (“NYSE Letter”); Letter to Nancy M. Morris, Secretary, Commission, from David A. Herron, Chief Executive Officer, Chicago Stock Exchange, Inc., dated October 5, 2006 (“CHX Letter”); and Letter to Nancy M. Morris, Secretary, Commission, from Jeffrery S. Davis, Assistant General Counsel, Nasdaq Stock Market LLC, dated October 10, 2006 (“Nasdaq Letter”). 6 *See* Partial Amendment to Form 19b-4 dated October 27, 2006 (“Amendment No. 3”), *infra* Section III. The Exchange submitted Amendment No. 2 to the Commission on October 30, 2006 and withdrew Amendment No. 2 on October 31, 2006. II. Description of Proposal The Commission recently approved the Exchange's new hybrid market platform for equity products and ETFs, known as AEMI, that will integrate automatic execution and floor-based auction trading (the “AEMI Rule Filing”). 7 The Exchange has proposed to adopt, prior to the Trading Phase Date, 8 which is set for February 5, 2007, a modified version of the AEMI Rules, known as the “AEMI-One Rules,” as a pilot program (the “AEMI-One Pilot”). The AEMI-One Pilot would commence with two listed equities and two ETF UTP securities. Following a successful ten-day period of trading, up to four listed ETFs would be added for an additional five days of trading. The Exchange would then accelerate the deployment of all equity products and ETFs on a per-post basis and give notice to members and publish on Amex's Web site the timing for each group of securities being migrated to the AEMI platform. 7 Securities Exchange Act Release No. 54552 (September 29, 2006), 71 FR 59546 (October 10, 2006) (“AEMI Approval Order”). 8 By the Trading Phase Date, each trading center intending to qualify its quotations for trade-through protection must bring a Regulation NMS-compliant trading system into full operation for all NMS stocks intended to be traded during the phase-in period ( *i.e.,* through October 8, 2007). *See* Securities Exchange Act Release No. 53829 (May 18, 2006), 71 FR 30038, 30039 (May 24, 2006) (“NMS Extension Release”) (extending compliance dates for Rules 610 and 611 of Regulation NMS). Because not all provisions of Regulation NMS are fully operative, the AEMI-One Pilot rules are modified from their AEMI Rule counterparts to reflect the different regulatory environments in effect before and after the Trading Phase Date. The Exchange expects that the AEMI-One Pilot would be in effect from shortly after Commission approval of the AEMI-One Rules until the Trading Phase Date. At the Trading Phase Date, the AEMI Rules would become effective and supersede the AEMI-One Rules. The Exchange has stated that it would make this change via a filing with the Commission to delete the AEMI-One Rules from its rulebook. The operation of AEMI-One would be, in most respects, consistent with the operation of AEMI, except for the following provisions: • A “protected quotation” in the AEMI-One Pilot (“AEMI-One Protected Quotation”) is a quotation in an NMS stock that:
(1)Is disseminated pursuant to an effective national market system plan;
(2)is the best bid or best offer of a national securities exchange or a national securities association that is at a better price than the next trade that would occur on AEMI; and
(3)is a firm manual or automated quotation, irrespective of whether the quotation is at the national best bid or offer (“NBBO”). 9 In contrast, a “protected quotation” under the AEMI Rules is defined to be consistent with Rule 611 of Regulation NMS 10 and must be an automated quotation that is the best bid or offer of an automated trading center. 9 *See* Amendment No. 3, *supra* note 6. 10 *See* 17 CFR 242.600(b)(58) (defining “protected quotation”); *see also* 17 CFR 242.600(b)(57) (defining “protecting bid” and “protected offer”). • During the AEMI-One Pilot, not every away market center that displays an AEMI-One Protected Quotation may be capable of receiving intermarket sweep orders (“ISOs”), as such orders are defined in Regulation NMS. 11 In such circumstances, AEMI would not utilize ISOs and instead would generate “away market obligations.” An “away market obligation” is defined in the AEMI-One Rules as an immediate-or-cancel limit order generated by AEMI and routed to one or more away market centers to execute against all AEMI-One Protected Quotations up to their displayed size. 12 If an away market that trades a particular security were capable of receiving ISOs prior to the Trading Phase Date, the Exchange could choose to require AEMI to generate and utilize ISOs as the away market obligations for that market. 13 In contrast, the AEMI Rules effective on and after the Trading Phase Date would provide for the use of ISOs exclusively to comply with the trade-through provisions of Rule 611 for protected quotations displayed at other market centers. However, during the AEMI-One Pilot, AEMI would accept and trade all ISOs received by the Exchange that involve securities traded on the Exchange that have made the transfer from Amex's legacy systems to the AEMI platform, similar to the way AEMI would operate following the AEMI-One Pilot. 14 11 *See* 17 CFR 242.600(b)(30) (defining “intermarket sweep order”). 12 The Commission notes that the Exchange has represented that such immediate-or-cancel orders will carry an expiration delay timer that at the outset of AEMI-One will be set to 35 seconds for all away market obligations. *See* Letter to Nancy M. Morris, Secretary, Commission, from Claire P. McGrath, Senior Vice President and General Counsel, Amex, dated October 31, 2006 (“Amex Request Letter”) (requesting exemption from Section 8(d) of the ITS Plan in connection with Amex's use of ISOs and the use of private linkages instead of ITS for routing away market obligations). 13 The Commission notes that as a condition to the Exchange marking an order as an ISO, the Exchange must immediately send ISOs or away market obligations, as appropriate to the trading center whose quote the Exchange is trying to access, to all AEMI-One Protected Quotations. 14 In Amendment No. 1 the Exchange, among other things, clarified that, during the period of the AEMI-One Pilot, a member of the Exchange sending an intermarket sweep order to the AEMI platform must simultaneously send an intermarket sweep order (or a comparable order) for the full displayed size of the top of book of every other market center displaying a better-period quotations. *See* proposed Rule 131-AEMI-One. In Amendment No. 2, the Exchange revised proposed Rule 131-AEMI-One to state “better-priced *protected* quotation” (emphasis added). III. Amendment No. 3 In Amendment No. 3, the Exchange proposed certain changes to conform the AEMI-One Rules to the final AEMI Rules. These conforming changes are made in Rules 24-AEMI-One, 115-AEMI-One, 128A-AEMI-One, 131-AEMI-One, and 170-AEMI-One. The Exchange also proposed the following: • To change the language describing how the AEMI platform will route orders in AEMI-One to protected quotations of away markets for trade-through purposes. As described in Amendment No. 3, an AEMI-One Protected Quotation is any firm quotation, whether manual or automated, that is at a better price than the next trade that would occur on AEMI, and that is the best bid or offer of a national securities exchange or a national securities association. In contrast, a “protected quotation” under the AEMI Rules (effective on and after the Trading Phase Date) is defined to be consistent with Rule 611 of Regulation NMS and must be an automated quotation that is the best bid or offer of an automated trading center (as defined in Regulation NMS). • To make certain changes to Rule 126A-AEMI-One to insure that the AEMI system's handling of trade-throughs is consistent with the ITS Plan. • To remove the order types “buy minus” and “sell plus” from proposed Rule 131-AEMI-One(n) (and all references thereto in the AEMI-One Rules) pending additional study of their functionality in a Regulation NMS environment. • To revise the descriptions of “stop order” in Rule 131-AEMI-One(o) and “stop limit order” in proposed Rule 131-AEMI-One(p) to provide that “too marketable” stop and stop limit orders for ETFs will be executed, not rejected. • To codify as Commentary .01 to proposed Rule 154-AEMI-One the Exchange's interpretation that a Specialist will not be deemed to be “trading ahead” of a percentage order (of which it is the agent) if:
(1)An aggressing order that executes against the Specialist's quote “elects” the percentage order (making it eligible for immediate execution); and
(2)the percentage order is not executed by that aggressing order due to insufficient remaining interest and therefore reverts back to unelected status. Additionally, the Commentary would provide that any subsequent trade by the Specialist for its own account would not constitute “trading ahead” if the percentage order has not been otherwise re-elected at that time. • To revise the definitions of “Specialist emergency quote” and “stabilizing quote” in proposed Rule 1A-AEMI-One to provide for an upper limit (not to exceed ten) on the number of Specialist emergency quotes that may be immediately generated under a possible scenario in which the Specialist pairs off through another market. Otherwise, a potentially large number of such quotations might be required to be sent out to protect quotes of away markets, creating excessive risk, before a tolerance breach occurs. Under the proposed rule change, the Specialist must re-quote its market when the above referenced limit is hit. The proposed change in the definition of “stabilizing quote” is a related change to provide that a stabilizing quote would be issued if the maximum number of Specialist emergency quotes has been reached. • To add language to Rule 126A-AEMI-One reiterating the obligations to other market centers that members of the Exchange who choose to send ISOs to AEMI during the AEMI-One Pilot will have. This requirement also appears in proposed Rule 131-AEMI-One as described above. Such members will be obligated to protect all AEMI-One Protected Quotations. • To clarify the meaning of the last sentence of the definition of an “intermarket sweep order” in proposed Rule 131-AEMI-One(k), by adding the word “protected” before the word “quotation.” This sentence describes the obligations to other market centers of a member of the Exchange who chooses to send an intermarket sweep order to the AEMI platform during the AEMI-One Pilot. Such a member would be obligated to protect all AEMI-One Protected Quotations. IV. Comments The Commission received four comment letters regarding the proposed rule change. One commenter, OES, asserted that the proposed routing arrangements contemplate that Amex would inappropriately perform duties required to be performed by a broker-dealer, such as making decisions on when, how, and where orders are routed. 15 New York Stock Exchange (“NYSE”) argued that Amex's proposal constituted “an attempt to move forward the effective date of the Reg. NMS Order Protection Rule from February 5, 2007 to whenever the Amex is ready to implement AEMI-One.” 16 NYSE also argued that Amex's proposal would violate the Intermarket Trading System (“ITS”) Plan and give it the ability to trade-through quotes that Amex deems slow. NYSE also observed that, when Amex previewed its proposal with the ITS Operating Committee, several other markets noted that it would have a negative impact on their respective technology implementation schedules. The Chicago Stock Exchange (“CHX”) also viewed Amex's proposed rule change as an attempt to accelerate the Trading Phase Date and opposed Amex's proposal to trade-through quotations Amex deems to be slow. 17 15 *See* OES Letter at 1. *See also* AEMI Approval Order, 71 FR at 59554, n. 103. 16 *See* NYSE Letter at 1. 17 *See* CHX Letter at 1. Nasdaq supported Amex's proposed rule change, characterizing it as a “sensible transitional approach” that would help it prepare for the Trading Phase Date at no or little cost to other market participants. 18 Nasdaq disagreed with NYSE's comments on Amex's proposal, stating that the proposed rule change would not result in any technical or programming impact to Nasdaq, is voluntary, and could be implemented by Amex at any time without requiring other markets to implement similar functionality. Nasdaq also asserted that, when Amex previewed its plan to the ITS Operating Committee, there was no overwhelming consensus either for or against the proposal, and this is not unusual given that market participants often have competing interests. In Nasdaq's view, any concerns presented at that time about the proposal's potential impact on other markets' programming requirements were based upon a lack of familiarity with the proposal. 18 *See* Nasdaq Letter at 1. Amex responded to NYSE's and OES's comment letters. 19 Amex disagreed with NYSE's assertion that the Trading Phase Date is the date on which all SRO trading centers will launch their respective Regulation NMS-compliant systems. Rather, Amex stated that the Trading Phase Date represents an end date by which all such systems must comply with Regulation NMS. Moreover, Amex argued that the deadline of the Trading Phase Date does not negate the desirability of providing a phase-in period for a new trading system. The Exchange asserted that the industry should have operating experience with new systems prior to the Trading Phase Date before market participants become liable for compliance. The Exchange also stated that its proposal would not create any additional technical burdens on other market centers. Amex also explained that it would not send ISOs to any market not ready to accept them and would publish the list of markets to which it would send ISOs prior to the Trading Phase Date. 20 The Exchange also stated that it would seek an exemption from the ITS Plan to the extent its proposal required. 21 19 *See* Letter to Nancy M. Morris, Secretary, Commission, from Neal L. Wolkoff, Chief Executive Officer, Amex, dated October 10, 2006 (“Amex Response Letter”). 20 *See id.* at 2. 21 *See id.* at 2; *see also* Amex Request Letter, *supra* note 12 (requesting exemption from Section 8(d) of the ITS Plan in connection with Amex's use of ISOs and the use of private linkages instead of ITS for routing away market obligations). In response to OES's comment letter, Amex stated that the Exchange's routing functionality has no discretion and thus the Exchange would not be acting in the capacity of a broker. 22 Amex further explained that the routing logic is based on pre-coded functionality which seeks to route orders to the market center displaying the best price based on price-size priority. The Exchange also stated that it does not believe that its use of routing logic or licensing of routing technology would undermine or change its ability to provide a marketplace of buyers and sellers. 22 *See* Amex Response Letter at 3-4. The Commission notes that, in Amendment No. 2, the Exchange amended its proposal so that during the AEMI-One Pilot it would protect any firm quotation, whether manual or automated, that is at a better price than the next trade that would occur on AEMI and that is the best bid or offer of a national securities exchange or a national securities association. This change should address the comment made by NYSE and CHX that the Exchange would “be permitted to trade through quotes it deems slow * * *.” 23 23 *See* CHX Letter at 2; see also NYSE Letter at 1. V. Discussion After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, with the requirements of Section 6(b) of the Act. 24 Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act 25 in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission also finds that the proposal is consistent with Section 6(b)(8) of the Act, 26 which prohibits an exchange's rules from imposing a burden on competition that is not necessary or appropriate in furtherance of the Act. Finally, the Commission believes that the proposal is consistent with Section 11A(a)(1)(C) of the Act, 27 in which Congress found that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure:
(1)Economically efficient execution of securities transactions;
(2)fair competition among brokers and dealers and among exchange markets, and between exchange markets, and markets other than exchange markets;
(3)the availability to brokers, dealers, and investors of information with respect to quotations and transactions in securities;
(4)the practicability of brokers executing investors' orders in the best market; and
(5)an opportunity for investors' orders to be executed without the participation of a dealer. Since the Commission has already approved the final AEMI Rules, 28 only those aspects of the AEMI-One Rules that differ from the final AEMI Rules are discussed more fully below. 24 15 U.S.C. 78f(b). In approving this proposal, the Commission has considered the proposed rules' impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 25 15 U.S.C. 78f(b)(5). 26 15 U.S.C. 78f(b)(8). 27 15 U.S.C. 78k-1(a)(1)(C). 28 *See* AEMI Approval Order, *supra* note 7. In its AEMI-One proposal, the Exchange stated that it will protect all AEMI-One Protected Quotations—namely all quotations that:
(1)Are disseminated pursuant to an effective national market system plan;
(2)are the best bid or best offer of a national securities exchange or a national securities association that is at a better price than the next trade that would occur on AEMI; and
(3)are firm quotations, regardless of whether they are manual or automated. The Commission notes that this level of price protection appears consistent with the ITS Plan. The Exchange plans to utilize ISOs to route orders to AEMI-One Protected Quotations of those market centers capable of receiving ISOs. For markets that are unable to receive ISOs, the AEMI-One Rules provide for the use of an “away market obligation” to reach the quotations of such markets. An “away market obligation” is an immediate-or-cancel limit order generated by AEMI in connection with the execution of an order by AEMI and simultaneously routed to one or more away market centers to execute against the full displayed size of any AEMI-One Protected Quotation. In addition, an Amex member may send an ISO to AEMI during the AEMI-One Pilot only if it has simultaneously sent an ISO (or comparable order) to execute against the full displayed size of any AEMI-One Protected Quotation. The AEMI-One Rules provide that the Exchange will accept and act upon all inbound, appropriately marked ISOs received before the Trading Phase Date that involve securities traded on the AEMI platform. The Commission believes that the Exchange's proposal is reasonably designed to allow Amex and its market participants to gain experience with ISOs before the Trading Phase Date. In a separate action, the Commission today is exempting Amex from certain provisions of the ITS Plan relating to the Exchange's use of ISOs and the use of private linkages instead of ITS for routing away market obligations. 29 This exemption will enable Amex to implement certain provisions of the AEMI-One Rules without violating the ITS Plan. For reasons discussed in the Amex Exemption Letter, the Commission believes that granting Amex's request for an exemption from certain provisions of the ITS Plan is warranted. 29 *See* Letter to Claire P. McGrath, Senior Vice President and General Counsel, Amex, from David S. Shillman, Associate Director, Division Commission, dated November 3, 2006 (“Amex Exemption Letter”). The Commission does not believe that OES's comments regarding the AEMI routing arrangements preclude approval of the AEMI-One Rules. The Commission previously considered this comment as part of the AEMI Rule Filing. For reasons discussed in the order approving that filing, the Commission believes that the Exchange's arrangements for outbound routing functionality are consistent with the Act. 30 30 *See* AEMI Approval Order, 71 FR at 59554, n. 103. Accelerated Approval of Amendment No. 3 Pursuant to Section 19(b)(2) of the Act, the Commission finds good cause to approve the proposal, as amended by Amendment No. 3, prior to the thirtieth day after the amended proposal is published for comment in the **Federal Register** . The changes that the Exchange proposes in Amendment No. 3 are technical in nature and raise no new issues of regulatory concern beyond those raised in the original proposal, which had a full notice-and-comment period. The Commission finds good cause to accelerate approval of the amended proposal prior to the thirtieth day after publication in the **Federal Register** . VI. Solicitation of Comments on Amendment No. 3 Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 3, including whether the amendment is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • ( Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-Amex-2006-72 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2006-72. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2006-72 and should be submitted on or before November 30, 2006. VII. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change, as amended, is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular with Sections 6(b)(5) and 6(b)(8) of the Act. 31 *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 32 that the proposed rule change (SR-Amex-2006-72), as amended by Amendment No. 1, be, and it hereby is, approved, and that Amendment No. 3 is approved on an accelerated basis. 31 15 U.S.C. 78f(b)(5) and 78f(b)(8). 32 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 33 33 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18978 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54693; File No. SR-CBOE-2006-74] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Regarding the Initial and Continued Listing and Trading of Options on Units That Represent Interests in a Trust That Holds a Specified Non-U.S. Currency November 2, 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 31, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” or the “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 Amendment No. 1 to the proposed rule change on October 19, 2006. 3 The Exchange filed Amendment No. 2 to the proposed rule change on November 1, 2006. 4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons and is approving the proposal on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superseded the original filing in its entirety. 4 In Amendment No. 2, which supplemented the filing as reflected in Amendment No. 1, the Exchange made several clarifying changes to the proposed rule text contained in CBOE Rule 5.3, Interpretation and Policy .06(D) and
(E)and CBOE Rule 5.4, Interpretation and Policy .08. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange hereby proposes to amend CBOE Rule 4.18 Interpretation and Policy .01; CBOE Rule 5.3 Interpretation and Policy .06; CBOE Rule 5.4 Interpretation and Policy .08; CBOE Rule 8.9; and CBOE Rule 15.1 Interpretation and Policy .03 to enable the initial and continued listing and trading on the Exchange of options on Units that represents interests in a trust that holds a specified non-U.S. currency. The text of the proposed rule change, as amended, is available on the Exchange's Web site ( *http://www.cboe.com* ), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change, as amended, and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend CBOE Rule 4.18, Interpretation and Policy .01; CBOE Rule 5.3, Interpretation and Policy .06; CBOE Rule 5.4, Interpretation and Policy .08; CBOE Rule 8.9; and CBOE Rule 15.1, Interpretation and Policy .03 to enable the initial and continued listing and trading on the Exchange of options on Units that represent interests in a trust that holds a specified non-U.S. currency. 5 Currently, the term “Units,” as defined under CBOE Rule 5.3, Interpretation and Policy .06, requires that the investment assets held by a trust, investment company, or similar entity consist of portfolios of securities. As proposed, amended CBOE Rule 5.3, Interpretation and Policy .06 would permit the investment assets also to consist of a trust that holds a specified non-U.S. currency deposited with the trust. 5 The Commission notes that it recently approved a substantially similar rule change for the International Securities Exchange, Inc. (n/k/a the International Securities Exchange LLC) (“ISE”), upon which the CBOE has based this proposed rule change. *See* Securities Exchange Act Release No. 54087 (June 30, 2006), 71 FR 38918 (July 10, 2006) (SR-ISE-2005-60). In particular, the proposed amendment to CBOE Rule 5.3, Interpretation and Policy .06 would permit the Exchange to list options on the Euro Currency Trust (“Trust”). The Trust issues Euro Shares (“Shares”) that represent units of fractional undivided beneficial interest in, and ownership of, the Trust. PADCO Advisors II, Inc., d/b/a Rydex Investments, is the sponsor of the Trust (“Sponsor”) 6 and may be deemed the “issuer” of the Shares pursuant to Section 2(a)(4) of the Securities Act of 1933, as amended. 7 The Bank of New York is the trustee of the Trust (“Trustee”), JP Morgan Chase Bank, N.A., London Branch, is the depository for the Trust, and Rydex Distributors, Inc. is the distributor for the Trust. The Trust intends to issue additional Shares on a continuous basis through the Trustee. 6 The Sponsor maintains a public Web site on behalf of the Trust, *http://www.currencyshares.com* , which contains information about the Trust and Shares. 7 The Exchange does not consider Rydex Investments to be an “issuer” as per CBOE rules. As stated in the Trust's Registration statement, 8 the investment objective of the Trust is for the Shares to reflect the price of the euro. The Sponsor believes that the Trust is the first exchange traded fund (“ETF”) 9 whose assets are limited to a particular foreign currency. The Shares may be purchased from the Trust only in one or more blocks of 50,000 Shares, as described in the prospectus under “Creation and Redemption of Shares.” A block of 50,000 shares is called a Basket. The Trust issues Shares in Baskets on a continuous basis to certain authorized participants (“Authorized Participants”). Each Basket, when created, is offered and sold to an Authorized Participant at a price in euro equal to the net asset value (“NAV”) for 50,000 Shares on the day that the order to create the Basket is accepted by the Trustee. 8 *See* Registration No. 333-125581. 9 The Exchange notes that the Trust is not a registered investment company under the Investment Company Act of 1940 (the “1940 Act”) and is not required to register under the 1940 Act. The Exchange believes that permitting options on foreign currency-based Units to be traded on the Exchange is consistent with the Commission's approval order of a rule change filed by the New York Stock Exchange, Inc. (“NYSE”) to list and trade shares of the Trust. 10 Through this rule change to CBOE's listing criteria for Units, the Exchange intends to provide appropriate listing standards for options on shares of these and similar types of foreign currency-based Units that may be listed in the future. 10 *See* Securities Exchange Act Release No. 52843 (November 28, 2005), 70 FR 72486 (December 5, 2005). The Shares trade under the symbol “FXE.” Specifically, the Exchange is proposing to amend CBOE Rule 5.3, Interpretation and Policy .06 (Criteria for Underlying Securities) to broaden the definition of Units to include shares or other securities that represent interests in registered investment companies or unit investment trusts or similar entities that hold a specified non-U.S. currency. The Exchange is also proposing to make other conforming changes to the text of CBOE Rule 5.3, Interpretation and Policy .06 to reflect the proposed broadened definition of Units. In addition, the Exchange is proposing to require, in CBOE Rule 5.3, Interpretation and Policy .06(D), that before listing and trading options on Units based on a non-U.S. currency, the Exchange must have entered into a comprehensive surveillance sharing agreement with the applicable marketplace or marketplaces with last sale reporting that represent(s) the highest volume in derivatives (options or futures) on the specified non-U.S. currency, which are utilized by the national securities exchange where the underlying Units are listed and traded. For options trading, the underlying Units will continue to need to satisfy the initial listing standards in CBOE Rule 5.3, Interpretation and Policy .06. Specifically, the Units must be traded on a national securities exchange or through the facilities of a national securities association and must be an “NMS stock” as defined under Rule 600 of Regulation NMS. 11 The Units must also meet either:
(1)The criteria and guidelines under CBOE Rule 5.3(a)(1) or
(2)(Criteria for Underlying Securities); or
(2)be available for creation or redemption each business day from and through the issuing trust, investment company, or other entity in cash or in-kind at a price related to net asset value, and the investment company or issuer is obligated to issue Units in a specified aggregate number even if some or all of the investment assets required to be deposited have not been received by the investment company or issuer, subject to the condition that the person obligated to deposit the investment assets has undertaken to deliver them as soon as possible, and such undertaking is secured by the delivery and maintenance of collateral consisting of cash or cash equivalents satisfactory to the issuer, as described in the Units' prospectus. 11 17 CFR 242.600. The Exchange also proposes to amend CBOE Rule 4.18, Interpretation and Policy .01 to require a member to establish, maintain, and enforce written policies and procedures to prevent the misuse of any material nonpublic information it might have or receive in a related security, option, or derivative security or in the applicable non-U.S. currency, non-U.S. currency options, futures or options on futures on such currency, or any other derivatives based on such currency. In addition, the Exchange proposes to amend CBOE Rules 8.9 and 15.1, Interpretation and Policy .03 to require that Market-Makers handling options on Units provide the Exchange with all necessary information relating to their trading in the applicable non-U.S. currency, non-U.S. currency options, futures or options on futures on such currency, or any other derivatives based on such currency. In addition, proposed CBOE Rule 8.9(a) would prohibit Market-Makers from engaging in stock, options, non-U.S. currency, non-U.S. currency options, futures or options on futures on such currency, or any other derivatives based on such currency or related securities trading in an account which has not been reported in a manner prescribed by the Exchange. 12 12 The Exchange anticipates requiring Market-Makers to provide the information upon request, consistent with CBOE Rule 8.9(a). The Exchange further proposes to amend CBOE Rule 5.4, Interpretation and Policy .08 regarding withdrawal of approval of the underlying securities to specify that Units approved for options trading under CBOE Rule 5.3, Interpretation and Policy .06 will not be deemed to meet the requirements for continued approval, and CBOE will not open any additional series of options contracts thereof, if, among other things, the Units are delisted in accordance with the terms of CBOE Rule 5.4, Interpretation and Policy .01(f), or the Units are halted from trading in their primary market, or if the value of the non-U.S. currency on which the Units are based is no longer calculated or available. The Exchange represents that the expansion of the types of investments that may be held by a Unit under the listing standards in CBOE Rule 5.3, Interpretation and Policy .06 will not have any effect on the rules pertaining to position and exercise limits. 13 The Exchange also represents that the margin requirements for options on Units that represent interests in a trust that holds a specific non-U.S. currency will be evaluated for each product the Exchange anticipates listing. The Exchange represents that any new margin rules it deems necessary will be filed separately with the Commission. 13 *See* CBOE Rules 4.11 and 4.12. *See also* Amendment No. 1, *supra* note 3. The Exchange represents that it has an adequate surveillance program in place for options on Units based on the value of a non-U.S. currency, and it intends to apply those same program procedures that apply to options on Units that currently trade on the Exchange. In addition, the Exchange may obtain trading information upon request via the Intermarket Surveillance Group (“ISG”) from other exchanges who are members or affiliates of the ISG. Specifically, CBOE can obtain such information from the Philadelphia Stock Exchange (“Phlx”) in connection with euro options trading on the Phlx and from the Chicago Mercantile Exchange (“CME”) and the London International Financial Futures Exchange (“LIFFE”) in connection with euro futures trading on those exchanges. 14 14 Phlx is a member of ISG. CME and LIFFE are affiliate members of ISG. 2. Statutory Basis The Exchange believes that, with the commencement of trading of a currency-based ETF on the NYSE, amending its rules to accommodate the listing and trading of options on publicly-traded shares of other securities that hold investment assets consisting of foreign currency will benefit investors by providing them with the same valuable risk management tool that is currently available with respect to other publicly-traded ETFs whose investment assets consist of securities. Accordingly, the Exchange believes that the proposed rule change, as amended, is consistent with Section 6(b) of the Act, in general, and furthers the objectives of Section 6(b)(5) in particular, in that it would remove impediments to and perfect the mechanism for a free and open market in a manner consistent with the protection of investors and public interest. B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change, as amended, will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others No written comments were solicited or received by the Exchange with respect to the proposed rule change, as amended. 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-CBOE-2006-74 on the subject line. Paper comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2006-74. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2006-74 and should be submitted on or before November 30, 2006. IV. Commission's Findings and Order Granting Accelerated Approval of the Proposed Rule Change CBOE has asked the Commission to approve its proposal on an accelerated basis to accommodate its timetable for listing options on the Units. After careful consideration, 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. 15 In particular, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of Section 6(b)(5) of the Act, 16 which requires, among other things, that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Further, the Commission finds that the CBOE's proposal, as amended, is substantially similar to one it recently approved for the ISE. 17 15 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 16 15 U.S.C. 78f(b)(5). 17 *See* Securities Exchange Act Release No. 54087 (June 30, 2006), 71 FR 38918 (July 10, 2006) (SR-ISE-2005-60). The CBOE based its proposed rule change on the ISE filing. Currently, CBOE's rules permit it to list options on Units that represent interests in registered investment companies, unit investment trusts, or similar entities that hold portfolios of securities composed or otherwise based on or representing investments in indexes or portfolios of securities. 18 The Exchange's proposal would allow it to list and trade options on Units whose investment assets consist of a specified non-U.S. currency deposited with a trust. For example, the proposed rule change would allow the CBOE to list options on the Euro Currency Trust. 18 *See* CBOE Rule 5.3, Interpretation and Policy .06. The underlying Units would continue to need to satisfy the listing standards in CBOE Rule 5.3. To accommodate the listing and trading of options on Units investing primarily in a non-U.S. currency, the Exchange proposes to amend CBOE Rule 4.18 to require a member to establish, maintain, and enforce written policies and procedures designed to prevent the misuse of any material nonpublic information it might have or receive in a related security, option, or derivative security or in the applicable non-U.S. currency, non-U.S. currency options, futures or options on futures on such currency, or any other derivatives based on such currency. In addition, the Exchange proposes to amend CBOE Rule 8.9 and CBOE Rule 15.1, Interpretation and Policy .03 to require that Market-Makers handling options on Units provide the Exchange with all necessary information relating to their trading in the applicable non-U.S. currency, non-U.S. currency options, futures or options on futures on such currency, or any other derivatives based on such currency. The Commission believes that these requirements are designed to minimize the potential for manipulating the underlying currency held by the Units. In addition, the Units must be traded on a national securities exchange or through the facilities of a registered securities association and, as the Exchange has proposed, must be an “NMS stock” as defined under Rule 600(b)(47) of Regulation NMS. 19 The Units must also either:
(1)Meet the criteria and guidelines under CBOE Rule 5.3 (Criteria for Underlying Securities); or
(2)be available for creation or redemption each business day from and through the issuing trust, investment company, or other entity in cash or in-kind at a price related to net asset value, and the issuer is obligated to issue Units in a specified aggregate number. 20 The Commission notes that the Exchange has represented that the expansion of the types of investments that may be held by Units will not have any effect on the rules pertaining to position and exercise limits or margin. 19 17 CFR 242.600(b)(47). 20 *See* proposed CBOE Rule 5.3, Interpretation and Policy .06(E). Finally, under the proposed change to CBOE Rule 5.4, Interpretation and Policy .08, Units would not be deemed to meet the requirements for continued approval, and the Exchange would not open for trading any additional series of option contracts of the class covering such Units, if, among other things, the Units are delisted in accordance with the terms of CBOE Rule 5.4, Interpretation and Policy .01(f), or the Units are halted from trading in their primary market. The Commission believes that the Exchange's proposal to expand CBOE Rule 5.4, Interpretation and Policy .08 to address the effect of a trading halt or a delisting of the Units is consistent with the protection of investors and the public interest. The Commission also believes that the proposed change by which the Exchange will consider the suspension of opening transactions for Units if the value of the non-U.S. currency on which the Units are based is no longer calculated or available is similarly consistent with the protection of investors and the public interest. 21 21 *See* proposed CBOE Rule 5.4, Interpretation and Policy .08(c). The Commission notes that the Exchange has represented that it has an adequate surveillance program in place for options on Units based on the value of a non-U.S. currency. In addition, the Exchange is able to obtain currency-related trading information via the ISG from other exchanges who are members or affiliates of the ISG, as discussed above, in connection with options and futures trading on those exchanges. The Commission finds good cause for approving the proposed rule change, as amended, prior to the thirtieth day after the date of publication of the notice of filing thereof in the **Federal Register** . The Exchange has requested accelerated approval because this proposed rule change is based on, and is substantially similar to, a proposal by the ISE that the Commission recently approved. 22 Accordingly, this proposal raises no new or novel regulatory issues that have not been previously considered by the Commission. In addition, the Commission notes that it did not receive any comments on the ISE's proposal. The Commission believes that expanding CBOE Rule 5.3 to encompass options on Units that represent interests in a trust that holds a non-U.S. currency deposited with the trust will provide investors with an additional investment choice and that accelerated approval of the proposal will allow investors to begin trading these products on the CBOE without further delay. Additionally, the proposal contains measures that are designed to minimize the potential for manipulation of the underlying currency held by the Units. Therefore, the Commission finds good cause, consistent with Section 19(b)(2) of the Act, to approve the proposal on an accelerated basis. 22 *See* Securities Exchange Act Release No. 54087 (June 30, 2006), 71 FR 38918 (July 10, 2006) (SR-ISE-2005-60). V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 23 that the proposed rule change, as amended, (SR-CBOE-2006-74) is hereby approved on an accelerated basis. 23 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 24 24 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18955 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54701; File No. SR-DTC-2006-11] Self-Regulatory Organizations; The Depository Trust Company; Order Approving Proposed Rule Change To Allow the Inventory Management System To Accept Real-Time and Late Affirmed Trades From Omgeo November 3, 2006. I. Introduction On July 11, 2006, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) and on September 20, 2006, amended proposed rule change SR-DTC-2006-11 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”). 1 Notice of the proposal was published in the **Federal Register** on October 3, 2006. 2 The Commission received no comment letters in response to the proposed rule change. For the reasons discussed below, the Commission is approving the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 54521 (September 27, 2006), 71 FR 58457. II. Description DTC seeks to expand its Inventory Management System (“IMS”) to accept in real-time non-Continuous Net Settlement (“non-CNS”) institutional trades from Omgeo LLC (“Omgeo”) and to accept late affirmed trades into IMS for automated settlement at DTC. 1. Current Process for IMS Omgeo's TradeSuite system currently feeds DTC a batch file of approximately 320,000 eligible affirmed institutional trades at approximately 1 p.m. on T+2. Delivering DTC participants then authorize or exempt these trades in IMS for automated settlement to be attempted at DTC. Any trades affirmed after 12 p.m. on T+2 are ineligible for automated settlement at DTC via the TradeSuite interface. These late affirmed trades are typically settled by the broker-dealer or custodian by processing a DTC Delivery Order (“DO”). These DOs experience a higher reclaim rate than deliveries of eligible affirmed trades. 2. Proposed Changes DTC proposed to enhance its interface with Omgeo to accept eligible affirmed non-CNS trades from Omgeo's TradeSuite system in real-time. Although DTC will receive affirmed trades from Omgeo's TradeSuite system in real-time as they are affirmed, participants will still have the ability to process authorizations and exemptions as they do today. Participants will be able to authorize trades as they are received into IMS through the existing options ( *i.e.* , globally or on a trade-for-trade basis). Omgeo will continue to produce the Cumulative Eligible Trade report/file at approximately 1 p.m. on T+2. This batch report/file notifies participants of affirmed Matched Institutional Trades (“MITS”) sent to IMS for the following settlement date. However, IMS will continue the current practice of applying a participant's authorization profile for MITS after the midday cut-off on T+2 (at approximately 1 p.m.). In addition, some new functionality is also being introduced through the enhanced Omgeo and DTC interface. Omgeo will send “late affirmed” 3 trades to IMS. Late affirmed trades will be stored and identified in IMS as a new transaction type, Late Matched Institutional Trades (“LMIT”). These trades are currently ineligible for automated settlement at DTC. This new functionality will allow participants to eliminate settling these transactions as DOs at DTC, which experience a higher reclaim rate than affirmed eligible trades, and will provide for the automated settlement of these transactions. 3 Late affirmed trades are defined as trades affirmed after the 12:00 p.m. cutoff on T+2 until 12:00 p.m. on settlement date. For the new LMITs, IMS will default to the “active” authorization mode ( *i.e.* , deliveries would not be processed unless they are authorized). Unauthorized “late affirmed” trades will remain in IMS until settlement date + 21 days (the current IMS trade retention time frame). For authorized LMIT items, IMS will apply a participant's authorization profile as the items are received from Omgeo. LMITs will bypass DTC's Receiver Authorized Delivery (“RAD”) processing as do all Omgeo deliveries. Omgeo will continue to update IMS and notify DTC participants using a status message of any Change of Eligibility (“COE”). 4 COE ( *i.e.* , DTC-eligible to DTC-ineligible) messages will be passed to IMS by TradeSuite up until midnight of T+1. IMS will process COE-related messages on a real-time basis for both authorized and yet to be authorized trades. IMS will “reauthorize” a previously authorized DTC-eligible trade in the event the trade becomes DTC-eligible, again. In addition, an appropriate audit trail will be provided by IMS for participants. Ineligible MITS transactions in IMS will be cancelled at end of day on settlement date. 4 COE-related messages can be sent for the following reasons:
(1)When a DTC eligible trade changes to CNS eligible, the trade is resent to IMS by Omego with an indicator that it is now ineligible (IMS status becomes ineligible). Omego will then send the trade to NSCC for settlement in CNS. A trade can become CNS eligible after being DTC eligible, if the security, ID agent (a prime broker), clearing agent, and clearing broker all are CNS eligible.
(2)When a DTC eligible trade subsequently becomes ineligible for settling at DTC, the trade is resent to IMS by Omego with an indicator that it is now Ineligible (IMS status updated to ineligible). A trade may become ineligible for DTC settlement processing if prior to settlement date, the participant, security, or ID agent become ineligible for DTC processing.
(3)If a previously sent DTC eligible trade changed to ineligible becomes eligible for settling at DTC, again, the trade is re-sent to IMS by Omego with an indicator that it is now eligible (IMS status is updated to eligible from ineligible). DTC will charge the following delivery fees for LMITs: • $0.17 (current “night DO” fee) if authorized by the participant before the night cycle. • $0.45 (current “day DO” fee) if authorized by the participant after the night cycle. • $0.006 per delivery (current IMS delivery fee) for every trade that is processed through the IMS authorization profile. Participants that currently submit machine-readable authorization/exemption instructions can choose to continue to process their Omgeo deliveries as they do today. The proposed change is scheduled to be implemented in November 2006. III. Discussion Section 19(b) of the Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. Section 17A(b)(3)(F) of the Act requires that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions. 5 The Commission finds that DTC's proposed rule change is consistent with this requirement because it should promote the prompt and accurate clearance and settlement of securities transactions by enhancing the IMS interface with Omgeo to accept eligible affirmed trades from Omgeo's TradeSuite system in real-time and to accept late affirmed trades into IMS for automated settlement at DTC. In addition, the proposed rule change should provide for the equitable allocation of reasonable dues, fees, and other charges among DTC's members as required by Section 17A(b)(3)(D). 6 5 15 U.S.C. 78q-1(b)(3)(F). 6 15 U.S.C. 78q-1(b)(3)(D). IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular Section 17A of the Act and the rules and regulations thereunder. *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR-DTC-2006-11) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18958 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54682; File No. SR-FICC-2006-15] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Modify its Rules To Diversify and Standardize Clearing Fund Collateral Requirements Across the Divisions To Improve Liquidity and Minimize Risk for its Members November 1, 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 October 4, 2006, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change seeks to modify the rules of both of the Government Securities Division (“GSD”) and the Mortgage-Backed Securities Division (“MBSD”) (collectively, the “Divisions”) of FICC to diversify and standardize Clearing Fund 3 collateral requirements across the Divisions in order to improve liquidity and minimize risk for FICC and its members. 4 3 The GSD Rules refer to member collateral deposits as the “Clearing Fund” while the MBSD rules refer to these deposits as the “Participants Fund.” The term “Clearing Fund” in this rule filing will refer to both. 4 This rule filing also proposes to make a minor technical change to Rule 4 of the GSD rules. Section 2 of Rule 4 has been relettered to accommodate changes made in an earlier FICC rule filing, SR-FICC-2006-12. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FICC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of these statements. 5 5 The Commission has modified the text of the summaries prepared by FICC. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Presently, both GSD and MBSD members may satisfy their Clearing Fund requirement with cash deposits. Members may also satisfy a portion of their deposits with an open account indebtedness fully secured by certain types of securities and/or letters of credit. FICC proposes to modify its rules as detailed below to:
(1)expand the types of securities which members may deposit to satisfy their Clearing Fund requirement (“Eligible Clearing Fund Securities”) to secure their open account indebtedness;
(2)establish concentration requirements with regard to members' use of Eligible Clearing Fund Securities;
(3)create a correlating range of haircuts to be applied to the expanded types of Eligible Clearing Fund Securities; and
(4)eliminate letters of credit as a generally acceptable form of collateral securing members' open account Clearing Fund indebtedness. 1. Revised Clearing Fund Components
(a)*Cash* . Currently the rules of GSD require that the greater of $100,000 or ten percent of a member's Clearing Fund requirement with a maximum of $500,000 be made in the form of cash. 6 The rules of MBSD currently do not contain a minimum cash requirement. For both Divisions, the proposed new cash collateral component will be the lesser of $500,000 or ten percent of a member's Clearing Fund requirement with a minimum of $100,000. 6 GSD Rule 4, Section 2(b)(ii).
(b)*Securities.* Currently each Division of FICC accepts different types of securities as Clearing Fund collateral. For example, GSD accepts Agency securities but not mortgage-backed securities, and MBSD accepts mortgage-backed securities but not Agency securities. In addition, there are currently no concentration requirements placed on the securities deposited at either Division. In an effort to standardize the securities which are eligible as Clearing Fund collateral across the Divisions, FICC proposes to modify the rules of both Divisions by adding a definition to each Division's rules for “Eligible Clearing Fund Securities” (with respect to GSD) and “Eligible Participants Fund Securities” (with respect to MBSD). As defined, these securities will be unmatured bonds which are either an “Eligible Clearing Fund Agency Security,” an “Eligible Clearing Fund Mortgage-Backed Security” or an “Eligible Clearing Fund Treasury Security.” 7 “Eligible Clearing Fund Agency Security” would be defined as a direct obligation of those U.S. agencies or government sponsored enterprises as FICC may designate from time to time that satisfies the criteria set forth in notices issued by FICC from time to time. “Eligible Clearing Fund Mortgage-Backed Security” would be defined as a mortgage-backed pass through obligation issued by those U.S. agencies or government sponsored enterprises as FICC may designate from time to time that satisfies the criteria set forth in notices issued by FICC from time to time. “Eligible Clearing Fund Treasury Security” would be defined as a direct obligation of the U.S. government that satisfies the criteria set forth in notices issued by FICC from time to time. 7 In the MBSD Rules, these terms would be as follows: “Eligible Participants Fund Agency Security,” “Eligible Participants Fund Mortgage-Backed Security,” and “Eligible Participants Fund Treasury Security.” Initial eligibility criteria for each type of Eligible Clearing Fund/Participant Fund Security will be announced to members through an Important Notice prior to the effective date of this proposed rule change. Any future changes to the eligibility criteria will also be announced to members through Important Notices in advance of such changes becoming effective.
(c)*Security Concentration Provisions.* FICC also proposes to establish security concentration provisions for Clearing Fund deposits. As proposed, a minimum of forty percent of a member's required Clearing Fund deposit would have to be made in cash and Eligible Clearing Fund Treasury Securities. The remainder of a member's deposit could be secured by cash and the pledge of Eligible Clearing Fund Securities in any combination of Eligible Clearing Fund Treasury Securities, Eligible Clearing Fund Agency Securities, and/or Eligible Clearing Fund Mortgage-Backed Securities. However
(1)any deposits of Eligible Clearing Fund Agency Securities or Eligible Clearing Fund Mortgage-Backed Securities, respectively, in excess of twenty-five percent of a member's required Clearing Fund deposit would be subject to an additional haircut equal to twice the percentage specified in the haircut schedule. Furthermore, no more than twenty percent of a member's required Clearing Fund deposit could be secured by pledged Eligible Clearing Fund Agency Securities of a single issuer. Lastly, no member would be permitted to post as Clearing Fund collateral Eligible Clearing Fund Agency Securities for which it is the issuer. 8 8 However, a member would be permitted to pledge Eligible Clearing Fund Mortgage-Backed Securities for which it is the issuer subject to a haircut. The haircut would be fourteen percent as an initial matter. If the member exceeded the twenty-five percent concentration limit, the haircut would be twenty-one percent.
(d)*Letters of Credit and Other Adequate Assurances.* The current provisions within FICC's Rules that pertain to Letter of Credit Issuers will be modified to reflect that letters of credit would no longer be accepted by FICC as a form of Clearing Fund collateral. 9 Effective April 1, 2007 (which is the regular expiration date of letters of credit), members that have letters of credit posted as collateral (other than members, if any, that have been required to post letters of credit for legal risk), would be required to replace the portion of the Clearing Fund collateralized by letters of credit with either cash or Eligible Clearing Fund Securities. 9 FICC has found that in practice letters of credit are not as liquid as cash and securities and therefore pose more risk to FICC and its members when pledged as Clearing Fund collateral. FICC will, however, reserve the right to require letters of credit from members in those instances where a particular member has been found, by FICC in its discretion, to present legal risk.
(e)*Implementation Timeframes.* The foregoing rule changes would become effective thirty days after an Important Notice is issued to members informing them that FICC's systems are ready to accommodate such changes. The corresponding changes to FICC's rules would be made at that time.
(f)*Alternative Proportions of Eligible Collateral.* As is currently the case under FICC's rules, FICC will continue to reserve the right to require different proportions of the Clearing Fund collateral components as necessary to address any heightened legal or insolvency risks presented by a member. 10 10 GSD Rule 4, Section 2(o), MBSD Rule 2, Section 4 of Article IV. FICC believes the proposed rule change is consistent with the requirements of Section 17A of the Act 11 and the rules and regulations thereunder because it will enable FICC to standardize acceptable forms of collateral across both of its Divisions, which should lead to an increase of liquidity and a decrease of risk to FICC and its members. As such, FICC believes it will better enable FICC to safeguard the securities or funds in its possession or control or for which it is responsible. 11 15 U.S.C. 78q-1. B. Self-Regulatory Organization's Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five 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 ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding; or
(ii)as to which the self-regulatory organization consents, the Commission will:
(A)By order approve such proposed rule change or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ) or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-FICC-2006-15 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-FICC-2006-15. 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 filings also will be available for inspection and copying at the principal office of FICC and on FICC's Web site at *http://www.ficc.com/gov/notices/GOV115.06.htm?NS-query* . All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-FICC-2006-15 and should be submitted on or before November 30, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 12 Nancy M. Morris, Secretary. 12 17 CFR 200.30-3(a)(12). [FR Doc. E6-18948 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54697; File No. SR-ISE-2006-61] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Fee Changes November 2, 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 October 5, 2006, the International Securities Exchange, LLC (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the ISE. On October 17, 2006, ISE filed Amendment No. 1 to the proposed rule change. 3 The ISE has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the ISE under Section 19(b)(3)(A)(ii) of the Act, 4 and Rule 19b-4(f)(2) thereunder, 5 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange revised footnote 10, *infra,* to clarify that six of the Premium Products that are the subject of this filing constitute Fund Shares under ISE Rule 502(h), while the other two Premium Products are narrow-based index options listed pursuant to the Exchange's generic listing standards. The Exchange also represented that Amendment No. 1 did not affect the proposed fees covered by this filing. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to amend its Schedule of Fees to establish fees for transactions in options on eight Premium Products. 6 The text of the proposed rule change, as amended, is available on the ISE's Web site *(http://www.iseoptions.com/legal/proposed_rule_changes.asp),* at the principal office of the ISE, and at the Commission's Public Reference Room. 6 “Premium Products” is defined in the Schedule of Fees as the products enumerated therein. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the ISE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The ISE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend its Schedule of Fees to establish fees for transactions in options on the following eight Premium Products: KBW Bank Index (“BKX”), ISE Revere Natural Gas Index (“FUM”), iShares Dow Jones U.S. Energy Sector Index Fund (“IYE”), iShares Dow Jones Transportation Average Index Fund (“IYT”), 7 PowerShares WilderHill Clean Energy Portfolio (“PBW”), 8 Merrill Lynch Utilities HOLDRs Trust (“UTH”), 9 Consumer Staples Select Sector SPDR Fund (“XLP”), and Consumer Discretionary Select Sector SPDR Fund (“XLY”). 10 Specifically, the Exchange is proposing to adopt an execution fee and a comparison fee for all transactions in options on BKX, FUM, IYE, IYT, PBW, UTH, XLP, and XLY. 11 The amount of the execution fee and comparison fee for products covered by this filing shall be $0.15 and $0.03 per contract, respectively, for all Public Customer Orders 12 and Firm Proprietary orders. The amount of the execution fee and comparison fee for all ISE Market Maker transactions shall be equal to the execution fee and comparison fee currently charged by the Exchange for ISE Market Maker transactions in equity options. 13 Finally, the amount of the execution fee and comparison fee for all non-ISE Market Maker transactions shall be $0.16 and $0.03 per contract, respectively. All of the applicable fees covered by this filing are identical to fees charged by the Exchange for all other Premium Products. The Exchange believes the proposed rule change will further the Exchange's goal of introducing new products to the marketplace that are competitively priced. 7 iShares® is a registered trademark of Barclays Global Investors, N.A. (“BGI”), a wholly owned subsidiary of Barclays Bank PLC. “Dow Jones,” “Dow Jones U.S. Energy Sector Index Fund,” and “Dow Jones Transportation Average Index Fund” are trademarks and service marks of Dow Jones & Company, Inc. (“Dow Jones”) and have been licensed for use for certain purposes by BGI. All other trademarks and service marks are the property of their respective owners. Neither IYE nor IYT are sponsored, endorsed, issued, sold or promoted by Dow Jones. BGI and Dow Jones have not licensed or authorized ISE to:
(i)Engage in the creation, listing, provision of a market for trading, marketing, and promotion of options on IYE and IYT; or
(ii)use and refer to any of their trademarks or service marks in connection with the listing, provision of a market for trading, marketing, and promotion of options on IYE and IYT or with making disclosures concerning options on IYE and IYT under any applicable federal or state laws, rules or regulations. BGI and Dow Jones do not sponsor, endorse, or promote such activity by ISE and are not affiliated in any manner with ISE. 8 PowerShares TM and PBW TM are trademarks of PowerShares Capital Management LLC (“PowerShares” or the “Adviser”). The WilderHill Clean Energy Index is a service mark of WilderShares, LLC (“WilderShares”). All other trademarks and service marks are the property of their respective owners. WilderShares is not affiliated with the PBW or with the Adviser. PBW is not sponsored, endorsed, sold or promoted by WilderShares, and WilderShares makes no representation regarding the advisability of investing in PBW. WilderShares and PowerShares have not licensed or authorized ISE to:
(i)Engage in the creation, listing, provision of a market for trading, marketing, and promotion of options on PBW; or
(ii)use and refer to any of their trademarks or service marks in connection with the listing, provision of a market for trading, marketing, and promotion of options on PBW or with making disclosures concerning options on PBW under any applicable federal or state laws, rules or regulations. WilderShares and PowerShares do not sponsor, endorse, or promote such activity by ISE and are not affiliated in any manner with ISE. 9 UTH issues Depositary Receipts called Utilities HOLDRS SM representing undivided beneficial ownership in the U.S.-traded common stock of a group of specified companies that, among other things, are involved in various segments of the utilities industry. “HOLDRS” and “HOLding Company Depositary ReceiptS” are service marks of Merrill Lynch & Co., Inc. (“Merrill Lynch”). All other trademarks and service marks are the property of their respective owners. Merrill Lynch has not licensed or authorized ISE to:
(i)Engage in the creation, listing, provision of a market for trading, marketing, and promotion of options on UTH; or
(ii)use and refer to any of their trademarks or service marks in connection with the listing, provision of a market for trading, marketing, and promotion of options on UTH or with making disclosures concerning options on UTH under any applicable federal or state laws, rules or regulations. Merrill Lynch does not sponsor, endorse, or promote such activity by ISE and is not affiliated in any manner with ISE. 10 The Exchange represents that IYE, IYT, PBW, UTH, XLP and XLY constitute “Fund Shares,” as defined by ISE Rule 502(h). The Exchange further represents that BKX and FUM meet the standards of ISE Rule 2002(b), which allows the ISE to begin trading these products by filing Form 19b-4(e) at least five business days after commencement of trading these new products pursuant to Rule 19b-4(e) of the Act. Accordingly, the ISE has submitted Form 19b-4(e) to the Commission. 11 These fees will be charged only to Exchange members. Under a pilot program that is set to expire on July 31, 2007, these fees will also be charged to Linkage Orders (as defined in ISE Rule 1900). 12 “Public Customer Order” is defined in ISE Rule 100(a)(33) as an order for the account of a Public Customer. “Public Customer” is defined in ISE Rule 100(a)(32) as a person that is not a broker or dealer in securities. 13 The execution fee is currently between $0.21 and $0.12 per contract side, depending on the Exchange Average Daily Volume, and the comparison fee is currently $0.03 per contract side. Additionally, the Exchange has entered into a license agreement with Keefe, Bruyette & Woods, Inc. in connection with the listing and trading of options on BKX; with Revere Data, LLC in connection with the listing and trading of options on FUM; and with Standard & Poor's in connection with the listing and trading of options on XLP and XLY. As with certain other licensed options, to defray the licensing costs, the Exchange is adopting a surcharge fee of $0.10 per contract for trading in options on BKX, XLP and XLY, and $0.05 per contract for trading in options on FUM. The Exchange believes charging the participants that trade these products is the most equitable means of recovering the costs of the licenses. However, because of competitive pressures in the industry, the Exchange proposes to exclude Public Customer Orders from this surcharge fee. Accordingly, this surcharge fee will only be charged to Exchange members with respect to non-Public Customer Orders ( *e.g.* , ISE Market Maker, non-ISE Market Maker, and Firm Proprietary orders) and shall apply to Linkage Orders 14 under a pilot program that is set to expire on July 31, 2007. Further, since options on BKX, IYE, IYT, PBW, UTH, XLP and XLY are multiply-listed, the Payment for Order Flow fee shall also apply. 14 *See* ISE Rule 1900. Finally, the Exchange has terminated its development agreement with Boenning & Scattergood, Inc. for options on the ISE Water Index (“HHO”). As a result, the Exchange proposes to no longer charge a $0.05 per contract surcharge fee for options on HHO. Accordingly, the Exchange proposes to delete the reference to a surcharge for HHO on its Schedule of Fees. 2. Statutory Basis The Exchanges believes that the basis under the Act for this proposed rule change is the requirement under Section 6(b)(4) of the Act 15 that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. 15 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change, as amended, does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change, as amended, establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 16 and Rule 19b-4(f)(2) 17 thereunder. At any time within 60 days of the filing of such amended 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. 18 16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 19b-4(f)(2). 18 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on October 17, 2006, the date on which the ISE submitted Amendment No. 1. *See* 15 U.S.C. 78s(b)(3)(C). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, 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 No. SR-ISE-2006-61 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-ISE-2006-61. 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 ISE. 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-ISE-2006-61 and should be submitted on or before November 30, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 19 19 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18956 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54704; File No. SR-ISE-2006-44] Self-Regulatory Organizations; International Securities Exchange, Inc.; Order Approving a Proposed Rule Change To Amend the Schedule of Fees To Expand the Broker Marketing Alliance To Include Non-Broker-Dealers With Regard to the Enhanced Sentiment Market Data Offering November 3, 2006. On July 25, 2006, the International Securities Exchange, Inc. (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 to amend its Schedule of Fees regarding its enhanced sentiment market data offering to expand the Broker Marketing Alliance by eliminating its limitation to only broker-dealers. The proposed rule change was published for comment in the **Federal Register** on October 3, 2006. 3 The Commission received no comments on the proposal. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54508 (September 26, 2006), 71 FR 58459 (“Notice”). The Exchange offers an enhanced sentiment market data product that allows an end user to identify investor sentiment for individual securities or select industry sectors based on a calculation methodology that utilizes proprietary Exchange opening long option customer trade data. 4 Previously, the Commission approved a fee structure for this product. 5 The amount that a subscriber is charged depends upon whether the subscription is obtained directly from the Exchange or indirectly through a U.S. broker-dealer participating with the ISE in a Broker Marketing Alliance. A Broker Marketing Alliance is an arrangement between ISE and a participating broker-dealer that allows a participating U.S. broker-dealer to be compensated for enlisting subscribers to the enhanced sentiment market data product. There are four subscription levels of fees based on the number of customer queries. Broker-dealer clients pay lower fees at the four levels than subscribers directly to the Exchange, and broker-dealers receive a rebate of the subscription fees collected. Specifically, the Fee Schedule provides that participating broker-dealers receive:
(1)A rebate of 35% of the subscription fee collected from subscribers; and
(2)an additional bonus rebate based on
(a)the achievement of certain subscription levels; and
(b)the size of their firm, as measured by the number of the firm's customers. 4 The enhanced sentiment market data is based on the ISE Sentiment Index or ISEE. The ISEE, which is created by the ISE, provides an intra-day picture of how investors view stock prices by assessing customers' option trading activity. *See* Securities Exchange Act Release Nos. 53756 (May 3, 2006), 71 FR 27529 (May 11, 2006) (SR-ISE-2005-56) (order approving the prior fee structure for the product) (“Prior Order”); and 53532 (March 21, 2006), 71 FR 15501 (March 28, 2006) (SR-ISE-2005-56). 5 *See* Prior Order, *supra* at n.4. With the instant proposed rule change, the Exchange seeks to expand the Broker Marketing Alliance by eliminating its limitation to only broker-dealers. 6 Under the proposal, the lower level subscription fees billed to broker-dealer clients will now be expanded to apply to subscribers of non-broker-dealers. These non-broker-dealers will also be allowed to receive the same rebates and bonus rebates as described above and previously approved for broker-dealers participating in the Broker Marketing Alliance. 7 6 In the ISE's Schedule of Fees, it will now be referred to as a “Subscription through Marketing Alliance.” 7 *See* Prior Order, *supra* at n.4. In support of its proposal, the Exchange states that, since the introduction of this market data offering, it has received interest from many non-broker-dealers, including firms that provide investors with market commentary, investment tools and educational materials, seeking to sell subscriptions and participate in a revenue sharing arrangement similar to the Broker Marketing Alliance. The Exchange believes that allowing non-broker dealers to market its enhanced sentiment market data offering will increase the number of product subscribers. The Commission has reviewed carefully the proposed rule change and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 8 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act, 9 which requires that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. We note that the fee structure for subscribers of non-broker-dealers is identical to the fee structure previously approved for subscribers of participating U.S. broker-dealers in the Broker Marketing Alliance and, as noted above, the rebates and revenue sharing arrangements are the same. Further, as noted in the Prior Order, enhanced sentiment market data is a purely optional product, and it is not necessary to subscribe to this service to trade options on the ISE. 8 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition and capital formation. *See* 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(4). *It is therefore ordered* , pursuant to section 19(b)(2) of the Act, 10 that the proposed rule change be and hereby is approved. 10 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18975 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54702; File No. SR-NASD-2006-121] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NASD Rule 11890(b)(2) To Allow NASD To Designate Officers To Take Action Under the Rule With Respect to Clearly Erroneous Transactions November 3, 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 October 30, 2006, the National Association of Securities Dealers, Inc. (“NASD”) 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 NASD. NASD has designated the proposed rule change as constituting a “non-controversial” rule change under 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. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing to amend NASD Rule 11890 (Clearly Erroneous Transactions) to allow any NASD officer designated by an Executive Vice President of NASD's Market Regulation Department or an Executive Vice President of NASD's Transparency Services Department to, on his or her own motion, review any transaction in a Nasdaq-listed security or an OTC equity security, as defined in NASD Rule 6610, arising out of or reported through any quotation, communication, or trade reporting system owned or operated by NASD or its subsidiaries. The text of the proposed rule change is available on NASD's Web site ( *http://www.nasd.com* ), at the NASD's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 Currently, NASD Rule 11890(b)(2) provides that, in the event of
(1)a disruption or malfunction in the use or operation of any quotation, communication, or trade reporting system owned or operated by NASD or its subsidiaries and approved by the Commission, or
(2)extraordinary market conditions in which the nullification or modification of transactions may be necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest, an Executive Vice President of NASD's Market Regulation Department or an Executive Vice President of NASD's Transparency Services Department may, on his or her own motion, review any transaction in a Nasdaq-listed security or an OTC equity security, as defined in NASD Rule 6610, arising out of or reported through any such quotation, communication, or trade reporting system. 5 On October 1, 2005, NASD assumed direct authority for OTC equities operations, in place of a prior delegation to Nasdaq. 6 At that time, NASD amended NASD Rule 11890(b)(2) to provide NASD (rather than Nasdaq) with the authority to declare, on its own motion, clearly erroneous transactions in OTC equity securities ( *e.g.* , OTCBB and Pink Sheets securities) in the event of a disruption or malfunction in the use of an NASD system or due to extraordinary market conditions. Additionally, NASD amended NASD Rule 11890(b)(2) to provide NASD with similar clearly erroneous authority with respect to all transactions in Nasdaq-listed securities reported to NASD. 7 Thus, NASD Rule 11890(b)(2) also provides NASD with the authority to declare, on its own motion, clearly erroneous transactions in Nasdaq-listed securities reported to NASD's Alternative Display Facility or an NASD Trade Reporting Facility 8 in the event of a disruption or malfunction in the use of an NASD system or due to extraordinary market conditions. 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 NASD has filed a proposed rule change that would
(1)renumber NASD Rule 11890(b)(2) as Rule 11890(a) and rename it as “Procedures for Reviewing Transactions on NASD's Own Motion;” and
(2)expand the scope of the rule to transactions in all securities by deleting the reference to Nasdaq-listed and OTC equity securities. *See* Securities Exchange Act Release No. 54451 (September 15, 2006), 71 FR 55243 (September 21, 2006) (notice of filing of SR-NASD-2006-104). 6 *See* Securities Exchange Act Release No. 52508 (September 26, 2005), 70 FR 57346 (September 30, 2005) (order approving SR-NASD-2005-089). 7 *See* Securities Exchange Act Release No. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) (order approving SR-NASD-2005-087). Prior to these amendments, such authority was delegated to Nasdaq with respect to trades reported through Nasdaq's Automated Confirmation Transaction
(ACT)Service and there was no such authority with respect to trades reported to NASD's Alternative Display Facility. 8 *See* Securities Exchange Act Release Nos. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) (order approving SR-NASD-2005-087 relating to the NASD/Nasdaq Trade Reporting Facility); 54479 (September 21, 2006), 71 FR 56573 (September 27, 2006) (notice of filing of SR-NASD-2006-108 relating to the proposed NASD/National Stock Exchange Trade Reporting Facility); and 54591 (October 12, 2006), 71 FR 61519 (October 18, 2006) (notice of filing of SR-NASD-2006-115 relating to the proposed NASD/Boston Stock Exchange Trade Reporting Facility). By its terms, NASD Rule 11890(b)(2) authorizes an Executive Vice President of NASD's Market Regulation Department or an Executive Vice President of NASD's Transparency Services Department to take action with respect to clearly erroneous transactions. Currently, NASD has one Executive Vice President of Market Regulation, and one Executive Vice President of Transparency Services. NASD is proposing to amend NASD Rule 11890(b)(2) to provide that an Executive Vice President of NASD's Market Regulation Department or an Executive Vice President of NASD's Transparency Services Department may also designate any NASD officer ( *i.e.* , an NASD employee with the title of Vice President or above) to take action under this Rule. NASD believes that such designation is consistent with current NASD Rules 11890(a)(1) and (b)(1), which authorize officers of Nasdaq designated by its President, or any Executive Vice President of Nasdaq designated by its President, respectively, to act under the Rule. NASD applies this authority in only very limited circumstances, for example, where there is an extraordinary event and multiple self-regulatory organizations are canceling or modifying trades. However, since implementation of the aforementioned rule changes, it has become apparent to NASD that having just two NASD officers authorized to act under the Rule is insufficient to review and consider promptly potential clearly erroneous transactions as they arise. For example, if the Executive Vice President of Market Regulation and Executive Vice President of Transparency Services are unreachable at the same time because they are in meetings or on travel or out of the office for any other reason, potential clearly erroneous transactions cannot be reviewed in a timely manner. NASD staff believes that delays in reviewing these transactions should be avoided and the proposed rule change will allow NASD to take prompt and effective action with respect to clearly erroneous trades. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, 9 which requires, among other things, that NASD rules 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 rule change will lessen the impact of clearly erroneous transactions on the market and the public by allowing NASD to empower designated NASD officers with the authority to take prompt action with respect to such transactions. 9 15 U.S.C. 78 *o* -3(b)(6). 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. 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 by NASD. 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 and Rule 19b-4(f)(6) thereunder. 10 In accordance with Rule 19b-4(f)(6)(iii), 11 NASD provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change. 10 15 U.S.C. 78s(b)(3)(A) and 17 CFR 240.19b-4(f)(6), respectively. 11 17 CFR 240.19b-4(f)(6)(iii). A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. NASD has requested that the Commission waive the 30-day operative delay based upon a representation that the requested waiver is necessary to enable NASD to take prompt and effective action with respect to clearly erroneous transactions as they arise. NASD noted that there have been instances where the review of potential clearly erroneous transactions has been delayed because both Executive Vice Presidents authorized under the Rule have been unreachable. NASD wishes to remedy this situation as quickly as possible. In light of the foregoing, the Commission believes that such waiver is consistent with the protection of investors and the public interest. Accordingly, the Commission designates the proposal to be effective and operative upon filing with the Commission. 12 12 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASD-2006-121 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-2006-121. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASD-2006-121 and should be submitted on or before November 30, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18957 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54695; File No. SR-NASD-2006-116] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Pricing for NASD Members Using ITS/CAES, Brut and Inet November 2, 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 September 29, 2006, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by Nasdaq. Nasdaq submitted the proposed rule change under Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to modify the pricing for NASD members using ITS/CAES, Brut, and Inet. Nasdaq implemented the proposed rule change on October 2, 2006. The text of the proposed rule change is available on the Nasdaq's Web site at *http://www.nasdaq.com* , at Nasdaq's Office of the Secretary and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 In response to a recently announced pricing change by NYSE Arca, Inc. (“NYSE Arca”) 5 and to better reflect other pre-existing NYSE Arca charges, Nasdaq is instituting a price change for orders in non-Nasdaq exchange-listed securities routed to NYSE Arca for execution. Specifically, most orders in non-Nasdaq securities routed to NYSE Arca will be assessed a routing fee of $0.0028 per share executed; the exception will be for orders for exchange-traded funds routed outside of the Intermarket Trading System (“ITS”), 6 for which the fee will remain $0.003 per share executed. By contrast, the applicable fee had been $0.001 per share executed for orders in securities other than exchange-traded funds and $0.0007 per share executed for orders routed through the ITS. The price change reflects the higher costs that Nasdaq expects to incur to access liquidity at NYSE Arca. 5 *See* Securities Exchange Act Release No. 54686 (November 1, 2006) (SR-NYSEArca-2006-68). 6 Since October 1, 2006, the effective date of the “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” (“Linkage Plan”), connectivity between markets is provided pursuant to the Linkage Plan. The current ITS technology is used to effectuate both the ITS Plan and Linkage Plan. Therefore, the term “ITS” applies to the technology used to effectuate both the ITS Plan and the Linkage Plan. To enhance the competitiveness of Nasdaq's DOT router to the NYSE, Nasdaq is also instituting a cap of $100,000 per month with respect to orders routed through DOT that do not attempt to execute against liquidity in Nasdaq trading systems prior to routing and that are not charged a fee by the NSYE specialist (also known as non-billable orders). Nasdaq had previously instituted a $60,000 per month cap for non-billable orders that attempt to execute in Nasdaq before routing. 7 7 The proposed rule change also deletes obsolete rule language regarding fees charged to persons that are not NASD members using Brut or Inet. Persons who are not NASD members are no longer permitted to use these systems for trading non-Nasdaq securities. Similarly, persons who are not members of The NASDAQ Stock Market LLC may not use Brut or Inet to trade Nasdaq-listed securities. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with Section 15A of the Act, 8 in general, and furthers the objectives of Section 15A(b)(5) of the Act, 9 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the NASD operates or controls. 8 15 U.S.C. 78o-3. 9 15 U.S.C. 78o-3(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq 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 Nasdaq has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 10 and subparagraph (f)(2) of Rule 19b-4 thereunder, 11 because it establishes or changes a due, fee, or other charge imposed by the Nasdaq. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 10 15 U.S.C. 78s(b)(3)(a)(ii). 11 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASD-2006-116 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-2006-116. 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 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-NASD-2006-116 and should be submitted on or before November 30, 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. E6-18959 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54705; File No. SR-NASD-2005-146] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendments No. 1 and 2 Thereto To Expand the Scope of IM-2110-2 Relating To Trading Ahead of Customer Limit Orders To Apply to All OTC Equity Securities November 3, 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 December 9, 2005, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described below in Items I, II, and III, which Items have been prepared by NASD. On September 26, 2006, NASD filed Amendment No. 1 to the proposed rule change, 3 and on October 19, 2006, NASD filed Amendment No. 2 to the proposed rule change. 4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superseded the original rule filing in its entirety. 4 Amendment No. 2 replaced and superseded the amended rule filing in its entirety. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing to expand the scope of its Interpretive Material 2110-2 relating to trading ahead of customer limit orders to apply to all over-the-counter (“OTC”) equity securities. Below is the text of the proposed rule change. Proposed new language is in *italics* ; proposed deletions are in brackets. IM-2110-2. Trading Ahead of Customer Limit Order
(a)General Application To continue to ensure investor protection and enhance market quality, NASD's Board of Governors is issuing an interpretation to NASD Rules dealing with member firms' treatment of their customer limit orders in *NMS stocks and OTC equity* [exchange-listed] securities. This interpretation, which is applicable from 9:30 a.m. to 6:30 p.m. Eastern Time, will require members to handle their customer limit orders with all due care so that members do not “trade ahead” of those limit orders. Thus, members that handle customer limit orders, whether received from their own customers or from another member, are prohibited from trading at prices equal or superior to that of the limit order without executing the limit order. In the interests of investor protection, NASD is eliminating the so-called disclosure “safe harbor” previously established for members that fully disclosed to their customers the practice of trading ahead of a customer limit order by a market-making firm.† *For purposes of this interpretation,
(1)“NMS stock” shall have the meaning set forth in SEC Rule 600(b)(47) of Regulation NMS and
(2)“OTC equity security” shall have the meaning set forth in Rule 6610(d).* † For purposes of the operation of certain [Nasdaq] transaction and quotation reporting systems and facilities during the period from 4 p.m. to 6:30 p.m. Eastern Time, members may generally limit the life of a customer limit order to the period of 9:30 a.m. to 4 p.m. Eastern Time. If a customer does not formally assent (“opt-in”) to processing of the customer's limit order(s) during the extended hourse period commencing after the normal close of the [Nasdaq] market, limit order proteciton will not apply to that customer's order(s). Rule 2110 states that: A member, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade. Rule 2320, the Best Execution Rule, states that: In any transaction for or with a customer, a member and persons associated with a member shall use reasonable diligence to ascertain the best inter-dealer market for the subject security and buy or sell in such a market so that the resultant price to the customer is as favorable as possible to the customer under prevailing market conditions. Interpretation The following interpretation of Rule 2110 has been approved by the Board: A member firm that accepts and holds an unexecuted limit order from its customer (whether its own customer or a customer of another member) in an *NMS stock or OTC equity* [exchange-listed] security and that continues to trade the subject security for its own account at prices that would satisfy the customer's limit order, without executing that limit order, shall be deemed to have acted in a manner inconsistent with just and equitable principles of trade, in violation of Rule 2110, provided that a member firm may negotiate specific terms and conditions applicable to the acceptance of limit orders only with respect to limit orders that are:
(a)for customer accounts that meet the definition of an “institutional account” as that term is defined in Rule 3110(c)(4); or
(b)10,000 shares or more, unless such orders are less than $100,000 in value. In the event that a member trades ahead of an unexecuted customer limit order at a price that is better than the unexecuted limit order, such member is required to execute the limit order at the price received by the member or better. Nothing in this interpretation, however, requires members to accept limit orders from any customer. By rescinding the safe harbor position and adopting this interpretation, NASD wishes to emphasize that members may not trade ahead of their customer limit orders even if the member had in the past fully disclosed the practice to its customers prior to accepting limit orders. NASD believes that, pursuant to Rule 2110, members accepting and holding unexecuted customer limit orders owe certain duties to their customers and the customers of other member firms that may not be overcome or cured with disclosure of trading practices that include trading ahead of the customer's order. The terms and conditions under which institutional account or appropriately sized customer limit orders are accepted must be made clear to customers at the time the order is accepted by the firm so that trading ahead in the firm's market-making capacity does not occur. [As outlined in NASD Notice to Members 97-57, the minimum amount of price improvement necessary in order for a member to execute an incoming order on a proprietary basis when holding an unexecuted limit order for a Nasdaq security trading in fractions, and not be required to execute the held limit order, is as follows:] • [If actual spread is greater than 1/16 of a point, a firm must price improve an incoming order by at least a 1/16 . For stocks priced under $10 (which are quoted in 1/32 increments), the firm must price improve by at least 1/64 .] • [If actual spread is the minimum quotation increment, a firm must price improve an incoming order by one-half the minimum quotation increment.] [For Nasdaq securities authorized for trading in decimals pursuant to the Decimals Implementation Plan For the Equities and Options Markets, t] *T* he minimum amount of price improvement necessary in order for a member to execute an incoming order on a proprietary basis [in a security trading in decimals] when holding an unexecuted limit order in that same security, and not be required to execute the held limit order, is as follows:
(1)For customer limit orders priced *greater than or equal to $1.00 that are* at or inside the best inside market [displayed in Nasdaq], the minimum amount of price improvement required is $0.01; [and]
(2)* For customer limit orders priced less than $1.00 that are at or inside the best inside market, the minimum amount of price improvement required is the lesser of $0.01 or one-half ( 1/2 ) of the current inside spread; * *(3)* For customer limit orders priced outside the best inside market [displayed in Nasdaq], the member must price improve the incoming order by executing the incoming order at a price *at or inside the best inside market for the security; and* [at least equal to the next superior minimum quotation increment in Nasdaq (currently $0.01)] *(4) For customer limit orders in securities for which there is no published inside market, the minimum amount of price improvement required is $0.01.* NASD also wishes to emphasize that all members accepting customer limit orders owe those customers duties of “best execution” regardless of whether the orders are executed through the member or sent to another member for execution. As set out above, the Best Execution Rule requires members to use reasonable diligence to ascertain the best inter-dealer market for the security and buy or sell in such a market so that the price to the customer is as favorable as possible under prevailing market conditions. NASD emphasizes that order entry firms should continue to monitor routinely the handling of their customers' limit orders regarding the quality of the execution received.
(b)through
(c)No change. 6541. [Limit Order Protection] *Reserved* . [(a) Members shall be prohibited from “trading ahead” of customer limit orders that a member accepts in securities quoted on the OTCBB. Members handling customer limit orders, whether received from their own customers or from another member, are prohibited from trading at prices equal or superior to that of the customer limit order without executing the limit order. Members are under no obligation to accept limit orders from any customer.] [(b) Members may avoid the obligation specified in paragraph
(a)through the provision of price improvement. If a customer limit order is priced at or inside the current inside spread, however, the price improvement must be for a minimum of the lesser of $0.01 or one-half ( 1/2 ) of the current inside spread. For purposes of this rule, the inside spread shall be defined as the difference between the best reasonably available bid and offer in the subject security.] [(c) Notwithstanding subparagraph
(a)of this rule, a member may negotiate specific terms and conditions applicable to the acceptance of limit orders only with respect to such orders that are:] [(1) for customer accounts that meet the definition of an “institutional account” as that term is defined in Rule 3110(c)(4); or] [(2) for 10,000 shares or more, and greater than $20,000 in value.] [(d) Contemporaneous trades] [A member that trades through a held limit order must execute such limit order contemporaneously, or as soon as practicable, but in no case later than five minutes after the member has traded at a price more favorable than the customer's price.] [(e) Application] [(1) This rule shall apply, regardless of whether the subject security is additionally quoted in a separate quotation medium.] [(2) This rule shall apply from 9:30 a.m. to 4 p.m. Eastern Time.] 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 NASD Interpretive Material
(IM)2110-2, Trading Ahead of Customer Limit Order (“IM-2110-2”) (commonly referred to as the “Manning Rule”) generally prohibits a NASD member from trading for its own account in an exchange-listed security at a price that is equal to or better than an unexecuted customer limit order in that security, unless the member immediately thereafter executes the customer limit order at the price at which it traded for its own account or better. The legal underpinnings for the Manning Rule are a member's basic fiduciary obligations and the requirement that a member must, in the conduct of its business, “observe high standards of commercial honor and just and equitable principles of trade.” 5 5 *See* NASD Rule 2110. IM-2110-2 currently applies to exchange-listed securities, 6 but does not apply to OTC equity securities. NASD Rule 6541, however, extends the general principles of the Manning Rule to a subset of OTC equity securities, those that are quoted on the OTC Bulletin Board (“OTCBB”), but differs from IM-2110-2 in several respects, which are described in more detail below. 6 On June 30, 2006, the Commission approved SR-NASD-2005-087, which amended certain NASD rules to reflect separation of The Nasdaq Stock Market, Inc. from NASD upon the operation of the Nasdaq Stock Market LLC as a national securities exchange. *See* Securities Exchange Act Release No. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) (File No. SR-NASD-2005-087). SR-NASD-2005-087 became effective on August 1, 2006, the date upon which Nasdaq began operation as an exchange for Nasdaq-listed securities. As part of SR-NASD-2005-087, the Commission approved amendments to IM-2110-2 to reflect Nasdaq's approval and operation as a national securities exchange. The Commission approved further amendments to IM-2110-2 to codify NASD's existing position that IM-2110-2 applies to all members, whether acting as a market maker or not. These amendments became effective on April 14, 2006. *See* Securities Exchange Act Release No. 53653 (April 14, 2006), 71 FR 20429 (April 20, 2006) (File No. SR-NASD-2006-35). The Commission also approved the expansion of IM-2110-2, which previously applied to Nasdaq securities, to exchange-listed securities. *See* Securities Exchange Act Release No. 52210 (August 4, 2005), 70 FR 46897 (August 11, 2005) (File No. SR-NASD-2004-089). *See also* NASD Notice to Members 05-64 (October 2005) (announcing Commission approval of the amendments to IM-2110-2, which became effective on January 2, 2006). NASD is proposing to expand the scope of IM-2110-2 and any interpretive guidance thereunder to include OTC equity securities. 7 NASD believes that customer limit orders in OTC equity securities should be subject to the same order handling and customer protection requirements under the Manning Rule as exchange-listed securities. Given this proposed expansion of IM-2110-2 to OTC equity securities, NASD also is proposing to repeal NASD Rule 6541. As noted above, although NASD Rule 6541 is substantially similar to the Manning Rule, it differs in its application in several ways. NASD believes that these distinctions in application no longer make sense and that having uniform limit order protection requirements across market sectors is appropriate. The most significant differences between IM-2110-2 and NASD Rule 6541 and any related proposed changes to IM-2110-2 are summarized below. 7 NASD states that the term “OTC equity securities” does not include options. *See* NASD Rule 6610(d) (defining “OTC Equity Security” as any non-exchange-listed security and certain exchange-listed securities that do not otherwise qualify for real-time trade reporting). First, both IM-2110-2 and NASD Rule 6541 provide that a member is not deemed to have traded ahead of a customer limit order if the member provides a contemporaneous execution of the customer's order. For the purposes of IM-2110-2, contemporaneous has been interpreted to require execution as soon as possible, but absent reasonable and documented justification, within one minute. 8 In contrast, NASD Rule 6541(d) provides a longer maximum time limit of five minutes, within which an execution of a customer order will be deemed to be contemporaneous with an execution for a member firm's account. The five-minute standard was intended to be an outside limit, absent extraordinary circumstances, and not a normal practice. 9 NASD believes that most customer limit orders are filled within a period shorter than five minutes following a proprietary trade that triggers the obligation, and despite the more manual nature of the unlisted market, one minute is not an unreasonably short time to fill a customer order. 8 *See* NASD Notices to Members 95-67 (August 1995) and 98-78 (September 1998). 9 *See* NASD Notice to Members 01-46 (July 2001). Second, both IM-2110-2 and NASD Rule 6541 permit members to negotiate terms and conditions on the acceptance of certain large-sized limit orders. Such terms and conditions would permit the member to continue to trade alongside of, or ahead of, the limit order, if the customer agrees. NASD Rule 6541 applies a lower threshold requirement on the types of orders for which a member can negotiate such terms and conditions. Specifically, NASD Rule 6541(c) only requires that an order be 10,000 shares or more and greater than $20,000 in value, while IM-2110-2 requires that an order be 10,000 shares or more and greater than $100,000 in value. This lower threshold for OTCBB securities was established due to the lower average dollar amount of trades in OTCBB securities relative to trades in exchange-listed securities. NASD believes the higher value threshold requirement under IM-2110-2 should be applied to all securities uniformly. The value threshold of an order is intended to be an objective criteria upon which an assumption can be made that the order involves a best-efforts commitment and the commitment of substantial capital on the part of the member, and therefore, it is appropriate for the member to be able to place terms and conditions on the acceptance of that order. As such, NASD believes that it is the value and size of the customer order that is of significance in making this determination, not the average price of securities in a particular market sector. Third, IM-2110-2 excludes limit orders that are marketable at the time of receipt (marketable limit orders), whereas the requirements under NASD Rule 6541 apply to such orders. This exclusion to IM-2110-2 for marketable limit orders recognizes that marketable limit orders and market orders are functionally equivalent and, thus, customers placing marketable limit orders should not have an unwarranted advantage over market orders. If marketable limit orders were not excluded from the Manning Rule, the Rule's operation could have the unintended consequence of providing marketable limit orders with execution priority over market orders placed at the same time or prior to the marketable limit orders (commonly referred to as “jumping the queue”). 10 As such, consistent with the current application of IM-2110-2, NASD staff believes that continuing to exclude marketable limit orders from the application of the Manning Rule is appropriate. 11 10 *See* Securities Exchange Act Release No. 41990 (October 7, 1999), 64 FR 5600 (October 15, 1999) (File No. SR-NASD-99-44). 11 Recently-approved NASD Rule 2111 governs trading ahead of marketable limit orders in Nasdaq and exchange-listed securities. Although NASD Rule 2111 does not apply to OTC equity securities, it is consistent with a member's best execution obligations to execute marketable limit orders fully and promptly. NASD Rule 2111 became effective on January 9, 2006. *See* Securities Exchange Act Release No. 52226 (August 9, 2005), 70 FR 48219 (August 16, 2005) (File No. SR-NASD-2004-045). *See also* NASD Notice to Members 05-69 (October 2005). Fourth, both IM-2110-2 and NASD Rule 6541 apply only during certain specified time periods. Specifically, IM-2110-2 is applicable from 9:30 a.m. to 6:30 p.m. Eastern Time, 12 whereas NASD Rule 6541 applies only during normal market hours of 9:30 a.m. to 4:00 p.m. Eastern Time. This difference in application for OTCBB securities was established due to the fact that, although the OTCBB service is available from 7:30 a.m. to 6:30 p.m., prices on the OTCBB are required to be firm only during the normal market hours. 13 Given that in some OTC equity securities, quoting of the security may not exist at a given time, NASD believes that linking this requirement to whether quotes in the security are required to be firm is not appropriate. As such, NASD believes the time period under the Manning Rule should be applied to all securities uniformly. 12 A member may generally limit the life of a customer limit order to the period of 9:30 a.m. to 4 p.m. Eastern Time. If a customer does not formally assent to processing of the customer's limit order(s) during the extended hours period commencing after the normal close of the market, limit order protection will not apply to that customer's order. *See* IM-2110-2 (footnote 1). 13 *See* NASD Notice to Members 01-46 (July 2001). Lastly, both IM-2110-2 and NASD Rule 6541 prescribe a minimum level of price-improvement that a member must provide to trade ahead of an unexecuted customer limit order. Specifically, the price-improvement standard currently set forth in IM-2110-2 provides that, where a member is holding a customer limit order priced at or inside the best inside market displayed in Nasdaq, the member may execute an incoming order on a proprietary basis without being obligated to execute the customer limit order if the member executes the incoming order at least $0.01 better than the price of the customer limit order. Further, if the customer limit order is priced outside the best inside market displayed in Nasdaq, then the member must execute the incoming order at the next superior minimum quotation increment permitted by Nasdaq (currently $0.01). In contrast, NASD Rule 6541 provides that if the customer limit order is priced at or inside the current inside spread, 14 the price improvement is a minimum of the lesser of $0.01 or one-half (1/2) of the current inside spread. 14 For purposes of NASD Rule 6541, the inside spread is defined as the difference between the best reasonably available bid and offer in the subject security. The determination of what is “reasonably available” is largely factual and best determined on a case-by-case basis. *See* NASD Notice to Members 01-46 (July 2001). On June 9, 2005, the Commission adopted Regulation NMS that, among other things, established a minimum price variation (“MPV”) standard for NMS stocks. 15 Specifically, Rule 612 of Regulation NMS 16 generally prohibits market participants from accepting, ranking, or displaying orders, quotations, or indications of interest in a pricing increment smaller than a penny, except for orders, quotations, or indications of interest that are priced at less than $1.00 per share. If the order, quotation, or indication of interest is priced less than $1.00 per share, the minimum pricing increment is $0.0001. 15 Given that Regulation NMS only applies to national market system (“NMS”) securities and NASD believes that the same potential harms associated with sub-penny quoting that exist in NMS securities also exist in OTC equity securities, NASD filed a proposed rule change that would prohibit members from displaying, ranking, or accepting a bid or offer, an order, or an indication of interest in any OTC equity securities in any quotation medium priced in an increment smaller than $0.01 if such bid or offer, order, or indication of interest is priced equal to or greater than $1.00 per share. Members also would be prohibited from displaying, ranking, or accepting a bid, offer, an order, or an indication of interest in any OTC equity security priced in an increment smaller than $0.0001 if such bid or offer, order, or indication of interest is priced equal to or greater than $0.01 per share and less than $1.00 per share. *See* Securities Exchange Act Release Nos. 52280 (August 17, 2005), 70 FR 49959 (August 25, 2005) (File No. SR-NASD-2005-095); and 53024 (December 27, 2005), 71 FR 159 (January 3, 2006) (File No. SR-NASD-2005-095). 16 17 CFR 242.612. Given the implementation of Rule 612 of Regulation NMS, 17 NASD is proposing to amend the price-improvement provisions in IM-2110-2 to revise and make uniform for all equity securities the minimum price-improvement standards as follows. For customer limit orders priced greater than or equal to $1.00 that are at or inside the best inside market, the minimum amount of price improvement required would be $0.01. For customer limit orders priced less than $1.00 that are at or inside the best inside market, the minimum amount of price improvement required would be the lesser of $0.01 or one-half ( 1/2 ) of the current inside spread. For customer limit orders priced outside the best inside market, the member would be required to execute the incoming order at a price at or inside the best inside market for the security. Lastly, for customer limit orders in securities for which there is no published inside market, the minimum amount of price improvement required is $0.01. NASD believes these amendments are necessary to support the new pricing formats and to have uniform price improvement standards across market sectors. 17 The compliance date for Rule 612 of Regulation NMS was January 31, 2006. *See* Securities Exchange Act Release No. 52196 (August 2, 2005), 70 FR 45529 (August 8, 2005) (File No. S7-10-04) (extending the compliance date for Rule 612 of Regulation NMS). In addition, given that the definition of an “NMS stock” effectively covers stocks listed on a national securities exchange, NASD is proposing to replace the term “exchange-listed security” with the term “NMS stock.” 18 18 The term “NMS stock” is defined in Rule 600(b)(47) of Regulation NMS as any NMS security other than an option. *See* 17 CFR 242.600(b)(47). The term “NMS security” is defined in Rule 600(b)(46) of Regulation NMS as any security or class of securities for which transaction reports are collected, processed, and made available pursuant to an effective transaction reporting plan, or an effective national market system plan for reporting transactions in listed options. *See* 17 CFR 242.600(b)(46). As such, the term “NMS stock,” for purposes of IM-2110-2, would include, among other things, exchange traded funds (ETFs). Finally, IM-2110-2 currently contains provisions that prescribe the minimum level of price-improvement for securities trading in non-decimalized fractions. Given that equities no longer trade in fractions, NASD proposes to delete such fractional references as part of this proposed rule change. As a result of the proposed changes described above, NASD is proposing to apply limit order protection requirements uniformly to all equity securities by extending the scope of the Manning Rule to OTC equity securities. 19 In doing so, NASD also is proposing to repeal NASD Rule 6541, as those requirements would be subsumed in the proposed expansion of the Manning Rule. 19 In addition to the differences between IM-2110-2 and NASD Rule 6541 described above, the Commission also approved amendments to IM-2110-2 that generally require a member that has traded ahead of a customer limit order at a price that is more favorable than the customer limit order price, to pass along that price improvement to the customer limit order. This requirement currently does not apply under NASD Rule 6541. *See* Securities Exchange Act Release No. 52210 (August 4, 2005), 70 FR 46897 (August 11, 2005) (File No. SR-NASD-2004-089). *See* also NASD Notice to Members 05-64 (October 2005). NASD intends to announce the effective date of the proposed rule change in a *Notice to Members* to be published no later than 60 days following Commission approval. In recognition of the technological and systems changes the proposed rule change may require, NASD proposed to set the effective date at 90 days following publication of the Notice to Members announcing Commission approval. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, 20 which requires, among other things, that NASD 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 rule change will improve treatment of customer limit orders and promote investor protection. 20 15 U.S.C. 78 *o* -3(b)(6). 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. 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 by NASD. 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 NASD consents, the Commission will:
(A)by order approve such proposed rule change, as amended, or
(B)institute proceedings to determine whether the proposed rule change, as amended, should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. At the NASD's request, the Commission also is seeking comment on whether 90 days from the publication of NASD's *Notice to Members* provides adequate time for implementation of the proposal or whether additional implementation time may be needed and the reasons therefor. 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-2005-146 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-2005-146. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASD-2005-146 and should be submitted on or before November 30, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 21 21 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-18977 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54692; File No. SR-NSX-2006-12] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Implement a Fee Schedule Under Rule 16.1(a) and 16.1(c) for Transactions Executed Through the Intermarket Trading System Plan and/or the Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage November 2, 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 October 2, 2006, the National Stock Exchange, Inc. SM (“NSX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change, as described in Items I, II, and III below, which Items have been prepared by NSX. NSX submitted the proposed rule change under Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to implement a Fee Schedule under Rule 16.1(a) and 16.1(c) for transactions executed through the Intermarket Trading System Plan and/or the Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage (“ITS Plans”). 5 The text of the proposed rule change is available on the Exchange's Web site at *http://www.nsx.com* , at the Exchange's Office of the Secretary and at the Commission's Public Reference Room. 5 Since October 1, 2006, the effective date of the “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” (“Linkage Plan”), connectivity between markets is provided pursuant to the Linkage Plan. *See* Securities Exchange Act Release No. 54551 (September 29, 2006), 71 FR 59148 (October 6, 2006) (approving the NMS Linkage Plan). 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 parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In anticipation of the approval of the Exchange's new trading rules, 6 the Exchange amended its rules in July 2006 to add Chapter XVI to its rules to set forth, in their own chapter, rules relating to fees, dues, assessments and the tape rebate program. The rule change, SR-NSX-2006-10, was filed pursuant to Section 19(b)(3)(A) of the Act, which rendered it effective upon filing. 7 As part of that filing, Rule 16.1(c) states that the Exchange will “provide ETP Holders with notice of all relevant dues, fees, assessments and charges of the Exchange. Such notice may be made available to ETP Holders on the Exchange's Web site or by any other method deemed reasonable by the Exchange.” 6 *See* Securities Exchange Act Release No. 54391 (August 31, 2006), 71 FR 52836 (September 7, 2006). 7 *See* Securities Exchange Act Release No. 54194 (July 24, 2006), 71 FR 43258 (July 31, 2006) (Rule 16.3 provides that the new Chapter XVI will become effective upon written notice by the Exchange to the ETP Holders). As part of this rule change, the Exchange is filing a Fee Schedule under Rule 16.1(a) and 16.1(c) for transactions executed through the ITS Plans. 8 The Fee Schedule provides for the ability to pass through costs that are assessed by a third party to the Exchange if such costs are attributable to transactions executed through the ITS Plans. 9 8 As set forth in Release No. 34-54194, the Exchange proposed to maintain a separate fee schedule that contains its current fees, dues and other charges, instead of including all of its specific fees, dues and charges in the text of its rules. 9 *See* Securities Exchange Act Release Nos. 54548 (September 29, 2006), 71 FR 59159 (October 6, 2006) and 54480 (September 21, 2006) 71 FR 57596 (September 29, 2006) (which allow Linkage Plan participants to directly bill, and to accept direct billing from, any such Linkage Plan participants that are unable to implement Sponsoring Member billing by October 1, 2006.) While SR-NSX-2006-10 was effective upon filing, Rule 16.3 allows the Exchange to delay the effectiveness of Chapter XVI until it gives written notice to its ETP Holders. The Exchange will give notice declaring Rule 16.1(a) and 16.1(c) of Chapter XVI effective solely to implement the pass-through cost provisions for transactions executed through the ITS Plans. All other fees continue to be governed by Rule 11.10 for National Securities Trading System Fees. Moreover, nothing in the proposed Fee Schedule alters in any way any fees otherwise owed under NSX Rule 11.10. Pursuant to newly approved Rule 16.1(c), the Exchange will “provide ETP Holders with notice of all relevant dues, fees, assessments and charges of the Exchange.” ETP Holders and others using the Exchange will be advised of these fees through the Exchange's Web site. In addition, the ETP Holders will, simultaneous with the filing, be notified through the issuance of a Regulatory Circular declaring Rule 16.1(a) and 16.1(c) of Chapter XVI effective, and attaching the new Fee Schedule applicable to transactions through the ITS plans. The fees have been designed in this manner in order to ensure that the Exchange can continue to fulfill its obligations under Section 6(b) of the Act. 10 10 15 U.S.C. 78f(b). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) of the Act, 11 in general, and Section 6(b)(4) of the Act, 12 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and other charges. 11 *See id.* 12 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 13 and subparagraph (f)(2) of Rule 19b-4 14 thereunder, because it involves a member due, fee or other charge. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 13 15 U.S.C. 78s(b)(3)(A)(ii). 14 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NSX-2006-12 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-NSX-2006-12. This file number should be included in the subject line if e-mail is used. To help the Commission process and review 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 filings will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to file number SR-NSX-2006-12 and should be submitted on or before November 30, 2006. 15 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to the delegated authority. 15 Nancy Morris, Secretary. [FR Doc. E6-18947 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54694; File No. SR-NYSE-2006-93] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Relating to Amendments to NYSE Rule 607 Concerning the Use of the Random Selection Method To Appoint Arbitrators in Matters Not Involving Customers November 2, 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 October 24, 2006, the New York Stock Exchange LLC (“NYSE” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the NYSE. 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 NYSE is proposing to amend Rule 607(c) to provide that in all arbitration matters not involving customers, claimants may use the “Random List Selection” method for arbitrator appointment. Below is the text of the proposed rule change. Proposed new language is in italics; proposed deletions are in brackets. Rule 607. Appointment of Arbitrators
(c)Party Requests for [Agreement on Arbitrator Selection] Random List Selection If the customer [or non-member] requests in writing within 45 days from the time the statement of claim is filed, [or, if all parties agree and so notify the Exchange within that time frame,] arbitrators will be selected according to Random List Selection, as described below. *In all arbitration matters not involving customers, if the claimant requests in writing within 45 days from the time the statement of claim is filed, arbitrators will be selected according to Random List Selection, as described below* . The Exchange will accommodate any reasonable alternative way to select arbitrators, provided the parties agree. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the NYSE included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The NYSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Under the Random List Selection methodology, the Director of Arbitration sends parties a randomly generated list of five public arbitrators for claims heard by a single arbitrator. If the claim is heard by three arbitrators, the Director of Arbitration provides parties a randomly generated list of 10 public arbitrators and another list of five securities industry arbitrators. Each party is then allocated strikes against these arbitrators. 3 Currently, customers or non-members may request in writing a Random List Selection within 45 days after they file a statement of claim. The parties also may agree to this methodology provided that they notify the NYSE within this timeframe. 4 If parties do not request a Random List Selection, the Director of Arbitration will select the arbitrator(s) and name a chairman of each panel. 5 NYSE Rule 607(c) also permits the NYSE to accommodate reasonable alternatives to select arbitrators, provided that all parties agree on the methodology. 3 NYSE Rule 607(c)(2)(i). 4 NYSE Rule 607(c). 5 NYSE Rule 607(b). Under the proposed amendments to NYSE Rule 607(c), the Random List Selection methodology could be used in all arbitration matters not involving customers if the claimant requests that methodology in writing within 45 days after filing its statement of claim. The proposed amendments would not change the ability of a customer to request the Random Selection Method. The purpose of these amendments is to allow non-member or member claimants to use the Random List Selection method and to ensure that their choice of methodology for arbitrator appointment would prevail. 2. Statutory Basis The NYSE believes that the proposed rule change is consistent with Section 6(b)(5) 6 of the Act requiring exchanges to have rules designed to promote just and equitable principles of trade, and to protect investors and the public interest. 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The NYSE 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 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 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 the proposed rule change, or
(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSE-2006-93 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-2006-93. 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-2006-93 and should be submitted on or before November 30, 2006. 7 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 Nancy M. Morris, Secretary. [FR Doc. E6-18945 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54688; File No. SR-Phlx-2006-62] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to PACE Equity Transaction Charge and NMS Linkage November 2, 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 September 26, 2006, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Phlx. The Exchange submitted the proposed rule change under Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Equity Transaction Charge (“Charge”) on the Phlx Fee Schedule to extend the application of the Charge to an order, after being delivered to the Exchange by the PACE system, 5 that is executed by the specialist by way of an outbound NMS Linkage order, when such outbound NMS Linkage order reflects the PACE order's clearing information. 6 The Charge will not apply where a PACE order was executed against an inbound NMS Linkage order. The text of the proposed rule change is available on the Exchange's Web site at *http://www.phlx.com* , at the Exchange's Office of the Secretary and at the Commission's Public Reference Room. 5 PACE is the Exchange's automated order routing, delivery, execution and reporting system for equities. *See* Phlx Rule 229. 6 Since October 1, 2006, the effective date of the “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” (“NMS Linkage Plan”), connectivity between markets is provided pursuant to the Linkage Plan. *See* Securities Exchange Act Release No. 54551 (September 29, 2006), 71 FR 59148 (October 6, 2006) (approving the NMS Linkage Plan). 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 Phlx 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 the proposed rule change is to treat PACE trades that interact with NMS Linkage orders the same as Intermarket Trading System (“ITS”) commitments with respect to the Exchange's Charge. 7 The NMS Linkage Plan is the successor Plan to the ITS Plan. While there are some operational differences between the two Plans, both Plans facilitate intermarket linkage among market centers trading certain listed securities and the Exchange believes the NMS Linkage Plan is used in a similar manner as the ITS Plan by its members and member organizations. Therefore, the Exchange proposes to apply the Charge to PACE trades that interact with NMS Linkage orders in the identical manner as PACE trades that interact with ITS commitments. This is accomplished by adding the words “or NMS Linkage order” to footnote 1 in the Summary of Equity Charges section of the Exchange's Fee Schedule. 7 *See* Securities Exchange Act Release No. 47245 (January 24, 2003), 68 FR 5069 (January 31, 2003) (adopting the current fee treatment of PACE trades that interact with ITS commitments). 2. Statutory Basis The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act, 8 in general, and furthers the objectives of Section 6(b)(4) of the Act, 9 in particular, regarding the equitable allocation of reasonable dues, fees, and other charges among exchange members and other persons using exchange facilities. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 10 and subparagraph (f)(2) of Rule 19b-4 thereunder, 11 because it establishes or changes a due, fee, or other charge imposed by the Phlx. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 10 15 U.S.C. 78s(b)(3)(a)(ii). 11 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-Phlx-2006-62 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-Phlx-2006-62. 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-Phlx-2006-62 and should be submitted on or before November 30, 2006. 12 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 Nancy M. Morris, Secretary. [FR Doc. E6-18944 Filed 11-8-06; 8:45 am] BILLING CODE 8011-01-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Aviation Proceedings, Agreements Filed the Week Ending October 20, 2006 The following Agreements were filed with the Department of Transportation under the Sections 412 and 414 of the Federal Aviation Act, as amended (49 U.S.C. 1382 and 1384) and procedures governing proceedings to enforce these provisions. Answers may be filed within 21 days after the filing of the application. *Docket Number:* OST-2006-26147. *Date Filed:* October 20, 2006. *Parties:* Members of the International Air Transport Association. *Subject:* TC23/123 Middle East—TC3 Mail Vote 515, Special Passenger Amending Resolution 010d, From Iran to Afganistan (Memo 0310). *Intended Effective Date:* 1 November 2006. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E6-19031 Filed 11-8-06; 8:45 am] BILLING CODE 4910-9X-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Aviation Proceedings, Agreements Filed the Week Ending October 13, 2006 The following Agreements were filed with the Department of Transportation under the Sections 412 and 414 of the Federal Aviation Act, as amended (49 U.S.C. 1382 and 1384) and procedures governing proceedings to enforce these provisions. Answers may be filed within 21 days after the filing of the application. *Docket Number:* OST-2006-26088. *Date Filed:* October 11, 2006. *Parties:* Members of the International Air Transport Association. *Subject:* TC23 Mail Vote 508, Between Europe and South Asian Subcontinent, (Memo 0150), *Intended effective date:* 1 November 2006, (Memo 0150). *Docket Number:* OST-2006-26089-1. *Date Filed:* October 11, 2006. *Parties:* Members of the International Air Transport Association. *Subject:* TC23/TC123 Europe-South West Pacific, Expedited Resolution 002dp, Between Europe and South Asian Subcontinent, (Memo 0108), *Intended effective date:* 1 November 2006. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E6-19033 Filed 11-8-06; 8:45 am] BILLING CODE 4910-9X-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Approval of Noise Compatibility Program, Columbia Metropolitan Airport, Columbia, SC AGENCY: Federal Aviation Administration, DOT. ACTION: Notice. SUMMARY: The Federal Aviation Administration
(FAA)announces its findings on the Noise Compatibility Program submitted by the Richland-Lexington Airport District under the provisions of 49 U.S.C. (the Aviation Safety and Noise Abatement Act, hereinafter referred to as “the Act)” and 14 CFR part 150. These findings are made in recognition of the description of Federal and nonfederal responsibilities in Senate Report No. 96-52 (1980). On July 29, 2005, the FAA determined that the noise exposure maps submitted by the Richland-Lexington Airport District under Part 150 were in compliance with applicable requirements. On September 18, 2006, the FAA approved the Columbia Metropolitan Airport noise compatibility program. Most of the recommendations of the program were approved. DATES: *Effective Date:* The effective date of the FAA's approval of the Columbia Metropolitan Airport Noise Compatibility Program is September 18, 2006. FOR FURTHER INFORMATION CONTACT: Bonnie Baskin, Federal Aviation Administration, Atlanta Airports District Office, 1701 Columbia Avenue, Campus Building, Suite 2-260, College Park, Georgia 30337, phone number: 404-305-7152. Documents reflecting this FAA action may be reviewed at this same location. SUPPLEMENTARY INFORMATION: This notice announces that the FAA has given its overall approval to the Noise Compatibility Program for Columbia Metropolitan Airport, effective September 18, 2006. Under Section 47504 of the Act, an airport operator who has previously submitted a Noise Exposure Map may submit to the FAA a Noise Compatibility Program which sets forth the measures taken or proposed by the airport operator for the reduction of existing non-compatible land uses and prevention of additional non-compatible land uses within the area covered by the Noise Exposure Maps. The Act requires such programs to be developed in consultation with interested and affected parties including local communities, government agencies, airport users, and FAA personnel. Each airport noise compatibility program developed in accordance with Federal Aviation Regulations
(FAR)Part 150 is a local program, not a Federal Program. The FAA does not substitute its judgment for that of the airport operator with respect to which measure should be recommended for action. The FAA's approval or disapproval of FAR Part 150 program recommendations is measures according to the standards expressed in FAR Part 150 and the Act, and is limited to the following determinations: a. The Noise Compatibility Program was developed in accordance with the provisions and procedures of FAR Part 150; b. Program measures are reasonably consistent with achieving the goals of reducing existing non-compatible land uses around the airport and preventing the introduction of additional non-compatible land uses; c. Program measures would not create an undue burden on interstate or foreign commerce, unjustly discriminate against types of classes of aeronautical uses, violate the terms of airport grant agreements, or intrude into areas preempted by the Federal government; and d. Program measures relating to the use of flight procedures can be implemented within the period covered by the program without derogating safety, adversely affecting the efficient use and management of the navigable airspace and air traffic control systems, or adversely affecting other powers and responsibilities of the Administrator prescribed by law. Specific limitations with respect to FAA's approval of an airport Noise Compatibility Program are delineated in FAR Part 150 § 150.5. Approval is not a determination concerning the acceptability of land uses under Federal, State, or local law. Approval does not by itself constitute an FAA implementing action. A request for Federal action or approval to implement specific noise compatibility measures may be required, and an FAA decision on the request may require an environmental assessment of the proposed action. Approval does not constitute a commitment by the FAA to financially assist in the implementation of the program nor a determination that all measures covered by the program are eligible for grant-in-aid funding from the FAA. Where Federal funding is sought, requests for project grants must be submitted to the FAA Airports District Office in Atlanta, Georgia. The Richland-Lexington Airport District submitted to the FAA on April 13, 2005, the Noise Exposure Maps, descriptions, and other documentation produced during the noise compatibility planning study conducted from September 17, 2001, through March 21, 2006. The Columbia Metropolitan Airport Noise Exposure Maps determined by FAA to be in compliance with applicable requirements on July 29, 2005. Notice of this determination was published in the **Federal Register** on July 29, 2005. The Columbia Metropolitan Airport study contains a proposed Noise Compatibility Program comprised of actions designed for phased implementation by airport management and adjacent jurisdictions from March 21, 2006 to the year 2011. It was requested that FAA evaluate and approved this material as a Noise Compatibility Program as described in Section 47504 of the Act. The FAA began its review of the Program on March 22, 2006, and was required by a provisions of the Act to approve or disapprove the program with 180 days (other than the use of new or modified flight procedures for noise control). Failure to approve or disapprove such program within the 180-day period shall be deemed to be an approval of such program. The submitted program contained nineteen
(19)proposed actions for noise mitigation on and off the airport. The FAA completed its review and determined that the procedural and substantive requirements of the Act and FAR Part 150 have been satisfied. The overall program, therefore, was approved by the FAA effective September 18, 2006. Outright approval was granted for twelve of the specific program elements. One was approved in part. Several measures were disapproved pending submission of additional information to make and informed analysis. One measure was disapproved because it was not a noise mitigation measure. Operational Measures OC-1. Flight Track Modifications—Arriving Turbojet and Heavy Turboprop Aircraft When air traffic, weather, and safety conditions permit, arriving heavy turboprop and turbojet aircraft should be aligned with the runway centerline approximately 3 to 4 miles from the runway end for Runways 11, 29, and 5. This measure is to adjust aircraft flight tracks to reduce the areas that would be exposed to aircraft overflights, especially those operations at low altitudes. The benefits from implementation include a reduction in low altitude close-in approach turns over noise sensitive uses, including Three Fountains, Cedar Estates, and South Congaree. While there would be no change in the size of the noise contour as a result of implementation of this measure, this will help expose a smaller population to individual overflight events that were consistently noted in public meetings as creating significant adverse reaction by area residents. The procedure also places arriving aircraft over airport property to the greatest extent possible. These procedures could be formalized in the form of a published approach procedure that standardizes the specific elements of the procedures, such as in the form of a Standard Terminal Arrival Route (STAR). (NCP, pages 4-8, and 68-69; Figures 5- (from Volume Two, 2-5, 7-2 and 7-3.)) *FAA Action: Disapproved for purposes of Part 150 pending submission of additional Information to make an informed analysis* . There is insufficient information to determine the number of persons benefited (either by changes to the DNL noise contour or appropriate supplemental metric showing dB noise reduction), versus people that maybe newly added due to changes in flight tracks. OC-2. Flight Track Modifications—Departing Turbojet and Heavy Turboprop Aircraft When air traffic, weather and safety conditions permit, turbojet and heavy turboprop aircraft, including military C-17 and C-130 aircraft, departing Runway 29 should maintain runway heading and not initiate turns until after crossing Old Barnwell Road. Turbojet and large turboprop aircraft departing Runway 11 should not initiate turns until crossing Interstate 26. Departures on Runway 23 should maintain runway heading one mile beyond the southern end of Runway 23. The procedure has the aircraft gaining altitude over airport owned property to the greatest extent possible prior to initiating turns. This results in a reduction in low altitude close in departure turns over noise sensitive uses including the residential concentrations of Three Fountains, Cedar Estates, and South Congaree. This will help expose a smaller population to individual overflight events that were consistently noted in public meetings as creating significant adverse reaction by area residents. (NCP, pages 8-11 and 69-70; and Figures 7-3 and 7-4.) *FAA Action: Disapproved for purposes of Part 150 pending submission of additional information to make an informed analysis.* There is insufficient information to determine the number of persons benefited (either by changes to the DNL noise contour or appropriate supplemental metric showing dB noise reduction), versus people that may be newly added due to changes in flight tracks. OC-3. Noise Abatement Departure Profile
(NADP)Turbojet aircraft departing Runway 5 and 23 should utilize the “Close-in” NADP. Benefits relate to reduction in noise from aircraft departures within the communities located in close proximity to the ends of Runway 5-23, including Churchill Heights to the north and residences situated in the vicinity of Pine Street to the south. (NCP, pages 11-13, and 70). *FAA Action: Approved as an informal, voluntary measure when air traffic and airspace safety and efficiency and weather conditions permit.* Appropriate use of NADPs have been shown to be noise beneficial. OC-4. Nightime Runway Use Modifications Subject to Airfield Enhancements To establish a nighttime noise abatement preferential runway use program, it is recommended that a full-length parallel taxiway south of runway 11-29 be approved as an eligible item by the FAA specifically to reduce noise impacts on the sensitive communities located within the 06 DNL contour immediately north of Runway 5-23. Design and construction costs will be determined subject to the approval of this item as part of the NCP. (NEM, Figures 5-11 and 5-12; NCP, pages 13-14, 18, and 71; Figures 7-5A, 7-5B, and 7-6.) *FAA Action: Disapproved for purposes of FAR Part 150.* The NCP does not provide noise benefit information on the nighttime preferential use of Runway 11. The graphics referenced are not sufficient to demonstrate a noise benefit. (Different land use base maps, scales, and graphics were not used to compare information, making it difficult to determine the required information.) Additional information on the location of homes and the number of persons benefited, and whether there would be newly impacted noise-sensitive airways, is required. The FAA notes that construction of a full parallel taxiway was proposed in the Airport's master plan for other purposes. OC-5. Military Flight Training Noise Reduction
(a)It is recommended that the Airport request that military touch and go operations be voluntarily reduced, eliminated, or limited to daylight hours.
(b)If the flight training cannot be eliminated altogether, the Airport should provide to the operators of these aircraft the location of noise sensitive uses surrounding the airport. This should help the military operators to conduct training in such a manner that noise sensitive areas are avoided to the extent that it is technically feasible.
(c)This procedure would reduce the number of large military aircraft operating patterns over residential areas during day and nighttime hours. (NCP, pages 18-19, and 72.) *FAA Action: Disapproved pending submission of additional information to make an informed analysis.*
(a)There is no evidence of contact with the military to determine their willingness to carry out this measure on a voluntary basis, as proposed. (Part 150.23(c))
(b)There is no information on where noise sensitive uses would be located in any printed handout information. The extended flight tracks at OC-1 and OC-2 are not approved in this Record of Approval due to insufficient analysis.
(c)There is no information on the number of homes/noise-sensitive sites currently within, versus removed from, the flight track corridors as a result of this measure or other noise metric benefits. OC-6. Construction of Ground Run-Up Enclosures to Reduce Engine Maintenance Noise Given the routine nighttime maintenance at Columbia Metropolitan Airport, it is recommended that a pen type enclosure be approved as an eligible item by the FAA and that the final decision on whether to construct such an enclosure be made by the Airport following an analysis of the associated costs and benefits, as 54 homes and 125 people will benefit from this measure if implemented. (NCP, pages 21-26, and 72-73; Figures 7-7, 7-8, and 7-9.) *FAA Action: Approved for further study.* The study should include information on speech interference and sleep disturbance, and should show benefits in terms of numbers of homes or other noise-sensitive sites benefited versus newly disturbed by the relocation of ground run-ups and aircraft taxiing to a proposed new location. If the study demonstrates, from the cost/benefit analysis, that a pen type enclosure would be beneficial to the surrounding airport community, the Airport may recommend construction of the enclosure in a supplement or amendment to this NCP. OC-7. Public Relations Programs This measure is designed to improve communication about the NCP programs to the general public and to those pilots operating at Columbia Metropolitan Airport: 1. The Airport should continue to update the noise information on the Airport's Internet Site and to include information about the current noise complaint procedures; 2. The FAA should approve the purchase of three portable noise monitors. These would be used to monitor aircraft noise at the request of citizens, elected officials, airport tenants or other reasons. Some monitoring may involve indoor-outdoor attenuation information where 2-3 monitors may be needed simultaneously; and 3. The Airport should purchase and install lighted noise abatement procedure reminder signs at each runway end (a total of four signs). This is to inform airport users regarding the recommendations of this study. Sample language may include “please follow noise abatement procedures.” (NCP, pages 27-29, and 73.) *FAA Action: Approved.* Eligibility for Federal funding of three probable noise monitors will be determined at the time of application. For purposes of aviation safety, this approval does not extend to the use of monitoring equipment for enforcement purposes by in-situ measurement of any pre-set noise thresholds and shall not be used for mandatory enforcement of any voluntary measure. Noise abatement procedure reminder signs must not be construed as mandatory air traffic procedure. The content and location of airfield signs are subject to specific approval by appropriate FAA officials outside of the FAR Part 150 process and are not approved in advance by this determination. Land Use Measures LU-1. Comprehensive Planning Airport staff should strive to be an active participant in the comprehensive planning process for nearby jurisdictions. It is recommended that this Part 150 Study, including its implementation recommendations, either be referenced in each jurisdiction's comprehensive plan or specific elements of the FAR Part 150 be incorporated into the plan to provide the basis for other land use management approaches. During the comprehensive planning process, the determination of future land uses should consider the 2007 noise exposure map developed in this study (NCP, pages 34-36 and 77-78). *FAA Action: Approved.* This is within the authority of the local land use jurisdictions; the Federal government does not control local land use. LU-2. Discretionary Project Review The use of discretionary project review of development, rezoning, subdividing, special use, conditional use and variance requests is recommended for implementation by nearby jurisdictions. The Airport staff should work with local permitting, zoning, and planning bodies to assist in the evaluation of noise impacts on projects under review. A detailed checklist will be developed for project reviews, (NCP, pages 36-37, and 78-79). *FAA Action: Approved.* This is within the authority of the local land use jurisdictions; the Federal government does not control local land use. LU-3. Noise Overlay Zoning In the vicinity of Columbia Metropolitan Airport, it is recommended that each jurisdiction without noise overlay zoning (Springdale, Pineridge, South Congaree, West Columbia, and Cayce) implement a noise overlay zone, like Lexington County's modified noise overlay zones at pages 40-42. The Lexington County zones use the NEF metric. NEF 40 is equivalent to DNL 65; NEF-30 is equivalent to DNL 55. Lexington County should revise its current “Noise Overlay Zone.” (NCP, pages 38-42, and 79-80; Figure 8-2.) *FAA Action: Approved.* This approval is limited to potential noncompatible land uses within the 2007 and 2022 DNL 65 dB and higher noise contours depicted on the accepted NEMs. The Federal government has no authority to control land use. The local governments have the authority to implement this proposed land use measure. Note that while FAA once used the NEF noise metric; FAA has adopted the DNL metric. Therefore, the NEF metric is a local standard. Outside the DNL 65 dB contour, FAA, as a matter of policy, encourages local efforts to prevent new noncompatible development immediately abutting the DNL 65 dB contour and to provide a buffer for possible growth in noise contours beyond the forecast period. LU-4. Compatible Use Zoning All jurisdictions should monitor zoning within the 65 DNL contour and in areas off the ends of runways for roughly one mile which are subject to significant arrival and departure overflight activity and prevent any rezoning that allows development of incompatible uses, mainly residential uses, schools, churches, hospitals, nursing homes, auditoriums, and concert halls. A further recommendation included the Airport entering into discussions with the Town of South Congaree to request that they consider expanding the existing commercial node at the intersection of Edmund Highway and Pine Street towards the north along Pine Street and Edmund Highway. These proposed measures would require Airport staff to monitor zoning in nearby areas and to continue to work with officials from all six jurisdictions previously identified in the Study. (NCP, pages 42-44, and 80-82; Figures 2-6 and 9-1; Table 8.2.) *FAA Action: Approved.* The Federal government has no authority to control land use. The local governments have the authority to implement this measure. This Part 150 program is limited to potential noncompatible land uses within the DNL 65 dB and higher noise contours. Outside the DNL 65 dB contour, FAA, as a matter of policy, encourages local efforts to prevent new noncompatible development immediately abutting the DNL 65 dB contour and to provide a buffer for possible growth in noise contours beyond the forecast period. LU-5. Zoning Changes, Residential Density It is recommended that residential densities be addressed by adjusting individual residential densities in current zoning ordinances if the noise overlay zoning is not enacted. Where vacant land is partially within the DNL 65 dB, and the parcel extends beyond that contour, it is recommended that compatible uses be developed within the DNL 65 dB, and that residential, or public use, or other uses incompatible with higher noise levels be built in the lesser noise contour (Planned Unit Development). This could be extended to areas located beneath and within one-half mile either side of the extended runway centerline out to a distance of one to one and one-half miles from the end of a runway. In combination with the noise overlay zoning recommendation, areas within the NEF-3O/DNL 55 dB to DNL 65 dB, it is recommended lower density noise-sensitive development occur within the areas impacted by the 2007 noise contour (from 10 units per acre to 4 units per acre). Consideration should be given to the potential use of cluster development techniques where appropriate in these same areas and where community support exists. If noise overlay zoning is not implemented, this should be incorporated into existing zoning near the airport for areas inside the 2007 55 DNL contour. (NCP, pages 44-46, and 82.) *FAA Action: Approved.* This approval is limited to potential noncompatible land uses within the 2007 and 2022 DNL 65 dB and higher noise contours depicted on the accepted NEMs. The Federal government has no authority to control land use. The local governments have the authority to implement this proposed land use measure. This Part 150 program is limited to potential noncompatible land uses within the DNL 65 dB and higher noise contours. Note that while FAA once used the NEF noise metric, FAA has adopted to DNL metric. Therefore, the NEF metric is a local standard. Outside the DNL 65 dB contour, FAA, as a matter of policy, encourages local efforts to prevent new noncompatible development immediately abutting the DNL 65 dB contour and to provide a buffer for possible growth in noise contours beyond the forecast period. LU-6. Environmental Zoning IT is recommended that the Airport support local jurisdictions in the continued use of environmental controls to limit development in nearby environmentally sensitive areas; this primarily includes the floodplain and wetland areas in Lexington County, and South Congaree and Pine Ridge. (NCP, pages 47-48, and 83.) *FAA Action: Disapproved for purposes of FAR Part 150.* The NCP describes this as an environmental protection measure, not a noise mitigation measure. Part 150 is strictly a noise compatibility program, not a broader environmental program. Existing controls appear to prohibit development in these areas for other reasons. LU-7. Subdivision Regulation Changes As a measure to ensure future land development compatibility, subdivision regulations should require a statement be recorded on the subdivision plat that identifies the potential for aircraft operational activity and possible noise impacts for plats that fall within the 55 DNL or higher on the 2007 NEM or NEF 30 if noise overlay zoning is implemented. It is recommended that the Airport encourage and work through local jurisdictions to consider noise impacts when parcels are being proposed for subdivision. (NCP, pages 48-49, and 83-84.) *FAA Action: Approved.* This approval is limited to potential noncompatible land uses within the 2007 and 2022 DNL 65 dB and higher noise contours depicted on the accepted NEMs. The Federal Government has no authority to control land use. The local governments have the authority to implement this proposed land use measure. This Part 150 program is limited to potential noncompatible land uses within the DNL 65 dB and higher noise contours. Note that while FAA once used the NEF noise metric, FAA has adopted the DNL metric. Therefore, the NEF metric is a local standard. Outside the DNL 65 dB contour, FAA as a matter of policy encourages local effects to prevent new noncompatible development immediately abutting the DNL 65 dB contour and to provide a buffer for possible growth in noise contours beyond the forecast period. LU-8. Dedicated Noise and Avigation Easements Noise and avigation easements are recommended as a condition of approval for re-zonings, subdivision plats and issuance of building permits on existing zoned and platted property for incompatible residential properties and other noise sensitive uses inside the 2007 65 DNL or within the proposed Airport Noise Overlay Zoning areas. An executed easement is also recommended for any approval zoning variance request that creates a noise incompatibility. (NCP, pages 49-50, and 84.) *FAA Action: Approved.* This approval is limited to potential noncompatible land uses within the 2007 and 2022 DNL 65 dB and higher noise contours depicted on the accepted NEMs. FAA's policy is that new noise sensitive land uses should be prevented from developing around airports. In cases where prevention is not feasible because the airport sponsor does not control land uses, they should be rendered compatible with noise exposure levels through measures such as avigation easements during construction. Additionally, the FAA published a policy (See 63 FR 16409-16414, dated April 3, 1998) stating it will fund only preventive mitigation after October 1, 1998. No remedial mitigation would be available for new noise-sensitive structures built after October 1, 1998. LU-9. Fair Disclosure Regulations It is recommended that the Airport undertake an informal disclosure program including mailing a realtor notification brochure, publishing results of this Study in local media, and placing copies of this Study at each jurisdiction's administrative office. This program should include information related to the South Carolina Residential Property Condition Disclosure Act. (NCP, pages 51-52, and 84-86; and, Figure 9-2.) *FAA Action: Approved.* LU-10. Fee Simple Acquisition Program This Study identified two parcels: Parcel A and B (south of Runway 5) as candidates for voluntary acquisition. Parcel A (4.9 acres) has one residential structure. Parcel B is 55 acres and has no noncompatible land use. (NCP pages 52-56, and 87; and, Figure 8-3.) *FAA Action: Disapproved for purposes of FAR Part 150, pending submission of additional Information to make an informed analysis.* There is insufficient evidence these parcels are likely to be developed incompatibly. Other measures in the NCP are intended to reduce the likelihood of incompatible development on vacant parcels. It is noted Parcel A is not located within the current conditions DNL 65 contour, and Parcel B is partially impacted by the DNL 65 dB noise contour but its current use is compatible with the airport. The need for this property as part of a future runway extension project may be evaluated outside of the FAR Part 150 process. LU-11. Voluntary Soundproofing Program Soundproof residences and public uses buildings on a voluntary basis (where it is cost effective and technically feasible) and it is recommended that in exchange for the property owner executing a noise and avigation easement. Soundproofing program would be based on 2002 NEM until activity meets 2007 N7EM forecasts (map dates represent years 2006 and 2011 respectively per sponsor letter dated 03/21/06). The incompatible areas (including 18 private residences and a commercial day care center) within the 2002 NEM 65 DNL contour should be considered for participation in a federally funded, voluntary soundproofing program. It is recommended that in exchange for soundproofing that the property owner execute a noise and avigation easement. This easement could also be signed in lieu of having improvements made to the home or building on the property. Executing an avigation easement would not be a mandatory requirement of the soundproofing program. A homeowner eligible for the program (within the DNL noise contour) would be permitted to sell a noise and avigation easement to the Airport Sponsor instead of participating in sound attenuation, should they choose not to participate or if their residence does not qualify for participation in the program. (NCP, pages 58-63, and 88-89; and, Figures 8-4, and 8-5.) *FAA Action: Approved.* The voluntary sound insulation within the DNL 65 dB noise contour is approved. The specific identification of structures recommended for inclusion in the program and specific definition of the scope of the program will be required prior to approval for Federal funding. This includes a determination of which NEM applies at the time of grant application, and evidence the day care manager holds good title to the building proposed for sound attenuation. Provisions will be included in the scope of work to allow eligible homeowners to sell an easement to the airport sponsor should they not choose sound insulation program or if their residence does not qualify. The FAA's policy is that no structures built after October 1, 1998, are eligible for Federal funding for remedial mitigation (see FAA policy at 63 FR 16409). LU-12 Noise and Avigation Easement Purchase It is recommended that the Airport undertake the acquisition of avigation easements in the 2007 noise impact area as a secondary measure to provide those property owners who may not qualify or opt to not participate in the soundproofing program with an option as well as providing the airport with the protection afforded by the easement with non-suit covenant. (NCP, pages 63-64, and 89.) *FAA Action: Approved.* This approval is limited to potential noncompatible land uses within the DNL 65 dB higher noise contours. *Disapproved for purposes of Part 150 with respect to Airport Improvement Program
(AIP)Funding outside the DN7L 65 dB noise contour.* Section 189 of Public Law 108-176, Vision 100-Century of Aviation Reauthorization Act, December 12, 2003, specifically prohibits FAA approval of Part 150 program measures that require AIP funding to mitigate aircraft noise outside DNL 65 dB—(through Fiscal Year 2007). Section 189 does not preclude the use of airport revenue outside DNL 65 dB. Mitigation within the 2007 NEM 65 dB noise contour area is subject to a showing the NEMs are applicable at the time of grant application. Provisions will be included in the scope of work to allow any homeowner eligible for the program to sell a noise and avigation easement to the Airport Sponsor should they choose not to participate in the sound insulation program or their residence does not qualify for participation in the program. Also, the FAA's policy is that no structures built after October 1, 1998 are eligible for Federal funding for remedial mitigation (see FAA policy at 63 FR 16409). These determinations are set forth in detail in a Record of Approval signed by the FAA on September 18, 2006. The Record of Approval, as well as other evaluation materials and the documents comprising the submittal, are available for review at the FAA office listed above and at the administrative office of the Richland-Lexington Airport District. The Record of Approval also will be available on-line at: *http://www.faa.gov/airports_airtraffic/airports/environmental/airport_noise/part_150/states/.* Issued in Atlanta, Georgia on October 25, 2006. Scott Seritt, Manager, Atlanta Airports District Office. [FR Doc. 06-9122 Filed 11-8-06; 8:45 am]
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12 references not yet in our index
- 5 CFR 724
- Pub. L. 107-174
- 29 CFR 1614
- Pub. L. 100-647
- 17 CFR 240.17
- 17 CFR 240.15
- 17 CFR 240.19
- 17 CFR 19
- 15 USC 78
- 49 USC 1382
- 14 CFR 150
- Pub. L. 108-176
Citation graph
cites case law
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Notice
Cite5 CFR 724
Pub. L.Pub. L. 107-174
Cite29 CFR 1614
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