Fed. Reg. Notices — SECURITIES AND EXCHANGE COMMISSION

BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54790; File No. SR-Amex-2006-01] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Change and Amendments No. 1, 2, and 3 Thereto Relating to the Listing and Trading of Principal Protected Notes Linked to the Dow Jones-AIG ExEnergy Sub-Index November 20, 2006. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, 2 notice is hereby given that on January 3, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange.

On March 21, Amex submitted Amendment No. 1 to the proposed rule change. 3 On May 24, 2006, Amex submitted Amendment No. 2 to the proposed rule change. 4 On November 13, 2006, Amex submitted Amendment No. 3 to the proposed rule change. 5 The Commission is publishing this notice and order to solicit comments on the proposed rule change, as amended, from interested persons and to approve the proposal on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 superseded and replaced the original filing in its entirety. 4 In Amendment No. 2, the Exchange makes representations regarding specialist prohibitions and accounts and clarifies certain aspects of the index methodology. 5 Amendment No. 3 supersedes and replaces the original filing, Amendment No. 1, and Amendment No. 2 in its entirety.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade, principal protected notes, linked to the performance of the Dow Jones-AIG ExEnergy Sub-Index (the “DJAIG ExEnergy Index” or the “Index”). The text of the proposed rule change is available on Amex's Web site at *http://www.amex.com* , at Amex's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change.

The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Notes Under Section 107A of the Amex Company Guide (the “Company Guide”), the Exchange may approve for listing and trading securities which cannot be readily categorized under the listing criteria for common and preferred stocks, bonds, debentures, or warrants. 6 The Amex proposes to list for trading under Section 107A of the Company Guide principal protected notes linked to the performance of the Index (the “Notes”). 7 Merrill Lynch will issue the Notes under the name “Market Index Target-Term Securities” or “MITTS.

” The Notes will provide for participation in the positive performance of the Index during their term while reducing the risk exposure to investors through principal protection. 6 *See* Securities Exchange Act Release No. 27753 (March 1, 1990), 55 FR 8626 (March 8, 1990) (approving File No. SR-Amex-89-29). 7 Merrill Lynch & Co. (“Merrill Lynch”), Dow Jones & Company, Inc. (“Dow Jones”) and AIG International, Inc. (“AIGI”) have entered into a non-exclusive license agreement providing for the use of the Dow Jones-AIG ExEnergy Sub-Index by Merrill Lynch and certain affiliates and subsidiaries in connection with certain securities including the Notes.

Dow Jones and AIGI are not responsible and will not participate in the issuance and creation of the Notes. The Notes will conform to the initial listing guidelines under Section 107A 8 and continued listing guidelines under Sections 1001-1003 9 of the Company Guide. The Notes are senior non-convertible debt securities of Merrill Lynch. The Notes will have a term of no more than ten

(10)years. Merrill Lynch will issue the Notes in denominations of whole units, with each unit representing a single Note. The original public offering price was $10 per Note 10 and thus the notes are currently trading over-the-counter but are not listed on any national securities exchange. 11 At a minimum, the Notes will entitle the owner at maturity to receive at least 100% of the principal investment amount. At maturity, the holder would receive the full principal investment amount of each Note plus a supplemental redemption amount (the “Supplemental Redemption Amount”) based on the percentage change or performance of the Index over the term of the Note. The performance of the Index will be based on an arithmetic average of the levels of the Index at the close of market on five

(5)business days shortly prior to the maturity of the Notes. The Notes are not callable by Merrill Lynch. 8 The initial listing standards for the Notes require:

(i)A market value of at least $4 million and

(ii)a minimum public distribution requirement of one million trading units with a minimum of 400 public shareholders. In addition, the listing guidelines provide that the issuer has assets in excess of $100 million and stockholder's equity of at least $10 million, and pre-tax income of at least $750,000 in the last fiscal year or in two of the three prior fiscal years. In the case of an issuer that is unable to satisfy the earning criteria stated in Section 101 of the Company Guide, the Exchange will require the issuer to have the following:

(i)assets in excess of $200 million and stockholders' equity of at least $10 million; or

(ii)assets in excess of $100 million and stockholders' equity of at least $20 million. 9 The Exchange's continued listing guidelines are set forth in Sections 1001 through 1003 of Part 10 to the Exchange's Company Guide. Section 1002(b) of the Company Guide states that the Exchange will consider removing from listing any security where, in the opinion of the Exchange, it appears that the extent of public distribution or aggregate market value has become so reduced to make further dealings on the Exchange inadvisable. With respect to continued listing guidelines for distribution of the Notes, the Exchange will rely, in part, on the guidelines for bonds in Section 1003(b)(iv). Section 1003(b)(iv)(A) provides that the Exchange will normally consider suspending dealings in, or removing from the list, a security if the aggregate market value or the principal amount of bonds publicly held is less than $400,000. 10 Telephone conference among Florence Harmon, Senior Special Counsel, Commission, Kristie Diemer, Special Counsel, Commission, Jeffrey P. Burns, Vice President and Associate General Counsel, Amex, and Sudhir C. Bhattacharyya, Assistant General Counsel, Amex on November 16, 2006 (“November 16 Telephone Conference”). 11 Telephone conference between Kristie Diemer, Special Counsel, Commission and Sudhir C. Bhattacharyya, Assistant General Counsel, Amex on November 20, 2006. The Supplemental Redemption Amount that a holder of a Note will be entitled to receive is defined as the greater of zero or the product of $10, the performance of the Index and the Participation Rate (which is 106.92%). The performance of the Index will be determined at maturity based on the relation of the “Ending Value” 12 to the “Starting Value” of the Index. The “Ending Value” is generally equal to the average of the closing levels of the Index, determined on five

(5)separate calculation days. The “Starting Value” is the closing level of the Index on the date the Notes are priced for initial sale to the public. The Ending Value may be calculated by reference to fewer than five or even a single day's closing level if, during the period shortly before the maturity date of the Notes, there is a disruption in the trading of a sufficient number of commodity futures included in the Index or certain futures or option contracts relating to the Index. 13 12 The “Ending Value” is equal to the average of the closing levels of the Index, determined on each of the five calculation days shortly prior to maturity ( *i.e.* , the calculation period). If there are fewer than five calculation days during the calculation period, due to a market disruption event, then the Ending Value will equal the average of the closing levels of the Index on those calculation days. If there is only one calculation day during the calculation period, then the Ending Value will equal the closing level of the Index on that calculation day. If no calculation days occur during the calculation period, then the Ending Value will equal the closing level of the Index determined on the last scheduled Index business day in the calculation period, regardless of the occurrence of a market disruption event on that scheduled Index business day. 13 A “market disruption event” means any of the following events as determined by the calculation agent:

(i)The suspension of or material limitation on trading for more than two hours of trading, or during the one-half hour period preceding the close of trading, on the applicable exchange (without taking into account any extended or after-hours trading session), in any futures contract used in the calculation of the Index or any successor index;

(ii)the suspension of or material limitation on trading, in each case, for more than two hours of trading, or during the one-half hour period preceding the close of trading, on the applicable exchange (without taking into account any extended or after-hours trading session), whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise, in option contracts or futures contracts related to the Index, or any successor index, which are traded on any major U.S. exchange; or

(iii)the failure on any day of the applicable exchange to publish the official daily settlement prices for that day for any futures contract used in the calculation of the Index. At maturity, a holder will receive a maturity payment amount per Note equal to: EN27NO06.000 The Supplemental Redemption Amount may not be less than zero. If the Ending Value is less than the Starting Value, the amount paid at maturity will be 100% of the Principal Amount. The amount paid at maturity per Note will never be less than the Principal Amount. Dow Jones-AIG ExEnergy Sub-Index The Dow Jones-AIG Commodity Index and the DJAIG ExEnergy Index are proprietary indexes that AIGI International Inc. (“AIGI”) developed, that each year are determined by “AIG-Financial Products Corp. (“AIG-FP”) 14 , subject to oversight and approval of the Oversight Committee (defined below), and that Dow Jones calculates. The Index is designed to track rolling futures positions in a diversified basket of fifteen commodity futures (each, an “Index Component”) which, plus energy commodities, comprise the Dow Jones-AIG Commodity Index. 14 AIG-FP is not a broker-dealer or futures commission merchant; however, AIG-FP may have such affiliates. Therefore, AIG-FP

(i)implemented and agrees to maintain procedures reasonably designed to prevent the use and dissemination by relevant employees of AIG-FP, in violation of applicable laws, rules and regulations, of material non-public information relating to changes in the composition or method of computation or calculation of the Index or the Dow Jones-AIG Commodity Index and

(ii)agrees to periodically check the application of such procedures as they relate to personnel of AIG-FP responsible for such changes. Dow Jones has informed the Exchange that they do not have any affiliates engaged in the securities or commodities trading businesses and, as such, do not believe that such firewall procedures are necessary in its case. In addition, the Oversight Committee is subject to written policies that acknowledge their obligations with respect to material non-public information. The DJAIG ExEnergy Index tracks what is known as a rolling futures position, which is a position where, on a periodic basis, futures contracts on physical commodities specifying delivery on a nearby date must be sold and futures contracts on physical commodities that have not yet reached the delivery period must be purchased. An investor with a rolling futures position is able to avoid delivering underlying physical commodities while maintaining exposure to those commodities. The rollover for each Index Component occurs over a period of five Dow Jones-AIG business days each month according to a pre-determined schedule. Currently, Dow Jones calculates and disseminates the DJAIG ExEnergy Index level at least 15-second intervals from 8 a.m. to 3 p.m., Eastern time (“ET”), 15 and publishes a daily settlement price for the Index at approximately 5 p.m., ET each day the Amex is open for trading. Any disseminated value of the Index after 3 p.m. is static. 15 November 16 Telephone Conference. The fifteen commodities for 2006 that comprise the DJAIG ExEnergy Index are (weightings as of November 15, 2006 noted in parentheses): aluminum (9.31%); coffee (3.49%); copper (10.24%); corn (11.87%); cotton (3.48%); gold (8.41%); lean hogs (5.03%); live cattle (6.58%); nickel (6.54%); silver (3.33%); soybeans (9.81%); soybean oil (4.03%); sugar (2.73%); wheat (8.43%); and zinc (6.73%). 16 16 E-mail from Sudhir C. Bhattacharyya, Assistant General Counsel, Amex, to Florence Harmon, Senior Special Counsel, Commission, dated November 17, 2006. Dow Jones-AIG Commodity Index. The calculation of the DJAIG ExEnergy Index follows the same rules as the calculation of the Dow Jones-AIG Commodity Index; provided that the daily value of the DJAIG ExEnergy Index is determined by summing the product of the prices of the Index Components and their respective CIMs (as defined below). The Dow Jones-AIG Commodity Index was created by Dow Jones and AIGI to provide a liquid and diversified benchmark for commodities. The Dow Jones-AIG Commodity Index was established on July 14, 1998 and is currently comprised of futures contracts on nineteen physical commodities. 17 17 A futures contract is an agreement that provides for the purchase and sale of a specified type and quantity of a commodity during a stated delivery month for a fixed price. The nineteen commodities for 2006 that comprise the Dow Jones-AIG Commodity Index (the “Dow Jones-AIG Commodity Index Commodities”) are (weightings as of November 15, 2006 noted in parentheses): aluminum (6.90%); coffee (2.59%); copper (7.59%); corn (8.80%); cotton (2.58%); crude oil (10.30%); gold (6.24%); heating oil (3.16%); lean hogs (3.73%); live cattle (4.88%); natural gas (9.34%); nickel (4.85%); silver (2.47%); soybeans (7.27%); soybean oil (2.99%); sugar (2.03%); unleaded gasoline (3.06%); wheat (6.25%); and zinc (4.99%). 18 Futures contracts on the Dow Jones-AIG Commodity Index are currently listed for trading on the Chicago Board of Trade (the “CBOT”). The Dow Jones-AIG Commodity Index commodities currently trade on United States exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange (the “LME”). 18 November 16 Telephone Conference. The Index was created using the following four main principles: • Economic significance. The Dow Jones-AIG Commodity Index is designed to reflect the importance of a diversified group of physical commodities to the world economy. To achieve a fair representation, the Dow Jones-AIG Commodity Index uses both liquidity data and dollar-adjusted production data in determining the relative quantities of the commodities. The Dow Jones-AIG Commodity Index primarily relies on the liquidity of a particular commodity ( *i.e.* , the relative amount of trading activity of a particular commodity), as an important indicator of the value placed on that commodity by financial and physical market participants. In addition, production data is also identified to measure the importance of a commodity to the world economy. Production data alone would underestimate the economic significance of storable commodities, such as gold, relative to non-storable commodities, such as livestock. Production data alone also may underestimate the value that the financial community places on certain commodities and/or the amount of commercial activity related to various commodities. The Dow Jones-AIG Commodity Index accordingly relies on both futures market liquidity of commodities and production in determining relative weightings. • Diversification. The Dow Jones-AIG Commodity Index is designed to provide diversified exposure to commodities as an asset class. Disproportionate weightings of any particular commodity or sector may increase the volatility and negate the concept of a broad-based commodity index. As described further below, diversification rules have been established and are applied annually. Additionally, the Dow Jones-AIG Commodity Index is re-balanced annually on a price-percentage basis in order to maintain diversified commodities exposure over time. • Continuity. The Dow Jones-AIG Commodity Index is designed to be responsive to the changing nature of the commodity markets in a manner that does not completely reshape the character of the Dow Jones-AIG Commodity Index from year to year. The Dow Jones-AIG Commodity Index is intended to provide a stable benchmark, so that end-users may be reasonably confident that historical performance data is based on a structure that bears some resemblance to both the current and future composition of the Dow Jones-AIG Commodity Index. • Liquidity. The Dow Jones-AIG Commodity Index is designed to provide a highly liquid index. Liquidity as a weighting factor helps to ensure that the Dow Jones-AIG Commodity Index can accommodate substantial investment flows. The liquidity of an index affects transaction costs associated with current investments and may also affect the reliability of historical price performance data. Designated Contracts for Each Dow Jones-AIG Commodity Index Commodity A futures contract, known as a Designated Contract, is selected by the Dow Jones-AIG Oversight Committee (the “Oversight Committee”) 19 for each Dow Jones-AIG Commodity Index Commodity. The Oversight Committee was established by Dow Jones and AIGI to assist with the operation of the Dow Jones-AIG Commodity Index. The Exchange states that the Oversight Committee includes prominent members of the financial, academic and legal communities selected by AIGI and meets annually to consider any changes to be made to the Dow Jones-AIG Commodity Index for the coming year. The Oversight Committee may also meet at such other times as may be necessary. 19 The Exchange has been informed by Merrill Lynch that none of the members of the Oversight Committee are officers, directors or employees of Merrill Lynch. With the exception of several LME contracts, where the Oversight Committee believes that there exists more than one futures contract with sufficient liquidity to be chosen as a Designated Contract for a Dow Jones-AIG Commodity Index Commodity, the Oversight Committee selects the futures contract that is traded in the U.S. and denominated in U.S. dollars. If more than one of those contracts exists, the Oversight Committee will select the most actively traded contract. Data concerning this Designated Contract will be used to calculate the Dow Jones-AIG Commodity Index. If a Designated Contract were to be terminated or replaced, a comparable futures contract would be selected, if available, to replace that Designated Contract. 20 20 The Oversight Committee may exclude any otherwise eligible contract from the Dow Jones-AIG Commodity Index if it determines that it has an inadequate trading window. The Dow Jones-AIG Commodity Index currently includes contracts traded on the London Metal Exchange (“LME”), which is located in London. During the hours where the LME is closed, Dow Jones uses the last price and uses the settlement price once it is available in order to publish the Dow Jones-AIG Commodity Index value through the end of the trading day. The Dow Jones-AIG Commodity Index value does not reflect any after-hours or overnight trading in contracts traded on the LME. The Designated Contracts for the Dow Jones-AIG Commodity Index Commodities included in the Dow Jones-AIG Commodity Index for 2006 are traded on the LME, the CBOT, the New York Board of Trade (the “NYBOT”), the Chicago Mercantile Exchange, Inc. (the “CME”) and the New York Mercantile Exchange (the “NYMEX”). 21 The particular commodities futures exchange for each futures contract with Web site information is as follows:

(i)Aluminum, nickel and zinc—LME at *http://www.lme.com* ;

(ii)corn, soybeans, soybean oil and wheat—CBOT at *http://www.cbot.com* ;

(iii)live cattle and lean hogs—CME at *http://www.cme.com* ;

(iv)coffee and sugar—NYBOT at *http://www.nybot.com* and

(v)copper, crude oil, gold, heating oil, natural gas, silver and unleaded gasoline—NYMEX at *http://www.nymex.com* . In addition, various market data vendors and financial news publications publish futures prices and data. The Exchange represents that futures quotes and last sale information for the commodities underlying the Index are widely disseminated through a variety of major market data vendors worldwide, including Bloomberg and Reuters. In addition, the Exchange further represents that complete real-time data for such futures is available by subscription from Reuters and Bloomberg. The CBOT, LME and NYMEX also provide delayed futures information on current and past trading sessions and market news free of charge on their respective Web sites, and for a fee, will provide real-time futures data. The specific contract specifications for the futures contracts are also available from the futures exchanges on their Web sites, as well as other financial informational sources. 21 November 16 Telephone Conference (confirming designated contracts for 2005 and 2006 are traded on same exchanges). Annual Reweighting and Rebalancing of the Dow Jones-AIG Commodity Index. The Dow Jones-AIG Commodity Index is reweighted and rebalanced each year in January on a price percentage basis. The annual weightings for the Dow Jones-AIG Commodity Index are determined each year in June or July by AIGI under the supervision of the Oversight Committee. The annual weightings are announced in July and implemented the following January. The weightings for 2006, as listed below, have been approved and became effective in January 2006. The relative weightings of the component commodities included in the Dow Jones-AIG Commodity Index are determined annually according to both liquidity and dollar-adjusted production data. Each June, for each commodity designated for potential inclusion in the Dow Jones-AIG Commodity Index, liquidity is measured by the commodity liquidity percentage (the “CLP”) and production by the commodity production percentage (the “CPP”). The CLP for each commodity is determined by taking a five-year average of the product of the trading volume and the historic dollar value of the Designated Contract for that commodity, and dividing the result by the sum of the products for all commodities that were designated for potential inclusion in the Dow Jones-AIG Commodity Index. The CPP is determined for each commodity by taking a five-year average of annual world production figures, adjusted by the historic dollar value of the Designated Contract, and dividing the result by the sum of the production figures for all the commodities that were designated for potential inclusion in the Dow Jones-AIG Commodity Index. The CLP and CPP are then combined (using a ratio of 2:1) to establish the Commodity Dow Jones-AIG Commodity Index Percentage (the “CIP”) for each commodity. The CIP is then adjusted in accordance with the diversification rules described below to determine the commodities to be included in the Dow Jones-AIG Commodity Index and their respective percentage weights. To ensure that no single commodity or commodity sector dominates the Dow Jones-AIG Commodity Index, the following diversification rules are applied to the annual reweighting and rebalancing of the Dow Jones-AIG Commodity Index, as of January of the applicable year: • No related group of commodities designated as a Commodity Group ( *e.g.* , energy, precious metals, livestock or grains) may constitute more than 33% of the Dow Jones-AIG Commodity Index; • No single commodity may constitute more than 15% of the Dow Jones-AIG Commodity Index; • No single commodity, together with its derivatives ( *e.g.* , crude oil, together with heating oil and unleaded gasoline), may constitute more than 25% of the Dow Jones-AIG Commodity Index; and • No single commodity in the Dow Jones-AIG Commodity Index may constitute less than 2% of the Dow Jones-AIG Commodity Index. Following the annual reweighting and rebalancing of the Dow Jones-AIG Commodity Index in January, the percentage of any single commodity or group of commodities at any time prior to the next reweighting or rebalancing will fluctuate and may exceed or be less than the percentage set forth above. 22 22 The Exchange represents and clarifies that the weightings of the components of the DJAIG ExEnergy Index are determined in conjunction with the annual reweighting and rebalancing of the Dow Jones-AIG Commodity Index by assigning weightings of zero to the energy commodities included in the Dow Jones-AIG Commodity Index and proportionally increasing the weightings of the remaining commodities. For example, assume the Dow Jones-AIG Commodity Index includes five equally weighted (20%) commodities, including an energy commodity. If the energy component were assigned a weight of 0%, the weightings of the remaining four non-energy components comprising the DJAIG ExEnergy Index would be increased pro rata and assigned equal weightings of 25%. Following application of the diversification rules discussed above, CIPs are incorporated into the Dow Jones-AIG Commodity Index by calculating the new unit weights for each Dow Jones-AIG Commodity Index commodity. Near the beginning of each new calendar year (the “CIM Determination Date”), the CIPs, along with the settlement prices on that date for Designated Contracts included in the Dow Jones-AIG Commodity Index, are used to determine a Commodity Index Multiplier (“CIM”) for each Dow Jones-AIG Commodity Index commodity. This CIM is used to achieve the percentage weightings of the Dow Jones-AIG Commodity Index commodities, in dollar terms, indicated by their respective CIPs. After the CIMs are calculated, they remain fixed throughout the year. As a result, the observed price percentage of each Dow Jones-AIG Commodity Index commodity will float throughout the year, until the CIMs are reset the following year based on new CIPs. To avoid delivering the underlying physical commodities and to maintain exposure to the underlying physical commodities, periodically futures contracts on physical commodities specifying delivery on a nearby date must be sold and futures contracts on physical commodities that have not yet reached the delivery period must be purchased. The rollover for each contract occurs over a period of five DJ-AIG Business Days 23 each month according to a pre-determined schedule. This process is known as “rolling” a futures position. The Dow Jones-AIG Commodity Index is a “rolling index.” 23 A DJ-AIG Business Day (“DJ-AIG Business Day”) is a day on which the sum of the CIPs for the Dow Jones-AIG Commodity Index commodities that are available to trade is greater than 50%. The Dow Jones AIG-Commodity Index is calculated by Dow Jones by applying the impact of the changes to the futures prices of commodities included in the Dow Jones-AIG Commodity Index (based on the commodities' relative weightings). Once the CIMs are determined as discussed above, the calculation of the Dow Jones-AIG Commodity Index is a mathematical process whereby the CIMs for the Dow Jones-AIG Commodity Index commodities are multiplied by the daily settlement prices in U.S. dollars for the applicable Designated Contracts. These products are then summed. During the rollover period, the sum includes both nearby and deferred contracts weighted according to the specified roll percentage. The percentage change in this sum from the prior day is then applied to the prior Dow Jones-AIG Commodity Index value. Finally, the value of one day's interest is added, calculated using the most recent (lagged by one day) 91-Day U.S. Treasury Bill Auction High Rate to arrive at the current Dow Jones-AIG Commodity Index value. Dow Jones-AIG Commodity Index Calculation Disruption Events. From time to time, the Exchange states that disruptions can occur in trading futures contracts on various commodity futures exchanges. The daily calculation of the Dow Jones-AIG Commodity Index and the Index will be adjusted in the event that AIGI determines that any of the following index calculation disruption events exists:

(i)The termination or suspension of, or material limitation or disruption in the trading of any futures contract used in the calculation of the Dow Jones-AIG Commodity Index on that day;

(ii)the settlement price of any futures contract used in the calculation of the Dow Jones-AIG Commodity Index reflects the maximum permitted price change from the previous day's settlement price;

(iii)the failure of an exchange to publish official settlement prices for any futures contract used in the calculation of the Dow Jones-AIG Commodity Index; or

(iv)with respect to any futures contract used in the calculation of the Dow Jones-AIG Commodity Index that trades on the LME, a business day on which the LME is not open for trading. In the case of a temporary disruption in connection with the trading of the futures contracts of the commodities comprising the Index, the Exchange believes that it is unnecessary for a filing pursuant to Section 19(b) under the Act 24 to be submitted to the Commission. The Exchange submits that for a temporary disruption of said futures contracts, AIGI will typically use the prior day's price for an Index commodity or commodities. In exceptional cases, AIGI may employ a “fair value” price. However, the Exchange represents that if the use of a prior day's price or “fair value” pricing for an Index commodity or commodities is more than of a temporary nature, a rule filing will be submitted pursuant to Section 19(b) of the Act 25 seeking approval to continue trading the Notes. Unless such approval is received, the Exchange will commence delisting the Notes. 24 15 U.S.C. 78s(b). 25 *Id.* Exchange Rules Applicable to the Notes The Notes are cash-settled in U.S. dollars and do not give the holder any right or other ownership interest in the Index or commodities comprising the Index. The Notes are designed for investors who desire to participate in, or gain exposure to, an index composed of a basket of actively-traded commodities, are willing to hold the investment to maturity, and who want to limit risk exposure by receiving principal protection of their investment amount. The Notes will trade as equity securities subject to the Amex equity trading rules including, among others, rules governing priority, parity and precedence of orders, specialist responsibilities, account opening, and customer suitability requirements. In addition, the Notes will be subject to the equity margin rules of the Exchange. 26 The Exchange will, prior to trading the Notes, distribute a circular to the membership providing guidance with regard to member firm compliance responsibilities (including suitability recommendations) when handling transactions in the Notes and highlighting the special risks and characteristics of the Notes. With respect to suitability recommendations and risks, the Exchange will require members, member organizations and employees thereof recommending a transaction in the Notes:

(i)To determine that such transaction is suitable for the customer, and

(ii)to have a reasonable basis for believing that the customer can evaluate the special characteristics of, and is able to bear the financial risks of such transaction. In addition, Merrill Lynch will deliver a prospectus in connection with the initial sales of the Notes. The circular will also reference that the Commission has no jurisdiction over the trading of the physical commodities or the futures contracts or on such commodities upon which the value of the Notes is based. 27 26 *See* Amex Rule 462. 27 November 16 Telephone Conference. Criteria for Initial and Continued Listing The Exchange represents that it prohibits the initial and/or continued listing of any security that is not in compliance with Rule 10A-3 under the Act. 28 The Exchange also has a general policy that prohibits the distribution of material, non-public information by its employees. The Notes will be subject to the criteria in Section 107D of the Company Guide for initial and continued listing. The continued listing criteria provides for the delisting or removal from listing of the Notes under any of the following circumstances: 28 *See* Rule 10A-3(c)(1), 17 CFR 240.10A-3(c)(1). • If the aggregate market value or the principal amount of the Notes publicly held is less than $400,000; • If the value of the Index is no longer calculated or widely disseminated by a major market data vendor on at least a 15-second basis during the time the Notes trade on the Exchange; or • If such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable. Additionally, the Exchange represents that it will file a proposed rule change pursuant to Rule 19b-4 under the Act, 29 seeking approval to continue trading the Notes and unless approved, the Exchange will commence delisting the Notes if: 29 17 CFR 240.19b-4. • Dow Jones and AIG-FP substantially change either the index component selection methodology or the weighting methodology; • If a new component is added to the Index (or pricing information is used for a new or existing component) that constitutes more than 10% of the weight of the Index with whose principal trading market the Exchange does not have a comprehensive surveillance sharing agreement; or • If a successor or substitute index is used in connection with the Notes. The filing will address, among other things the listing and trading characteristics of the successor or substitute index and the Exchange's surveillance procedures applicable thereto. Trading Halts The Exchange will halt trading in the Notes if the circuit breaker parameters of Exchange Rule 117 have been reached. In exercising its discretion to halt or suspend trading in the Notes, the Exchange may consider factors such as those set forth in Exchange Rule 918C(b), in addition to other factors that may be relevant. In particular, if the Dow Jones-AIG Commodity Index value is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the Dow Jones-AIG Commodity Index value occurs. If the interruption to the dissemination of the Dow Jones-AIG Commodity Index value persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. 30 30 November 16 Telephone Conference. The Exchange deleted inconsistent language regarding trading halts. Specialist Prohibitions The Exchange submits that current Rule 1203A will be applicable to the Notes. In connection with the Notes, Rule 1203A provides that the prohibitions in Rule 175(c) apply to a specialist in the Notes, so that the specialist or affiliated person may not act or function as a market maker in the underlying commodities, related futures contracts or options, or any other related commodity derivative. Consistent with Rule 193, an affiliated person of the specialist may be afforded an exemption to act in a market making capacity, other than as a specialist in the Notes on another market center, in the underlying commodities, related futures or options, or any other related commodity derivative. In particular, Rule 1203A provides that an approved person of the specialist that has established and obtained Exchange approval for procedures restricting the flow of material, non-public market information between itself and the specialist member organization, and any member, officer, or employee associated therewith, may act in a market making capacity, other than as a specialist in the Notes on another market center, in the underlying commodity, related commodity futures or options on commodity futures, or any other related commodity derivatives. Additionally, the Exchange further submits that Rule 1204A will be applicable to the Notes. Rule 1204A was adopted to ensure that specialists provide the Exchange with all the necessary information relating to their trading in physical commodities and related futures contracts and options thereon or any other related commodities derivative. This Rule further reminds members that, in connection with trading the physical asset or commodities, futures or options on futures, or any other related derivatives, the use of material, non-public information received from any person associated with a member, member organization or employee of such person regarding trading by such person or employee in the physical asset or commodities, futures or options on futures, or any other related derivatives is prohibited by the Exchange. Surveillance The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Notes. Specifically, the Amex will rely on its existing surveillance procedures governing exchange-traded funds, trust issued receipts (including the iShares Comex Gold Trust, streetTRACKS Gold Trust and DB Commodity Index Tracking Fund) and index-linked securities. 31 With regard to the Index Components, the Exchange currently has in place a comprehensive surveillance sharing arrangement with the NYMEX and the LME, for the purpose of providing information in connection with trading in or related to futures contracts traded on their respective exchanges comprising the Index. The Exchange also notes that the CBOT, CME, and NYBOT are members of the Intermarket Surveillance Group (“ISG”). As a result, the Exchange asserts that it can obtain market surveillance information, including customer identity information, from the CBOT, CME, LME, NYBOT, and NYMEX, if necessary, due to regulatory concerns that may arise in connection with the futures contracts. 31 The Commission requested, and the Exchange agreed, to remove the phrase “which have been deemed adequate under the Act” at the end of this sentence. November 16 Telephone Conference. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6 of the Act, 32 in general, and furthers the objectives of Section 6(b)(5) of the Act, 33 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. 32 15 U.S.C. 78f. 33 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, 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-Amex-2006-01 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-2006-01. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of 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-2006-01 and should be submitted on or before December 18, 2006. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 34 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act, 35 which requires 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. 34 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 35 15 U.S.C. 78f(b)(5). A. Surveillance Information sharing agreements with primary markets are an important part of a self-regulatory organization's ability to monitor for trading abuses with respect to derivative securities. The Commission believes that Amex's comprehensive surveillance sharing agreements with the NYMEX and the LME for the purpose of providing information in connection with the Notes create the basis for Amex to monitor for fraudulent and manipulative practices in the trading of the Notes. Moreover, Amex Rules, including Rule 1204A, give Amex the authority to request information to monitor for fraudulent and manipulative trading facilities. The Commission believes that these rules provide the Amex with the tools necessary to adequately surveil trading in the Notes. B. Dissemination of Information The Commission believes that sufficient venues for obtaining reliable information exist so that investors in the Notes can monitor the underlying Index Components, the Dow Jones-AIG Commodity Index, and the Index. There is a considerable amount of information about the Index Components, the Dow Jones-AIG Commodity Index, and the Index available through public Web sites, and real time intraday prices and daily closing prices for the Index Components are available by subscription from major market vendors. The Commission notes that the amount paid at maturity, per Note, will be based on the percentage change or performance of the Index over the term of the Note. As more specifically described herein, the amount paid at maturity, per Note, will consist of at least 100% of the Principal Amount, plus a Supplemental Redemption Amount, but it will never be less than the Principal Amount. The Commission believes that the wide availability of such information will facilitate transparency and reduce the potential of unfair informational advantage with respect to the Notes and, when coupled with the principal-protected nature of the Notes, will diminish the risk of manipulation. C. Listing and Trading The Commission finds that the Exchange's proposed rules and procedures for the listing and trading of the Notes are consistent with the Act. The Notes will trade as equity securities subject to the Amex equity trading rules including, among others, rules governing priority, parity and precedence of orders, specialist responsibilities, account opening, and customer suitability requirements. In addition, the Notes will be subject to the equity margin rules of the Exchange, set forth in Amex Rule 462. The Commission believes that the listing and delisting criteria for the Notes should help to maintain a minimum level of liquidity and therefore minimize the potential for manipulation of the Notes. The Commission notes that prior to trading the Notes, Amex will distribute a circular to the membership providing guidance with regard to member firm compliance responsibilities and highlighting the special risks and characteristics of the Notes. Specifically, the Exchange will require those recommending a transaction in the Notes to determine that such transaction is suitable for the customer, and to have a reasonable basis for believing that the customer can evaluate the special characteristics of, and bear the financial risks of, such transaction. The Commission believes that the information circular will inform members about the terms, characteristics and risks in trading the Notes. D. Accelerated Approval The Commission finds good cause for approving this proposed rule change, as amended, before the thirtieth day after the publication of notice thereof in the **Federal Register** . The Commission notes that this principal protected product is similar to other products already approved by the Commission. 36 Therefore, accelerating approval of this proposed rule change should benefit investors who desire to participate in an index composed of a basket of actively-traded commodities, who are willing to hold the investment to maturity, and who want to limit risk exposure, by creating, without undue delay, opportunities for such investments. 36 *See e.g.,* Securities Exchange Act Release No. 54731 (November 9, 2006), 71 FR 66814 (notice and order granting accelerated approval to the New York Stock Exchange LLC to list and trade two series of principal protected, commodity-linked securities); Securities Exchange Act Release No. 54033 (June 22, 2006), 71 FR 37131 (June 29, 2006) (order approving the listing and trading of principal protected notes linked to the Metals-China basket on Amex). V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 37 that the proposed rule change, as amended (SR-Amex-2006-01), is hereby approved on an accelerated basis. 37 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 38 38 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-19978 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54777; File No. SR-Amex-2006-89] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Establish Fees for the Receipt and Use of Proprietary Market Data Disseminated by the Exchange November 17, 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 September 22, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On November 15, 2006, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaces the original filing in its entirety. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Amex Fees Schedule to establish fees for the receipt and use of proprietary market data disseminated by the Exchange. The text of the proposed rule change is available on Amex's Web site ( *http://www.amex.com* ), at Amex's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose Through the new Auction and Electronic Market Integration trading platform (known as AEMI), the Exchange's hybrid trading system, the Exchange plans to make available for dissemination on a real-time basis 4 a compilation of all visible limit orders resident in the AEMI central limit order book (“AEMI Depth of Book”). The Exchange proposes that AEMI Depth of Book information be made available to market data vendors, broker-dealers, private network providers, and other entities by means of data feeds. The Exchange believes that, by making the AEMI Depth of Book available, the Exchange would be enhancing market transparency and fostering competition among orders and markets. With the adoption of Regulation NMS, the Commission rescinded “the prohibition on SROs and their members from disseminating their trade reports independently.” The Commission requires such dissemination to be fair, reasonable and not unreasonably discriminatory. The Exchange believes that the Exchange's data distribution and proposed fees would be consistent with these standards and reflect an equitable allocation of the Exchange's overall costs to users of its facilities. 4 It should be noted that the Exchange makes available to vendors the best bids and offers that are included in the AEMI limit order book data no earlier than it makes those best bids and offers available to the processors under the CQ Plan and the Reporting Plan for Nasdaq/National Market System Securities Traded on an Exchange on an Unlisted or Listed Basis (the “UTP Plan”). The Exchange proposes to establish the Market Data Fee Schedule for the receipt and use of various forms of Amex market data. The Market Data Fee Schedule being proposed is limited to market data for equities and exchange-traded fund shares (“ETFs”) trading on the AEMI system. Amex plans to implement use of the AEMI system over a period of time, commencing with four products. The Exchange will monitor the operation of AEMI and will deploy additional products when appropriate. It is anticipated that all equity and ETF products will be trading on AEMI prior to the implementation of Regulation NMS in February 2007. The Exchange would begin charging for the AEMI Depth of Book data once all products are trading on the AEMI system and the market data is available for all products. When AEMI is expanded to other product lines, such as options, the Exchange may further amend its fee schedule to include fees for the receipt and use of Amex market data for those products. As the Market Data Fee Schedule details, the Exchange is proposing to assess data access fees and professional and nonprofessional device fees for the AEMI Depth of Book. The Exchange states that these categories of fees are consistent with fees the New York Stock Exchange's (“NYSE”) charges for the receipt and use of their market data through the NYSE OpenBook 5 and the fees proposed to be charged for the NYSE Arca, Inc.'s (“NYSE Arca”) ArcaBook. 6 5 NYSE OpenBook provides information relating to limit orders. 6 The ArcaBook provides a compilation of all limit orders resident in the NYSE Arca limit order book. *See* Securities Exchange Act Release No. 53952 (June 7, 2006), 71 FR 33496 (June 9, 2006) (notice of filing of proposed rule change for SR-NYSEArca-2006-21). • *Data Access Fees. Direct Access.* —The Exchange proposes to impose a monthly fee of $2,000 for a data recipient to gain direct access to the data feeds through which the Exchange makes AEMI market data available. • *Indirect Access.* —The Exchange proposes to impose a monthly fee of $1,500 for a data recipient to gain indirect access to the data feeds through which the Exchange makes AEMI market data available. “Indirect access” refers to access to an AEMI market data feed indirectly through one or more intermediaries, rather than by means of a direct connection or linkage with the Exchange's facilities. The Exchange believes that these Data Access Fees compare favorably with fees charged by other exchanges for similar products. For example, NYSE charges $5,000 per month for direct and indirect access to NYSE OpenBook. While NYSE Arca proposes to charge only $750 per month for direct access to ArcaBook, that access is limited to four “Logons.” Amex does not propose to place any limitation on the number of “Logons.” • *Device Fees* .—The Exchange proposes to establish device fees for professional and nonprofessional subscribers for the display of AEMI Depth of Book. In differentiating between professional and nonprofessional subscribers, the Exchange proposes to apply the same criteria for nonprofessional qualification as used by the CTA and CQ Plan Participants. a. Professional Subscribers. For professional subscribers, the Exchange is proposing to establish a monthly fee of $20 per device for the receipt of AEMI Depth of Book data relating to all securities traded on AEMI. The Exchange believes this fee compares favorably with fees charged by other exchanges for similar products. For example, for professional subscribers, Nasdaq charges $76 for its combined TotalView 7 and OpenView 8 products and NYSE charges $60 for NYSE OpenBook. 9 In addition, NYSE Arca proposes to charge a combined monthly professional subscriber device fee of $30 for receipt of ArcaBook data. 10 7 Through TotalView, Nasdaq provides information relating to the displayed quotes and orders of Nasdaq participants in UTP Plan Securities. TotalView displays quotes and orders at multiple prices and is similar to AEMI Depth of Book. 8 Through OpenView, Nasdaq provides information relating to the displayed quotes and orders of Nasdaq participants in CTA Plan Securities. OpenView displays quotes and orders at multiple prices and is similar to AEMI Depth of Book. 9 Through NYSE OpenBook, NYSE provides information relating to limit orders. 10 *See* Securities Exchange Act Release No. 53952 (June 7, 2006), 71 FR 33496 (June 9, 2006) (notice of filing of proposed rule change for SR-NYSEArca-2006-21). b. Nonprofessional subscribers. For nonprofessional subscribers, the Exchange is proposing to reduce those monthly fees to $10 per device for the receipt of AEMI Depth of Book data for securities traded on AEMI. NYSE Arca proposes to charge a combined monthly nonprofessional subscriber device fee of $10 for receipt of ArcaBook data. 11 11 *See id.* The Exchange would require each recipient of a data feed containing AEMI market data to enter into the form of “vendor” agreement into which the CTA and CQ Plans require recipients of the Network B data feeds to enter. The agreement would authorize the data feed recipient to provide AEMI Market Data services to its customers or to distribute the data internally. In addition, the Exchange would require each professional end-user that receives AEMI market data displays from a vendor or broker-dealer to enter into the form of professional subscriber agreement into which the CTA and CQ Plans require end users of Network B data to enter into. The Exchange would also require vendors and broker-dealers to subject nonprofessional subscribers to the same contract requirements as the CTA and CQ Plan Participants require of Network B nonprofessional subscribers. The Exchange proposes to provide its market data under the same contracts that the CTA and CQ Plans use since those contracts are drafted as generic, one-size-fits-all agreements and explicitly apply to the receipt and use of certain market data that individual exchanges make available in the same way as they apply to data made available under the CTA and CQ Plans. According to the Exchange, no amendments to those contracts are needed to cause them to govern the receipt and use of the Exchange's market data. Moreover, the Exchange is not imposing restrictions on the use or display of the AEMI market data beyond those set forth under these preexisting agreements. The Exchange believes that the proposed market data fees would reflect an equitable allocation of its overall costs to users of its facilities. As described above, the Exchange believes that the fees are fair and reasonable because they compare favorably to fees that other markets charge for similar products. 2. Statutory Basis 12 12 *See* E-mail to David Hsu, Special Counsel, Division of Market Regulation, Commission, from Claire McGrath, Senior Vice President and General Counsel, Amex, dated November 17, 2006 (clarifying the statutory basis of the proposed rule change). The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act. 13 Specifically, the Exchange believes the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act 14 that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and practices, and, in general, to protect investors and the public interest. In addition, the Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)(4) of the Act, 15 which requires that the rules an exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change would impose no 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

(A)By order approve 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, 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-Amex-2006-89 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-2006-89. 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 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-2006-89 and should be submitted on or before December 18, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-19980 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54789; File No. SR-BSE-2006-49] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To Implement a Pilot Program To Trade Certain Options in Pennies November 20, 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 November 17, 2006, the Boston Stock Exchange, Inc. (“BSE” 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 BSE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Boston Options Exchange (“BOX”) Rules to reflect BOX's participation in a six-month Penny Pilot Program, which will commence on January 26, 2007. The text of the proposed rule change is available on the BSE's Web site at *http://www.bostonstock.com,* at the 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 BSE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to amend the BOX Rules to reflect BOX's participation in a six-month Penny Pilot Program, which will commence on January 26, 2007. The Exchange proposes to amend Section 6 (“Minimum Trading Increments”) and to add a new section, Section 33, (“Penny Pilot Program”) to Chapter V (“Doing Business on BOX”) of the BOX Rules. All six options exchanges, including BOX, currently quote options in nickel and dime increments. Once the Penny Pilot Program commences in January, investors will be able to begin quoting in pennies in a limited number of option classes. The thirteen

(13)classes represented in the Penny Pilot Program include: IWM (Ishares Russell 2000), QQQQ (NASDAQ-100 Index Tracking Stock), SMH (Semiconductor Holders), GE (General Electric), AMD (Advanced Micro Devices), MSFT (Microsoft), INTC (Intel), CAT (Caterpillar), WFMI (Whole Foods), TXN (Texas Instruments), FLEX (Flextronics International), and SUNW (Sun Microsystems). 3 These classes represent a diverse group of options with various trading characteristics. This diversity will allow for broad-based reporting, which will enable analysis on the impact of penny quoting on options with different volumes, liquidity, and strike prices. 3 The Exchange understands that another options class will be added to the Penny Pilot Program to bring the total number of classes in the Penny Pilot Program to thirteen. Telephone Conversation between Lisa J. Fall, General Counsel, BOX, and Johnna B. Dumler, Special Counsel, Division of Market Regulation, Commission, on November 20, 2006. All classes contained in the Penny Pilot Program, except for the QQQQs will be quoted in the following manner: If the options contract trades below $3, one

(1)cent; and if the options contract trades at $3 or above, five

(5)cents. The QQQQs will be quoted in one

(1)cent increments for all options series. The Exchange believes that this change in minimum increments should help investors by providing more competitive pricing, reducing payment for order flow, reducing costs, and tightening spreads. BOX will deliver a report, which will be comprised of data from the first three months of trading, to the Commission during the fourth month of the pilot. The report will detail the impact of quote updating to the Options Price Reporting Authority (“OPRA”), the effect the Penny Pilot Program has on price improvement, and data on average spreads. BOX anticipates that this report will be used in conjunction with the reports from the other five exchanges to analyze the impact that the penny quoting would have on the options industry. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 4 in general, and furthers the objectives of Section 6(b)(5) of the Act, 5 in particular, in that the proposed rule change is designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 4 15 U.S.C. 78f(b). 5 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

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

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *http://www.sec.gov/rules/sro.shtml;* or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-BSE-2006-49 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-BSE-2006-49. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site at *http://www.sec.gov/rules/sro.shtml* . Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-BSE-2006-49 and should be submitted on or before December 18, 2006. 6 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 6 Nancy M. Morris, Secretary. [FR Doc. E6-19979 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54779; File No. SR-BSE-2006-48] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To Implement a Quote Mitigation Plan November 17, 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 November 15, 2006, the Boston Stock Exchange, Inc. (“BSE” 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 BSE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Boston Options Exchange (“BOX”) Rules to add a Quote Mitigation Plan. The text of the proposed rule change is available on the BSE's Web site at *http://www.bostonstock.com* , at the BSE'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 BSE 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 Background and Introduction The U.S. options industry has witnessed an explosion in market broadcast data traffic over the past six years due to a number of factors, including, but not limited to: • Automation of the quote updating mechanisms used by market makers and specialists; • Two additional, fully automated exchanges; • Opening of access to market making status at several exchanges, resulting in multiple “quote streamers” versus the previous environment where essentially only one market maker, the “specialist”, was able to electronically stream quote updates into the exchange trading systems; and • Proliferation of additional options instruments due to additional options classes and narrower intervals between strike prices (“dollar pilot”). While the trends which have caused the dramatic increase in options market data traffic have been to the benefit of the investor in terms of improved market quality due to increased competition on the liquidity provider side of the market, they are not without costs. Specifically, according to the Exchange, the Order Flow Providers (“OFPs”) and market data vendors find it increasingly difficult to provide real-time and accurate market data to investors without contemplating significant increases in the costs to the end users (either in the form of higher rates in the case of the data vendors or higher commissions in the case of the OFPs). It is common belief that this trend will be exacerbated by the implementation of the “penny pilot program” in January 2007. Many observers feel that a point of diminishing returns has been reached where the marginal extra cost of yet more traffic is not justified in terms of improved market quality or information to the investor. Allowing for different levels of service whereby the end user would pay for the level of market data he wished to receive ( *e.g.* a user wanting real-time, across the board data would pay more than a user who only required market data refreshing at, say, half-second intervals) has been rejected by the industry as presenting an “unlevel playing field” which would ultimately be to the detriment of the private investor. Furthermore, there are “firm quote obligations” that each exchange must take into account in any strategy it used to reduce traffic. Quote Mitigation The Exchange believes it is possible to significantly reduce overall peak market data traffic with a relatively small impact on the quality of information available to options market users, due to the following: • *Diminishing Returns of Speed:* “Timeliness” of quote updates does indeed have a point of diminishing returns and it is likely that, so long as all options traders and investors are receiving information at the same rate of “delay” from pure “real time”, they are willing to allow similar information to be “bundled” and broadcast with a reasonable delay. For example, a series with ten market makers, all of whom are at the same price on the bid and the offer, and who, in response to information on the underlying security's price, wish to update their markets to the same new prices (an admittedly simplistic assumption) can be managed by simply bundling some of the updates so long as the “slowest” message due to this bundling is no higher than an agreed upon lapse. Using this approach, what would have been ten individual updates may be reduced to one update, a reduction of 90%. • *All Series Are Not of Equal Interest to Investors:* BOX presently lists slightly fewer than 500 options classes represented by 80-85,000 different instruments. Market Makers have an obligation to provide continuous two way markets on virtually all of them, representing a staggering amount of update traffic if markets are turbulent. However, not all of these instruments are of “equal interest” to options investors. Indeed trading volume tends to concentrate on a relatively small percentage of the overall universe of instruments; arguably, investors and traders are quite willing to tolerate reasonable update delays in those instruments deemed to be of lesser interest. For example, over 25% of all series cleared by the Options Clearing Corporation (“OCC”) have open interest below 100 contracts, a reasonable indication that the updates concerning over one-quarter of the marketplace are of minimal interest. • *Certain Updates Are More “Interesting” Than Others:* There are three types of updates: a. Those that represent a change in price at the top of the book; b. Those that represent an increase in quantity at the same price at the top of the book; and c. Those that represent a decrease in quantity at the same price at the top of the book. Investors are likely in many cases to tolerate delays in

(b)over delays in

(c)and consider short delays in

(a)to be most important of the three. • *Reducing Traffic “Peaks” Is More Important Than Reducing Overall Quote Update Traffic:* The costs of Data Vendors and Order Flow firms providing market data services to their customers are more sensitive to the requirements of managing peak 3 traffic than they are to processing “normal” traffic. This is true of most technology services since systems generally must be built to manage the “worst”, though they will be, by definition, significantly underutilized over the trading day as a result. In other words, the costs of managing industry traffic will not be significantly reduced if mitigation only reduces overall traffic. Arguably, the biggest “bang for the buck” is in decreasing peak traffic levels. While the bundling algorithm proposed by BOX is likely to be more “efficient” (that is, result in a proportionally greater reduction of traffic) during busier moments like peaks, BOX intends to bundle some of its traffic all of the time, since the open interest threshold will be set no lower than 50 contracts and the bundling lapse at no lower than 200 milliseconds. 3 There are many definitions of “peaks”; it is not necessary to agree on a precise definition here in order to understand the goals. A peak may be defined as either the “N” busiest seconds over the trading session of roughly 23,000 seconds (where “N” is likely equal to 100 or fewer or it may be defined as “those seconds where traffic is “N” times greater than the average over the 23,000 seconds of the trading session and “N” is set to perhaps 3. The point is that the peaks are the exceptional levels that drive the scaling and, therefore, the costs, of the data broadcast systems. BOX Proposal BOX believes there are optimal compromises and the accompanying rule proposal for “quote mitigation” addresses this in the following manner: • Rather than adopt an arbitrary definition of which instruments are considered to be “less interesting,” BOX proposes to “let the market decide” by basing this on the open interest in contracts at the OCC for each instrument. Clearly those series with lower open interest are likely to be of less interest to options traders and investors. The precise threshold of open interest which will determine whether the broadcast of a series is subject to mitigation or not will vary according to the degree BOX is meeting its stated goals of reducing overall traffic. It is anticipated that this threshold could be as high as 300 to 400 contracts, but that it will be no lower than 50 contracts. BOX does not propose to apply mitigation to instruments which have been listed for fewer than ten trading sessions, regardless of the open interest. • BOX will “bundle” at intervals of up to 1,000 milliseconds (and no less than 200 milliseconds) any changes to its broadcast for those instruments which have fallen below the threshold in the previous point. • BOX will use variable rates of “bundling” delays for the three different types of broadcast updates: changes in price, increases in quantity without a change in price, and decreases in quantity without a change in price. Under this proposal, changes in prices may be subject to less delay than changes to quantity at same price. For example, BOX may apply a “bundling interval” of 400 milliseconds to updates regarding a price change while using a figure of 1,000 milliseconds for updates concerning only a change in quantity at the same price. The appropriate mix will be determined by the relative success BOX is meeting in its overall goals of traffic reduction. The Exchange does not propose to apply the above-described bundling to traffic relating to price improvement auctions or NBBO exposure mechanisms, nor to trade reporting messages. Furthermore, no bundling of quotes is proposed for inbound orders and quotes which are sent to BOX by users; messaging will only be bundled for outbound updates. The Exchange believes this proposal is an optimal trade-off between costs and benefits and that it is fully compliant with its firm quote obligations. The Exchange further believes that the proposed rule is designed to provide the Exchange with a quote mitigation plan which will significantly reduce overall peak market data traffic with a relatively small impact on the quality of information available to options market users. • BOX's target reduction in outbound peak traffic is 15% to 20% of what the traffic would have been had no mitigation been applied. • Reduction in overall traffic, as opposed to peaks, will be lower, but still significant, with a target of 8% to 10%. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 4 in general, and furthers the objectives of Section 6(b)(5) of the Act, 5 in particular, in that the proposed rule change is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and practices, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 4 15 U.S.C. 78f(b). 5 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

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

(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *http://www.sec.gov/rules/sro.shtml* ; or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-BSE-2006-48 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-BSE-2006-48. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site at *http://www.sec.gov/rules/sro.shtml.* Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-BSE-2006-48 and should be submitted on or before December 18, 2006. 6 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 6 Nancy M. Morris, Secretary. [FR Doc. E6-19983 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54771; File No. SR-CBOE-2006-88] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change To Codify a Fee Schedule for the Sale of Open and Close Volume Data on CBOE Listed Options by Market Data Express, LLC November 16, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on November 3, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the CBOE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The CBOE proposes to codify a fee schedule for the sale of open and close volume data on CBOE listed options by Market Data Express, LLC (“MDX”), a wholly-owned subsidiary of CBOE. The text of the proposed rule change is available on the CBOE's Web site ( *http://www.cboe.com* ), the Office of the Secretary, CBOE, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CBOE creates volume data for each CBOE listed option that consists of opening buys and opening sells and closing buys and closing sells. 3 This opening and closing position data is subdivided by origin code ( *i.e.,* customer or firm) and the customer data is further subdivided by order size. The volume data is summarized by day and series (symbol, expiration date, strike price, call or put). This volume data is referred to herein as the “Open/Close Data.” 3 An opening buy is a transaction that creates or increases a long position and an opening sell is a transaction that creates or increases a short position. A closing buy is a transaction made to close out a position. A closing sell is a transaction to reduce or eliminate a long position. MDX offers the Open/Close Data for sale to CBOE members and non-members. The fees that MDX assesses for the Open/Close Data are set forth in the Price List on MDX's Web site. Members and non-members are charged the same fees for the Open/Close Data. Under the proposal, customers may purchase Open/Close Data on a subscription basis or by ad hoc request. Daily Open/Close Data covering all CBOE securities would be available for purchase by subscribing to the Daily Update service at a cost of $600 per month. Subscribers to the Daily Update service would receive a daily data file via download from MDX's Web site. Historical Open/Close Data covering all CBOE securities may be purchased on an ad hoc request basis and is delivered via DVD. The charge for Historical Open/Close Data covering all CBOE securities would be $7,200 per year for requests for one to four years of data. Requests for five or more years of Historical Open/Close Data would receive a 50% discount beginning with the fifth year of data ( *i.e.,* MDX charges $7,200 for each of the first four years of data and $3,600 for year five and each subsequent year of data). Alternatively, a customer may purchase Historical Open/Close Data on an individual CBOE security at a cost of $4.50 per security per month. This data would be available via download form MDX's Web site. A 50% discount would be applied for requests for ten or more years of data, beginning with the tenth year of data. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 4 in general, and furthers the objectives of Section 6(b)(4) of the Act, 5 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members and issuers and other persons using its facilities. The Open/Close Data is summarized and formatted by MDX in such a way that it increases its usability and value. In order to develop the Open/Close Data, MDX had to develop at significant expense a separate and more detailed system than the system MDX uses to generate its options summary data. The Exchange took these development costs into account when setting the proposed fees for the Open/Close Data. The Exchange is not aware of any data product offered by another exchange that is similar to the Open/Close Data product. 6 While there is no direct comparison to another exchange's product, the Exchange believes the proposed Open/Close Data fees are fair and reasonable in that the fees are less than the fees charged by another exchange for data that is not summarized and formatted in the way the Open/Close Data is. 7 The Exchange also believes the proposed MDX fees are consistent with Rule 603 under the Act ( *Distribution, Consolidation, and Display of Information with Respect to Quotations for and Transaction in NMS Stocks* ) 8 in that the fees are fair and reasonable and not unreasonably discriminatory. Members and non-members pay the same fees for the Open/Close Data. 4 15 U.S.C. 78f(b). 5 15 U.S.C. 78f(b)(4). 6 The Exchange believes the Options Clearing Corporation provides free of charge gross contract volume by class and by origin code only. 7 *See* Securities Exchange Act Release No. 53212 (February 2, 2006), 71 FR 6803 (February 9, 2006) (SR-ISE-2006-07) and Securities Exchange Act Release No. 53390 (February 28, 2006), 71 FR 11457 (March 7, 2006) (SR-ISE-2006-08). 8 17 CFR 242.603. 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

(ii)as to which the self-regulatory organization consents, the Commission will: A. By order approve such proposed rule change; or B. Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. 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-2006-88 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2006-88. 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 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-2006-88 and should be submitted on or before December 18, 2006. 9 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 Nancy M. Morris, Secretary. [FR Doc. E6-19976 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54792; File No. SR-CBOE-2006-96] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change Regarding Allocation of Stocks to CBSX DPMs November 20, 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 November 20, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange submits this rule change filing to modify its rules relating to the allocation of stocks for the Exchange's proposed stock-trading facility, CBSX. The text of the proposed rule change is set forth below. Additions are in *italics;* deletions are in [brackets]. Chicago Board Options Exchange, Incorporated Rules RULE 53.54. [Conditions on the] Allocation of Securities to [STOC] CBSX DPMs *(a) CBSX* [The STOC DPM Committee] may establish [(i) restrictions applicable to all STOC DPMs on the concentration of securities allocable to a single STOC DPM and to affiliated STOC DPMs and (ii)] minimum eligibility standards applicable to all [STOC] *CBSX* DPMs which must be satisfied in order for a [STOC] *CBSX* DPM to receive allocations of securities, including but not limited to standards relating to adequacy of capital and number of personnel. *(b) CBSX shall determine, for each security in which CBSX begins trading, which CBSX DPM should be allocated such security. Factors to be considered in making such determinations may include, but are not limited to, any one or more of the following: Performance, volume, capacity, market performance commitments, operational factors, efficiency, competitiveness, expressed preferences of issuers, and the best interest of CBSX. Alternatively, in instances where multiple securities are being allocated at one time, CBSX may allocate such securities utilizing a draft where the draft selection order for the eligible CBSX DPMs is determined randomly by CBSX.* *(c) Prior to the commencement of trading on CBSX, all securities that will initially trade on CBSX (pursuant to a rollout schedule determined by CBSX) shall be allocated as follows:* *(1) CBSX will randomly set a draft rotation for all CBSX DPMs.* *(2) The top 500 securities (based on a twelve-month average daily volume) will be selected by the DPMs (one by one) in the established rotation order.* *(3) Any additional securities selected by CBSX to initially trade on CBSX shall be allocated equally among the CBSX DPMs in a random fashion by CBSX.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it 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 In September 2006, the Commission approved Exchange Chapters 50-55 governing the trading of non-option securities on the Exchange. 3 The Exchange, via a separate rule filing, will be proposing to further modify Chapters 50-55 in connection with the establishment of the CBOE Stock Exchange (“CBSX”). CBSX will be a facility of the Exchange and will serve as the Exchange's vehicle for trading non-option securities. CBSX would be a separate legal entity (a Delaware Limited Liability Company) that is owned by the Exchange and several strategic partners. The Exchange is also submitting rule filings proposing to establish CBSX as a facility of the Exchange and proposing to allow CBSX to appoint CBSX DPMs. The purpose of this filing is to adopt rules that would allow for the allocation of stocks to CBSX DPMs (the Exchange expects that the filing allowing appointment of CBSX DPMs will become effective prior to approval of this filing). Any such appointments and allocations would be contingent on Commission approval of rules governing CBSX DPM trading procedures and obligations. 3 *See* Securities Exchange Act Release No. 54422 (September 11, 2006), 71 FR 54537 (September 15, 2006) (approving SR-CBOE-2004-21). *See also* Securities Exchange Act Release No. 54526 (September 27, 2006), 71 FR 58646 (October 4, 2006) (approving SR-CBOE-2006-70). Initial CBSX DPM stock allocations would be handled pursuant to proposed modified CBOE Rule 53.54. For the initial launch, and potentially in instances where CBSX seeks to commence trading a number of new securities at one time, CBSX would conduct a “draft” for eligible CBSX DPMs to select available stocks. The draft order would be determined randomly. In connection with the initial launch, the draft would only apply to the first 500 securities selected. 4 After that point, all of the remaining securities slated for trading on CBSX would be allocated randomly by CBSX to the CBSX DPMs equally. 4 Telephone conversation between Angelo Evangelou, Assistant General Counsel, CBOE, and Nathan Saunders, Special Counsel, Division of Market Regulation, Commission, November 20, 2006. CBSX would utilize proposed CBOE Rule 53.54 for future stock allocations as well. In those cases, a draft could be employed or CBSX could allocate the stocks based on any one or more of the following: Performance, volume, capacity, market performance commitments, operational factors, efficiency, competitiveness, expressed preferences of issuers, and the best interest of CBSX. The ability to allocate stocks to CBSX DPMs ahead of the launch of the CBSX facility would allow the Exchange and the CBSX DPM firms to be prepared to commence trading on CBSX immediately upon approval of CBSX trading rules and pursuant to a robust rollout schedule. The Exchange seeks to launch the CBSX facility on February 5, 2007. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act 5 in general and furthers the objectives of Section 6(b)(5) of the Act 6 in particular in that it serves to remove impediments to and perfect the mechanism of a free and open market because it will help the Exchange manage the initial launch of trading on CBSX. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that this proposed rule change would 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 neither solicited nor received comments with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

(A)By order approve 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 an e-mail to *rule-comments@sec.gov* . Please include File Number SR-CBOE-2006-96 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-2006-96. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2006-96 and should be submitted on or before December 18, 2006. 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. E6-19982 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54791; File No. SR-CHX-2006-31] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Participant Fees and Credits November 20, 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 23, 2006, the Chicago Stock Exchange, Inc. (“CHX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the CHX. On November 15, 2006, the CHX filed Amendment No. 1 to the proposed rule change. 3 The CHX has designated this proposal as one establishing or changing a member due, fee, or other charge imposed by the CHX pursuant to 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 The purpose of Amendment No. 1 is to provide further clarity as to the proposed NTM Fee Schedule changes, by providing additional commentary with respect to:

(i)The provisions of the NTM Fee Schedule that are impacted;

(ii)the amounts of the fees established by such provisions;

(iii)the basis for certain changes or references to these provisions; and

(iv)the correction of certain rule change marking. 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 CHX proposes several changes to its Schedule of Participant Fees and Credits (the “NTM Fee Schedule”), relating to the new trading model being implemented by the CHX this fall. The text of this proposed rule change is available on the Exchange's Web site at *http://www.chx.com/rules/proposed_rules.htm* and in the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the CHX included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The CHX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Throughout 2006, the Exchange has been working on the design and development of a new trading model centered around a core matching system that will provide for fully automated electronic matching of orders, as well as corresponding rules and regulatory initiatives. On September 29, 2006, the Exchange's proposed rules relating to the new trading model were approved by the Commission. 6 6 *See* Securities Exchange Act Release No. 54550 (September 29, 2006); 71 FR 59563 (October 10, 2006) (SR-CHX-2006-05) (referred to as the “NTM Approval Order”). On September 29, 2006, the Exchange filed with the Commission its NTM Fee Schedule, contemplating the Exchange's transition to its new trading model, commencing the week of October 23, 2006. 7 Subsequent industry developments, and further refinement of certain NTM Fee Schedule provisions, have necessitated several changes to the NTM Fee Schedule. These changes are summarized below: 7 *See* Securities Exchange Act Release No. 54657 (October 26, 2006); 71 FR 64590 (November 2, 2006) (SR-CHX-2006-29). The NTM Fee Schedule provides for all fees and charges that are billed by the Exchange to its participants; it does not contain any fees or charges that are applicable to non-participants. *Trading Permit Fees:* There is no change to the text of Section A of the NTM Fee Schedule. The text of Section A merely incorporates the Trading Permit cancellation fee that was in place prior to submission of the NTM Fee Schedule. 8 This cancellation fee is unchanged and remains in effect for Trading Permits that were issued before October 1, 2006. This provision was inadvertently omitted from the NTM Fee Schedule when it was submitted in SR-CHX-2006-29. 9 8 This fee, which is applicable to trading permits in effect before October 1, 2006, is $2,000, or, if less, $500/month for the remainder of the one-year term. 9 The provision was not shown in Exhibit 5 to SR-CHX-2006-29, but was not deleted in such submission (or any other submission) and remains applicable. *See* Securities Exchange Act Release No. 54657 (October 26, 2006); 71 FR 64590 (November 2, 2006) (SR-CHX-2006-29). *Registration Fees:* This change is intended to clarify application of the Off-Exchange trader fee. The $500 annual fee is assessed for a trader who is engaged in proprietary securities trading for an Off-Exchange Participant Firm for which the CHX is the Designated Examining Authority, if such Participant Firm is solely involved in proprietary securities trading. The clarifying change relates to the Participant Firm; the Participant Firm must be solely involved in proprietary securities trading for the fee to be assessed. Other Participant Firms would not be assessed an Off-Exchange trader fee. *Transaction and Order Processing Fees:* This change to Section E.1 of the NTM Fee Schedule is intended to clarify that the liquidity taking fee of $0.0028/share for a Matching System single order execution does not apply to a CHX institutional broker in connection with a transaction that is subject to the agency fees set forth in Section E.3 of the NTM Fee Schedule. Because the institutional broker's customer is assessed the agency fee under Section E.3, the institutional broker would not also be subject to a take fee for the same transaction. This change does not modify applicable provisions regarding credits for providing liquidity to the Matching System. *Matching System Routing Fees/Transaction and Order Processing Fees Associated With Securities Not Yet Traded in the Matching System:* These changes to Section E.6 and Section E.8 (formerly E.7) of the NTM Fee Schedule relate to the fees that the CHX may assess against its participants on account of outbound NMS Linkage Plan orders. Section E.6 applies to orders that are Matching System eligible and therefore are routed from the Matching System to other market centers. Section E.8 applies to orders that have not yet migrated to the Matching System and therefore are routed from the Exchange's pre-NTM facilities. This provision was necessitated in order to implement the CHX's participation in the exchange-to-exchange billing arrangement associated with the NMS Linkage Plan, which took effect on October 1, 2006. 10 When an outbound NMS Linkage Plan order is executed on another NMS Linkage participant market, such market will directly invoice the CHX for a transaction fee, in an amount that may not exceed the transaction fee that it would charge its own member for such an execution. The CHX is then responsible for payment of such invoice. Sections E.6 and E.8 of the NTM Fee Schedule provision permit the CHX to collect a corresponding fee from the CHX participant who generated the outbound NMS Linkage Plan order. The CHX believes that it is appropriate to establish outbound NMS Linkage fee rates that reasonably correspond to the respective transaction fee rates being charged by the executing markets. Accordingly, it is submitting changes to Sections E.6 and E.8 of the NTM Fee Schedule, to reflect recent developments regarding applicable transaction fees assessed by other market centers on account of NMS Linkage Plan executions. 10 *See* Securities Exchange Act Release No. 54548 (September 29, 2006), 71 FR 59159 (October 6, 2006) (SR-CHX-2006-28) (approving NMS Linkage Plan exchange-to-exchange billing procedures); Securities Exchange Act Release No. 54551 (September 29, 2006), 71 FR 59148 (October 6, 2006) (approving NMS Linkage Plan). As an example, in the NTM Fee Schedule, the CHX originally established an outbound fee, for non-ETF orders routed to the Nasdaq Stock Market, that was significantly higher than Nasdaq's applicable transaction fee rate for October, 2006. 11 This proposed rule change seeks to modify this rate for the balance of the month of October; the rate would then revert to the originally- filed rate effective November 1, 2006. Specifically, from October 23 through October 31, 2006, the outbound fee for NMS Linkage orders routed to Nasdaq (in issues other than exchange-traded funds) would decrease from $.0030/share to $.0007/share. On November 1, 2006, the effective date of Nasdaq's fee increase, the CHX outbound NMS Linkage routing fee for such issues would return to $.0030/share. This change is not applicable to orders for exchange-traded funds. 11 The CHX anticipated that Nasdaq's transaction fee rate was increasing, but the increase ultimately was filed with an effective date of November 1, 2006 instead of October 1. *Trade Processing Fees:* New Section E.7 of the NTM Fee Schedule is not a new provision; this provision, which provides for a Trade Processing Fee of $.0015/share, up to $100 per side of the trade, is merely relocated from former Section H.2. New Section H.2. establishes a Clearing Support Activity Fee, which will be assessed by the CHX beginning January 1, 2007. This fee of $.02 per ticket, capped at $8,000 per month, will apply to firms that average, within a month, at least 2,500 tickets per day. In establishing this fee, the CHX is attempting to defray some of the expenses associated with clearing support services that it provides to certain participant firms. Prior to submission of the NTM Fee Schedule, these expenses were largely offset by a portion of the Specialist Fixed Fee, which was eliminated in the NTM Fee Schedule. Although this fee is a new fee, the actual aggregate amount assessed by the CHX will decrease, due to elimination of the Specialist Fixed Fee. Accordingly, the CHX believes that it is appropriate to institute the new Clearing Support Activity Fee. 2. Statutory Basis The CHX believes that the proposed rule change is consistent with Section 6(b)(4) of the Act 12 in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members. 13 12 15 U.S.C. 78f(b)(4). 13 Email from Kathleen Boege, Vice President and Associate General Counsel, CHX, to Joseph Morra, Special Counsel, Division of Market Regulation (“Division”), Commission, and Sara Gillis, Attorney, Division, Commission, dated November 16, 2006. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change establishes or changes a member due, fee or other charge imposed by the Exchange, it has become effective pursuant to Section 19(B)(3)(A) of the Act 14 and subparagraph (f)(2) of Rule 19b-4 thereunder. 15 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. 16 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 240.19b-4(f)(2). 16 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 November 15, 2006, the date on which the CHX filed 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-CHX-2006-31 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-CHX-2006-31. 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 CHX. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CHX-2006-31 and should be submitted on or before December 18, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-19981 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54775; File No. SR-DTC-2006-14] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change To Amend Its Certificate of Organization To Provide for the Issuance of an Additional 500,000 Shares of DTC Series A Preferred Stock November 17, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on October 6, 2006, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) and on November 14, 2006, amended, the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by DTC. The Commission is publishing this notice and order to solicit comments from interested persons and to grant accelerated approval of the proposal. 1 15 U.S.C. 78s(b)(1). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purposed rule change relates to changes to DTC's Certificate of Organization to provide for the issuance of an additional 500,000 shares of DTC Series A Preferred Stock. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, DTC 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. DTC has prepared summaries, set forth in sections (A), (B), and

(C)below, of the most significant aspects of these statements. 2 2 The Commission has modified the text of the summaries prepared by DTC.

(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In 1999, DTC's Certificate of Organization was amended to provide for the issuance of up to $150 million of Series A Preferred Stock as thereafter authorized by the Board of Directors. 3 In February 2000, the Board decided to increase the capital of DTC by issuing 750,000 shares of variable rate, noncumulative, nonvoting Series A Preferred Stock at the par value of $100 per share and to reduce the mandatory deposits to the Participants Fund by a corresponding amount. 4 DTC participants are required to purchase and own shares of the Series A Preferred Stock in proportion to their use of DTC services. DTC treats the Series A Preferred Stock held by participants substantially the same as the mandatory cash deposits made by participants to the Participants Fund for purposes of collateralizing securities transactions, limiting net debit positions, implementing default procedures, and allocating unrecovered losses. 3 The amended Certificate of Organization was the subject of a DTC rule filing previously approved by the Commission. Securities Exchange Act No. 41529 (June 15, 1999), 64 FR 33333 (June 22, 1999) [File No. SR-DTC-99-08]. 4 This restructuring of DTC's Participants Fund was the subject of a rule filing previously approved by the Commission. Securities Exchange Act No. 43197 (August 23, 2000), 65 FR 52459 (August 29, 2000) [File No. SR-DTC-00-02]. In order to further increase capital, 5 DTC is proposing to amend its Certificate of Organization to provide for the issuance of an additional 500,000 shares of Series A Preferred Stock at the par value of $100 per share and to further reduce mandatory cash deposits by a corresponding amount. 6 The proceeds of the reductions of the mandatory cash deposits will be used to pay the purchase price of the shares, and all reductions and payments will be settled through the facilities of DTC with no action required on the part of any participant. 5 DTC, as a depository institution, is subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve. To be considered “well capitalized” under these guidelines, DTC must maintain a Tier I Leverage Ratio of at least 3% and Tier I Risk Based Capital Ratio of at least 8%. The issuance of the additional Series A Preferred Stock will enable DTC to continue to meet these requirements. 6 The issuance of an additional 500,000 shares will increase the outstanding amount of Preferred Stock to $125 million and will reduce the mandatory cash portion of the Participants Fund deposit to $475 million, maintaining the total mandatory amount at $600 million. DTC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 7 and the rules and regulations thereunder applicable to DTC because the proposed rule change will not affect the safeguarding of securities and funds in DTC's custody or control for which it is responsible. 7 15 U.S.C. 78q-1.

(B)Self-Regulatory Organization's Statement on Burden on Competition DTC 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. DTC will notify the Commission of any written comments received by DTC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Section 17A(b)(3)(F) 8 of the Act requires that the rules of a clearing agency be designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible. For the reasons set forth below, the Commission finds that DTC's proposed rule change is consistent with DTC's obligations under the Act. 8 15 U.S.C. 78q-1(b)(3)(F). The Series A Preferred Stock will be used in conjunction with and will have the characteristics of required deposits to the Participants Fund. The proposed rule change enables DTC to increase its capital base and maintain the same level of assets for use in the event of a participation default without imposing any additional financial burden on its participants and enables DTC to continue to meet the risk-based capital guidelines issued by the Board of Governors of the Federal Reserve. Therefore, the Commission finds that the rule change is consistent with DTC's obligation to assure the safeguarding of securities and funds which are in its custody or control or for which it is responsible. The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice of filing because approving the proposed rule change prior to the thirtieth day after the date of publication of notice of filing will allow DTC to implement the proposed rule change prior to the end of the year. 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-DTC-2006-14 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-DTC-2006-14. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of DTC and on DTC's Web site at *http://www.dtc.org.* 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-DTC-2006-14 and should be submitted on or before December 18, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 9 Nancy M. Morris, Secretary. 9 17 CFR 200.30-3(a)(12). [FR Doc. E6-19961 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54787; File No. SR-FICC-2006-14] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating To Returning Excess Clearing Fund Collateral November 20, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on September 22, 2006, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by FICC. 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). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purpose of this rule filing is to amend FICC's Government Securities Division's (“GSD”) rules to permit GSD members to request the return of their excess clearing fund collateral held on deposit with FICC on a more frequent basis than is currently allowed under GSD's rules. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FICC has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 2 2 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 Currently, GSD members generally are permitted to request the return of excess clearing fund collateral once per month. 3 In addition, on any business day, if a GSD member has an excess clearing fund deposit in the amount of $5 million or more, the member may request the return of the excess deposit provided, among other requirements, that the member retain on deposit with GSD the greater of at least 110 percent of its calculated required clearing fund deposit or $1 million more than its calculated required clearing fund deposit. 3 Excess clearing fund is the amount of collateral held on deposit at GSD that is greater than a member's required clearing fund deposit as set forth in GSD Rule 4 (Clearing Fund, Watch List and Loss Allocation). In an effort to harmonize GSD's process with respect to the return of excess collateral with the processes of other Depository Trust & Clearing Corporation (“DTCC”) subsidiary clearing agencies, FICC proposes to change GSD's rules to give GSD the discretion to return excess clearing fund more frequently whether or not the excess reaches 110 percent of the required clearing fund deposit or $5 million. 4 Under the proposal, GSD members would be able to request the return of excess clearing fund on a daily basis. GSD would retain the right, however, to deny the return of some or all of a member's excess collateral in the following instances:

(i)If, the member has an outstanding payment obligation to FICC;

(ii)if a member's funds-only settlement amounts or net settlement positions over the upcoming 90 days may reasonably be expected to be materially different than those of the preceding 90 days;

(iii)if the member is on the watch list; or

(iv)when the return of excess clearing fund will cause the member to be in violation of another GSD rule. In addition, excess clearing fund would not be returned to a member if doing so would reduce a member's cross-guaranty repayment deposit or cross-margining repayment deposit to the clearing fund below the required amount. 5 4 The rules of the National Securities Clearing Corporation (“NSCC”) and FICC's Mortgage Backed Securities Division (“MBSD”) permit their respective members to request (under normal circumstances) the return of their excess clearing fund more frequently than once per month. Currently, NSCC's and MBSD's procedures allow members to request the return of excess collateral on a daily basis. 5 Under GSD's rules, a “cross-guaranty repayment deposit” is a deposit to the clearing fund required to be made by a cross-guaranty beneficiary member pursuant to Rule 41, Section 4 of GSD's rules. A “cross-margining repayment deposit” is a deposit to the clearing fund required to be made by a cross-margining beneficiary participant pursuant to Rule 43, Section 6 of GSD's rules. FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act and the rules thereunder because by enabling FICC members to request and receive an earlier return of excess clearing fund collateral held on deposit at FICC while maintaining the GSD's ability to deny the return of excess collateral in order to protect FICC from undue risk, the proposed rule change should not adversely affect FICC's ability to safeguard securities and funds in its possession or control or for which it is responsible and at the same time should enhance member liquidity. 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 FICC has not solicited written comments relating to the proposed rule change. FICC will notify the Commission of any written comments it receives. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the ** Federal Register ** or within such longer period

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

(ii)as to which the self-regulatory organization consents, the Commission will:

(A)By order approve such proposed rule change or

(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, 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-FICC-2006-14 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-1090. All submissions should refer to File No. SR-FICC-2006-14. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at FICC's principal office and on FICC's Web site at < *http://ficc.com/gov/gov.docs.jsp?NS-query=#rf* >. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submission should refer to File No. SR-FICC-2006-14 and should be submitted on or before December 18, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-19984 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54773; File No. SR-NASD-2006-120] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Extend the Hours of Operation of the NASD/Nasdaq TRF, the OTC Reporting Facility and the Trade Reporting of Non-Nasdaq Exchange-Listed Securities Under the NASD Rule 6400 Series November 17, 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 National Association of Securities Dealers, Inc. (“NASD”) 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 NASD. On November 3, 2006, NASD filed Amendment No. 1. NASD filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders it effective upon filing with the Commission. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). 5 For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on November 3, 2006, the date NASD filed Amendment No. 1. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD proposes to extend the hours of operation of

(1)the Trade Reporting Facility established by NASD and the Nasdaq Stock Market, Inc. (“NASD/Nasdaq TRF”); 6

(2)the trade reporting of non-Nasdaq exchange-listed securities under the NASD Rule 6400 Series; and

(3)the trade reporting of OTC Equity Securities to the OTC Reporting Facility (“ORF”) 7 under the NASD Rule 6600 Series, until 8 p.m. Eastern Time (“ET”). The text of the proposed rule change is available at NASD, on the NASD Web site at *http://www.nasd.com,* and at the Commission's Public Reference Room. 8 6 During the initial transitional period, the NASD/Nasdaq TRF is used to report transactions executed otherwise than on an exchange in all Nasdaq Global Market, Nasdaq Capital Market securities and convertible bonds listed on Nasdaq. *See* NASD Rule 4000 Series and 6100 Series. NASD filed a separate proposed rule change to expand the scope of the NASD/Nasdaq TRF rules to include trade reporting in non-Nasdaq exchange-listed securities. *See* Securities Exchange Act Release No. 54451 (September 15, 2006), 71 FR 55243 (September 21, 2006) (SR-NASD-2006-104). 7 For purposes of the NASD Rule 6600 Series, the ORF is the service provided by NASD that accommodates reporting and dissemination of last sale reports in OTC Equity Securities. Regarding those OTC Equity Securities that are not eligible for clearance and settlement through the facilities of the National Securities Clearing Corporation, the ORF comparison function is not available. However, the ORF supports the entry and dissemination of last sale data on such securities. *See* NASD Rule 6610(k). 8 NASD has proposed changes to NASD Rule 4623(e), among other NASD rules, in SR-NASD-2006-104, which is currently pending at the Commission. *See* Securities Exchange Act Release No. 54451 (September 15, 2006), 71 FR 55243 (September 21, 2006). Those proposed changes include the insertion of “NASD/Nasdaq” before each reference to the Trade Reporting Facility in NASD Rule 4632, which also is reflected in the proposed rule text. Further, the Commission has approved changes to NASD Rules 4632(e), 6420(e) and 6620(e) in SR-NASD-2006-055, which becomes effective on December 1, 2006. *See* Securities Exchange Act Release No. 53977 (June 12, 2006), 71 FR 34976 (June 16, 2006) (SR-NASD-2006-055) (approval order). Lastly, the Commission also has approved changes to NASD Rule 6420, among others, in SR-NASD-2006-091, which is scheduled to become effective on February 5, 2007. *See* Securities Exchange Act Release No. 54537 (September 28, 2006), 71 FR 59173 (October 6, 2006). Upon the implementation of SR-NASD-2006-091, the requirements in NASD Rule 6420, among others, will no longer be necessary as they will be incorporated directly into NASD's Alternative Display Facility rules. 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 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. 9 As part of SR-NASD-2005-087, the Commission approved the establishment of, and rules governing, the NASD/Nasdaq TRF, which currently provides members another mechanism for reporting transactions in Nasdaq-listed securities effected otherwise than on an exchange. 10 9 *See* Securities Exchange Act Release No. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006). 10 *See supra* note 6. Pursuant to the NASD Rule 6600 Series, members use the ORF for purposes of reporting transactions in OTC Equity Securities to NASD. 11 In addition, pursuant to the NASD Rule 6400 Series, members report over-the-counter trades for non-Nasdaq exchange-listed securities to NASD. Nasdaq's Automated Confirmation Transaction Service (“ACT”) is the system used for each of these purposes. 11 NASD Rule 6610(d) defines “OTC Equity Securities” as any non-exchange-listed security and certain exchange-listed securities that do not otherwise qualify for real-time trade reporting. Currently, the NASD/Nasdaq TRF trade reporting rules reflect a system closing time of 6:30 p.m. ET, which was consistent with the system closing time of the UTP Securities Information Processor (“UTP SIP”). Effective September 18, 2006, the UTP SIP system closing time was extended from 6:30 p.m. ET to 8 p.m. ET. To accommodate the extended UTP SIP system closing time, NASD proposes to extend the closing time of the NASD/Nasdaq TRF from 6:30 p.m. to 8 p.m. ET. In addition, to keep the hours of operation uniform across the ACT system, NASD proposes to extend the closing time to 8 p.m. for reporting OTC Equity Securities under NASD Rule 6600 and non-Nasdaq exchange-listed securities under NASD Rule 6400. Finally, the text of NASD Rule 6920 incorrectly reflects a system closing time of 5:15 p.m. ET. This closing time should have been amended at the time that the other NASD trade reporting rules were amended to reflect a system closing time of 6:30 p.m. Accordingly, as part of this proposed rule change, NASD also proposes to amend NASD Rule 6920 to extend the time from 5:15 p.m. until 8 p.m., the closing time of the ORF. NASD filed the instant proposed rule change for immediate effectiveness. NASD proposes to make the proposed rule change operative on December 4, 2006. To ensure that market participants have sufficient time to program their internal systems to accommodate a new closing time of 8 p.m. ET for the NASD/Nasdaq TRF and ORF, the extended closing time was announced in a Nasdaq Head Trader Alert on August 23, 2006. 12 Extension of the system hours for the NASD/Nasdaq TRF and ORF will allow market participants to timely report more trades taking place after normal market hours. NASD believes that the proposed effective date draws an appropriate balance between the benefits of expanded access to the NASD/Nasdaq TRF and ORF systems with the needs of market participants to prepare for it. 12 *See* Nasdaq Head Trader Alert 2006-120 (August 23, 2006) (available at *http://www.nasdaqtrader.com).* 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A of the Act, 13 in general, and with Section 15A(b)(6) of the Act, 14 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, remove impediments to a free and open market and a national market system, and, in general, to protect investors and the public interest. NASD believes that the proposed rule change will afford market participants additional time to report trades taking place after normal market hours, resulting in more timely and accurate trade reporting, which in turn will result in greater transparency. 13 15 U.S.C. 78 *o* -3. 14 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. 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 15 and Rule 19b-4(f)(6) thereunder. 16 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. 15 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b-4(f)(6). 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-2006-120 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-2006-120. 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-2006-120 and should be submitted on or before December 18, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-19966 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54778; File No. SR-NASD-2006-127] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New NASD Rule 7000C Series Relating to Fees and Credits for the Trade Reporting Facility Established by NASD and the National Stock Exchange (NASD/NSX TRF) November 17, 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 November 15, 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 filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 13 and Rule 19b-4(f)(6) thereunder, 4 which renders it effective upon filing with the Commission. 5 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-(f)(6). 5 NASD gave the Commission written notice of its intent to file the proposed rule change on November 2, 2006. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD proposes to adopt a new NASD Rule 7000C Series relating to fees and credits for the Trade Reporting Facility (“NASD/NSX TRF”) established by NASD and the National Stock Exchange (“NSX”). The text of the proposed rule change is available at *http://www.nasd.com,* at the principal offices of NASD, 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 On November 6, 2006, the Commission approved SR-NASD-2006-108, 6 which proposed rules relating to the new NASD/NSX TRF. The NASD/NSX TRF will provide NASD members another mechanism for reporting to NASD over-the-counter transactions in exchange-listed securities. The NASD/NSX TRF will only accept locked-in trades. The NASD/NSX TRF will likely accept trade reports for Nasdaq-listed securities on the first day of operation and for non-Nasdaq exchange-listed securities at a later date, which will be announced within 90 days of Commission approval. However, it is possible that the NASD/NSX TRF will accept trade reports in all exchange-listed securities on the first day of operation. 6 *See* Securities Exchange Act Release No. 54715 (November 6, 2006), 71 FR 66354 (November 14, 2006) (approval order). The instant proposed rule change would adopt a new NASD Rule 7000C Series relating to fees and credits applicable to the NASD/NSX TRF. NASD proposes that under new NASD Rule 7002C, there will be no transaction fee for reporting locked-in trades to the NASD/NSX TRF in securities listed on the New York Stock Exchange (“Tape A”), the American Stock Exchange (“Tape B”) and the Nasdaq Exchange (“Tape C”). Although NASD is not required to file a proposed rule change where no fees are to be assessed, for members' convenience and to avoid potential confusion with the fee structures of other NASD facilities, NASD is proposing NASD Rule 7002C to clarify that there will be no charge for use of the NASD/NSX TRF to report locked-in transactions in exchange-listed securities effected otherwise than on an exchange. In addition, NASD is proposing a transaction credit program under proposed new NASD Rule 7001C. NASD members reporting trades in Tape A, Tape B and Tape C stocks to the NASD/NSX TRF will receive a 50% pro rata credit on gross market data revenue earned by the NASD/NSX TRF with respect to those trade reports. Credits will be paid on a quarterly basis. To the extent that market data revenue is subject to any adjustment, credits may be adjusted accordingly. Tape A and Tape B revenue is currently distributed to NASD and the exchanges based on the number of trades reported, while Tape C revenue is distributed based on an average of number of trades and number of shares reported. Thus, under the proposed program, the Tape A and Tape B revenue attributable to a member will be based on number of trades reported, while the Tape C revenue attributable to a member would be based on number of trades and number of shares reported. A member will receive 50% of the gross revenue attributable to it in each of the three tapes. “Gross revenue” is the revenue received by the NASD/NSX TRF from the three tape associations after the tape associations deduct allocated support costs and unincorporated business costs. The proposed transaction credit program is identical to the existing transaction credit program for the NSX, which provides a 50% transaction credit on gross revenues generated by transactions in Tape A, Tape B and Tape C securities and is allocable to NSX members on a pro rata basis based upon the revenue generated by NSX members in the three tapes. 7 7 *See* Securities Exchange Act Release Nos. 54194 (July 24, 2006), 71 FR 43258 (July 31, 2006) (SR-NSX-2006-10), and 53860 (May 24, 2006), 71 FR 31250 (June 1, 2006) (SR-NSX-2006-07). “Gross revenue” is defined under the existing NSX program the same way as under the proposed program for the NASD/Nasdaq TRF. NASD also notes that the proposed transaction credit program is substantially equivalent to the existing transaction credit program for the NASD/Nasdaq TRF under NASD Rule 7001B. The only difference between the two programs is that under the NASD/Nasdaq TRF transaction credit program, members receive 50% of revenue after deducting any amounts that the NASD/Nasdaq TRF will be required to pay to the Consolidated Tape Association or the Nasdaq Securities Information Processor for capacity usage. Under the proposed transaction credit program for the NASD/NSX TRF, such expenses will not be deducted. NASD filed the proposed rule change for immediate effectiveness. NASD proposes to implement the proposed rule change

(1)for Nasdaq-listed securities on the first day of operation of the NADS/NSX TRF, which is currently anticipated to be in November 2006, and

(2)for non-Nasdaq exchange-listed securities on the day on which the NASD/NSX TRF commences operation with respect to such securities. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A of the Act, 8 in general, and with Section 15A(b)(5) of the Act, 9 in particular, which requires, among other things, that NASD rules provide for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system that NASD operates or controls. NASD believes that the proposed rule change is a reasonable and equitable fee and credit structure in that there will be no fees charged for trade reporting to the NASD/NSX TRF for locked-in transactions in exchange-listed securities effected otherwise than on an exchange, and the proposed transaction credit program is identical to existing credits for the NSX. 8 15 U.S.C. 78 *o* -3. 9 15 U.S.C. 78 *o* -3(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition 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. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:

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

(ii)Impose any significant burden on competition; and

(iii)Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(6) thereunder. 11 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). 11 17 CFR 240.19b-4(f)(6). NASD has asked that the Commission waive the 30-day operative delay contained in Rule 19b-4(f)(6)(iii) under the Act. 12 The Commission believes such waiver is consistent with the protection of investors and the public interest, for it will allow NASD to implement the proposed rule change on the first day of operation of the NASD/NSX TRF. For these reasons, the Commission designates the proposal to be effective and operative upon filing with the Commission. 13 12 17 CFR 240.19b-4(f)(6)(iii). 13 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. 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-NASD-2006-127 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-2006-127. 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-2006-127 and should be submitted on or before December 18, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-19967 Filed 11-24-06; 8:45 am] BILLING CODE 8011-01-P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 34792] Portland & Western Railroad, Inc.—Acquisition and Operation Exemption—Union Pacific Railroad Company Portland & Western Railroad, Inc. (P&W), a Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41 to acquire a permanent, exclusive rail freight operating easement from Union Pacific Railroad Company

(UP)to operate over an approximately 5-mile rail line between milepost 749.95 in Tigard, OR, and milepost 755.43 in Beaverton, OR. Currently, P&W conducts local and overhead freight operations on the rail line pursuant to a lease with UP. The proposed transaction will change P&W's property interest in the rail line, but P&W will continue to operate over the line as the only common carrier providing rail freight service. P&W has certified that its projected annual revenues as a result of this transaction will not exceed the annual revenues of a Class III railroad, but will exceed $5 million. The transaction is scheduled to be consummated by no later than November 27, 2006. 1 1 P&W seeks a waiver of the notice requirements of 49 CFR 1150.42(e). The Board will address that request in a separate decision. In the absence of a waiver granted by the Board on or before November 27, 2006, the earliest the transaction would be able to be consummated would be the date established by the Board as the effective date of the exemption in the decision addressing the waiver request. If the verified notice contains false or misleading information, the exemption is void *ab initio* . Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the transaction. An original and 10 copies of all pleadings, referring to STB Finance Docket No. 34792, must be filed with the Surface Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In addition, a copy of any pleading filed with the Board must be sent to P&W's representative: Marc D. Machlin, 600 Fourteenth Street, NW., Washington, DC 20005. Board decisions and notices are available on our Web site at “ *WWW.STB.DOT.GOV* .” Decided: November 16, 2006. By the Board, David M. Konschnik, Director, Office of Proceedings. Vernon A. Williams, Secretary. [FR Doc. 06-9416 Filed 11-24-06; 8:45 am]

Notices. SECURITIES AND EXCHANGE COMMISSION