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Code · REGISTER · 2006-12-27 · DEPARTMENT OF JUSTICE · Notices

Notices. Notice of information collection

60,800 words·~276 min read·/register/2006/12/27/06-9864

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

BILLING CODE 4310-04-M DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 04-48] William R. Lockridge, M.D. Affirmance of Immediate Suspension of Registration Introduction and Procedural History On May 17, 2004, I, the Deputy Administrator of the Drug Enforcement Administration, issued an Order to Show Cause and Notice of Immediate Suspension of the practitioner's Certificate of Registration, BL6779005, held by William R. Lockridge, M.D. (Respondent), of Wayne, N.J.
The Notice of Immediate Suspension was based upon my preliminary finding that Respondent was “responsible for the diversion of large quantities of controlled substances” by writing prescriptions for controlled substances that were issued on behalf of persons he never physically examined and which thus lacked a “legitimate medical purpose.” Order to Show Cause at 9. Based on this finding, I concluded that Respondent's continued registration “constitute[d] an imminent danger to the public health and safety because of the substantial likelihood that [he] would continue to divert controlled substances.” *Id.* at 10.
More specifically, the Show Cause Order alleged that a Pennsylvania State Pharmacy Inspector had conducted an inspection of an Internet pharmacy, CMC Pharmacy (CMC), and determined that a “significant portion of” the controlled substances prescriptions dispensed by CMC were issued by Respondent. *Id.* at 5. The Show Cause Order alleged that a DEA Diversion Investigator
(DI)had interviewed a drug-dependent person who informed the DI that he had obtained prescriptions for Schedule III and IV controlled substances such as Lortab and Xanax from Respondent based on a telephone interview and a falsified medical record. *See id.* at 5-6. The Order further alleged that this person told the DI that several of his acquaintances had also obtained prescriptions for controlled substances from Respondent and CMC although they had no legitimate medical need for the drugs. *See id.* at 6. The Show Cause Order also alleged that the DI subsequently contacted CMC regarding the purchase of controlled substances from it, and was told that in order to do so, he was required to register as a patient of the Southwest Medical Group (SMG). *See id.* The Show Cause Order alleged that the DI, using an undercover persona, registered as a patient with SMG and faxed to it a fabricated medical record which stated that he had shoulder pain but did not indicate that he had ever been prescribed controlled substances for the condition. *See id.* at 7. The Show Cause Order next alleged that the DI subsequently completed an online questionnaire and obtained an appointment for a telephonic consultation with Respondent. *See id.* at 8. The Show Cause Order alleged that the DI called Respondent and that during the conversation Respondent asked him why he was requesting Vicodin. *See id.* The Show Cause Order alleged that the DI told Respondent that he had bought the drug from a friend and that he needed it because he was a truck driver and had to turn his truck's steering wheel. *See id.* The Show Cause Order alleged that Respondent then suggested a prescription for 120 ten mg. tablets of Vicodin with two refills, and ultimately prescribed the drug. *See id.* The Show Cause Order further alleged that Respondent then asked the DI whether there was anything else he could do for him. *See id.* According to the Show Cause Order, after the DI informed Respondent that he was nervous because he had just been given a contract to haul dynamite, Respondent prescribed 120 two mg. tablets of alprazolam with two refills. *See id.* The Show Cause Order thus alleged that both prescriptions were issued without a legitimate medical purpose and without a legitimate medical examination. *See id.* at 8-9. Next, the Show Cause Order alleged that Respondent told the DI that the prescription had been forwarded to CMC. *See id.* at 9. The Show Cause Order also alleged that the DI was charged $ 115 for Respondent's services, which was payable to SMG. *See id.* The Show Cause Order alleged that the DI subsequently received 120 tablets of 10 mg. hydrocodone and 120 tablets of 2 mg. alprazolam, for which he paid $ 261. *See id.* Finally, the Show Cause Order alleged that “nearly all” of the controlled substance prescriptions that were filled by CMC were issued by Respondent through the SMG. *See id.* The Show Cause further alleged that over a one year period, Respondent was responsible for dispensing more than 2,316,300 dosage units of hydrocodone-based drugs “via the Internet, for no legitimate medical purpose and without the benefit of a * * * legitimate medical examination.” *See id.* DEA DIs initially attempted to serve the Show Cause Order and Immediate Suspension on Respondent at his registered location of 1777 Hamburg Turnpike, Suite 202, Wayne, N.J. However, upon their arrival at this address, the DIs were told that Respondent had not practiced there for the past four years. See ALJ at 4. Thereafter, DI Conlon, who had conducted the investigation, contacted Respondent using a phone number from SMG's Web site which was for a Florida address. *See id.* The DI instructed Respondent that his registration had been immediately suspended and subsequently, DIs from Florida served Respondent with the Order to Show Cause and Immediate Suspension. *See id.* Thereafter, Respondent timely requested a hearing. The matter was assigned to Administrative Law Judge
(ALJ)Gail Randall, who conducted a hearing in Pittsburgh, Pa., on October 26 and 27, 2004. At the hearing, the Government elicited the testimony of six witnesses and introduced numerous exhibits. Respondent rested without putting on a case. Thereafter, both parties submitted post-hearing briefs. On November 18, 2005, the ALJ issued her decision. The ALJ concluded that the Government had proved by a preponderance of the evidence that the revocation of Respondent's registration was in the public interest and recommended that I revoke Respondent's registration. See ALJ at 42-43. Neither party filed exceptions. Having carefully reviewed the record as a whole, I hereby issue this decision and final order. I adopt the ALJ's findings of fact and conclusions of law in their entirety. Because Respondent's registration has since expired and Respondent did not submit a renewal application, I do not adopt the ALJ's recommendation that Respondent's registration be revoked. I do, however, affirm the immediate suspension of Respondent's registration and make the following findings. Findings of Fact Respondent is a medical doctor who at the time of the hearing held medical licenses in the States of New Jersey and New York. See ALJ at 4. Respondent did not, however, hold a medical license in the State of Florida. See id. At the time of the hearing, Respondent held DEA Certificate of Registration, BL6779005, with an expiration date of March 31, 2006. I take official notice of the fact that Respondent has not submitted an application to renew his Certificate of Registration. *Respondent's registered location was:* Associates in Women's Health, 1777 Hamburg Turnpike, Suite 202, Wayne, N.J. See Gov. Ex. 1. Respondent had not, however, practiced at this location for at least four years prior to the May 2004 service of the Order to Show Cause. ALJ at 4. Moreover, pursuant to 5 U.S.C. 557(e), I take official notice of the records of the New Jersey Division of Consumer Affairs, which indicate that Respondent's N.J. medical license expired on June 30, 2005. 1 1 Under the Administrative Procedure Act (APA), an agency “may take official notice of facts at any stage in a proceeding-even in the final decision.” U.S. Dept. of Justice, Attorney *General's Manual on the Administrative Procedure Act* 80
(1947)(Wm. W. Gaunt & Sons, Inc., Reprint 1979). In accordance with the APA and DEA's regulations, Respondent is “entitled on timely request, to an opportunity to show to the contrary.” 5 U.S.C. 556(e); see also 21 CFR 1316.59(e). To allow Respondent the opportunity to refute the facts of which I am taking official notice, publication of this final order shall be withheld for fifteen days, which shall begin on the date of service by placing this order in the mail. Respondent did not hold a DEA Certificate of Registration for either of the two Florida addresses he used during the 2003 through 2004 time frame. See Tr. 236; Gov. Ex. 2 (printout of registration status); Gov. Ex. 8 (N.J. and N.Y. medical licenses listing Respondent's address as 2555 PGA Blvd., # 157, Palm Beach Gardens, Fl. 33410); Gov. Ex. 10 (Letter of June 28, 2003, from Respondent to Mr. Dave Schwartzenberger of SMG, using 2555 PGA Blvd. address); Gov. Ex. 24 (Rx forms listing Respondent's address as 461 Surfside Lane, Juno, Fl.). Respondent was living in Juno Beach, Florida, when he was finally served with the Order to Show Cause and Immediate Suspension. See Gov. Ex. 6 (Return Receipt Card signed by Respondent on June 2, 2004, using Juno Beach address). In October 2003, a DI assigned to the Pittsburgh field office received information that CMC and Respondent were using the Internet to distribute controlled substances. ALJ at 5. While CMC was the initial focus of the investigation, at some point thereafter, a Pennsylvania State Pharmacy Inspector informed the DI that a high volume of CMC's prescriptions were for hydrocodone combination drugs (which are Schedule III controlled substances, see 21 CFR 1308.13(e)), and various benzodiazepines such as diazepam and alprazolam (which are Schedule IV controlled substances, see 21 CFR 1308.14(c)), and that “the vast majority of the prescriptions” filled by CMC were written by Respondent. Tr. 343, 359. On March 25, 2004, the DI phoned CMC to find out how the “scheme worked.” Tr. 238. During that conversation, the DI was told by an unidentified person at CMC that the pharmacy worked with SMG and that SMG “set up the doctor consults.” Tr. 240; see also Gov. Ex. 3. The DI was then given SMG's phone number. See Tr. 240. Later that day, the DI called SMG and spoke with a person named Sam about obtaining prescriptions from CMC. Id. at 241. Sam told the DI to go to SMG's Web site and follow the posted instructions to register with it. Id. at 241-42. Thereafter, the DI, using the undercover persona of John Dearing, went to SMG's “New Patient Registration” webpage and completed the form. On the form, the DI gave both e-mail and street addresses, his date of birth, phone number and indicated that his medical condition was a “problem with shoulder.” Gov. Ex. 12. The webpage stated: “Before completing this form please make sure you have your medical records or release form and a legible copy of your government issued identification ready to fax upon completion of this registration form.” Id. To comply with this requirement, the DI created a false medical record which indicated that he had been treated for neck pain and flu-like symptoms with over-the-counter drugs such as Tylenol and Motrin during several office visits. See Gov. Ex. 14; Tr. 246. The document also contained a reference to spasms and exterior and lateral extension. See Gov. Ex. 14; Tr. 246. Finally, the document did not include the name, address and phone number of a physician. See Gov. Exh. 14. The DI also created a fictitious photo identification by altering his driver's license. Tr. 243. The DI subsequently faxed both items to SMG. See Gov. Ex. 16. Several hours later, the DI received an e-mail from SMG which congratulated him on his registration and provided him with a patient identification number. See Gov. Ex. 17. The e-mail also instructed the DI to visit the southwestmedicalgroup.com webpage to “to secure an appointment for a physician consultation.” Id. Thereafter, on April 7, 2004, the DI returned to the SMG Web site and completed a “repeat patient medical history form” even though “he was a new customer.” ALJ at 8, Gov. Ex. 18, at 50. On this form, the DI was asked whether he was “requesting a specific Medication(s)?.” Gov. Ex. 18, at 50. The DI indicated “yes,” and that he was requesting “Vicodin 10 mg” for a “shoulder” condition. See id. The DI further indicated that he had “taken Vikes before with no side effects.” Id. Vikes is a street name for Vicodin. ALJ at 8. The DI also selected a time for a “consultation” with Respondent; the DI was subsequently instructed to call Respondent at 11:10 AM the next day and was given Respondent's name and a Florida phone number. See Gov. Ex. 18, at 60. At the appointed time, the DI called Respondent. During this conversation, Respondent asked the DI what he wanted; the DI told Respondent that he wanted Vicodin. While Respondent was aware that the DI had indicated that he had a shoulder problem, he did not ask the DI whether he was in pain and the DI did not say that he “had any pain.” Tr. 255-56. The DI also told Respondent that he had been getting Vicodin from friends but had just found out that it was illegal to do so. Gov. Ex. 4. Respondent replied that it was illegal to obtain the drug from friends and that a doctor had to prescribe it. See Tr. 300. Respondent then asked the DI “how many [he] wish[ed] to purchase?”; the DI replied “120.” Id. Respondent then agreed to prescribe 120 Vicodin tablets with two refills. See id. Respondent then asked whether there was “anything else [he] could do” for the DI. Id. at 301. The DI told Respondent that he was “nervous” because he was going through a divorce and had just gotten a contract to haul dynamite. Id. Respondent then asked the DI “[w]hat would you like for your nerves?,” and offered to prescribe “either Xanax or Valium.” Id. The DI eventually asked for Valium and requested that the prescription coincide with the Vicodin so that they would “run out at the same time.” Id. at 302. Respondent then told the DI that he would authorize a prescription for 120 Valium tablets with two refills. Id. 2 2 The DI attempted to record this conversation, but the recording device did not pick up Respondent's voice. The DI subsequently called Respondent again to recapture the substance of the first conversation. See Tr. 303. The transcript of that conversation confirms that Respondent prescribed 120 tablets of both Vicodin and diazepam, with two refills for each drug, for the DI. See Gov. Ex. 4, at 9-10. In that conversation, Respondent also told the DI that the fee for the consultation (which was $ 115) should be paid to SMG. Id. at 9. The DI subsequently sent a postal money order to SMG. See Gov. Ex. 20, at 66 & 68. Respondent also informed the DI that CMC would bill him separately for the drugs. Tr. 302. Respondent did not take a complete medical history from the DI, and obviously did not perform a physical exam. See ALJ at 12 (citing Tr. 256-58). He did not order medical testing, and did not discuss with the DI either the risks and benefits of taking the drugs he prescribed or the availability of alternative treatments. See id. Moreover, Respondent did not ask the DI whether he was seeing other physicians or using other online pharmacies. See id. Finally, Respondent did not discuss the contents of the “medical record” the DI had submitted and did not establish a treatment plan or a timetable for taking the drugs. See id. On April 22, 2004, the DI faxed to SMG a copy of the postal money order paying for the consultation. See Gov. Ex. 20. Later that day, SMG sent an e-mail to the DI providing him with a United Parcel Service tracking number and instructing him that the drugs were being shipped COD and that the “total for all pharmacy services (medication, shipping and handling) [was] $ 261.” See Gov. Ex. 21. The e-mail also gave instructions for ordering refills and stated that: “You will NOT be able to refill your prescription at any local pharmacy. You must order your refill through the Southwest Medical Group Web site only.” Id. The ALJ also found that CMC “did not accept any form of insurance as payment for medications.” ALJ at 9 (citing Tr. 335). Thereafter, the DI obtained both drugs from CMC along with an invoice that indicated the details of each prescription and listed Respondent as the prescribing physician. See Gov. Ex. 22. Moreover, on May 19, 2004, during the execution of a search warrant at CMC, copies of the prescriptions which Respondent wrote for the DI were retrieved. See Gov. Ex. 24; Tr. 325. The heading of the forms gave Respondent's name and his address as his Juno, Florida residence. See Gov. Ex. 24. The forms also listed Respondent's New Jersey medical license number and the DEA number for his former office in Wayne, N.J. See id., see also Gov. Ex. 8. During the search of CMC, the Government seized the pharmacy's computer database and retrieved from it patient and prescription information. Tr. 328-29; Gov. Exs. 25-30. The ALJ specifically found that Respondent wrote “the vast majority of [the] prescriptions filled by CMC.” See ALJ at 10. This finding is supported by substantial evidence. See Tr. 328; Gov. Exs. 27-30. Moreover, the Government compiled a list of CMC's customers by their State. CMC filled prescriptions for customers located “in virtually every [S]tate.” ALJ at 11, see also Gov. Ex. 25. Indeed, CMC filled prescriptions for customers in such far-off places as Alaska, Hawaii and Washington State. See id. The Government also compiled a 467 page list of the prescriptions filled by CMC between July 1, 2003, and May 11, 2004, which includes the patient's name, the prescribing physician's name, the drug, and the quantity. See Gov. Exhs. 28 & 30; see also Gov. Exhs. 27 & 29. Based on this evidence, I further find that the overwhelming majority of the prescriptions Respondent issued (and CMC dispensed) were for controlled substances. The Government also submitted into evidence an analysis of the prescriptions Respondent wrote and CMC dispensed for the drugs alprazolam, diazepam, hydrocodone and Lortab (a branded drug that combines acetaminophen and hydrocodone). See Gov. Ex. 65. During the last six months of 2003, Respondent wrote 1,207 prescriptions for alprazolam (for a total of 115,400 dosage units) and 1,140 prescriptions for diazepam (for a total of 71,811 dosage units). See id. During the portion of 2004 in which CMC remained in business, 3 Respondent wrote 2,519 prescriptions for alprazolam (for a total of 245,130 dosage units) and 1,806 prescriptions for diazepam (for a total of 126,925 dosage units). See id. 3 While the document states that the data covered the “[f]irst 5 months of 2004,” in fact, the last date that the data was available for was May 11, 2004. See Gov. Ex. 65. CMC was shut down following the execution of the search warrant. During the last six months of 2003, Respondent wrote 7,939 prescriptions for hydrocodone (for a total of 1,021,146 dosage units) and 44 prescriptions for Lortab (for a total of 5,730 dosage units). See id. During the period of 2004 in which CMC remained in business, Respondent wrote 14,129 prescriptions for hydrocodone (for a total of 1,840,355 dosage units) and 97 prescriptions for Lortab (for a total of 12,330 dosage units). See id. Finally, the analysis found that on May 10, 2004, and May 11, 2004 (the last two days for which there was data), CMC filled respectively 358 and 242 prescriptions for controlled substances that were written by Respondent. Id. On October 15, 2004, the Government also executed a search warrant at Respondent's residence. The only documents found were scheduling charts. No patient records were found. Tr. 407. The Government also called three other persons who testified as to the circumstances surrounding their obtaining prescriptions for controlled substances from Respondent. Mr. A.W. testified that he submitted a medical record, on which he altered the date; the record had been prepared by a physician, who had since died, and contained the physician's name, address and phone number. Id. at 24-26. A.W. gave testimony consistent with that of the DI as to the process required to register with SMG. Id. at 28-33. A.W. further testified that upon receiving his identification number and password, he went to the “repeat patient medical history form” and requested a prescription for Xanax (alprazolam) and Norco, a product containing hydrocodone and acetaminophen. Id. at 33-34. A.W. obtained a time for a phone consultation with Respondent and called him. Id. at 40. As a result of the consultation, which lasted “no more than four or five minutes,” Respondent prescribed for A.W. a month's supply of both hydrocodone and Xanax with two refills. Id. at 33-34, 41. A.W. had several additional “consultations” with Respondent at three month intervals, each of which lasted approximately four to five minutes. Id. at 41. The conversations typically involved Respondent asking A.W. how he was feeling, whether everything was o.k., whether he wanted the same drugs, and if there was anything else Respondent could do for him. Id. at 42. Respondent never required A.W. to submit any other medical records to him. Id. Moreover, Respondent never asked A.W. if he had previously been addicted to drugs, never took a medical history, and never asked what drugs he had previously taken or what other drugs he was then taking. See ALJ at 23 (citing Tr. 42-43). Most significantly, Respondent never performed a physical exam on A.W. and did not require that he obtain a physical exam from another physician. Tr. 43. Furthermore, A.W. never saw Respondent “in person.” Id. at 43. Respondent also never suggested alternative treatments for A.W.'s condition, and other than to mention that the drugs he prescribed could be addictive, never discussed the benefits and risks of taking controlled substances. Id. at 44. A.W. further testified that all of the prescriptions written for him by Respondent were filled by CMC, id. at 52, that he was not allowed to have the prescriptions filled at another pharmacy, and that he could not use his insurance to pay for the drugs and instead had to pay with cash. Id. at 97-98. According to the data obtained during the search of CMC, A.W. received from CMC prescriptions for 140 hydrocodone tablets and 60 alprazolam tablets, which were authorized by Respondent on a monthly basis from October 2003 through April 2004. See Govt. Ex. 27, at 5-6. A.W. further testified that the 140 hydrocodone tablets he received each month “was more than any doctor ever gave” him in his entire life. Tr. 44. A.W. also testified that he was addicted to drugs when he became a “patient” of SMG. Id. at 84. I credit A.W.'s testimony. The Government also called as a witness Ms. B.B. I, like the ALJ, credit her testimony. Consistent with the testimony of the DI and A.W., B.B. testified that she registered with SMG by going to its Web site and completing its new patient registration form and submitting a copy of her driver's license and medical records. See ALJ at 25-26. B.B.'s medical record indicated that she had been treated by a chiropractor for “tennis elbow” with heat therapy and “electrolysis.” Tr. 123, 132. The medical record did not indicate that B.B. had been treated with controlled substances, and the chiropractor had not prescribed controlled substances for her condition. See ALJ at 26 (citing Tr. 131-32). In completing SMG's “repeat patient medical history form,” B.B. requested a prescription for hydrocodone 10/500 to treat her condition. See id. (citing Tr. 135-36). B.B. then selected a time for her consultation with Respondent. See id. (citing Tr. 137). After the first consultation, Respondent prescribed 90 hydrocodone tablets for B.B. See id. at 27 (citing Tr. 140 & 142). 4 B.B. had three consultations with Respondent, each of which lasted for two to “three minutes tops.” Tr. 139. According to B.B., the consultations involved Respondent asking her “what can I do for you, what do you need?” Id. While Respondent and B.B. did discuss her condition, id. at 144, after B.B. told Respondent what she wanted, Respondent “always ask[ed] is there anything else I can do for you or get for you?” Id. at 139. The ALJ further found that “B.B. credibly testified that every time she talked to the Respondent, she got the controlled substances she requested.” ALJ at 27 (citing Tr. 147). 4 TDI Pharmacy initially filled the prescriptions B.B. obtained from Respondent. ALJ at 28 (citing Tr. 147-48). At some point thereafter, CMC started filling the prescriptions B.B. obtained from Respondent. See id. (citing Tr. 147-48). B.B. testified that following the first consultation she found out from an Internet message board that Respondent was giving other persons prescriptions for 120 hydrocodone tablets. Id. (citing Tr. 142-43). B.B. subsequently asked Respondent to increase her prescription and Respondent did so. Id. (citing Tr. 142-43). B.B. testified that she never saw Respondent “face to face,” that Respondent never performed a physical exam on her, and never took a complete medical history. Tr. 125. Moreover, Respondent never ordered any medical tests (such as an x-ray or mri) or asked her to submit any previous test results. Id. at 125-26. Respondent also did not discuss with B.B. alternative treatments or the benefits and risks of taking controlled substances. Id. at 126. Nor did Respondent discuss with B.B. a timetable for her use of controlled substances. Id. Respondent also never asked B.B. if she was obtaining prescriptions from another doctor or using other Internet pharmacies. Id. at 180. Finally, Respondent never asked B.B. whether she had previously been addicted. Id. B.B. paid SMG a fee of $ 120.00 for these consultations. Id. at 133. B.B. further testified that Respondent never gave her a paper prescription that she could take to another pharmacy. Id. at 148-49. B.B. testified that at the same time that she was obtaining prescriptions from Respondent, she was able to obtain hydrocodone from ten other Internet pharmacies and was taking “up to 40” hydrocodone tablets a day. Id. at 145. B.B. became addicted, “contemplate[ed] suicide,” and could not function without the drug. Id. at 145-46. She also lost her house and means of transportation and did not have money to care for her children. Id. The Government also called as a witness Mr. B.H., who at the time was incarcerated for possession of a forged instrument and was about to plead guilty to this offense. Tr. 215-16. B.H. also admitted that he had been convicted of two misdemeanor theft offenses, one misdemeanor drug offense, and one felony drug offense for which he was given youthful offender status. Id. at 216-17. Moreover, B.H. testified that in exchange for his testimony in this proceeding, local law enforcement officials had promised not to prosecute him for conduct related to his obtaining controlled substances over the Internet. Id. at 207. B.H. also testified that he had been drug dependent since 1998. Id. at 188. The ALJ credited B.H.'s testimony and I find no reason to disturb this finding. See *Universal Camera Corp* . v. *NLRB* , 340 U.S. 474, 494-96 (1951). B.H. testified that in 2002, he found SMG's Web site while searching the Internet. Tr. 189. B.H. “filled out the paperwork” and faxed to SMG a copy of his driver's license and a medical record that he had obtained from another person. Id. at 189-90. B.H. altered the medical record, which indicated that he had a problem with his L-4 & L-5 disk and suffered from severe anxiety, by placing his name, date of birth and social security number on it. Id. at 190. The record also indicated that B.H. had previously been prescribed Lortab and Xanax. Id. at 191. After obtaining his “patient ID,” B.H. logged on to SMG's Web site and requested hydrocodone and Xanax. Id. at 191-92. He also obtained an appointment for a telephone consultation with Respondent. Id. at 192. SMG did not provide B.H. with a choice of physicians, and throughout his association with SMG, B.H. always dealt with Respondent. Id. B.H. testified that all of his consultations with Respondent followed the same pattern and took “about three or four minutes, maybe, if that.” Id. at 194. According to B.H., Respondent would state that “it says here you need hydrocodone and it said here you need this. He'd write the prescription and you hang up.” Id. B.H. further testified that “I would call up at my certain time and tell [Respondent] what I wanted, and he would say okay. That would be it.” Id. at 196-97. 5 5 B.H. acknowledged on cross-examination that he “probably” asked Respondent to prescribe Oxycontin and Percodan (which contain oxycodone, a Schedule II controlled substance, 21 CFR 1308.12(b)), but Respondent told him he could not prescribe these drugs. Tr. 214-15. Indeed, the ALJ specifically found that “during the initial call, the Respondent and B.H. never discussed B.H.'s medical condition.” ALJ at 31 (citing Tr. 197). During the first consultation, Respondent gave B.H. a prescription for 150 hydrocodone tablets and either 120 Xanax or its generic equivalent alprazolam; B.H. subsequently received these drugs on a monthly basis. Tr. 193. Throughout this period, Respondent never took B.H.'s complete medical history, never met with B.H. and performed a physical exam, never asked B.H. about prior medical tests, and never ordered any medical tests. Id. at 194-95. Respondent also never discussed a treatment plan or alternative treatments. Id. at 195. Nor did he ever discuss with B.H. the benefits and risks of taking controlled substances, or a time table for taking the drugs. Id. at 195-96. Finally, Respondent never asked B.H. whether he was seeing any other doctors, if he was obtaining prescriptions from any other online pharmacies, or asked whether he had ever been addicted to controlled substances. Id. at 196. Other than when B.H. asked for a Schedule II drug, Respondent never refused a request by B.H. for a controlled substance. Id. at 195. B.H. was obtaining controlled substances from other online pharmacies at the same time he was obtaining prescriptions from Respondent. Id. at 208. B.H. sold the hydrocodone he received from Respondent's prescriptions to buy Oxycontin, but took the Xanax. Id. at 207. B.H. never received from Respondent a prescription form that he could take to a pharmacy. Id. at 209. He also showed several other persons how to obtain prescriptions from SMG; these individuals then obtained controlled substances which were prescribed to them by Respondent. Id. at 198-200. B.H. testified that these individuals had not previously obtained controlled substances from a physician for a medical condition. Id. at 202. The Government also called Dr. Richard Weinberg, a physician who is board certified in internal medicine, as well as hospice and palliative medicine. Tr. at 383. Dr. Weinberg testified as an expert in internal medicine. See ALJ at 16. I credit all of his testimony which is summarized as follows. Dr. Weinberg reviewed a list of the prescriptions Respondent issued and that were filled by CMC. See Tr. 386, Gov. Exhs. 28 & 30. He also reviewed various documents related to the DEA DI's obtaining controlled substances prescriptions from Respondent including transcripts of the telephone conversations, the medical “documentation” the DI submitted, and the various SMG Web pages that the DI filled out in order to obtain the prescriptions. Tr. 386. Dr. Weinberg testified that based on the above, Respondent did not establish a valid doctor-patient relationship with the DI and did not conduct an “adequate assessment” or “evaluation” to justify Respondent's prescribing the controlled substances (hydrocodone and Valium) which he did for the DI. Tr. 389. Dr. Weinberg further testified that to establish a valid doctor-patient relationship, “[a] physician must have a direct and immediate observation of the patient,” which “should be person-to-person.” Id. at 393. Dr. Weinberg testified that in treating pain, a physician must obtain a medical history which includes “what the origin of the pain was, the history of it, previous treatments, attempts at physical therapy, and other modalities for treatment of pain.” Id. The physician must further do “a direct physical exam” and create “a plan for further evaluation and treatment [with] reassessment at an appropriate interval.” Id. Moreover, a physician must “inquire as to whether there is a risk of chemical dependency before initiating the use of drugs that are commonly associated with addiction, including all opiates and benzodiazepines.” Id. at 400. As for treating anxiety, Dr. Weinberg testified that the physician must take “an extensive history to understand the appropriate background, whether the patient is experiencing any depression, any psycho-social stresses, [has] a history of panic disorder, et cetera.” Id. at 393. According to Dr. Weinberg, this “can only be done on a face-to-face basis and, again, requires that a patient be followed over time.” Id. Dr. Weinberg further testified that he has “been involved with addiction medicine throughout [his] career,” id. at 403, that he was currently “the head of the addiction task force” at a hospital and that he is familiar with some of the street terminology used by drug dependent persons. Id. at 403-04. More specifically, Dr. Weinberg testified that “Vikes” is street talk for Vicodin, id. at 402, and that if he received a questionnaire which indicated that a patient had been taking “Vikes” and was told by the patient that he got the drug from a friend (as the DI did in obtaining prescriptions from Respondent), he would not prescribe the drug. Id. at 404. Dr. Weinberg added that “obtaining controlled substances from acquaintances [or] friends [is] a warning sign that this is someone who is chemically dependent or certainly involved with illicit use.” Id. Dr. Weinberg further added that a sedating medication such as Valium should not be prescribed to a person who reports that he has anxiety from hauling dynamite. Id. at 405. Dr. Weinberg also reviewed the prescription data seized from CMC. While acknowledging that there was “a scattering of other prescriptions,” Dr. Weinberg noted that “[i]n every instance in this database, patients [were] prescribed substantial quantities of short-acting opiates * * * and, in most cases, patients are also prescribed benzodiazepine[s], either diazepam or alprazolam.” Id. at 393-94. According to Dr. Weinberg, “[i]t would be a highly unusual relationship with a set of patients that every single patient with whom you have an encounter would be prescribed these agents.” Id. at 394. Moreover, it would also be “extraordinary to have up to 120 patients receive prescriptions in a single day.” Id. According to Dr. Weinberg, “[i]t's impossible for any clinician to have an appropriate evaluation of that volume of patients in any short period of time.” Id. The Government also called as a witness Dr. James M. Tolliver, a DEA employee who holds a Ph.D. in Pharmacology. See Gov. Ex. 34. Dr. Tolliver has also served as a scientific advisor to the World Health Organization
(WHO)and has been involved in the preparation of various documents used by the WHO in recommending that various drugs of abuse be controlled under international conventions. See id. at 2. Specific to this case, Dr. Tolliver explained that hydrocodone is “a narcotic drug similar to morphine,” which produces euphoria and “has a potency similar to morphine.” Tr. 275. Hydrocodone is “a substitute for heroin” and “heroin users like” the drug. Id. at 275-76. Moreover, over time hydrocodone users develop a tolerance to the drug and thus require increased doses “to produce the same effect.” Id. at 277. In 2002, the abuse of hydrocodone combination products resulted in “over 27,000 emergency room episodes.” Id. at 279. Hydrocodone was thus among “the top six to seven controlled substances” found in persons seeking treatment for drug abuse in emergency rooms. Id. Dr. Tolliver also testified regarding the abuse of benzodiazepines such as alprazolam (Xanax) and diazepam (Valium). According to Dr. Tolliver, “[a]lprazolam is the number one prescription drug that is abused by our youth in the United States.” Id. at 283. Alprazolam was number five on the list of drugs most frequently abused by persons who require treatment in emergency rooms. Id. at 284. Moreover, other benzodiazepines such as diazepam also rank in the top twenty of drugs abused by persons requiring treatment in emergency rooms. Id. Furthermore, benzodiazepines “severely impact[]” a user's psychomotor control, thus affecting the ability to drive or operate machinery. 6 Id. at 285. 6 Respondent neither testified on his own behalf nor put on any witnesses. Discussion At the outset, this case presents a substantial question as to whether this proceeding is moot. Respondent's registration expired on March 31, 2006, after the hearing in this case and the ALJ's issuance of her decision. Moreover, Respondent apparently has not submitted a renewal application. Under DEA precedent, “[i]f a registrant has not submitted a timely renewal application prior to the expiration date, then the registration number expires and there is nothing to revoke.” *Ronald J. Riegel* , 63 FR 67132, 67133 (1998). In *Riegel* , the registrant sought a hearing upon being served with a Show Cause Order; his registration, however, expired several months before the hearing was held and the registrant did not submit a renewal application. Id. at 67132. Following the hearing in *Riegel* , the Government discovered that the respondent's registration had expired and moved to either order the respondent to submit a renewal application or to terminate the proceeding as moot. Id. The respondent did not respond to the motion. Id. The ALJ, however, denied the motion concluding that the proceeding was not moot under existing agency precedent. Id. While my predecessor concluded that the matter was “moot because there [was] no viable registration to revoke,” he nonetheless reasoned that “it would be unfair to * * * terminate the proceedings without resolution” because the Government's position was based on a “deviation” from agency precedent and was not raised until after the hearing was held. Id. at 67133. He thus decided the case on the merits and ordered the revocation of the respondent's registration. *See id.* at 67133-35. Having carefully considered this precedent, as well as authorities discussing the mootness doctrine in both the judicial and administrative settings, I conclude that Riegel is not controlling. “ ‘[A]n administrative agency is not bound by the constitutional requirement of a “case or controversy” that limits the authority of article III courts to rule on moot issues.’ ” *RT Communications, Inc* . v. *FCC* , 201 F.3d 1264, 1267 (10th Cir. 2000) (quoting *Climax Molybdenum Co* . v. *Secretary of Labor* , 703 F.2d 447, 451 (10th Cir. 1983)); see also *Metropolitan Council of NAACP Branches* v. *FCC* , 46 F.3d 1154, 1161 (D.C. Cir. 1995) (“case or controversy requirement” does not apply to an agency). As the Tenth Circuit has explained, “an agency has ‘substantial discretion’ to decide whether to hear issues which might be precluded by mootness” if litigated in an Article III court. *RT Communications* , 201 F.3d at 1267 (quoting *Climax Molybdenum* , 703 F.2d at 451). Moreover, my decision to issue a final order in this matter finds ample support in the mootness doctrine applied by the courts. Under long settled principles, “ ‘a defendant's voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice,’ ” because “ ‘if it did, the courts would be compelled to leave “[t]he defendant * * * free to return to his old ways.’ ” *Friends of the Earth, Inc.* , v. *Laidlaw Env. Servs., Inc.* , 528 U.S. 167, 189
(2000)(quoting *City of Mesquit* e v. *Aladdin's Castle, Inc* ., 455 U.S. 283, 289 & n.10
(1982)(quoting United States v. W.T. Grant Co., 345 U.S. 629, 632 (1953))). Most significantly, the standard “for determining whether a case has been mooted by the defendant's voluntary conduct is stringent: ‘A case might become moot if subsequent events made it absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.’ ” *Friends of the Earth* , 528 U.S. at 189 (quoting *United States* v. *Concentrated Phosphate Export Assn.* , 393 U.S. 199, 203 (1968)). Finally, a case remains a live dispute when “collateral consequences” attach to a proceeding which otherwise would be moot. *In re Surrick* , 338 F.3d 224, 230 (3d Cir. 2003). As several courts have noted in cases involving sanctions against licensed professionals such as attorneys, even a temporary suspension followed by a reinstatement does not moot a challenge to the initial suspension because the action “is harmful to a [professional's] reputation, and ‘the mere possibility of adverse collateral consequences is sufficient to preclude a finding of mootness.’ ” Id. (quoting *Dailey* v. *Vought Aircraft Co* ., 141 F.3d 224, 228 (5th Cir. 1998)). See also id. (quoting *Kirkland* v. *National Mortgage Network, Inc.* , 884 F.2d 1367, 1370 (11th Cir. 1989) (“attorney's appeal of the revocation of his pro hac vice status was not moot following dismissal of the underlying case because ‘the brand of disqualification on grounds of dishonesty and bad faith could well hang over his name and career for years to come’ ”). Relying on these cases for guidance, I hold that this case is not moot. As an initial matter, I note that neither party has moved to dismiss the proceeding on mootness grounds. Moreover, while Respondent has not submitted a renewal application, he has submitted no evidence (such as a declaration) establishing that he intends to permanently cease the practice of medicine. Cf. 21 CFR 1301.52(a) (“Any registrant who * * * discontinues business or professional practice shall notify the Administrator promptly of such fact.”). Indeed, under DEA's regulations, Respondent can apply for a new registration at any time and could re-engage in the practice at issue here. It is thus not “ ‘absolutely clear that [Respondent's] allegedly wrongful behavior could not reasonably be expected to recur.’ ” *See, e.g., Friends of the Earth* , 528 U.S. at 189 (quoting *Concentrated Phosphate* , 393 U.S. at 203). Moreover, the Government (as did Respondent) expended substantial resources in litigating this case; the ALJ also committed an extensive amount of time to preparing her decision. To dismiss this proceeding without making the findings which the evidence in this case compels would prejudice the public interest. I thus conclude that Respondent's failure to submit a renewal application does not preclude the entry of a final order in this matter. Furthermore, this case is not moot because of the collateral consequences that attach to the immediate suspension of Respondent's registration. As explained above, the immediate suspension was imposed based on my preliminary finding that Respondent's continued registration “would constitute an imminent danger to the public health and safety” because he was diverting large amounts of controlled substances. Show Cause Order at 10. It is indisputable that when the Agency is forced to take this extraordinary step to protect public health and safety, a registrant's reputation is harmed. Moreover, it is likely that Respondent would be required to report the Immediate Suspension were he to apply for a renewal of his state medical licenses. Finally, were Respondent to apply for a new DEA registration at some point in the future, he would be required to disclose the suspension that is at issue here. See DEA Form-224, Section 5; DEA Form-224A, Section 4. 7 7 Furthermore, pursuant to 21 U.S.C. 824(f), DEA personnel who serve an immediate suspension are directed to seize and place under seal all controlled substances possessed by a registrant. See, e.g., Show Cause Order at 10. Under federal law, title to any such property is dependent upon the outcome of the proceeding. 21 U.S.C. 824(f). Thus, while there is no evidence in the record as to whether DEA investigators seized any controlled substances when they served the order on Respondent, most cases which begin with the issuance of an immediate suspension present this additional collateral consequence. As the forgoing demonstrates, the issuance of an immediate suspension creates collateral consequences beyond those that are present when the Government serves a Show Cause Order but allows a registrant to continue to handle controlled substances throughout the litigation. Therefore, I conclude that *Riegel* is not controlling and that this case is not moot. I thus proceed to analyze the merits of this case under the standards of section 304. The Statutory Factors Section 304(a) of the Controlled Substances Act provides that a registration to “dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making the public interest determination, the Act requires the consideration of the following factors:
(1)The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2)The applicant's experience in dispensing * * * controlled substances.
(3)The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4)Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5)Such other conduct which may threaten the public health and safety. Id. “[T]hese factors are * * * considered in the disjunctive.” *Robert A. Leslie, M.D.,* 68 FR 15227, 15230 (2003). I “may rely on any one or a combination of factors, and may give each factor the weight [I] deem[] appropriate in determining whether a registration should be revoked.” Id. Moreover, case law establishes that I am “not required to make findings as to all of the factors.” *Hoxie* v. *DEA* , 419 F.3d 477, 482 (6th Cir. 2005); see also *Morall* v. *DEA* , 412 F.3d 165, 173-74 (D.C. Cir. 2005). Finally, section 304(d) provides that “[t]he Attorney General may, in his discretion, suspend any registration simultaneously with the institution of proceedings under this section, in cases where he finds that there is an imminent danger to the public health or safety.” 21 U.S.C. 824(d). In this case I conclude that Factors Two, Four and Five establish that allowing Respondent to handle controlled substances would be inconsistent with the public interest. Analyzing these factors, I also conclude that Respondent's conduct created “an imminent danger to public health or safety,” id., and thus sustain the immediate suspension of his registration. Factors Two and Four—Respondent's Experience In Dispensing Controlled Substances and Respondent's Compliance With Applicable Laws As the ALJ noted, the key issue in this case is whether the prescriptions Respondent issued to the persons who were referred to him through the SMG Web site complied with Federal law. As explained below, the evidence conclusively demonstrates that Respondent used his prescribing authority to act as a drug pusher; the only difference between him and a street dealer was that he did not physically distribute the drugs to SMG's clients. Under DEA regulations, a prescription for a controlled substance is not “effective” unless it is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). This regulation further provides that “an order purporting to be a prescription issued not in the usual course of professional treatment * * * is not a prescription within the meaning and intent of [21 U.S.C. 829] and * * * the person issuing it, shall be subject to the penalties provided for violations of the provisions of law related to controlled substances.” Id. As the Supreme Court recently explained, “the prescription requirement * * * ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse. As a corollary, [it] also bars doctors from peddling to patients who crave the drugs for those prohibited uses.” *Gonzales* v. *Oregon* , 126 S.Ct. 904, 925
(2006)(citing *Moore* , 423 U.S. 122, 135 (1975)). It is fundamental that a practitioner must establish a bonafide doctor-patient relationship in order to be acting “in the usual course of * * * professional practice” and to issue a prescription for a “legitimate medical purpose.” As Doctor Weinberg, the Government's expert explained, existing professional standards require that to establish a bonafide doctor-patient relationship, a physician must first obtain a medical history which establishes the origin of the patient's complaint, its history and previous attempts to treat the condition. Tr. 393, 400. Moreover, the physician must conduct a physical examination which involves the “direct and immediate observation of the patient” and should be on an in-person basis. Id. at 393. Furthermore, before prescribing controlled substances, the physician must determine whether there is a risk of chemical dependency or the patient is engaged in the illicit use of drugs. Id. at 400. The physician should also develop “a plan for further evaluation and treatment [with] reassessment at an appropriate interval.” Id. at 393. The American Medical Association's *Guidance for Physicians on Internet Prescribing* explains the “components” of a bonafide doctor-patient relationship. Gov. Ex. 48. The AMA instructs that a “physician shall”: i. obtain a reliable medical history and perform a physical examination of the patient, adequate to establish the diagnosis for which the drug is being prescribed and to identify underlying conditions and/or contraindications to the treatment recommended/provided; ii. have sufficient dialogue with the patient regarding treatment options and the risks and benefits of treatment(s); iii. as appropriate, follow up with the patient to assess the therapeutic outcome; iv. maintain a contemporaneous medical record that is readily available to the patient and * * * to his * * * other health care professionals; and v. include the electronic prescription information as part of the patient medical record. Id . To similar effect are the guidelines issued by the Federation of State Medical Boards of the United States, Inc. See Gov. Ex. 50 (Model Guidelines for the Appropriate use of the Internet in Medical Practice). According to the Guidelines, “[t]reatment and consultation recommendations made in an online setting, including issuing a prescription via electronic means, will be held to the same standards of appropriate practice as those in traditional (face-to-face) settings. *Treatment, including issuing a prescription, based solely on an online questionnaire or consultation does not constitute an acceptable standard of care.* ” Id. at 4 (emphasis added). Cf. DEA, Dispensing and Purchasing Controlled Substances over the Internet, 66 FR 21181, 21183
(2001)(guidance document) (“Completing a questionnaire that is then reviewed by a doctor hired by the Internet pharmacy could not be considered the basis for a doctor/patient relationship.”). 8 8 The guidance document reflects this Agency's understanding of what constitutes a bonafide doctor-patient relationship under state laws and existing professional standards. 66 FR 21182-83. Under the standards of the medical profession, it is clear that Respondent did not establish a bonafide doctor-patient relationship with any of the four material witnesses in this case and thus, none of the prescriptions he issued to them complied with federal law. Respondent never obtained a reliable medical history from these persons—indeed, in this case there is substantial evidence that he simply accepted whatever documents were provided by these individuals without verifying their validity. In doing so, he ignored the potential for fraud inherent in the scheme, which was obvious in light of the fact that SMG allowed its “patients” to request a particular drug. Most significantly, he did not physically examine any of these four persons, direct that they be examined by another physician, or order medical testing to verify their reported medical complaints. Furthermore, he did not discuss with any of these persons the existence of alternative treatments, generally failed to discuss the risks/benefits of taking the various controlled substances he prescribed, never developed a timetable for using controlled substances or a treatment plan, and never attempted to determine whether any of these persons had a history of addiction to the drugs or were obtaining them from other sources. It is thus indisputable that none of the prescriptions Respondent issued for these four persons were for a legitimate medical purpose. Indeed, there is ample evidence suggesting that Respondent knew that his “patients” were seeking the drugs to abuse them. Several witnesses testified that they requested specific drugs. Moreover, at least three of the witnesses stated that during their conversations with Respondent, he would ask them whether there was anything else he could do for them. This is not the type of question that a physician normally asks a patient during the course of providing medical treatment. Indeed, several of the witnesses testified that they interpreted Respondent's question as an offer to supply additional controlled substances. See Tr. 301 (testimony of DI); id. at 140 (testimony of B.B.). The evidence in this case further demonstrates the danger to public health and safety created by Respondent and other Internet prescribers. B.B. testified that while she was obtaining controlled substances from Respondent and CMC, she was also able to obtain them from ten other Internet pharmacies. B.B. acknowledged that she was taking as many as 40 hydrocodone tablets a day, that she became addicted, and that she considered suicide. Relatedly, B.H. testified that he sold the hydrocodone he obtained from Respondent's prescriptions in order to buy Oxycontin, a stronger and more addictive controlled substance. He also related that he showed several acquaintances how to obtain controlled substances from SMG, which were prescribed to them by Respondent. B.H. further testified that these persons had not previously been prescribed controlled substances for a medical condition. He (along with the DI) also testified to the ease of obtaining their prescriptions by submitting fraudulent medical records. Obviously, Respondent's prescribing practices invited fraud. Cf. 66 FR at 21183 (“A consumer can more easily provide false information in a questionnaire than in a face-to-face meeting with a doctor.”). The prescription data further supports the conclusion that Respondent was engaged in drug dealing rather than the legitimate practice of medicine. Among other things, the evidence suggests that in a single day (on or about May 10, 2004), Respondent issued as many as 358 prescriptions for controlled substances. The assembly line nature of this activity refutes any suggestion that Respondent was engaged in the legitimate practice of medicine. See Tr. 394 (testimony of Dr.Weinberg) (noting that it would be “extraordinary to have up to 120 patients receive prescriptions in a single day”). The ALJ also reasoned that “the sheer volume of the Respondent's prescriptions also puts into question his medical practices.” ALJ at 40-41. As found above, during the first four and half months of 2004 (before CMC was shut down), Respondent issued and CMC filled 14,219 prescriptions for hydrocodone, 2,519 prescriptions for alprazolam, and 1,806 prescriptions for diazepam. According to the ALJ, this Agency has previously held “that the numbers of prescriptions for controlled substances, alone, do not create a regulatory violation.” See ALJ at 41 (citing *Paul W. Saxton* , 64 FR 25073 (1999)). I need not decide, however, whether Saxton supports this broad proposition. As the ALJ also noted, there the respondent justified his prescribing by presenting evidence as to the medical needs of his patients. See 64 FR 25075-76. Here, by contrast, Respondent presented no such evidence. Moreover, the geographical location of SMG's customers demonstrates the substantial likelihood that most, if not all, of the prescriptions were issued by Respondent without the establishment of a bonafide doctor-patient relationship and while acting outside of the usual course of professional practice. Indeed, one of the Government's exhibits (# 25) shows that Respondent prescribed to persons in every State as well as the District of Columbia. Perhaps some of these patients actually visited Respondent at his Florida residence, but given his lack of licensure in that state, as well as the cost and time involved for patients to travel there, the nature of SMG's scheme (which offered the ability to obtain prescriptions based on a short telephone conversation), and the absence of any medical records during the search of his residence, it is most improbable that any “patients” did. Respondent also violated the CSA for the additional reason that he did not possess lawful authority to prescribe controlled substance in Florida, the State in which he was practicing medicine. He also did not hold a DEA registration authorizing him to dispense from his Florida address. The CSA defines the term “practitioner” as “a physician . . . licensed, registered, or otherwise permitted, by the United States *or the jurisdiction in which he practices* . ., to distribute, dispense . . . [or] administer . . . a controlled substance in the course of professional practice.” 21 U.S.C. 802(21) (emphasis added). Under the CSA, the term “dispense” includes the act of “prescribing” a controlled substance. Id. § 802(10). As the ALJ noted, this Agency has consistently interpreted the CSA as prohibiting a practitioner from handling controlled substances unless authorized to do so under the law of the state in which he engages in professional practice. See ALJ at 37-38 (collecting cases). See also Sheran Arden Yeates, 71 FR 39130, 39131 (2006). Also relevant to this case is section 302 of the CSA, which expressly provides that “[a] separate registration shall be required at each principal place of business or professional practice where the applicant . . . distributes, or dispenses controlled substances.” 21 U.S.C. 822(e). Here, there is substantial evidence that Respondent issued the prescriptions from his residence in Florida. This includes the addresses Respondent used in renewing his N.J. and N.Y. medical licenses, the address Respondent used in his June 28, 2003 correspondence to SMG's head, the address used on the Rx forms found during the search of CMC, the Florida phone number which the DI used for his consultation, and the address at which Respondent was living when the Show Cause Order and Immediate Suspension was served on him. Finally, there is also the evidence that Respondent had not practiced at the address of his DEA registered location for at least four years prior to the service of the Show Cause Order. Respondent did not, however, hold a Florida medical license and did not possess a DEA registration for his Florida address. See Tr. 236; Gov. Ex. 1 & 2. His prescribing thus violated the CSA for these reasons as well. I thus conclude that Respondent's experience in dispensing controlled substances and his history of non-compliance with applicable laws amply demonstrate that Respondent could not be entrusted with a DEA registration. I further affirm the preliminary finding that Respondent's conduct constituted an “imminent danger to the public health or safety,” 21 U.S.C. 824(d), and justified the immediate suspension of his registration. Factor Five—Other Conduct Which Threatens Public Health and Safety The ALJ also found this factor applicable because Respondent “failed to maintain adequate patient records.” ALJ at 41. As the ALJ explained, when the Government executed the search warrant at Respondent's residence, no patient records were found notwithstanding that he issued a substantial number of prescriptions from this address. Id. at 42. I agree with the ALJ's conclusion. As explained above under Factor Two, under existing professional guidelines, a physician should “maintain a contemporaneous medical record.” Gov. Ex. 48. Documenting the prescribing of controlled substances would seem to be essential to a physician's effective monitoring of a patient to ensure that the patient is not abusing the drugs or has become addicted to them. Furthermore, it seems clear that when a patient with a legitimate medical complaint needs to see a specialist, the specialist needs accurate information pertaining to the patient's use of controlled substances before recommending treatment options. Finally, if a person engages in “doctor shopping,” accurate records could help the new doctor assess the legitimacy of the person's medical complaint. I thus conclude that Respondent's failure to maintain patient records constitutes conduct that threatens public health and safety. *See James S. Bischoff* , 70 FR 12734 (2005). It is not surprising that Respondent did not maintain patient records because he was not engaged in anything remotely bordering on the legitimate practice of medicine. Rather, Respondent was a drug dealer. As I have previously noted, “[l]egally, there is absolutely no difference between the sale of an illicit drug on the street and the illicit dispensing of a licit drug by means of a physician's prescription.” *Mario Avello, M.D.* , 70 FR 11695, 11697
(2005)(citing *Floyd A. Santner, M.D.* , 55 FR 37581 (1990)). The use of a DEA registration to engage in such conduct manifestly creates “an imminent danger to the public health or safety” and justifies the immediate suspension of a registration. 21 U.S.C. 824(d). Order Pursuant to the authority vested in me by 21 U.S.C. 824, as well as 28 CFR 0.100 & 0.104, the order of immediate suspension of DEA Certificate of Registration, BL6779005, issued to William R. Lockridge, M.D., is hereby affirmed. The Office of Diversion Control is further directed to cancel Respondent's DEA number. This order is effective January 26, 2007. Dated: December 8, 2006. Michele M. Leonhart, Deputy Administrator. [FR Doc. E6-22105 Filed 12-26-06; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-59,941 and TA-W-59,941A] Caraustar Mill Group, Inc., Rittman Paperboard Division, Rittman, OH, Including Employees of Caraustar Mill Group, Inc., Rittman Paperboard Division, Rittman, OH, Located in Sprague, CT; Amended Certification Regarding Eligibility To Apply for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance In accordance with Section 223 of the Trade Act of 1974 (19 U.S.C. 2273), and Section 246 of the Trade Act of 1974 (26 U.S.C. 2813), as amended, the Department of Labor issued a Certification Regarding Eligibility to Apply for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance on September 20, 2006, applicable to workers of Caraustar Mill Group, Inc., Rittman Paperboard Division, Rittman, Ohio. The notice will soon be published in the **Federal Register** . At the request of a company official, the Department reviewed the certification for workers of the subject firm. New information shows that worker separations have occurred involving employees of the Rittman, Ohio facility of Caraustar Mill Group, Inc., Rittman Paperboard Division located in Sprague, Connecticut. Mr. Tom Loeb and Mr. Bill Clark provided technical service and sales function services for the production of coated recycled boxboard produced by the subject firm. Based on these findings, the Department is amending this certification to include employees of the Rittman, Ohio facility of Caraustar Mill Group, Inc., Rittman Paperboard Division located in Sprague, Connecticut. The intent of the Department's certification is to include all workers of Caraustar Mill Group, Inc., Rittman Paperboard Division, Rittman, Ohio who were adversely affected by increased company imports. The amended notice applicable to TA-W-59,941 is hereby issued as follows: ”All workers of Caraustar Mill Group, Inc., Rittman Paperboard Division, Rittman, Ohio (TA-W-59,941), and including employees located in Sprague, Connecticut (TA-W-59,941A), who became totally or partially separated from employment on or after August 17, 2005, through September 20, 2008, are eligible to apply for adjustment assistance under Section 223 of the Trade Act of 1974 and are also eligible to apply for alternative trade adjustment assistance under Section 246 of the Trade Act of 1974.” Signed at Washington, DC this 18th day of December, 2006. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E6-22130 Filed 12-26-06; 8:45 am] BILLING CODE 4510-30-P DEPARTMENT OF LABOR Employment and Training Administration Notice of Determinations Regarding Eligibility to Apply for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance In accordance with Section 223 of the Trade Act of 1974, as amended (19 U.S.C. 2273) the Department of Labor herein presents summaries of determinations regarding eligibility to apply for trade adjustment assistance for workers (TA-W) number and alternative trade adjustment assistance
(ATAA)by (TA-W) number issued during the period of December 11 through December 15, 2006. In order for an affirmative determination to be made for workers of a primary firm and a certification issued regarding eligibility to apply for worker adjustment assistance, each of the group eligibility requirements of Section 222(a) of the Act must be met. I. Section (a)(2)(A) all of the following must be satisfied: A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated; B. the sales or production, or both, of such firm or subdivision have decreased absolutely; and C. increased imports of articles like or directly competitive with articles produced by such firm or subdivision have contributed importantly to such workers' separation or threat of separation and to the decline in sales or production of such firm or subdivision; or II. Section (a)(2)(B) both of the following must be satisfied: A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated; B. there has been a shift in production by such workers' firm or subdivision to a foreign country of articles like or directly competitive with articles which are produced by such firm or subdivision; and C. One of the following must be satisfied: 1. The country to which the workers' firm has shifted production of the articles is a party to a free trade agreement with the United States; 2. the country to which the workers' firm has shifted production of the articles to a beneficiary country under the Andean Trade Preference Act, African Growth and Opportunity Act, or the Caribbean Basin Economic Recovery Act; or 3. there has been or is likely to be an increase in imports of articles that are like or directly competitive with articles which are or were produced by such firm or subdivision. Also, in order for an affirmative determination to be made for secondarily affected workers of a firm and a certification issued regarding eligibility to apply for worker adjustment assistance, each of the group eligibility requirements of Section 222(b) of the Act must be met.
(1)Significant number or proportion of the workers in the workers' firm or an appropriate subdivision of the firm have become totally or partially separated, or are threatened to become totally or partially separated;
(2)the workers' firm (or subdivision) is a supplier or downstream producer to a firm (or subdivision) that employed a group of workers who received a certification of eligibility to apply for trade adjustment assistance benefits and such supply or production is related to the article that was the basis for such certification; and
(3)either—(A) the workers' firm is a supplier and the component parts it supplied for the firm (or subdivision) described in paragraph
(2)accounted for at least 20 percent of the production or sales of the workers' firm; or
(B)a loss or business by the workers' firm with the firm (or subdivision) described in paragraph
(2)contributed importantly to the workers' separation or threat of separation. In order for the Division of Trade Adjustment Assistance to issue a certification of eligibility to apply for Alternative Trade Adjustment Assistance
(ATAA)for older workers, the group eligibility requirements of Section 246(a)(3)(A)(ii) of the Trade Act must be met. 1. Whether a significant number of workers in the workers' firm are 50 years of age or older. 2. Whether the workers in the workers' firm possess skills that are not easily transferable. 3. The competitive conditions within the workers' industry ( *i.e.* , conditions within the industry are adverse). Affirmative Determinations for Worker Adjustment Assistance The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination. The following certifications have been issued. The requirements of Section 222(a)(2)(A) (increased imports) of the Trade Act have been met. *None* . The following certifications have been issued. The requirements of Section 222(a)(2)(B) (shift in production) of the Trade Act have been met. *TA-W-60,465; Emerson electric Company, Appliance Solutions Div., Switches Department, Paragould, AR: November 20, 2005.* *TA-W-60,410; Ames True Temper, Formerly, Union Tools, Delaware, OH: November 10, 2005.* The following certifications have been issued. The requirements of Section 222(b) (supplier to a firm whose workers are certified eligible to apply for TAA) of the Trade Act have been met. *None.* The following certifications have been issued. The requirements of Section 222(b) (downstream producer for a firm whose workers are certified eligible to apply for TAA based on increased imports from or a shift in production to Mexico or Canada) of the Trade Act have been met. *None.* Affirmative Determinations for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination. The following certifications have been issued. The requirements of Section 222(a)(2)(A) (increased imports) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *TA-W-60,250; Senco Products, Inc., Plant 1, Cincinnati, OH: February 6, 2006.* *TA-W-60,250A; Senco Products, Inc., Plant 2, Cincinnati, OH: February 6, 2006.* *TA-W-60,381; CEP Products, Canton, OH: November 6, 2005.* *TA-W-60,462; St. Louis Braid Co., St. Louis, MO: November 21, 2005.* *TA-W-60,467; Hubbell Lighting, Formerly Know as Spaulding Lighting, Outdoor and Industrial, Cincinnati, OH: November 20, 2005.* *TA-W-60,472; Camillus Cutlery Co., Camillus, NY: November 16, 2005.* *TA-W-60,513; Cadence Innovation, LLC, Injection Tool Construction, Secondary Equipment, Almont, MI: November 27, 2005.* *TA-W-60,528; Sherwood Harsco Gasserv, Niagara Falls, NY: December 4, 2005.* *TA-W-60,246; Weyerhaeuser, Cellulose Fiber Div., SRI Technologies, Cosmopolis, WA: October 12, 2005.* *TA-W-60,360; Yakima Resources, LLC, Yakima, WA: October 31, 2005.* *TA-W-60,443; Vacumet Corporation, Wayne, NJ: November 14, 2005.* *TA-W-60,457; NewPage Corporation, Luke Paper Company, Luke, MD: November 20, 2005.* *TA-W-60,275; Statton Furniture, Hagerstown, MD: October 23, 2005.* *TA-W-60,367; Ford Motor Company, Norfolk Assembly Plant, Vehicle Operations, Norfolk, VA: October 31, 2005.* *TA-W-60,435; Ford Motors Company, Twin Cities Assembly Plant, Vehicle Operations, St. Paul, MN: November 14, 2005.* The following certifications have been issued. The requirements of Section 222(a)(2)(B) (shift in production) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *TA-W-60,385; Maxtor Corporation, Longmont, CO: November 6, 2005.* *TA-W-60,397; Dana Corporation, Thermal Products Division, Sheffield, PA: November 9, 2005.* *TA-W-60,424; Creative Engineered Products, LLC, Corporation Office, Akron, OH: November 7, 2005.* *TA-W-60,448; VF Jeanswear Limited Partnership, Winston Salem, NC: November 14, 2005.* *TA-W-60,428; Boc Edwards, Inc., Philadelphia, PA: November 6, 2005.* *TA-W-60,431; Wolverine Tube, Inc., Jackson, TN: November 6, 2005.* *TA-W-60,522; Michaels of Oregon, SOS Staffing, People Check and Pro People, Meridian, ID: December 1, 2005.* *TA-W-60,554; Spectrum Brands, Inc., Fennimore, WI: December 6, 2005.* The following certifications have been issued. The requirements of Section 222(b) (supplier to a firm whose workers are certified eligible to apply for TAA) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *TA-W-60,376; Creative Engineered Polymer Products, LLC, Carlisle Engineered, Rubber Operation, Alliance Staff, Middlefield, OH: November 7, 2005.* *TA-W-60,425; Steed Sales Company, Inc., Bowdon, GA: November 13, 2005.* *TA-W-60,470; Lanxess Corporation, Deutshland, Textile Processing Chemicals, Wellford, SC: November 10, 2005.* *TA-W-60,510; BHK of America, South Boston, VA: November 29, 2005.* *TA-W-60,526; Hardwick Knitted Fabrics, West Warren, MA: November 30, 2005.* The following certifications have been issued. The requirements of Section 222(b) (downstream producer for a firm whose workers are certified eligible to apply for TAA based on increased imports from or a shift in production to Mexico or Canada) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *None.* Negative Determinations for Alternative Trade Adjustment Assistance In the following cases, it has been determined that the requirements of 246(a)(3)(A)(ii) have not been met for the reasons specified. The Department has determined that criterion
(1)of Section 246 has not been met. Workers at the firm are 50 years of age or older. *None.* The Department has determined that criterion
(2)of Section 246 has not been met. Workers at the firm possess skills that are easily transferable. *TA-W-60,465; Emerson electric Company, Appliance Solutions Div., Switches Department, Paragould, AR.* *TA-W-60,410; Ames True Temper, Formerly, Union Tools, Delaware, OH.* The Department has determined that criterion
(3)of Section 246 has not been met. Competition conditions within the workers' industry are not adverse. *None.* Negative Determinations for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance In the following cases, the investigation revealed that the eligibility criteria for worker adjustment assistance have not been met for the reasons specified. Because the workers of the firm are not eligible to apply for TAA, the workers cannot be certified eligible for ATAA. The investigation revealed that criteria (a)(2)(A)(I.A.) and (a)(2)(B)(II.A.) (employment decline) have not been met. *TA-W-60,544; Schiffer Dental Care Products, LLC, Agawam, MA* . The investigation revealed that criteria (a)(2)(A)(I.B.) (Sales or production, or both, did not decline) and (a)(2)(B)(II.B.) (shift in production to a foreign country) have not been met. *TA-W-60,328; Johnson Controls Battery Group, Inc., Fullerton Distribution Center, Fullerton, CA.* The investigation revealed that criteria (a)(2)(A)(I.C.) (increased imports) and (a)(2)(B)(II.B.) (shift in production to a foreign country) have not been met. *TA-W-60,117; KBA North America, Web Press Div., York, PA* . *TA-W-60,555; Beard Hosiery, Inc., Lenoir, NC.* *TA-W-60,450; Richards Apex, Inc., Morgantown, PA.* The investigation revealed that the predominate cause of worker separations is unrelated to criteria (a)(2)(A)(I.C.) (increased imports) and (a)(2)(B)(II.C) (shift in production to a foreign country under a free trade agreement or a beneficiary country under a preferential trade agreement, or there has been or is likely to be an increase in imports). *None.* The workers' firm does not produce an article as required for certification under Section 222 of the Trade Act of 1974. *TA-W-60,415; United Healthcare Services, Inc., Contract Administration, Chico, CA.* The investigation revealed that criteria of Section 222(b)(2) has not been met. The workers' firm (or subdivision) is not a supplier to or a downstream producer for a firm whose workers were certified eligible to apply for TAA. *None* . I hereby certify that the aforementioned determinations were issued during the period of December 11 through December 15, 2006. Copies of these determinations are available for inspection in Room C-5311, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210 during normal business hours or will be mailed to persons who write to the above address. Dated: December 19, 2006. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E6-22128 Filed 12-26-06; 8:45 am] BILLING CODE 4510-30-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-60,390] Everett Charles Technologies, a Subsidiary of Dover Corporation, FSG San Jose, San Jose, CA; Notice of Termination of Investigation Pursuant to Section 221 of the Trade Act of 1974, as amended, an investigation was initiated on November 14 2006 in response to a petition filed on behalf of workers at Everett Charles Technologies, a subsidiary of Dover Corporation, FSG San Jose, San Jose, California. The petition regarding the investigation has been deemed invalid. One of the petitioners was separated over a year prior to the date of the petition. A petition filed by workers requires three
(3)valid signatures. Consequently, the investigation under this petition has been terminated. Signed at Washington, DC this 15th day of December 2006. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E6-22132 Filed 12-26-06; 8:45 am] BILLING CODE 4510-30-P DEPARTMENT OF LABOR Employment and Training Administration Investigations Regarding Certifications of Eligibility to Apply for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance Petitions have been filed with the Secretary of Labor under Section 221
(a)of the Trade Act of 1974 (“the Act”) and are identified in the Appendix to this notice. Upon receipt of these petitions, the Director of the Division of Trade Adjustment Assistance, Employment and Training Administration, has instituted investigations pursuant to Section 221
(a)of the Act. The purpose of each of the investigations is to determine whether the workers are eligible to apply for adjustment assistance under Title II, Chapter 2, of the Act. The investigations will further relate, as appropriate, to the determination of the date on which total or partial separations began or threatened to begin and the subdivision of the firm involved. The petitioners or any other persons showing a substantial interest in the subject matter of the investigations may request a public hearing, provided such request is filed in writing with the Director, Division of Trade Adjustment Assistance, at the address shown below, not later than January 8, 2007. Interested persons are invited to submit written comments regarding the subject matter of the investigations to the Director, Division of Trade Adjustment Assistance, at the address shown below, not later than January 8, 2007. The petitions filed in this case are available for inspection at the Office of the Director, Division of Trade Adjustment Assistance, Employment and Training Administration, U.S. Department of Labor, Room C-5311, 200 Constitution Avenue, NW., Washington, DC 20210. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance. Appendix—TAA Petitions Instituted Between 12/11/06 and 12/15/06 TA-W Subject Firm (Petitioners) Location Date of Institution Date of Petition 60568 Fiberweb/Reemay, Inc.
(Comp)Bethune, SC 12/11/06 12/08/06 60569 Metaldyne
(Comp)Solon, OH 12/11/06 12/05/06 60570 Sanyo Manufacturing Corporation (State) Forrest City, AR 12/11/06 12/08/06 60571 Caribe General Electric (State) Humacao, PR 12/11/06 12/13/06 60572 Senco Products, Inc.
(Wkrs)Cincinnati, OH 12/11/06 11/16/06 60572A Senco Products, Inc.
(Wkrs)Cincinnati, OH 12/11/06 11/16/06 60573 Teva Pharmaceuticals (State) Cidra, PR 12/11/06 11/22/06 60574 Finegoods Molding, Inc. (State) Carson, CA 12/11/06 11/29/06 60575 Store Room Solutions (State) Conshohocken, PA 12/12/06 12/11/06 60576 Schnadig Corporation
(Comp)Belmont, MS 12/12/06 11/30/06 60577 Dixie Regency
(Wkrs)Hickory, NC 12/12/06 11/28/06 60578 Loud Technologies
(Comp)Whitinsville, MA 12/12/06 12/11/06 60579 Dana Corporation
(Wkrs)Danville, KY 12/12/06 12/06/96 60580 Lear Corporation (IAMAW) Zanesville, OH 12/12/06 11/30/06 60581 Jeanne Skin Care Cosmetics Ltd.
(Wkrs)New York City, NY 12/12/06 11/28/06 60582 Harodite Industries, Inc. (State) Travelers Rest, SC 12/13/06 12/11/06 60583 Pulaski Furniture Corporation
(Comp)Pulaski, VA 12/13/06 12/12/06 60584 Hart and Cooley, Inc. (IAMAW) Holland, MI 12/13/06 12/11/06 60585 A.M. Todd Company
(Comp)Eugene, OR 12/13/06 12/11/06 60586 Dyno Nobel, Inc.
(Comp)Wolf Lake, IL 12/13/06 11/21/06 60587 Federal Mogul/National Seal Division
(USW)Van Wert, OH 12/13/06 12/11/06 60588 Clayson Knitting Company, Inc.
(Comp)Star, NC 12/13/06 12/08/06 60589 Ace Industries, LLC
(Comp)Lineville, AL 12/13/06 12/11/06 60590 Unifi Plant 4
(Comp)Reidsville, NC 12/13/06 12/08/06 60591 Leggett and Platt, Inc.
(Comp)Phoenix, AZ 12/13/06 12/05/06 60592 South End Manufacturing
(Comp)Lawrenceburg, TN 12/13/06 12/06/06 60593 Paul Lavitt Mills, Inc.
(Comp)Lincolnton, NC 12/14/06 12/12/06 60594 Ampac
(Wkrs)Spanish Fork, VT 12/14/06 12/12/06 60595 Berkline Benchcraft, LLC
(Wkrs)Blue Mountain, MS 12/14/06 12/08/06 60596 TTM Technologies (State) Dallas, OR 12/14/06 12/08/06 60597 Mason County Forest Products
(Wkrs)Shelton, WA 12/14/06 11/29/06 60598 Checkpoint Caribbean Ltd. (State) Ponce, PR 12/14/06 01/13/06 60599 E. S. Sutton dba Swak, LLC
(Wkrs)Ridgewood, NY 12/14/06 12/08/06 60600 Creative Apparel
(Wkrs)Eastport, ME 12/14/06 12/12/06 60601 Weyerhaeuser Company (State) Mountain Pine, AR 12/14/06 12/12/06 60602 Photocircuits Corporation
(Comp)Glen Cove, NY 12/14/06 12/02/06 60603 Wetherill Assoc., Inc.
(Wkrs)Royersford, PA 12/14/06 12/07/06 60604 T.A. Service Corporation (State) Newark, NJ 12/15/06 12/01/06 60605 Robetex, Inc.
(Comp)Lumberton, NC 12/15/06 10/02/06 60606 Pfizer, Inc.
(Wrks)Kalamazoo, MI 12/15/06 11/07/06 60607 Stimson Lumber Company
(LPIW)Bonner, MT 12/15/06 12/05/06 60608 Valley Mills
(Comp)Valley Head, AL 12/15/06 12/13/06 60609 Roseburg Forest Products
(Comp)Coquille, OR 12/15/06 12/13/06 60610 Southampton Textile Co.
(Wrks)Emporia, VA 12/15/06 12/05/06 60611 B.M.C.I. Rodgers Molding Corp.
(Wrks)El Paso, TX 12/15/06 12/13/06 60612 Riley Creek Lumber Company
(Wrks)Moyie Springs, ID 12/15/06 12/13/06 60613 Stanley Furniture Company
(Comp)Robbinsville, NC 12/15/06 12/13/06 60614 Weyerhaeuser Company (State) West Memphis, AR 12/15/06 12/13/06 60615 The York Group Metal Casket
(Comp)Marshfield, MO 12/15/06 12/12/06 60616 APW (State) Anaheim, CA 12/15/06 12/14/06 60617 Dana Corporation
(Wrks)Danville, KY 12/15/06 12/04/06 60618 Lockheed Martin
(IUE)Moorestown, NJ 12/15/06 12/07/06 60619 Alcan Packaging, Inc. (State) Lincoln Park, NJ 12/15/06 12/01/06 60620 Point Technologies
(Wrks)Wheeling, IL 12/15/06 11/17/06 60621 Lighting By Renee
(Wrks)West Memphis, AR 12/15/06 12/13/06 60622 Arvin Meritor OE, LLC
(Wrks)Mullins, SC 12/15/06 12/05/06 60623 Holiday Housewares, Inc. (State) Leominster, MA 12/15/06 11/22/06 [FR Doc. E6-22133 Filed 12-26-06; 8:45 am] BILLING CODE 4510-30-P DEPARTMENT OF LABOR Employment and Training Administration Notice of Determinations Regarding Eligibility to Apply for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance In accordance with Section 223 of the Trade Act of 1974, as amended (19 U.S.C. 2273) the Department of Labor herein presents summaries of determinations regarding eligibility to apply for trade adjustment assistance for workers (TA-W) number and alternative trade adjustment assistance
(ATAA)by (TA-W) number issued during the period of December 4 through December 8, 2006. In order for an affirmative determination to be made for workers of a primary firm and a certification issued regarding eligibility to apply for worker adjustment assistance, each of the group eligibility requirements of Section 222(a) of the Act must be met. I. Section (a)(2)(A) all of the following must be satisfied: A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated; B. the sales or production, or both, of such firm or subdivision have decreased absolutely; and C. increased imports of articles like or directly competitive with articles produced by such firm or subdivision have contributed importantly to such workers' separation or threat of separation and to the decline in sales or production of such firm or subdivision; or II. Section (a)(2)(B) both of the following must be satisfied: A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated; B. there has been a shift in production by such workers' firm or subdivision to a foreign country of articles like or directly competitive with articles which are produced by such firm or subdivision; and C. One of the following must be satisfied: 1. The country to which the workers' firm has shifted production of the articles is a party to a free trade agreement with the United States; 2. the country to which the workers' firm has shifted production of the articles to a beneficiary country under the Andean Trade Preference Act, African Growth and Opportunity Act, or the Caribbean Basin Economic Recovery Act; or 3. there has been or is likely to be an increase in imports of articles that are like or directly competitive with articles which are or were produced by such firm or subdivision. Also, in order for an affirmative determination to be made for secondarily affected workers of a firm and a certification issued regarding eligibility to apply for worker adjustment assistance, each of the group eligibility requirements of Section 222(b) of the Act must be met.
(1)Significant number or proportion of the workers in the workers' firm or an appropriate subdivision of the firm have become totally or partially separated, or are threatened to become totally or partially separated;
(2)the workers' firm (or subdivision) is a supplier or downstream producer to a firm (or subdivision) that employed a group of workers who received a certification of eligibility to apply for trade adjustment assistance benefits and such supply or production is related to the article that was the basis for such certification; and
(3)either—
(A)the workers' firm is a supplier and the component parts it supplied for the firm (or subdivision) described in paragraph
(2)accounted for at least 20 percent of the production or sales of the workers' firm; or
(B)a loss or business by the workers' firm with the firm (or subdivision) described in paragraph
(2)contributed importantly to the workers' separation or threat of separation. In order for the Division of Trade Adjustment Assistance to issued a certification of eligibility to apply for Alternative Trade Adjustment Assistance
(ATAA)for older workers, the group eligibility requirements of Section 246(a)(3)(A)(ii) of the Trade Act must be met. 1. Whether a significant number of workers in the workers' firm are 50 years of age or older. 2. Whether the workers in the workers' firm possess skills that are not easily transferable. 3. The competitive conditions within the workers' industry ( *i.e.* , conditions within the industry are adverse). Affirmative Determinations for Worker Adjustment Assistance The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination. The following certifications have been issued. The requirements of Section 222(a)(2)(A) (increased imports) of the Trade Act have been met. None. The following certifications have been issued. The requirements of Section 222(a)(2)(B) (shift in production) of the Trade Act have been met. *TA-W-60,412; Kwikset Corporation, Lever Finishing Department, Denison, TX: October 25, 2005.* The following certifications have been issued. The requirements of Section 222(b) (supplier to a firm whose workers are certified eligible to apply for TAA) of the Trade Act have been met. *None.* The following certifications have been issued. The requirements of Section 222(b) (downstream producer for a firm whose workers are certified eligible to apply for TAA based on increased imports from or a shift in production to Mexico or Canada) of the Trade Act have been met. *None.* Affirmative Determinations for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination. The following certifications have been issued. The requirements of Section 222(a)(2)(A) (increased imports) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *TA-W-60,105; Samtech Corporation, Building, McAllen, TX: September 19, 2005.* *TA-W-60,417; Whirlpool Corporation, Evansville Manufacturing Division, Evansville, IN: November 7, 2005.* *TA-W-60,432; Visteon Systems LLC, North Penn Electronics Facility, Lansdale, PA: November 20, 2005.* *TA-W-60,484; Pioneer Furniture Mfg. Co., Athens, TN: November 25, 2005.* *TA-W-60,487; Staff Mark, Working on Site at Maytag Corp, Searcy, AR: November 27, 2005.* *TA-W-60,153; Saint Gobain Containers, El Monte, CA: September 19, 2005.* *TA-W-60,255; Textron Fastening Systems, Wytheville, VA: October 16, 2005.* *TA-W-60,277A; Creative Engineered Products, Carlisle Engineered, Livonia Div., Livonia, MI: October 23, 2005.* *TA-W-60,362; Blederlack of America Corporation, Cumberland, MD: October 13, 2005.* *TA-W-60,363; Guide Corporation, Technology and Customer Center, Pendleton, IN: November 3, 2005.* *TA-W-60,364; New Page Corporation, Rumford Paper Company, Rumford, ME: November 3, 2005.* *TA-W-60,380; Delta Mills, Inc., Division of Delta Woodside Industries, Beattie Plant, Fountain Inn, SC: December 17, 2006.* *TA-W-60,380A; Delta Mills, Inc., Division of Delta Woodside Industries, Delta Plant #3, Wallace, SC: December 17, 2006.* *TA-W-60,380B; Delta Mills, Inc., Division of Delta Woodside Industries, Pamplico Plant, Pamplico, SC: December 17, 2006.* *TA-W-60,380C; Delta Mills, Inc., Division of Delta Woodside Industries, Sales Office, New York, NY: December 17, 2006.* *TA-W-60,380D; Delta Mills, Inc., Division of Delta Woodside Industries, Sales Office, Atlanta, GA: December 17, 2006.* *TA-W-60,380E; Delta Mills, Inc., Division of Delta Woodside Industries, Sales Office, Dallas, TX: December 17, 2006.* *TA-W-60,380F; Delta Mills, Inc., Division of Delta Woodside Industries, Sales Office, San Francisco, CA: December 17, 2006.* *TA-W-60,440; Excelsior Automobile Electronics Product, Inc., Yonkers, NY: November 14, 2005.* The following certifications have been issued. The requirements of Section 222(a)(2)(B) (shift in production) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *TA-W-60,359; Affinia Group, Brake Parts, Inc., Cuba, MO: October 29, 2005.* *TA-W-60,368; Ross Mould, Inc., Washington, PA: November 20, 2006.* *TA-W-60,382; Guide Anderson LLC, Anderson, IN: November 7, 2005.* *TA-W-60,391; TI Group Automotive Systems, LLC, Washington Courthouse, OH: June 24, 2006.* *TA-W-60,406; A.O. Smith Electrical Products Co., Prototypes Department, Scottsville, KY: November 9, 2005.* *TA-W-60,439; Freudenberg—Nok, Brakes Division, Scottsburg, IN: November 14, 2005.* *TA-W-60,483; AccuMed QCIV Laminating, Inc., formerly known as GCIV Laminating Co., Inc., Danville, PA: November 21, 2005.* *TA-W-60,498; Anvil Knitwear, Inc., Swannanoa, NC: November 28, 2005.* *TA-W-60,501; AET Films, Inc., Terre Haute Plant, Terre Haute, IN: November 20, 2005.* *TA-W-60,374; Alarama Jewelry, Inc., Long Island City, NY: November 3, 2005.* *TA-W-60,396; Suntec Industries, Inc., Glasgow, KY: November 9, 2005.* *TA-W-60,412; Kwikset Corporation, Lever Finishing Department, Denison, TX: October 25, 2005.* *TA-W-60,414; Print, Inc., A Subsidiary of Pitney Bowes, Inc., Gilbert, AZ: November 13, 2005.* *TA-W-60,427; Tyson Bearing Co., Inc., Roller Bearing Co. of America, Inc., Glasgow, KY: October 30, 2005.* The following certifications have been issued. The requirements of Section 222(b) (supplier to a firm whose workers are certified eligible to apply for TAA) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *TA-W-60,395; Wellman, Inc., Johnsonville, SC: October 27, 2005.* *TA-W-60,401; Pimalco, Inc., Alcoa Global Extruded Products, Chandler, AZ: November 9, 2005.* *TA-W-60,468; USR Metals, Inc., Bloomsburg, PA: November 20, 2005.* The following certifications have been issued. The requirements of Section 222(b) (downstream producer for a firm whose workers are certified eligible to apply for TAA based on increased imports from or a shift in production to Mexico or Canada) and Section 246(a)(3)(A)(ii) of the Trade Act have been met. *None.* Negative Determinations for Alternative Trade Adjustment Assistance In the following cases, it has been determined that the requirements of 246(a)(3)(A)(ii) have not been met for the reasons specified. The Department has determined that criterion
(1)of Section 246 has not been met. Workers at the firm are 50 years of age or older. *TA-W-60,412; Kwikset Corporation, Lever Finishing Department, Denison, TX.* The Department has determined that criterion
(2)of Section 246 has not been met. Workers at the firm possess skills that are easily transferable. *None.* The Department has determined that criterion
(3)of Section 246 has not been met. Competition conditions within the workers' industry are not adverse. *None.* Negative Determinations For Worker Adjustment Assistance and Alternative Trade Adjustment Assistance In the following cases, the investigation revealed that the eligibility criteria for worker adjustment assistance have not been met for the reasons specified. Because the workers of the firm are not eligible to apply for TAA, the workers cannot be certified eligible for ATAA. The investigation revealed that criteria (a)(2)(A)(I.A.) and (a)(2)(B)(II.A.) (employment decline) have not been met. *TA-W-60,033; Northern Hardwoods, Woodlands Department, South Range, MI.* *TA-W-60,369; Hoover Precision Products, Inc., East Granby, CT. * *TA-W-60,383; Bernard Chaus, Inc., aka Josephine Chaus, New York, NY.* *TA-W-60,503; Sourcing Connection., Inc., Statesville, NC.* The investigation revealed that criteria (a)(2)(A)(I.B.) (Sales or production, or both, did not decline) and (a)(2)(B)(II.B.) (shift in production to a foreign country) have not been met. *TA-W-60,174; Tyson Fresh Meats, Inc., Beef Division, Wallula, WA. * *TA-W-60,479; Omnova Solutions, Inc., Decorative Products Division, Auburn, PA.* The investigation revealed that criteria (a)(2)(A)(I.C.) (increased imports) and (a)(2)(B)(II.B.) (shift in production to a foreign country) have not been met. *TA-W-59,313; DeFrancesco and Sons, Firebaugh, CA.* *TA-W-59,643; Graham Packaging Company LP, Reinholds Drive Plant, Cincinnati, OH.* *TA-W-60,000; Dyer Specialty Co., Inc., Lake Havasu City, AZ. * *TA-W-60,277; Creative Engineered Products, Carlisle Engineered, Belleville Div., Belleville, MI.* *TA-W-60,282; International Truck and Engine Corp., Indianapolis Engine Plant, Indianapolis, IN.* *TA-W-60,309; Tactical Armor Products, Rutledge, TN.* *TA-W-60,313; Fairystone Fabrics, Burlington, NC.* *TA-W-60,349; Versa Tech Machining, Inc., Union, SC.* *TA-W-60,384; Roanoke Furniture, Columbus, OH.* The investigation revealed that the predominate cause of worker separations is unrelated to criteria (a)(2)(A)(I.C.) (increased imports) and (a)(2)(B)(II.C) (shift in production to a foreign country under a free trade agreement or a beneficiary country under a preferential trade agreement, or there has been or is likely to be an increase in imports). *None.* The workers' firm does not produce an article as required for certification under Section 222 of the Trade Act of 1974. *TA-W-60,361; Meadwestvaco Calmar, Colton, CA.* *TA-W-60,375; Paramount Cards, Huntersville, NC.* *TA-W-60,493; Progressive Logistics, Working On-Site at Continental Tires, Mayfield, KY. * The investigation revealed that criteria of Section 222(b)(2) has not been met. The workers' firm (or subdivision) is not a supplier to or a downstream producer for a firm whose workers were certified eligible to apply for TAA. *None.* I hereby certify that the aforementioned determinations were issued during the period of December 4 through December 8, 2006. Copies of these determinations are available for inspection in Room C-5311, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210 during normal business hours or will be mailed to persons who write to the above address. Dated: December 18, 2006. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E6-22134 Filed 12-26-06; 8:45 am] BILLING CODE 4510-30-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-60,126] Michelin North America Inc., BF Goodrich Tire Manufacturing, Opelika, AL; Notice of Revised Determination on Reconsideration By application dated November 1, 2006, a company official requested administrative reconsideration of the Department of Labor's Notice of Negative Determination Regarding Eligibility to Apply for Worker Adjustment Assistance, applicable to workers and former workers of the subject firm. The Notice of Affirmative Determination Regarding Application for Reconsideration was issued on November 15, 2006 and published in the **Federal Register** on November 24, 2006 (71 FR 67917). The initial determination was based on the Department's finding that the subject firm did not separate or threaten to separate a significant number or proportion of workers as required by the Trade Act of 1974. The subject workers produce passenger and light truck tires and are not separately identifiable by product line. Based on new information provided by the subject firm during the reconsideration investigation, the Department determined that, during the relevant period, a significant number or proportion of the workers at the subject firm was separated. The Department further determines that the subject firm's sales and production of tires declined absolutely during the relevant period. The subject firm's reliance on imported tires increased during the same period that the subject firm's tire production decreased. In accordance with Section 246 the Trade Act of 1974 (26 U.S.C. 2813), as amended, the Department of Labor herein presents the results of its investigation regarding certification of eligibility to apply for Alternative Trade Adjustment Assistance
(ATAA)for older workers. In order for the Department to issue a certification of eligibility to apply for ATAA, the group eligibility requirements of Section 246 of the Trade Act must be met. The Department has determined in this case that the requirements of Section 246 have been met. A significant number of workers at the firm are age 50 or over and possess skills that are not easily transferable. Competitive conditions within the industry are adverse. Conclusion After careful review of the information obtained in the reconsideration investigation, I determine that workers of Michelin North America Inc., BF Goodrich Tire Manufacturing, Opelika, Alabama qualify as adversely affected primary workers under Section 222 of the Trade Act of 1974, as amended. In accordance with the provisions of the Act, I make the following certification: ”All workers of Michelin North America Inc., BF Goodrich Tire Manufacturing, Opelika, Alabama, who became totally or partially separated from employment on or after September 20, 2005 through two years from the date of this certification, are eligible to apply for adjustment assistance under Section 223 of the Trade Act of 1974, and are eligible to apply for alternative trade adjustment assistance under Section 246 of the Trade Act of 1974.” Signed in Washington, DC this 18th day of December, 2006. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E6-22131 Filed 12-26-06; 8:45 am] BILLING CODE 4510-30-P DEPARTMENT OF LABOR Employment and Training Administration [TA-W-59,329] Optical Electro Forming a Division of Oracle Lens Manufacturing, Sola International and Carl Zeiss Vision Clearwater, FL; Amended Certification Regarding Eligibility to Apply for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance In accordance with Section 223 of the Trade Act of 1974 (19 U.S.C. 2273), and Section 246 of the Trade Act of 1974 (26 U.S.C. 2813), as amended, the Department of Labor issued a Certification of Eligibility to Apply for Worker Adjustment Assistance and Alternative Trade Adjustment Assistance on June 1, 2006, applicable to workers of Optical Electro Forming, a division of Oracle Lenses, Clearwater, Florida. The notice was published in the **Federal Register** on June 22, 2006 (71 FR 35949). At the request of the State agency, the Department reviewed the certification for workers of the subject firm. The workers were engaged in the production of optical molds and inserts. New information shows that Optical Electro Forming is a division of Oracle Lens Manufacturing, a division of SOLA International, in turn a division of Carl Zeiss Vision. Workers separated from employment at the subject firm had their wages reported under four separate unemployment insurance
(UI)tax accounts: Optical Electro Forming, Oracle Lens Manufacturing, SOLA International, and Carl Zeiss Vision. Accordingly, the Department is amending the certification to properly reflect this matter. The intent of the Department's certification is to include all workers of Optical Electro Forming and its parent companies, Clearwater, Florida, who were adversely affected by a shift in production to Mexico. The amended notice applicable to TA-W-59,329 is hereby issued as follows: ”All workers of Optical Electro Forming, a division of Oracle Lens Manufacturing, SOLA International and Carl Zeiss Vision, Clearwater, Florida, who became totally or partially separated from employment on or after May 2, 2005, through June 1, 2008, are eligible to apply for adjustment assistance under Section 223 of the Trade Act of 1974, and are also eligible to apply for alternative trade adjustment assistance under Section 246 of the Trade Act of 1974.” Signed at Washington, DC this 19th day of December 2006. Richard Church, Certifying Officer, Division of Trade Adjustment Assistance. [FR Doc. E6-22129 Filed 12-26-06; 8:45 am] BILLING CODE 4510-30-P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION Notice of Information Collection AGENCY: National Aeronautics and Space Administration (NASA). *Notice:* [06-100]. ACTION: Notice of information collection. SUMMARY: The National Aeronautics and Space Administration, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. 3506(c)(2)(A)). DATES: All comments should be submitted within 60 calendar days from the date of this publication. ADDRESSES: All comments should be addressed to Mr. Walter Kit, National Aeronautics and Space Administration, Washington, DC 20546-0001. FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Mr. Walter Kit, NASA PRA Officer, NASA Headquarters, 300 E Street, SW., JE000, Washington, DC 20546,
(202)358-1350, *Walter.Kit-1@nasa.gov* . SUPPLEMENTARY INFORMATION: I. Abstract Information is needed to guide implementation of GLOBE (Global Learning and Observations to Benefit the Environment) based on feedback from participating teachers, students, and partners in order to help meet the Program's goal of improving student achievement in mathematics and science. II. Method of Collection The GLOBE Partner survey is Web-based on-line instrument. The survey gathers data on all activities related to GLOBE implementation for the year prior to administration of the survey. III. Data *Title:* GLOBE Program Evaluation. *OMB Number:* 2700-0114. *Type of review:* Extension of currently approved collection. *Affected Public:* State, Local, or Tribal Government; Individuals or households; and Not-for-profit institutions. *Number of Respondents:* 258. *Responses Per Respondent:* 1. *Annual Responses:* 258. *Hours Per Request:* 2. *Annual Burden Hours:* 516. IV. Request for Comments Comments are invited on:
(1)Whether the proposed collection of information is necessary for the proper performance of the functions of NASA, including whether the information collected has practical utility;
(2)the accuracy of NASA's estimate of the burden (including hours and cost) of the proposed collection of information;
(3)ways to enhance the quality, utility, and clarity of the information to be collected; and
(4)ways to minimize the burden of the collection of information on respondents, including automated collection techniques or the use of other forms of information technology. Comments submitted in response to this notice will be summarized and included in the request for OMB approval of this information collection. They will also become a matter of public record. Gary L. Cox, Deputy Chief Information Officer (Acting). [FR Doc. E6-22151 Filed 12-26-06; 8:45 am] BILLING CODE 7510-13-P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice 06-099] NASA Advisory Council; Meeting AGENCY: National Aeronautics and Space Administration. ACTION: Notice of meeting. SUMMARY: In accordance with the Federal Advisory Committee Act, Public Law 92-463, as amended, the National Aeronautics and Space Administration announces a meeting of the NASA Advisory Council. The agenda for the meeting includes updates from each of the Council committees, including discussion and deliberation of potential recommendations. The Council Committees address NASA interests in the following areas: Aeronautics, Audit and Finance, Space Exploration, Human Capital, Science, and Space Operations. DATES: Thursday, February 8, 2007, 8 a.m.-4 p.m. ADDRESSES: Capital Ballroom, Holiday Inn Capitol, 550 C Street SW., Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Mr. Christopher Blackerby, Designated Federal Official, National Aeronautics and Space Administration, Washington, DC 20546, 202/358-4688. SUPPLEMENTARY INFORMATION: The meeting will be open to the public up to the seating capacity of the room. It is imperative that the meeting be held on this date to accommodate the scheduling priorities of the key participants. Dated: December 19, 2006. Diane Rausch, Advisory Committee Management Officer, National Aeronautics and Space Administration. [FR Doc. E6-22070 Filed 12-26-06; 8:45 am] BILLING CODE 7510-13-P NATIONAL CREDIT UNION ADMINISTRATION Privacy Act Systems of Records Notice AGENCY: National Credit Union Administration. ACTION: Notification of revisions of systems of records. SUMMARY: The National Credit Union Administration
(NCUA)is revising its Privacy Act Systems of Records
(SOR)Notice. As part of the periodic review of agency regulations, staff determined the need to update and revise its SOR Notice. The review identified several changes requiring revision to the SOR Notice including changes in recordkeeping practices, agency organizational changes, and new systems of records not previously identified. In some systems, NCUA staff identified minor changes to routine uses. No new exemptions from provisions of the Privacy Act of 1974 were required. The revisions reflect the changes, clarify, and update the SOR Notice. DATES: *Effective Date:* The revised system notices will be effective without further notice on January 26, 2007 unless comments received before that date cause a contrary decision. Based on NCUA's review of comments received, if any, NCUA will publish a new final notice if it determines to make changes to the system notices. FOR FURTHER INFORMATION CONTACT: Sheila A. Albin, Associate General Counsel for Operations & Senior Agency Official for Privacy, or Linda Dent, Staff Attorney, Division of Operations, Office of General Counsel, at the National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia, 22314, or telephone:
(703)518-6540. SUPPLEMENTARY INFORMATION: The Privacy Act of 1974 requires, *inter alia* , that all federal agencies publish a notice of any system of records maintained about individuals and, further, requires that the notice provide certain information. NCUA last published a revised notice in 2000. 65 FR 3486 (January 21, 2000). The Privacy Act, as well as guidance from the Office of Management and Budget, provides for periodic review and updating of an agency's SOR Notice, and NCUA's privacy regulation also requires review and revision as necessary to its SOR Notice. 12 CFR part 792, subpart E. NCUA is adding four new systems to its SOR Notice: Personal Identity Verification
(PIV)Files, Leave Transfer Program Case Files, AMAC Contract Employee Pay and Leave Records, and Bank of America Electronic Access Government Ledger System. While the previous System 6 is described as containing information used to create employee identification cards, the new PIV Files, identified as System 16 is significantly different in that it specifically describes a new system being established to meet the requirements of Homeland Security Presidential Directive 12. NCUA is also making several relatively minor changes to existing systems to correct and update information. For example, regarding storage, access, and retrieval, many of the existing systems now provide for electronic storage and retrieval in addition to maintaining hard copies of records and, as such, have additional security measures restricting access. In addition, the system managers or the titles for the system managers have changed in some instances due to organization changes within the agency or changes in duties for employee positions. In addition, Appendix B is revised to reflect that NCUA now has five rather than six regional offices and addresses of two of the regional offices have changed, as well as the states for which each regional office has jurisdiction. With these changes, NCUA's revised SOR Notice, along with the appendices, are published in their entirety below. National Credit Union Administration Systems of Records Notice List of Systems 1. Employee Suitability and Security Investigations Containing Adverse Information 2. Grievance Records 3. Payroll Records System 4. Travel Advance and Voucher Information System 5. Unofficial Personnel and Employee Development/Correspondence Records 6. Emergency Information (Employee) File 7. Employee Injury File 8. Investigative Reports Involving Any Crime, Suspected Crime or Suspicious Activity Against a Credit Union 9. Freedom of Information Act and Privacy Act Requests and Invoices 10. Liquidating Credit Union Records 11. Office of Inspector General
(OIG)Investigative Records 12. Consumer Complaints Against Federal Credit Unions 13. Litigation Case Files 14. Bank of America Electronic Access Government Ledger System (EAGLS) 15. Contract Employee Pay and Leave Records 16. Leave Transfer Files 17. Personal Identity Verification Files Appendix A-Standard Routine Uses Applicable to NCUA Systems of Records Appendix B-List of Regional Offices with Addresses and States Covered by Each Region NCUA-1 System Name: Employee Suitability and Security Investigations Containing Adverse Information System location: Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, VA. 22314-3428. Categories of individuals covered by this system: NCUA employees on whom a routine Office of Personnel Management
(OPM)background investigation has been conducted, the results of which contain adverse information. Categories of records in the system: Arrest records and/or information on moral character, integrity, or loyalty to the United States. Authority for maintenance of the system: Records maintained pursuant to OPM requirements. A separate notice is published because these records are maintained separately to provide extraordinary safeguards against unwarranted access and disclosures. Purpose: The information in this system of records is used to assist in the determination of the suitability of the effected individual for initial or continued NCUA employment, or other necessary action. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)Records are reviewed by the NCUA Security Officer (the Director of Human Resources). If the records are determined to be of a substantive nature, they are referred to the appropriate Associate Regional Director or Office Director for whatever action, if any, is deemed necessary.
(2)Standard routine uses as set forth in Appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are maintained on paper hard copy. Retrievability: Records are indexed by name. Safeguards: Records are maintained in a locked file cabinet accessible only to the Security Officer and his/her designated assistant. Retention and disposal: If the investigation is favorable to the employee, the record is destroyed. If the investigation uncovers adverse information, the record is held for two years. System manager(s) and address: Security Officer, Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedure: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the system manager listed above. Requesters should also reasonably identify the record, specify the information they are contesting, state the corrective action sought and the reasons for the correction, along with supporting justification showing why the record is not accurate, timely, or complete. Record source categories: OPM Security Investigations Index, FBI headquarters investigative files, fingerprint index of arrest records, Defense Central Index of Investigations, employers within the last five years, listed references, and personal associates, school registrars and responsive law enforcement agencies. Systems exempted from certain provisions of the Act: In addition to any exemption to which this system is subject by Notices published by or regulations promulgated by the OPM, the system is subject to a specific exemption pursuant to 5 U.S.C. 552a(k)(5) to the extent that disclosures would reveal a source who furnished information under an express promise of confidentiality, or prior to September 27, 1975, under an express or implied promise of confidentiality. NCUA-2 System name: Grievance Records System location: Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Categories of individuals covered by the system: Current or former Federal employees who have submitted grievances with NCUA in accordance with part 771 of the OPM's regulations. These case files contain all documents related to the grievance, including statements of witnesses, reports of interviews and hearings, examiners' findings and recommendations, a copy of the original and final decision with related correspondence and exhibits. Authority for maintenance of the system: 5 U.S.C. 1302, 3301, and 3302, E.O. 10577, 3 CFR 1954-1958 Comp., p. 218; E.O. 10987; 3 CFR 1959-1963 Comp., p. 519. Purpose: The information in this system is used in the Agency's formal grievance process. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)Information is used by the appropriate Federal, State, or local agency responsible for investigating, prosecuting, enforcing, or implementing a statute, rule, regulation, or order where the disclosing agency becomes aware of an indication of a violation or potential violation of civil or criminal law or regulations.
(2)Information is used by any source from which additional information is requested in the course of processing a grievance to the extent necessary to identify the individual, inform the source of the purpose(s) of the request, and identify the type of information requested.
(3)Information is used by a Federal agency in response to its request in connection with the hiring or retention of an employee, the issuance of a security clearance, the conducting of a security or suitability investigation of an individual, the classifying of jobs, the letting of a contract, or the issuance of a license, grant, or other benefit by the requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision on the matter.
(4)Information is used by the congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of that individual.
(5)Information is used by another Federal agency or by a court when the government is party to a judicial proceeding before the court.
(6)Information is used by the National Archives and Records Administration (General Services Administration) in records management inspections conducted under authority of 44 U.S.C. 2904 and 2906.
(7)Information is used by NCUA in the production of summary descriptive statistics and analytical studies in support of the function for which the records are collected and maintained, or for related work force studies. While published statistics and studies do not contain individual identifiers, in some instances, the selection of elements of data included in the study may be structured in such a way as to make the data individually identifiable by inference.
(8)Information is used by officials of the Office of Personnel Management, the Merit Systems Protection Board, including the Office of the Special Counsel, the Federal Labor Relations Authority and its General Counsel, or the Equal Employment Opportunity Commission when requested in performance of their authorized duties.
(9)Information (that is relevant to the subject matter involved in a pending judicial or administrative proceeding) is used to respond to a request for discovery or for appearance of a witness.
(10)Information is used by officials of labor organizations reorganized under the Civil Service Reform Act when relevant and necessary to their duties of exclusive representation concerning personnel policies, practices, and matters affecting work conditions.
(11)Standard routine uses as set forth in appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are maintained in file folders. Retrievability: Records are retrievable by the names of the individuals on whom they are maintained. Safeguards: Records are maintained in lockable metal filing cabinets to which only authorized personnel have access. Retention and disposal: Records are disposed of three
(3)years after closing of the case. Disposal is by shredding or burning. System manager(s) and address: Director, Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Request to amend or correct a record should be directed to the system manager listed above. Record source categories: Individual on whom the record is maintained; testimony of witness; agency officials; related correspondence from organization or persons. NCUA-3 System name: Payroll Records System. System location:
(1)Office of the Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428.
(2)General Services Administration, Region VI, Kansas City, Missouri.
(3)Regional offices. Categories of individuals covered by the system: Employees of NCUA. Categories of records in the system: Salary and related payroll data, including time and attendance information. Authority for maintenance of the system: 5 U.S.C. 703; 44 U.S.C. 3301. Purpose: This system documents time and attendance and ensures that employees receive proper compensation. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)Information is used to ensure proper compensation to all NCUA employees and to formulate financial reports and plans used within the agency or is sent to the General Services Administration (GSA).
(2)Also, information is used to document time worked and provide a record of attendance to support payment of salaries and use of annual, sick, and nonpaid leave.
(3)Users of the time and attendance information include the employee's supervisor, the office's timekeeper the payroll officer, and the GSA National Payroll Center in Kansas City, Missouri.
(4)Further information in this system is used to make reports to state and local taxing authorities.
(5)The names, social security numbers, home addresses, dates of birth, dates of hire, quarterly earnings, employer identifying information, and State of hire of employees may be disclosed to the Office of Child Support Enforcement, Administration for Children and Families, Department of Health and Human Services for the purpose of locating individuals to establish paternity, establish or modify orders of child support, identify sources of income and for other child support enforcement actions as required by the Personal Responsibility and Work Opportunity Reconciliation Act (Welfare Reform Law, Pub. L. 104-193).
(6)Standard routine uses as set forth in appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are maintained in file folders and electronically on computer systems. Retrievability: Records are retrieved by name or social security number. Safeguards: Records are maintained in secured offices, accessible by written authorization only. Retention and disposal: Records are retained and disposed of in accordance with GSA policy. System manager(s) and address: Primary: Payroll Officer, Office of the Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Secondary: Office Timekeepers, National Credit Union Administration, Central Office (1775 Duke Street, Alexandria, Virginia 22314-3428) and Regional Offices (see Appendix B for Regional Offices' addresses). Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the system manager listed above. Record source categories: Information is primarily obtained from the individual whom the record concerns, the Office of Personnel Management, and the GSA. Also, time and attendance information is prepared and submitted by the timekeeper in a given employee's office. NCUA-4 System name: Travel Advance and Voucher Information System. System location: Office of the Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Some relocation files are maintained in the Office of Administration, at the same address. Categories of individuals covered by the system: All NCUA employees who have traveled or relocated in the course of performing their duty and who have been reimbursed for the expense of such travel. Categories of records in the system: This system contains information from the following forms: Travel Vouchers (NCUA 1012), Relocation Travel Order (NCUA 1617) Application for Travel Advance (NCUA 1371), and Travel Voucher Cover Sheet (NCUA 1364), Agreement to Remain in Federal Service (NCUA 1030), Statement of Difference (NCUA 1310), Repayment of Travel Advance (NCUA 1372). Authority for maintenance of the system: 5 U.S.C. 5701-5752; Executive Order 11609 (July 22, 1971); Executive Order 11012 (March 27, 1962); 5 U.S.C. 4101-4118; Federal Travel Regulations, FPMR 101-7, Chapter 2, Section 6.3. Purpose The purpose of this system is to provide documentary support for reimbursements to employees. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)Records are used to provide documentary support for reimbursements to employees for on-the-job and relocation travel expenses.
(2)Users of the information include first and second line supervisors, NCUA accounting staff, and budgeting staff.
(3)Standard routine uses as set forth in appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are stored in paper hard copy form and in a computer system. Retrievability: Records are retrievable by social security number. Safeguards The paper hard copy records are maintained in secured offices. The computer disc is located in a secured office and its access is limited to user employees who know the logical identification access number. Retention and disposal Records are maintained in the Division of Accounting Services until the annual GAO audit is completed. After the audit, the paper hard copy records are stored in a Federal Records Center for a minimum of three years and the computer disc is purged. System manager(s) and address: Director, Accounting Services Division, Office of the Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the system manager listed above. Record source categories: Records are prepared by the individual whom the record concerns. NCUA-5 System name: Unofficial Personnel and Employee Development and Correspondence Records System location: For employees of a regional office, the system is located at the regional office where the employee is assigned, National Credit Union Administration, (See appendix B for addresses of Regional Offices). For employees of the central office, the system is located at the assigned office, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia, 22314-3428. Categories of individuals covered by the system: NCUA employees. Categories of records in the system: The system contains information on NCUA employees assigned to the particular regional or central office related to some or all of the following areas: name; address; telephone number; birthdate; ethnicity and gender codes; cu grade; employee identification number; work performance appraisals; district management; chartering efforts; reactions from credit union officials; individual development plans; supply and equipment information; for new examiners, bi-weekly training reports, training progress reports and training evaluations; work product samples; suggestions; awards; data on time and attendance, leave and pay; memos or notations and evaluations by superiors or others; benefit elections and designations of beneficiaries; and copies of personnel, travel and grievance records. Authority for maintenance of the system: 5 U.S.C. 301; 44 U.S.C. 3301. Purpose: Information is used for recording time, attendance and leave, controlling equipment inventories, contacting employees; evaluating and training staff, evaluating work progress; and for general administrative matters. Information may also be used to determine eligibility for retention or promotion. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)The information in this system may be disclosed to the United States Office of Personnel Management, the Merit Systems Protection Board, the Office of Special Counsel, the Equal Employment Opportunity Commission, the Federal Labor Relations Authority, the General Services Administration or an arbitrator or agent, to the extent the disclosure is needed to carry out the government-wide personnel management, investigatory, adjudicatory and appellate functions within their respective jurisdictions, or to obtain information.
(2)The information in this system may be disclosed to federal, state, local or professional licensing boards or Boards of Medical Examiners, when such records reflect on the qualifications of a licensed individual or an individual seeking to be licensed.
(3)This information is used to generate a telephone directory for all NCUA employees.
(4)Standard routine uses as set forth in appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are maintained on paper hard copy as well as electronically on computer systems or other database applications. Retrievability: Records are indexed alphabetically by name or Social Security number. Safeguards: Physical security consists of maintaining records in locked metal file cabinets within secured offices and password protected computer systems. Retention and disposal: Current and relevant information is maintained generally for a period of two years. Obsolete material is maintained in the same file cabinets and is periodically purged and destroyed after two years or upon employees' separation. System manager(s) and address: For employees assigned to a regional office the system manager is the Director of Management Services, Regional Office, National Credit Union Administration. (See appendix B for addresses of Regional Offices). For employees assigned to an office within the central office, the system manager is the Office Director, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the Regional Director where the system is located. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the Regional Director or Office Director will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the Regional Director or Office Director. Record source categories: Sources may include the individual whom the record concerns, supervisors of the individual, fellow employees, credit union officials, administrative officer or office assistant, and other persons whom the individual may encounter in the course of work performance. For payroll- and personnel-related information, the sources may include the General Service Administration and Office of Human Resources. NCUA-6 System name: Emergency Information (Employee) File. System location: For employees of a regional office, the system is located at the regional office where the employee is assigned, National Credit Union Administration, (See appendix B for addresses of Regional Offices). For employees of the central office, the system is located at the assigned office, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia, 22314-3428. Categories of individuals covered by the system: NCUA employees; individuals designated by employees as emergency contacts; family members of employees. Categories of records in the system: This system contains personal information about NCUA employees, such as height, weight, hair color, eye color, current address, and telephone number, and in some locations may also have a personal cell telephone number and personal email address. Also, this system identifies the individual to contact in case of an emergency involving the employee. Authority for maintenance of the system: 5 U.S.C. 301. Purpose: The information in this system is used to maintain employee identification information in case of emergency. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)The information on the individual to contact in cases of emergency may be disclosed in case of emergency to any federal, state or local authority responding to the emergency.
(2)In the event of an emergency, the information may be disclosed to the individual listed as a contact in case of emergency, or other person identified as a family member of the employee. This list is updated as necessary. The listed information is used to contact the employee if there is a national emergency.
(3)Standard routine uses as set forth in appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are stored on paper hard copy and may also be stored electronically. Retrievability: Records are indexed alphabetically by name and, where stored electronically as part of a computer system, are subject to electronic safeguards. Safeguards: Records are maintained in locked file drawers or stored electronically as part of a computer database. Retention and disposal: Records are disposed of after an employee is separated from the agency. System manager(s) and address:
(1)For employees of a regional office, the system manager is the regional director of the regional office where the employee is assigned, National Credit Union Administration, (See appendix B for addresses of Regional Offices). For employees of the central office, the system manager is the Office Director of the assigned office, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia, 22314-3428.
(2)Security Officer, Administrative Office, at the same address above. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the appropriate system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the appropriate system manager listed above. Record source categories: Individual on whom the record is maintained. NCUA-7 System name: Employee Injury File. System location: Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Categories of individuals covered by the system: Any employee who has sustained a job-related injury or disease. Categories of records in the system: Copies of reports submitted by an individual who has sustained a job-related injury or disease. Copies of any further claims made regarding the same injury or disease or any other material required for documenting and adjudicating the claim. Authority for maintenance of the system: Occupational Safety and Health Act of 1970, 29 CFR part 1960. Purpose: This information is maintained to provide data to the Department of Labor, when needed, for adjudication of a claim, and to prepare reports as required by the Department of Labor. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)Information is disclosed to the Department of Labor.
(2)Standard routine use as set forth in Appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are stored on paper in file cabinets. Retrievability: Records are indexed by NCUA Region, and date of injury. Safeguards: Records are maintained in locked file drawer. Retention and disposal: Records are disposed five years after the year to which they relate. System manager(s) and address: Director, Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, then individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the system manager listed above. Record source categories: Individual on whom the record is maintained; superiors of individual; individual's physician; hospital attending individual; Department of Labor. NCUA-8 System name: Investigative Reports Involving Any Crime, Suspected Crime or Suspicious Activity Against A Credit Union. System location: Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. Computerized records of Suspicious Activity Reports (SAR), with status updates, are managed by the Financial Crimes Enforcement Network (FinCEN), Department of the Treasury, pursuant to a contractual agreement, and are stored in Detroit, Michigan. Authorized personnel at NCUA's Central Office and regional offices have on-line access to the computerized database managed by FinCEN through individual work stations linked to the database central computer. Categories of individuals covered by the system: Directors, officers, committee members, employees, agents, and persons participating in the conduct of the affairs of federally insured credit unions who are reported to be involved in suspected criminal activity or suspicious financial transactions and are referred to law enforcement officials; and other individuals who have been involved in irregularities, violations of law, or unsafe or unsound practices referenced in documents received by the NCUA in the course of exercising its supervisory functions. Categories of records in the system: Inter- and intra-agency correspondence, memoranda and reports. The SAR contains information identifying the credit union involved, the suspected person, the type of suspicious activity involved, and any witnesses. Authority for maintenance of the system: 12 U.S.C. 1786 and 1789. Purpose(s): The overall system serves as a NCUA repository for investigatory or enforcement information related to its responsibility to examine and supervise federally insured credit unions. The system maintained by FinCEN serves as the database for the cooperative storage, retrieval, analysis, and use of information relating to Suspicious Activity Reports made to or by the NCUA Board, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, (collectively, the federal financial regulatory agencies), and FinCEN to various law enforcement agencies for possible criminal, civil, or administrative proceedings based on known or suspected violations affecting or involving persons, financial institutions, or other entities under the supervision or jurisdiction of such federal financial regulatory agencies. Routine uses of records maintained in the system, including categories of users, and the purposes of such uses: Information in these records may be used to:
(1)Determine if any further agency action should be taken.
(2)Provide the federal financial regulatory agencies and FinCEN with information relevant to their operations;
(3)Disclose information to third parties during the course of an investigation to the extent necessary to obtain information pertinent to the investigation;
(4)With regard to formal or informal enforcement actions; release information pursuant to 12 U.S.C. 1786(s), which requires the NCUA Board to publish and make available to the public final orders and written agreements, and modifications thereto; and
(5)Standard routine uses as set forth in Appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: The records will be maintained in electronic data processing systems and paper files. Retrievability: Computer output and file folders are retrievable by indexes of data fields, including name of the credit union, NCUA Region, and individuals' names. Safeguards: Paper records and word processing discs are stored at the NCUA in lockable metal file cabinets. The database maintained by FinCEN complies with applicable security requirements of the Department of the Treasury. On-line access to the information in the database is limited to authorized individuals who have been designated by each federal financial regulatory agency and FinCEN, and each such individual has been issued a nontransferable identifier or password. Retention and disposal: Records are maintained indefinitely. System manager(s) and address: General Counsel, NCUA, 1775 Duke Street, Alexandria, VA 22314-3428. Notification procedure: Inquiries should be sent to the System Manager as noted above. Record access procedures: Same as “Notification procedure” above. Contesting records procedures: Same as “Notification procedure” above. Record source categories: Information received by the NCUA Board from various sources, including, but not limited to law enforcement and other agency personnel involved in sending inquiries to the NCUA Board, NCUA examiners, credit union officials, employees, and members. The information maintained by FinCEN is compiled from SAR and related historical and updating forms compiled by financial institutions, the NCUA Board, and the other federal financial regulatory agencies for law enforcement purposes. System exempted from certain provisions of the Act: This system is exempt from 5 U.S.C. 552a(c)(3), (d)(1), (d)(2), (d)(3), (d)(4), (e)(1), (e)(4) (G),
(H)and (I), and
(f)of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2). NCUA-9 System name: Freedom of Information and Privacy Act Requests and Invoices System location: For requests processed by the central office, the system is located at the Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. For requests processed by the Office of Inspector General, the system is located in the Office of the Inspector General, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314. Categories of individuals covered by the system: This system of records includes information pertaining to any Freedom of Information Act
(FOIA)or Privacy Act requester. Categories of records in the system: The system may contain the requester's name, company name or organization, address, date of request, invoice number, amount due, phone number, social security or tax identification number, description of information requested and documents located or result of search for documents. Authority for maintenance of the system: 12 U.S.C. 1789, 5 U.S.C. 552, 5 U.S.C. 552a. Purpose: Records in this system are used to process requests received. These records may be used by the NCUA for collection of the amount due, as well as to identify subsequent requests made by the same individuals. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)The information may be disclosed to a consumer reporting agency. The information disclosed to a consumer reporting agency is limited to:
(a)Information necessary to establish the identity of the individual, including name, address, and social security or taxpayer identification number;
(b)the amount, status, and history of the claim; and
(c)the agency or program under which the claim arose. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are maintained on paper hard copy and computer disk. Retrievability: Records in this system are retrievable by requester's name, company name or organization, date of request, category of requester, request number, or invoice number. Safeguards: Physical security consists of storing records on a password protected computer database and a hard copy secured in a metal file cabinet which is accessible only to those individuals responsible for processing requests and collecting outstanding payments. Retention and disposal: Records are retained for various periods depending on the determination made on the request, but normally no greater than six years following the year in which the request was processed. System manager(s) and address: For requests processed at the central office, the system manager is the Freedom of Information Act Officer, Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314. For requests processed by the Office of Inspector General, the system manager is the Inspector General, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the system manager listed above. Record source categories: The sources of records for this system of records are the FOIA and Privacy Act request files. NCUA-10 System name: Liquidating Credit Union Records System. System location: Information within this system of records is located at the Asset and Management Assistance Center
(AMAC)4807 Spicewood Springs Road, Suite 5100, Austin, Texas 78759. Categories of individuals covered by the system: Members, employees and creditors of liquidating federally-insured credit unions. Categories of records in the system: Share and account records; personal data regarding income and debts; payment or employment history; accounts payable records. Authority for maintenance of the system: 12 U.S.C. 1787. Purpose: The information in this system is used to determine insurance, collect loan amounts due and for all purposes necessary to close out the affairs of the liquidated credit union. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)Information is used for payment of insurance claims to shareholders in liquidating federally-insured credit unions.
(2)Information is used in the collection of outstanding loans, which may include referral of information to third party servicer providers or potential purchasers of the loans.
(3)Information is used for all purposes necessary to close out the affairs of the liquidated credit union and carry out all appropriate liquidation-related functions of NCUA.
(4)Information may be disclosed to address locators or a surety company in pursuit of a fidelity bond claim.
(5)Information on unclaimed insured shares is included in a database on the NCUA web site after other efforts to locate account holders have failed.
(6)Information may be disclosed to the appropriate federal, state or local government agency, such as the Internal Revenue Service, if required by law or regulation or upon appropriate request.
(7)Standard routine uses as set forth in Appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: This information is maintained on computer databases and hard copy. Copies of share and loan documents, incoming payments, and loan portfolios may also be maintained on microfilm copy. Retrievability: Information is indexed by name of individual and by name of closed insured credit union. Safeguards: Information is maintained in secured offices and in password protected computer databases. Retention and disposal: Information is maintained for six years following the appointment of the NCUA Board as liquidating agent of an insured credit union after which the system manager may destroy any records that the system manager determines are unnecessary unless directed not to do so by a court of competent jurisdiction or governmental agency or prohibited by law. System manager(s) and address: President, AMAC, 4807 Spicewood Springs Road, Suite 5100, Austin, Texas 78759. Notification procedure: An individual may inquire as to whether the system contains information pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no information on the individual, the individual will be so advised. Written inquiries should include name of inquirer, name of closed insured credit union of which inquirer was a member, and share and loan account numbers, if known. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available information. Contesting record procedures: Requests to amend or correct a record should be directed to the system manager listed above. Record source categories: information is obtained from outside address locators; share and loan account files of the liquidating credit union of which the individual was a member; third party service providers; and credit bureaus. NCUA-11 System name: Office of Inspector General
(OIG)Investigative Records. System location: Office of Inspector General, NCUA, 1775 Duke Street, Alexandria, VA 22314-3428. Categories of individuals covered by the system: Subjects of investigation, complainants, and witnesses referred to in complaints or actual investigative cases, reports, accompanying documents, and correspondence prepared by, compiled by, or referred to the OIG. Categories of records in the system: The system is comprised of paper files of all OIG and some predecessor Office of Internal Auditor reports, correspondence, cases, matters, cross-indices, memoranda, materials, legal papers, evidence, exhibits, data, and workpapers pertaining to all closed and pending investigations and inspections. Authority for maintenance of the system: The Inspector General Act of 1978, as amended, 5 U.S.C. App.3; 12 U.S.C. 1766. Purpose: Records in this system document the investigative work of the Office of Inspector General. Routine uses of records maintained in the system, including categories of users and the purposes of such uses: The National Credit Union Administration Office of Inspector General
(OIG)may disclose information contained in a record in this system of records without the consent of the individual if the disclosure is compatible with the purpose for which the record was collected, under the following routine uses.
(1)The OIG may disclose information from this system of records as a routine use to any public or private source, including a federal, state, or local agency maintaining civil, criminal, or other relevant enforcement information or other pertinent information, but only to the extent necessary for the OIG to obtain information from those sources relevant to an OIG investigation, audit, inspection, or other inquiry.
(2)The OIG may disclose information from this system of records as a routine use to the Department of Justice to the extent necessary to obtain its legal advice on any matter relevant to an OIG investigation, audit, inspection, or other inquiry related to the responsibilities of the OIG.
(3)The OIG may disclose information to other federal entities, such as other Offices of Inspector General, to the General Accounting Office, or to a private party with which the OIG or the NCUA has contracted or with which it contemplates contracting, for the purpose of auditing or reviewing the performance or internal management of the OIG's investigative program, or for performing any other functions or analyses that facilitate or are relevant to an OIG investigation, audit, inspection or other inquiry. Such contractor or private firm shall be required to maintain Privacy Act safeguards with respect to such information.
(4)The OIG may disclose information from this system of records to any Federal, State, local, or foreign agency maintaining civil, criminal, or other relevant enforcement or other pertinent records, or to another public authority or professional organization, if necessary to obtain information relevant to an OIG decision concerning the retention of an employee or other personnel action (other than hiring), the retention of a security clearance, the letting of a contract, or the issuance or retention of a grant or other benefit.
(5)The OIG may disclose information in this system to federal, state, local or professional licensing boards or Boards of Medical Examiners, when such records reflect on the qualifications of a licensed individual or an individual seeking to be licensed.
(6)The OIG may disclose information from this system of records for the purposes set forth in Appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Information contained in this system is stored manually in files. Retrievability: Information is retrieved in files by case number, general subject matter, or name of the subject of investigation. Safeguards: Case reports and workpapers are maintained in approved security containers and locked filing cabinets in a locked room. Associated paper records are stored in locked metal filing cabinets, safes, or similar secure facilities. Retention and disposal: Investigative Case Files 1. Case files are normally destroyed when they are 5 years old. 2. Significant cases (those that result in national media attention, congressional investigation, or substantive changes in agency policy or procedures)—To be determined by the National Archives and Records Administration on a case-by-case basis. System manager(s) and address: Inspector General, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. Notification procedure: This System of Records is generally exempt from the notice, access, and amendment requirements of the Privacy Act. However, the NCUA will entertain written requests to the systems manager on a case by case basis for notification regarding whether this system of records contains information about an individual. Requests should be marked “Privacy Act request,” and should state the name and address of the requester, and provide a notarized statement, or other documentation, e.g., copy of a driver's license, attesting to the individual's identity. Requests submitted on behalf of other persons must include their written authorizations. Such requests in the form prescribed may also be presented in person at the Office of Inspector General, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. Simultaneously with requesting notification of inclusion in this system of records, the individual may request record access as described in this section. Record access procedures: Same as “Notification procedure.” Contesting record procedures: Same as “Notification procedure.” Record source categories: The OIG collects information from many sources, including the subject individuals, employees of the NCUA, other government employees, and witnesses and informants, and non-governmental sources. Systems exempted from certain provisions of the act: Pursuant to 5 U.S.C. 552a(j)(2), this system of records is exempt from subsections (c)(3) and (4), (d), (e)(1), (e)(2), (e)(3), (e)(4)(G), (e)(4)(H), (e)(4)(I), (e)(5), (e)(8),
(f)and
(g)of the Act. This exemption applies to information in the system that relates to criminal law enforcement and meets the criteria of the (j)(2) exemption. Pursuant to 5 U.S.C. 552(k)(2), to the extent that the system contains investigative material compiled for law enforcement purposes, other than material within the scope of subsection (j)(2), this system of records is exempt from 5 U.S.C. 552a(c)(3), (d), (e)(1), (G), (H), and (I), and (f). The exemption rule is contained in 12 CFR 792.66 of the NCUA regulations. NCUA-12 System name: Consumer Complaints Against Federal Credit Unions. System location: Information is maintained in NCUA's regional offices (see Appendix B for regional office locations). Categories of individuals covered by the system: Persons who submit complaints concerning operating federal credit unions. Categories of records in the system: Complaint letters, investigation reports, and related correspondence concerning the complainants and the federal credit union involved. Authority for maintenance of the system: 12 U.S.C. 1766(i)(1) and 1789(a)(7); 5 U.S.C. 301; 15 U.S.C. 1601-1693. Purpose: This system documents the number and type of consumer complaints received and processed by NCUA. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)Information may be disclosed to officials of federal credit unions and other persons mentioned in a complaint or identified during an investigation.
(2)Disclosures may be made to the Federal Reserve Board, other federal financial regulatory agencies, the Federal Financial Institutions Examination Council, the White House Office of Consumer Affairs, and the Congress, or any of its authorized committees in fulfilling reporting requirements or assessing implementation of applicable laws and regulations. (Such disclosures will be made in a nonidentifiable manner when feasible and appropriate.)
(3)Referrals may also be made to other federal and nonfederal supervisory or regulatory authorities when the subject matter is a complaint or inquiry which is more properly within such agency's jurisdiction.
(4)Standard routine uses as set forth in Appendix A. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are stored on paper or computer database. Retrievability: Records are retrievable from files by federal credit union name, by complainant name, or assigned control number. Safeguards: Records are maintained in secured offices in either a file cabinet or on a password protected computer system. Retention and disposal: Records are retained for three years and then destroyed. Consumer's name, federal credit union's name, subject of complaint, date received, and date resolved are kept until no longer needed. System manager(s) and address: The System Manager is the Regional Director in the regional office where the complaint was processed. (See Appendix B for Regional Office addresses.) Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Request to amend or correct a record should be directed to the system manager listed above. Record source categories: Complainant (and his or her representative, which may include, e.g., a member of Congress or an attorney); federal credit union officials; employees and members of the credit union involved; and NCUA examiners and central files on federal credit unions. NCUA-13 System name: Litigation Case Files. System location: Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Categories of individuals covered by the system: Records are maintained in files by the case name of individuals who are: the subject of NCUA investigations made in contemplation of legal action; involved in civil litigation with NCUA or involved in administrative proceedings; involved in litigation of interest to NCUA; or pursuing tort claims. Categories of records in the system: Records in case files include: Investigative reports relating to possible felonies or violations of the Federal Credit Union Act; transcripts of testimony or affidavits; documents and other evidentiary matters, pleadings and other documents filed in court; orders filed or issued in civil, administrative or criminal proceedings; correspondence relating to investigatory or litigation matters; information provided by the individual under investigation or from a federal credit union; and other memoranda gathered and prepared by staff in performance of their duties. Authority for maintenance of the system: 12 U.S.C. 1766, 1786, 1787, and 1789; 28 U.S.C. 2671-2680. Purpose: This system documents the preparation and progress of legal proceedings and investigations conducted by the Office of General Counsel. Routine uses of records maintained in the system, including categories of users and the purposes of such uses:
(1)The staff of the Office of General Counsel may use such records to render legal advice concerning investigations or courses of legal action; to represent NCUA in all judicial and administrative proceedings in which NCUA or any of its employees who, within the scope of employment and in an official capacity, is a party; or to intervene as an amicus curiae.
(2)The information in this system may be disclosed to federal, state, local or professional licensing boards or Boards of Medical Examiners, when such records reflect on the qualifications or fitness of a licensed individual or an individual seeking to be licensed.
(3)Standard routine uses set forth in Appendix A. System manager(s) and address: General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. Record access procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting record procedures: Requests to amend or correct a record should be directed to the system manager listed above. Record source categories: Record source categories vary depending upon the legal issue but generally are obtained from the following: NCUA staff and internal agency memoranda; federal employees and private parties involved in torts; contracts; federal credit union files or officials; general law texts and sources; law enforcement officers; witnesses and others; administrative and court pleadings, transcripts or judicial orders/decisions; evidence gathered in connection with the matter involved; and from individuals to whom the records relate. Systems exempted from certain provisions of the act: This system is subject to the specific exemption provided by 5 U.S.C. 552a(k)(2), as the system of records is investigatory material compiled for law enforcement purposes. NCUA-14 System Name: Bank of America Electronic Access Government Ledger System (EAGLS). System Location: Bank of America Government Card Services (Norfolk, Virginia). Categories of individuals covered by the system: Employees of NCUA with individually billed government travel cards and/or centrally billed government travel cards. Categories of records in the system: NCUA employee credit card data, including name and address, and past and present charges to account. Authority for maintenance of the system: Federal Travel Regulations, Travel and Transportation Reform Act of 1998 (Pub. L. 105-264). Purpose: The purpose of this system is for the Office of the Chief Financial Officer
(OCFO)to monitor the usage of the government travel card by NCUA employees and to assure timely payments of accounts. Routine uses of records maintained in the system, including categories of users and purposes of such uses: The system can be used by individual cardholders to access their own account information to monitor charges, payments, change their address, etc. It is also used by OCFO to provide oversight of the travel card program by monitoring card usage in order to reduce card misuse, abuse, and delinquencies. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are maintained in a database that is accessible by Internet over a 128-bit encryption secure connection. Retrievability: Records are retrieved by name or account number. Safeguards: Records are maintained in a secure database that can only be accessed with a username and password provided by Bank of America after receipt of an application submitted by the OCFO. Only authorized staff in OCFO can access multiple employee records, all other employees can only access their own account information within the EAGLS system. Retention and disposal: All account activity (charges, payments, credits, etc.) is retained in the EAGLS system for 36 months. All information on closed accounts (name, address, activity) is retained for 36 months before it is permanently removed from the EAGLS system. System manager(s) and address: Deputy Financial Officer, Office of the Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Notification procedure: An individual may inquire about his/her personal account information by accessing the EAGLS system with a username and password provided to them by Bank of America or by written request to OCFO. Record access procedures: Upon approval of the cardholder application and issuance of the government travel card by BOA, a username and password is also submitted to the cardholder for access to their account information in EAGLS. Contesting record procedures: Requests to amend or correct a record should be submitted online through the EAGLS system or submitted in writing to OCFO. Record source categories: Records are prepared by the individual whom the record concerns by submission of an application to Bank of America and by the subsequent activity to the individual's account. NCUA-15 System Name: Contract Employee Pay and Leave Records. System Location: Information within this system of records is located at the Asset Management and Assistance Center
(AMAC)4807 Spicewood Springs Road, Suite 5100, Austin TX 78759, and the payroll processor, Paychex of San Antonio, Texas. Categories of individuals covered by the system: Contract employees hired by the Agent for the Liquidating Agent for work on liquidation cases. Categories of records in the system: Wages and related payroll data, including leave records. Authority for maintenance of the system: Fair Labor Standards Act. Purpose: This system documents employee information and ensures that employees receive proper compensation. Routine uses of records maintained in the system, including categories of users and purposes of such uses: Information is used to document time worked and provide a record of attendance to support payment of wages and use of leave. Users of the system include the payroll officer (financial analyst), the employee's supervisor, and Paychex. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: Records are maintained in file folders. Retrievability: Records are retrieved by name. Safeguards: Records are maintained in a secured file cabinet, accessible only to the payroll officer and division manager. Retention and disposal: Records are retained and disposed of in accordance with the Fair Labor Standards Act. System manager(s) and address: Primary: Financial Analyst, Asset Management and Assistance Center (4807 Spicewood Springs Road, Suite 5100, Austin TX 78759). Secondary: Division of Accounting Service Director, Asset Management and Assistance Center (4807 Spicewood Springs Road, Suite 5100, Austin TX 78759). Notification procedure: An individual may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. NCUA-16 System Name: Leave Transfer Program Case Files. System location: Office of Human Resources, 1775 Duke Street, Alexandria, VA 22314. Categories of individuals covered by the system: NCUA employees who submitted applications to become leave recipients under the provisions of the Leave Transfer program. Categories of records in the system: Leave transfer program applications, leave requests, and medical documentation. Authority for maintenance of the system: 5 CFR 630.913. Purpose: To administer the NCUA leave transfer program. Routine uses of records maintained in the system, including categories of users and purposes of such uses: These records are used to administer the NCUA leave transfer program. Policies and practices for storing, retrieving, accessing, retaining, and disposing of records in the system: Storage: These records are maintained in file folders and filed in metal file cabinets. Retrievability: The records are retrieved by the names of the employee. Safeguards: These files are kept in a locked room and are available only to authorized personnel whose duties require access. Retention and disposal: These records are maintained in accordance with NARA General Records Schedules 1 (Civilian Personnel Records). Disposal of manual records is by shredding. System manager(s) and address: Director, Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314. Notification procedure: An individual or an individual's authorized representative may inquire as to whether the system contains a record pertaining to the individual by addressing a request in person or by mail to the system manager listed above. If there is no record on the individual, the individual will be so advised. NCUA-17 System Name: Personal Identity Verification Files. System Location: Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314. Categories Of Individuals Covered By The System: Individuals who require regular, ongoing access to federal facilities, information technology systems, or information classified in the interest of national security, including applicants for employment or contracts, federal employees, contractors, students, interns, volunteers, affiliates, individuals authorized to perform or use services provided in NCUA facilities and individuals formerly in any of these positions. The system also includes individuals accused of security violations or found in violation. Categories Of Records In The System: Name, former names, birth date, birth place, Social Security number, home address, phone numbers, employment history, residential history, education and degrees earned, names of associates and references and their contact information, citizenship, names of relatives, birthdates and places of relatives, citizenship of relatives, names of relatives who work for the federal government, criminal history, mental health history, drug use, financial information, fingerprints, summary report of investigation, results of suitability decisions, level of security clearance, date of issuance of security clearance, requests for appeal, witness statements, investigator's notes, tax return information, credit reports, security violations, circumstances of violation, and agency action taken. Copies of background investigation forms such as the SF-85, SF-85P, SF-86, or SF-87 may also be included in this file. Authority For Maintenance Of The System: Executive orders 10450, 10865, 12333, and 12356; sections 3301 and 9101 of title 5, U.S. Code; sections 2165 and 2201 of title 42, U.S. Code; sections 781 to 887 of title 50, U.S. Code; parts 5, 732, and 736 of title 5, Code of Federal Regulations; and Homeland Security Presidential Directive
(HSPD)12, Policy for a Common Identification Standard for Federal Employees and Contractors, August 27, 2004. Purpose(s): The records in this system of records are used to document and support decisions regarding clearance for access to classified information, the suitability, eligibility, and fitness for service of applicants for federal employment and contract positions, including students, interns, or volunteers to the extent their duties require access to federal facilities, information, systems, or applications. The records may be used to document security violations, employee access and attendance, and supervisory actions taken. Routine Uses Of Records Maintained In The System, Including Categories Of Users And The Purposes Of Such Uses:
(1)The information maintained in this system is collected from PIV Applicants, the individuals to whom a PIV card is issued. The PIV Applicant may be a current or prospective Federal hire, a Federal employee or a contractor. The information is used in each step of the PIV Process for example, conducting a background investigation, completing the identity proofing and registration process, creating an employee record in the Comprehensive Human Resources Integrated System (CHRIS), issuing a PIV card and the determination of physical and logical access. Additionally, the information such as card expiration date, PIV Registrar Approval, etc. is maintained in this file and is used to assist in the production of the PIV card.
(2)The information in this system may be disclosed to the United States Office of Personnel Management, the Merit Systems Protection Board, the Office of Special Counsel, the Equal Employment Opportunity Commission, the Federal Labor Relations Authority, the General Services Administration or an arbitrator or agent to the extent the disclosure is needed to carry out the government-wide personnel management, investigatory, adjudicatory and appellate functions within their respective jurisdictions, or to obtain information.
(3)The information in this system may be disclosed to federal, state, local or professional licensing boards or boards of Medical Examiners, when such records reflect on the qualifications of a licensed individual or individual seeking to be licensed.
(4)Standard routine uses as set forth in Appendix A. Policies And Practice For Storing, Retrieving, Accessing, Retaining And Disposing Of Records In The System: Storage: Records are stored on paper and electronically in a secure location. Retrievability: Files are retrieved by name or Social Security number (SSN), employee name, and employee identification number. Safeguards: For paper records: Comprehensive paper records are kept in a secure room at NCUA Central Office, Office of Human Resources. Limited paper records may be kept at NCUA regional offices in locked file cabinets in locked rooms. Access to the records is limited to those employees who have a need for them in the performance of their official duties. For electronic records: Comprehensive electronic records are kept at the NCUA Central Office, Office of Human Resources. Access to the records is restricted to those with a specific role in the PIV process that requires access to information to perform their duties, and who have been given a password to access that part of the system. Controls are in place to identify unauthorized access. Persons given roles in the PIV process must complete training specific to their roles to ensure they are knowledgeable about how to protect individually identifiable information. Electronic records of security badge and parking pass usage for access to the Central Office and access to parking are accessible by selected staff in the Division of Procurement and Facilities Management. Retention And Disposal: Records are destroyed upon notification of death or not later than five years after separation or transfer of employee to another agency, whichever is applicable. System Manager(s) And Address: Security Officer, Office of Human Resources, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314. Notification Procedure: An individual can determine if this system contains a record pertaining to the individual by addressing a request in writing to the system manager listed above. If there is no record on the individual, the individual will be so advised. When requesting notification of or access to records covered by this system, an individual should provide at a minimum his/her full name, date of birth, office and duty location in order to establish identity. Records Access Procedures: Upon request, the system manager will set forth the procedures for gaining access to available records. Contesting Record Procedures: Requests to amend or correct a record should be directed to the system manager listed above. Requesters should also reasonably identify the record, specify the information they are contesting, state the corrective action sought and the reasons for the correction along with supporting justification showing why the record is not accurate, timely, relevant, or complete. Record Source Categories: Information is obtained from a variety of sources including the employee, contractor, or applicant via use of the SF-85, SF-85P, or SF-86 and personal interviews; employers' and former employers' records; FBI criminal history records and other databases; financial institutions and credit reports; medical records and health care providers; educational institutions; interviews of witnesses such as neighbors, friends, co-workers, business associates, teachers, landlords, or family members; tax records; and other public records. Security violation information is obtained from a variety of sources, such as witnesses or supervisor's reports. Electronic records are created based on use of security badges and parking passes at readers at entrances and exits to parking at the Central Office, building entrances, and building elevators. Appendix A—Standard Routine Uses Applicable to NCUA Systems of Records 1. If a record in a system of records indicates a violation or potential violation of civil or criminal law or a regulation, and whether arising by general statute or particular program statute, or by regulation, rule, or order, the relevant records in the system or records may be disclosed as a routine use to the appropriate agency, whether federal, state, local, or foreign, charged with the responsibility of investigating or prosecuting such violation or charged with enforcing or implementing the statute, rule, regulation, or order issued pursuant thereto. 2. A record from a system of records may be disclosed as a routine use to a federal, state, or local agency which maintains civil, criminal, or other relevant enforcement information or other pertinent information, such as current licenses, if necessary, to obtain information relevant to an agency decision concerning the hiring or retention of an employee, the issuance of a security clearance, the letting of a contract, or the issuance of a license, grant, or other benefit. 3. A record from a system of records may be disclosed as a routine use to a federal agency, in response to its request, for a matter concerning the hiring or retention of an employee, the issuance of a security clearance, the reporting of an investigation of an employee, the letting of a contract, or the issuance of a license, grant, or other benefit by the requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision in the matter. 4. A record from a system of records may be disclosed as a routine use to an authorized appeal grievance examiner, formal complaints examiner, equal employment opportunity investigator, arbitrator or other duly authorized official engaged in investigation or settlement of a grievance, complaint, or appeal filed by an employee. Further, a record from any system of records may be disclosed as a routine use to the Office of Personnel Management in accordance with the agency's responsibility for evaluation and oversight of federal personnel management. 5. A record from a system of records may be disclosed as a routine use to officers and employees of a federal agency for purposes of audit. 6. A record from a system of records may be disclosed as a routine use to a member of Congress or to a congressional staff member in response to an inquiry from the congressional office made at the request of the individual about whom the record is maintained. 7. A record from a system of records may be disclosed as a routine use to the officers and employees of the General Services Administration
(GSA)in connection with administrative services provided to this Agency under agreement with GSA. 8. Records in a system of records may be disclosed as a routine use to the Department of Justice, when:
(a)NCUA, or any of its components or employees acting in their official capacities, is a party to litigation; or
(b)Any employee of NCUA in his or her individual capacity is a party to litigation and where the Department of Justice has agreed to represent the employee; or
(c)The United States is a party in litigation, where NCUA determines that litigation is likely to affect the agency or any of its components, is a party to litigation or has an interest in such litigation, and NCUA determines that use of such records is relevant and necessary to the litigation, provided, however, that in each case, NCUA determines that disclosure of the records to the Department of Justice is a use of the information contained in the records that is compatible with the purpose for which the records were collected. 9. Records in a system of records may be disclosed as a routine use in a proceeding before a court or adjudicative body before which NCUA is authorized to appear
(a)when NCUA or any of its components or employees are acting in their official capacities;
(b)where NCUA or any employee of NCUA in his or her individual capacity has agreed to represent the employee; or
(c)where NCUA determines that litigation is likely to affect the agency or any of its components, is a party to litigation or has an interest in such litigation, and NCUA determines that use of such records is relevant and necessary to the litigation, provided, however, NCUA determines that disclosure of the records to the Department of Justice is a use of the information contained in the records that is compatible with the purpose for which the records were collected. Appendix B—List of Regional Offices with Addresses and States Covered by Each Region NCUA Region I Regional Office: 9 Washington Square, Washington Square Extension, Albany, NY, 12205, Phone
(518)472-4554. States covered: Connecticut, Maine, Massachusetts, Michigan, New Hampshire, New York, Rhode Island, and Vermont. NCUA Region II Regional Office: 1775 Duke Street, Suite 4206, Alexandria, VA 22314, Phone:
(703)519-4600. States covered: Delaware, District Of Columbia, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia. NCUA Region III Regional Office: 7000 Central Parkway, Suite 1600, Atlanta, GA 30328, Phone:
(678)443-3000. States covered: Alabama, Florida, Georgia, Indiana, Kentucky, Mississippi, North Carolina, Puerto Rico, Ohio, South Carolina, Tennessee, and Virgin Islands. NCUA Region IV Regional Office: 4807 Spicewood Springs Road, Suite 5200, Austin, TX 78759, Phone:
(512)342-5600. States covered: Arkansas, Illinois Iowa, Kansas, Louisiana, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota, Texas, and Wisconsin. NCUA Region V Regional Office: 1230 West Washington Street, Suite 301, Tempe, AZ 85281, Phone:
(602)302-6000. States covered: Alaska, Arizona, California, Colorado, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. By the National Credit Union Administration Board on December 20, 2006. Mary F. Rupp, Secretary of the Board. [FR Doc. E6-22101 Filed 12-26-06; 8:45 am] BILLING CODE 7535-01-P THE NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES Meetings of Humanities Panel AGENCY: The National Endowment for the Humanities. ACTION: Notice of meetings. SUMMARY: Pursuant to the provisions of the Federal Advisory Committee Act (Pub. L. 92-463, as amended), notice is hereby given that the following meetings of Humanities Panels will be held at the Old Post Office, 1100 Pennsylvania Avenue, NW., Washington, DC 20506. FOR FURTHER INFORMATION CONTACT: Heather Gottry, Acting Advisory Committee Management Officer, National Endowment for the Humanities, Washington, DC 20506; telephone
(202)606-8322. Hearing-impaired individuals are advised that information on this matter may be obtained by contacting the Endowment's TDD terminal on
(202)606-8282. SUPPLEMENTARY INFORMATION: The proposed meetings are for the purpose of panel review, discussion, evaluation and recommendation on applications for financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including discussion of information given in confidence to the agency by the grant applicants. Because the proposed meetings will consider information that is likely to disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential and/or information of a personal nature the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, pursuant to authority granted me by the Chairman's Delegation of Authority to Close Advisory Committee meetings, dated July 19, 1993, I have determined that these meetings will be closed to the public pursuant to subsections (c)(4), and
(6)of section 552b of Title 5, United States Code. 1. *Date:* January 8, 2007. *Time:* 8:30 a.m. to 5:30 p.m. *Room:* 415. *Program:* This meeting will review applications for Humanities Projects in Media, submitted to the Division of Public Programs at the November 1, 2006 deadline. 2. *Date:* January 9, 2007. *Time:* 9 a.m. to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Digital Humanities Start-Up Grants, submitted to the Miscellaneous Humanities Projects at the November 15, 2006 deadline. 3. *Date:* January 10, 2007. *Time:* 8:30 a.m. to 5:30 p.m. *Room:* 415. *Program:* This meeting will review applications for Humanities Projects in Media, submitted to the Division of Public Programs at the November 1, 2006 deadline. 4. *Date:* January 16, 2007. *Time:* 8:30 a.m. to 5:30 p.m. *Room:* 415. *Program:* This meeting will review applications for Humanities Projects in Media, submitted to the Division of Public Programs at the November 1, 2006 deadline. 5. *Date:* January 22, 2007. *Time:* 8:30 a.m. to 5:30 p.m. *Room:* 415. *Program:* This meeting will review applications for Humanities Projects in Media, submitted to the Division of Public Programs at the November 1, 2006 deadline. 6. *Date:* January 23, 2007. *Time:* 8:30 a.m. to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Collaborative Research in European Studies, submitted to the Division of Research Programs at the November 1, 2006 deadline. 7. *Date:* January 29, 2007. *Time:* 8:30 a.m. to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Collaborative Research in Archaeology, Old World, submitted to the Division of Research Programs at the November 1, 2006 deadline. 8. *Date:* January 30, 2007 *Time:* 8:30 a.m. to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Collaborative Research in Africa and Asia, submitted to the Division of Research Programs at the November 1, 2006 deadline. 9. *Date:* January 31, 2007. *Time:* 8:30 a.m. to 5 p.m. *Room:* 315. *Program:* This meeting will review applications for Scholarly Editions in British and American Editions, submitted to the Division of Research Programs at the November 1, 2006 deadline. Heather Gottry, Acting Advisory Committee Management Officer. [FR Doc. E6-22172 Filed 12-26-06; 8:45 am] BILLING CODE 7536-01-P OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE Determination Regarding Waiver of Discriminatory Purchasing Requirements With Respect to Goods and Services of New Member States of the European Communities (Romania and the Republic of Bulgaria) AGENCY: Office of the United States Trade Representative. ACTION: Determination Regarding Waiver of Discriminatory Purchasing Requirements under the Trade Agreements Act of 1979. DATES: *Effective Date:* January 1, 2007. FOR FURTHER INFORMATION CONTACT: Jean Heilman Grier, Senior Procurement Negotiator, Office of the United States Trade Representative,
(202)395-9476. SUPPLEMENTARY INFORMATION: The European Communities (“EC”) is a party to the World Trade Organization (“WTO”) Agreement on Government Procurement (“GPA”) and has assumed rights and obligations under the GPA on behalf of its Member States. On January 1, 2007, Romania and the Republic of Bulgaria (collectively, the “new Member States”) will accede to the EC. In light of that accession, the EC has committed to assume rights and obligations on behalf of these new Member States under the GPA. On December 8, 2006, the WTO Committee on Government Procurement approved the application of the GPA to Romania and the Republic of Bulgaria. The United States, which is also a party to the GPA, has agreed to waive discriminatory purchasing requirements for eligible products and suppliers of the Romania and the Republic of Bulgaria, beginning on January 1, 2007. Section 1-201 of Executive Order 12260 of December 31, 1980 delegated the functions of the President under sections 301 and 302 of the Trade Agreements Act of 1979 (“the Trade Agreements Act”) (19 U.S.C. 2511, 2512) to the United States Trade Representative. *Determination:* In conformity with sections 301 and 302 of the Trade Agreements Act, and in order to carry out U.S. obligations under the GPA, I hereby determine that: 1. The European Communities, including its new Member States (Romania and the Republic of Bulgaria), is an instrumentality that:
(A)Is a party to the GPA; and
(B)will provide appropriate reciprocal competitive government procurement opportunities to United States products and services and suppliers of such products and services. In accordance with section 301(b)(1) of the Trade Agreements Act, the European Communities is so designated for purposes of section 301(a) of the Trade Agreements Act. 2. Accordingly, beginning on January 1, 2007, with respect to eligible products (namely, those goods and services covered under the GPA for procurement by the United States) of the Romania and the Republic of Bulgaria and suppliers of such products, the application of any law, regulation, procedure, or practice regarding government procurement that would, if applied to such products and suppliers, result in treatment less favorable than that accorded—
(A)To United States products and suppliers of such products, or
(B)To eligible products of another foreign country or instrumentality which is a party to the GPA and suppliers of such products, shall be waived. This waiver shall be applied by all entities listed in United States Annexes 1 and 3 of GPA Appendix 1. 3. The Trade Representative may modify or withdraw the designation in paragraph 1 and the waiver in paragraph 2. 4. This notice shall not affect the treatment to be accorded to eligible products of any country that was a Member State of the European Communities before January 1, 2007. Dated: December 19, 2006. Susan C. Schwab, United States Trade Representative. [FR Doc. E6-22173 Filed 12-26-06; 8:45 am] BILLING CODE 3190-W7-P OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE [Docket No. WTO/DS345] WTO Dispute Settlement Proceeding Regarding United States—Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing Duties AGENCY: Office of the United States Trade Representative. ACTION: Notice; request for comments. SUMMARY: The Office of the United States Trade Representative (“USTR”) is providing notice that on November 21, 2006, the Dispute Settlement Body, at India's request, established a panel under the Marrakesh Agreement Establishing the World Trade Organization (“WTO Agreement”). That request may be found at *http://www.wto.org* contained in a document designated as WT/DS345/6. USTR invites written comments from the public concerning the issues raised in this dispute. DATES: Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before February 28, 2006 to be assured of timely consideration by USTR. ADDRESSES: Comments should be submitted
(i)Electronically, to *FR0624@ustr.eop.gov* , Attn: “India Bond Dispute (DS345)” in the subject line, or
(ii)by fax, to Sandy McKinzy at
(202)395-3640. For documents sent by fax, USTR requests that the submitter provide a confirmation copy to the electronic mail address listed above. FOR FURTHER INFORMATION CONTACT: Elissa Alben, Assistant General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508,
(202)395-9622. SUPPLEMENTARY INFORMATION: Section 127(b) of the Uruguay Round Agreements Act (“URAA”) (19 U.S.C. 3537(b)(1)) requires that notice and opportunity for comment be provided after the United States submits or receives a request for the establishment of a WTO dispute settlement panel. Consistent with this obligation, USTR is providing notice that a dispute settlement panel has been requested pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”). The panel will hold its meetings in Geneva, Switzerland. Note that some of the issues described below were also raised in a request for the establishment of a panel submitted by Thailand, see 71 FR 59542 (October 10, 2006). Major Issues Raised by India On February 1, 2005 the Department of Commerce published an antidumping duty order covering certain frozen warm water shrimp from India (70 FR 5147). In its request for establishment of a panel, India alleges that the United States has imposed on importers a requirement to maintain a continuous entry bond in the amount of the anti-dumping duty margin multiplied by the value of imports of frozen warmwater shrimp imported by the importer in the preceding year. It alleges that Customs Bond Directive 99-3510-004, as amended on July 9, 2004 (and any clarifications and amendments thereof), as well as the laws and regulations of the United States pursuant to which the requirement was adopted (including 19 U.S.C. 1484, 1502, 1505, 1623, and 1673g, and 19 CFR 113.13, 113.40, 113.62, and 142.2) as such constitute specific action against dumping and subsidization not in accordance with Article VI:2 and 3 of the General Agreement on Tariffs and Trade 1994 (“GATT 1994”), as well as Articles 1, and 18.1 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“AD Agreement”) and Articles 10 and 32.1 of the Agreement on Subsidies and Countervailing Measures (“Subsidies Agreement”), that they result in charges in excess of the margin of dumping or amount of subsidy that are not in accordance with GATT 1994 Articles VI:2 and VI:3, and that the simultaneous imposition of the continuous bond requirement and the obligation to provide bonds or make cash deposits for the payment of anti-dumping or countervailing duty is unreasonable as security for payment of antidumping and countervailing duties and therefore inconsistent with Note Ad paragraphs 2 and 3 of GATT 1994 Article VI. India further alleges that they are inconsistent with Articles 7.1, 7.2, 7.4, and 7.5 of the AD Agreement and Articles 17.1, 17.2, 17.4, and 17.5 of the Subsidies Agreement to the extent that they are applied prior to the imposition of definitive antidumping or countervailing duties, and that they are inconsistent with Articles 2.2, 2.3, 2.4, 9.1, 9.2 and 9.3 of the AD Agreement and Articles 1, 14, 19.2, 19.3 and 19.4 of the Subsidies Agreement. India further states that because the amended directive was not published in the **Federal Register** or the Customs Bulletin of the United States, it is inconsistent with GATT 1994 Article X:1 and X:2, AD Agreement Article 18.5, and Subsidies Agreement Article 32.5. India alleges that the amended bond directive is inconsistent with GATT 1994 Article XI as a restriction other than a duty, tax or other charge and GATT 1994 Article XIII to the extent it is applied in a discriminatory manner, or, alternatively, is inconsistent with GATT 1994 Article I and II as a charge in excess of that imposed or mandatorily required by legislation on the date of entry into force of the GATT. India also states that the application of the continuous bond requirement to imports of frozen warmwater shrimp from India is inconsistent with Articles I:1, II:1(a) and (b), VI:2 (including Note 1 Ad Paragraphs 2 and 3 of Article VI) XI, and XIII of the GATT, and Articles 1, 2.2, 2.3, 2.4, 7.1, 7.2, 7.4, 7.5, 9.1, 9.2, 9.3, 9.3.1 and 18.1 of the AD Agreement. Finally, it states that the application of the continuous bond requirement only to importers of subject merchandise from India and five other countries is inconsistent with GATT 1994 Article X:3(a). Public Comment: Requirements for Submissions Interested persons are invited to submit written comments concerning the issues raised in this dispute. Persons may submit their comments either
(i)Electronically, to *FR0624@ustr.eop.gov* , Attn: “India Bond Dispute (DS345)” in the subject line, or
(ii)by fax to Sandy McKinzy at
(202)395-3640. For documents sent by fax, USTR requests that the submitter provide a confirmation copy to the electronic mail address listed above. USTR encourages the submission of documents in Adobe PDF format, as attachments to an electronic mail. Interested persons who make submissions by electronic mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. Similarly, to the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the submitter. Confidential business information must be clearly designated as such and the submission must be marked “BUSINESS CONFIDENTIAL” at the top and bottom of the cover page and each succeeding page. Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—
(1)Must clearly so designate the information or advice;
(2)Must clearly mark the material as “SUBMITTED IN CONFIDENCE” at the top and bottom of the cover page and each succeeding page; and
(3)Is encouraged to provide a non-confidential summary of the information or advice. Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room, which is located at 1724 F Street, NW., Washington, DC 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened or in the event of an appeal from such a panel, the U.S. submissions, the submissions, or non-confidential summaries of submissions, received from other participants in the dispute; the report of the panel, and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket No. WT/DS-345, India Bond Dispute) may be made by calling the USTR Reading Room at
(202)395-6186. The USTR Reading Room is open to the public from 9:30 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday. Daniel E. Brinza, Assistant United States Trade Representative for Monitoring and Enforcement. [FR Doc. E6-22185 Filed 12-26-06; 8:45 am] BILLING CODE 3190-W7-P OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE [Docket No. WTO/DS344] WTO Dispute Settlement Proceeding Regarding Antidumping Measures on Stainless Steel Sheet and Strip Coils From Mexico AGENCY: Office of the United States Trade Representative. ACTION: Notice; request for comments. SUMMARY: The Office of the United States Trade Representative
(USTR)is providing notice that on October 26, 2006, the Dispute Settlement Body established, at the request of Mexico, a panel under the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) concerning certain U.S. antidumping orders against stainless steel sheet and strip coils (Department of Commerce Case No. A-201-822). That request may be found at *http://www.wto.org* contained in a document designated as WT/SD344/4. USTR invites written comments from the public concerning the issues raised in this dispute. DATES: Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before February 28, 2007 to be assured of timely consideration by USTR. ADDRESSES: Comments should be submitted
(i)Electronically, to FR0620@ustr.eop.gov, with “Mexico Zeroing II (DS344)” in the subject line, or
(ii)by fax, to Sandy McKinzy at
(202)395-3640, with a confirmation copy sent electronically to the electronic mail address above, in accordance with the requirements for submission set out below. FOR FURTHER INFORMATION CONTACT: Elizabeth V. Baltzan, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC,
(202)395-3582. SUPPLEMENTARY INFORMATION: Section 127(b) of the Uruguay Round Agreements Act
(URAA)(19 U.S.C. 3537(b)(1)) requires that notice and opportunity for comment be provided after the United States submits or receives a request for the establishment of a WTO dispute settlement panel. Major Issues Raised by Mexico On October 12, 2006, Mexico requested the establishment of a panel regarding the Department of Commerce's use of “zeroing” in investigations and administrative reviews. Mexico challenges the following determinations: • Final results of the anti-dumping investigation and antidumping order, entitled “Final Determination Of Sales At Less Than Fair Value: Stainless steel sheet and strip in coils from Mexico,” published in 64 **Federal Register**
(FR)30790 of 8 June 1999 (investigation) and its amendments and order, 64 FR 40560 of 27 July 1999; • Final results of the determination of anti-dumping duties for the period from January 1999 to June 2000, entitled “Final Results of Antidumping Duty Administrative Review: Stainless Steel Sheet And Strip In Coils From Mexico,” published in 67 FR 6490 of 12 February 2002 (final results of the determination of duties 1999-2000) and its amendments, 67 FR 15542 of 2 April 2002); • Final results of the determination of anti-dumping duties for the period from July 2000 to June 2001, entitled “Final Results of Antidumping Duty Administrative Review: Stainless Steel Sheet And Strip In Coils From Mexico,” published in 68 FR 6889 of 11 February 2003 (final results of the determination of duties 2000-2001), and amendments, 68 FR 13686 of 20 March 2003. • Final results of the determination of anti-dumping duties for the period from July 2001 to June 2002, entitled “Final Results of Antidumping Duty Administrative Review: Stainless Steel Sheet And Strip In Coils From Mexico,” published in 69 FR 6259 of 10 February 2004 (final results of the determination of duties 2001-2002); • Final results of the determination of anti-dumping duties for the period from July 2002 to June 2003, entitled “Final Results Of Antidumping Duty Administrative Review: Stainless Steel Sheet And Strip In Coils From Mexico,” published in 69 FR 3677 of 26 January 2005 (final results of the determination of duties 2002-2003); • Final results of the determination of anti-dumping duties for the period from July 2003 to June 2004, entitled “Final Results Of Antidumping Duty Administrative Review: Stainless Steel Sheet And Strip In Coils From Mexico,” published in 70 FR 73444 of 12 December 2005 (final results of the determination of duties 2003-2004). Mexico also challenges: • Sections 736, 751, 771(35)(A) and (B), and section 777A(c) and
(d)of The Tariff Act of 1930, as amended; • The Statement of Administrative Action that accompanied the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, vol. I; • USDOC regulations codified at Title 19 of the United States Code of Federal Regulations, sections 351.212(b), 351.414(c),
(d)and (e); and • The Import Administration Antidumping Manual (1997 edition), including the computer program(s) to which it refers. In addition, Mexico challenges the methodologies used to calculate dumping margins in original investigations and periodic reviews. Public Comment: Requirements for Submissions Interested persons are invited to submit written comments concerning the issues raised in the dispute. Comments should be submitted
(i)Electronically, to *FR0620@ustr.eop.gov* , with “Mexico Zeroing II (DS344)” in the subject line, or
(ii)by fax, to Sandy McKinzy at
(202)395-3640, with a confirmation copy sent electronically to the electronic mail address above. USTR encourages the submission of documents in Adobe PDF format as attachments to an electronic mail. Interested persons who make submissions by electronic mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. Similarly, to the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the commenter. Confidential business information must be clearly designated as such and BUSINESS CONFIDENTIAL must be marked at the top and bottom of the cover page and each succeeding page. Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter
(1)Must clearly so designate the information or advice;
(2)must clearly mark the material as SUBMITTED IN CONFIDENCE at the top and bottom of the cover page and each succeeding page; and
(3)is encouraged to provide a non-confidential summary of the information or advice. Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room, which is located at 1724 F Street, NW., Washington, DC 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened or in the event of an appeal from such a panel, the U.S. submissions, the submissions, or non-confidential summaries of submissions, received from other participants in the dispute; the report of the panel, and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket WTO/DS-344 Mexico Zeroing II) may be made by calling the USTR Reading Room at
(202)395-6186. The USTR Reading Room is open to the public from 9:30 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday. Daniel Brinza, Assistant United States Trade Representative for Monitoring and Enforcement. [FR Doc. E6-22186 Filed 12-26-06; 8:45 am] BILLING CODE 3190-W7-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54961; File No. SR-Amex-2006-101] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendments No. 1 and 2 Thereto Relating to the Listing and Trading of Shares of Funds of the ProShares Trust December 18, 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 24, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On November 22, 2006, Amex submitted Amendment No. 1 to the proposed rule change. 3 On December 8, 2006, Amex submitted Amendment No. 2 to the proposed rule change. 4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, Amex proposed to list and trade the shares of twenty-four
(24)additional funds of the Trust (as defined herein) and made certain clarifying changes with respect to the trading of the Shares (as defined herein). Amendment No. 1 replaced the original filing in its entirety. 4 In Amendment No. 2, Amex made additional changes to clarify certain defined terms, the creation and redemption of the Shares, and the criteria for continued listing of the Shares. Amendment No. 2 replaced Amendment No. 1 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 the shares (the “Shares”) of eighty-one
(81)funds of the ProShares Trust (the “Trust”) based on numerous underlying securities indexes. The text of the proposal is available on Amex's Internet 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, 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, as amended. 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 Amex Rules 1000A *et seq.* provide standards for the listing of Index Fund Shares, which are securities issued by an open-end management investment company for exchange trading. These securities are registered under the Investment Company Act of 1940 (“1940 Act”), as well as under the Act. Index Fund Shares are defined in Amex Rule 1000A(b)(1) as securities based on a portfolio of stocks or fixed income securities that seek to provide investment results that correspond generally to the price and yield of a specified foreign or domestic stock index or fixed income securities index. Recent amendments adopting Amex Rule 1000A(b)(2) now permit the Exchange to list and trade Index Fund Shares that seek to provide investment results that exceed the performance of an underlying securities index by a specified multiple or that seek to provide investment results that correspond to a specified multiple of the inverse or opposite of the index's performance. The Exchange proposes to list under amended Amex Rule 1000A the Shares of eighty-one
(81)new funds of the Trust that are designated as Ultra Funds, Short Funds, and UltraShort Funds (the “Funds”). Each of the Funds will have a distinct investment objective. Each Fund will attempt, on a daily basis, to achieve its investment objective by corresponding to a specified multiple of the performance, or the inverse performance, of a particular equity securities index as briefly described below. The Funds are based on the following benchmark indexes: 5
(1)S&P Small Cap 600 Index,
(2)S&P500/Citigroup Value Index,
(3)S&P500/Citigroup Growth Index,
(4)S&P MidCap 400/Citigroup Value Index,
(5)S&P MidCap 400/Citigroup Growth Index,
(6)S&P SmallCap 600/Citigroup Value Index,
(7)S&P SmallCap 600/Citigroup Growth Index,
(8)Dow Jones U.S. Basic Materials Index,
(9)Dow Jones U.S. Consumer Services Index,
(10)Dow Jones U.S. Consumer Goods Index,
(11)Dow Jones U.S. Oil and Gas Index,
(12)Dow Jones U.S. Financials Index,
(13)Dow Jones U.S. Health Care Index,
(14)Dow Jones U.S. Industrials Index,
(15)Dow Jones U.S. Real Estate Index,
(16)Dow Jones U.S. Semiconductor Index
(17)Dow Jones U.S. Technology Index,
(18)Dow Jones U.S. Utilities Index
(19)Russell 2000® Index,
(20)Russell Midcap® Index,
(21)Russell Midcap® Growth Index,
(22)Russell Midcap® Value Index,
(23)Russell 1000® Index,
(24)Russell 1000® Growth Index,
(25)Russell 1000® Value Index,
(26)Russell 2000® Growth Index, and
(27)Russell 2000® Value Index (each index individually referred to as the “Underlying Index,” and all Underlying Indexes collectively referred to as the “Underlying Indexes”). 6 Certain Funds (the “Ultra Funds” or “Bullish Funds”) seek daily investment results, before fees and expenses that correspond to twice (200%) the daily performance of the Underlying Indexes. The net asset value (“NAV”) of the Shares of each of these Ultra Funds, if successful in meeting its objective, should increase, on a percentage basis, approximately twice as much as the respective Fund's Underlying Index gains when the prices of the securities in such Underlying Index increase on a given day, and should decrease approximately twice as much as the respective Underlying Index loses when such prices decline on a given day. 5 A complete list of the Funds is set forth in Exhibit A to Amendment No. 2, which is available on Amex's Internet Web site (http://www.amex.com). 6 The Statement of Additional Information (“SAI”) for the Funds discloses that each Fund reserves the right to substitute a different Underlying Index. Substitutions can occur if an Underlying Index becomes unavailable, no longer serves the investment needs of shareholders, the Fund experiences difficulty in achieving investment results that correspond to the applicable Underlying Index, or for any other reason determined in good faith by the Board (as defined herein). In such instance, the substitute index will attempt to measure the same general market as the current Underlying Index. Shareholders will be notified (either directly or through their intermediary) if a Fund's current Underlying Index is replaced. In the event a Fund substitutes an Underlying Index with another, different index, the Exchange will file with the Commission a Form 19b-4, which the Commission would have to approve to permit continued trading of the product based on the substitute index. See infra note 63 and accompanying text. In addition, the Exchange proposes to list and trade Shares of certain Funds (the “Short Funds”) that seek daily investment results, before fees and expenses, that correspond to the inverse or opposite of the daily performance (−100%) of the Underlying Indexes. If each of these Short Funds is successful in meeting its objective, the NAV of the Shares of each Short Fund should increase approximately as much, on a percentage basis, as the respective Underlying Index loses when the prices of the securities in the Underlying Index decline on a given day, or should decrease approximately as much as the respective Underlying Index gains when the prices of the securities in the Underlying Index rise on a given day. Finally, the Exchange proposes to list and trade Shares of certain Funds (the “UltraShort Funds”) that seek daily investment results, before fees and expenses, that correspond to twice the inverse (−200%) of the daily performance of the Underlying Indexes. If each of these UltraShort Funds is successful in meeting its objective, the NAV of the Shares of each UltraShort Fund should increase approximately twice as much, on a percentage basis, as the respective Underlying Index loses when the prices of the securities in the Underlying Index decline on a given day, or should decrease approximately twice as much as the respective Underlying Index gains when the prices of the securities in the Underlying Index rise on a given day. The Short Funds and UltraShort Funds each have investment objectives that seek investment results corresponding to an inverse performance of the Underlying Indexes and are collectively referred to as the “Bearish Funds.” The Commission recently approved the listing and trading of certain Ultra Funds, Short Funds, and UltraShort Funds based on the S&P 500 Index, Nasdaq-100 Index, Dow Jones Industrial Average Index, and S&P MidCap 400 Index. 7 Each of the existing Ultra Funds is expected to gain, on a percentage basis, approximately twice as much as the benchmark Underlying Index and should lose approximately twice as much as the Underlying Index when such prices decline. Each of the existing Short Funds is expected to achieve investment results, before fees and expenses, that correspond to the inverse or opposite of the daily performance (−100%) of an Underlying Index. In addition, each of the existing UltraShort Funds is expected to achieve investment results, before fees and expenses, that correspond to twice the inverse or opposite of the daily performance (−200%) of an Underlying Index. 7 *See* Securities Exchange Act Release No. 52553 (October 3, 2005), 70 FR 59100 (October 11, 2005). *See also* Securities Exchange Act Release No. 54040 (June 23, 3006), 71 FR 37629 (June 30, 2006) (approving Amex's proposal to list and trade shares of funds of the Trust based on certain other benchmark indexes). ProShare Advisors LLC is the investment advisor (the “Advisor”) to each Fund. The Advisor is registered under the Investment Advisers Act of 1940. 8 While the Advisor will manage each Fund, the Trust's Board of Trustees (the “Board”) will have overall responsibility for the Funds” operations. The composition of the Board is, and will be, in compliance with the requirements of Section 10 of the 1940 Act. 8 The Trust, Advisor, and Distributor (“Applicants”) have filed with the Commission an Amended Application for an Order under Sections 6(c) and 17(b) of the 1940 Act (the “Application”) for the purpose of exempting the Funds of the Trust from various provisions of the 1940 Act (File No. 812-12354). SEI Investments Distribution Company (the “Distributor”), a broker-dealer registered under the Act, will act as the distributor and principal underwriter of the Shares. JPMorgan Chase Bank, N.A. will act as the index receipt agent (“Index Receipt Agent”) for which it will receive fees. The Index Receipt Agent will be responsible for transmitting the Deposit List (as defined herein) to the National Securities Clearing Corporation (“NSCC”) and for the processing, clearance, and settlement of purchase and redemption orders through the facilities of the Depository Trust Company (“DTC”) and NSCC on behalf of the Trust. The Index Receipt Agent will also be responsible for the coordination and transmission of files and purchase and redemption orders between the Distributor and the NSCC. Shares of the Funds issued by the Trust will be a class of exchange-traded securities that represent an interest in the portfolio of a particular Fund. 9 The Shares will be registered in book-entry form only, and the Trust will not issue individual share certificates. The DTC or its nominee will be the record or registered owner of all outstanding Shares. Beneficial ownership of Shares will be shown on the records of DTC or DTC participants. 9 The Trust is registered as a business trust under the Delaware Corporate Code. Underlying Indexes The Exchange represents that the Underlying Index components comply with the generic listing standards set forth in Commentary .02 to Amex Rule 1000A. *S&P SmallCap 600 Index.* The S&P SmallCap 600 Index is a measure of small-cap company U.S. stock market performance. It is a float-adjusted, market capitalization-weighted index of 600 U.S. operating companies. Securities are selected for inclusion in the index by a committee of Standard & Poor's through a non-mechanical process that factors criteria such as liquidity, price, market capitalization, financial viability, and public float. This Underlying Index 10 has been approved for options trading and is also the basis for an exchange traded fund (“ETF”). 11 10 The shares of the iShares S&P SmallCap 600 Index Fund are traded on the Exchange. 11 *See* Securities Exchange Act Release No. 35532 (March 24, 1995), 60 FR 16518 (March 30, 1995). *S&P 500/Citigroup Value Index.* The S&P 500/Citigroup Value Index is designed to provide a comprehensive measure of large-cap U.S. equity “value” performance. It is an unmanaged, float-adjusted, and market capitalization-weighted index comprised of stocks representing approximately half the market capitalization of the S&P 500 Index that have been identified as being on the value end of the growth-value spectrum. This Underlying Index 12 is the basis for an ETF. 12 12 The shares of the iShares S&P 500 Value Index Fund are traded on the Exchange. *S&P 500/Citigroup Growth Index.* The S&P 500/Citigroup Growth Index is designed to provide a comprehensive measure of large-cap U.S. equity “growth” performance. It is an unmanaged, float-adjusted, and market capitalization-weighted index comprised of stocks representing approximately half the market capitalization of the S&P 500 Index that have been identified as being on the growth end of the growth-value spectrum. This Underlying Index 13 is the basis for an ETF. 13 The shares of the iShares S&P 500 Growth Index Fund are traded on the Exchange. *S&P MidCap 400/Citigroup Value Index.* The S&P MidCap 400/Citigroup Value Index is designed to provide a comprehensive measure of mid-cap U.S. equity “value” performance. It is an unmanaged, float-adjusted, and market capitalization-weighted index comprised of stocks representing approximately half the market capitalization of the S&P MidCap 400 Index that have been identified as being on the value end of the growth-value spectrum. This Underlying Index 14 has been approved for options trading and is also the basis for an ETF. 15 14 The shares of the iShares S&P MidCap 400 Value Index Fund are traded on the Exchange. 15 *See* Securities Exchange Act Release 30290 (January 27, 1992), 57 FR 4072 (February 3, 1992). S&P MidCap 400/Citigroup Growth Index. The S&P MidCap 400/Citigroup Growth Index is designed to provide a comprehensive measure of mid-cap U.S. equity “growth” performance. It is an unmanaged, float-adjusted, and market capitalization-weighted index comprised of stocks representing approximately half the market capitalization of the S&P MidCap 400 Index that have been identified as being on the growth end of the growth-value spectrum. This Underlying Index 16 has been approved for options trading and is also the basis for an ETF. 17 16 The shares of the iShares S&P MidCap 400 Growth Index Fund are traded on the Exchange. 17 *See supra* note 15. *S&P Small Cap 600/Citigroup Value Index.* The S&P SmallCap 600/Citigroup Value Index is designed to provide a comprehensive measure of small-cap U.S. equity “value” performance. It is an unmanaged, float-adjusted, and market capitalization-weighted index comprised of stocks representing approximately half the market capitalization of the S&P SmallCap 600 Index that have been identified as being on the value end of the growth-value spectrum. This Underlying Index 18 has been approved for options trading and is also the basis for an ETF. 19 18 The shares of the iShares S&P SmallCap 600 Value Index Fund are traded on the Exchange. 19 *See supra* note 11. *S&P SmallCap 600/Citigroup Growth Index.* The S&P SmallCap 600/Citigroup Growth Index is designed to provide a comprehensive measure of small-cap U.S. equity “growth” performance. It is an unmanaged, float-adjusted, and market capitalization-weighted index comprised of stocks representing approximately half the market capitalization of the S&P SmallCap 600 Index that have been identified as being on the growth end of the growth-value spectrum. This Underlying Index 20 has been approved for options trading and is also the basis for an exchange-traded fund ETF. 21 20 The shares of the iShares S&P SmallCap 600 Growth Index Fund are traded on the Exchange. 21 *See supra* note 11. *Dow Jones U.S. Basic Materials Index.* The Dow Jones U.S. Basic Materials Index measures the performance of the basic materials industry of the U.S. equity market. Component companies are involved in the production of aluminum, steel, non ferrous metals, commodity chemicals, specialty chemicals, forest products, paper products, as well as the mining of precious metals and coal. This Underlying Index 22 has been approved for options trading and is also the basis for an ETF. 22 The shares of the iShares Dow Jones U.S. Basic Materials Sector Index Fund are traded on the Exchange. *Dow Jones U.S. Consumer Goods Index.* The Dow Jones U.S. Consumer Goods Index measures the performance of consumer spending in the goods industry of the U.S. equity market. Component companies include manufacturers of automobiles and automobile parts and tires, brewers and distillers, farming and fishing operations, durable and non-durable household product manufacturers, cosmetic companies, and companies related to food and tobacco products, clothing, accessories, and footwear. This Underlying Index 23 is the basis for an ETF. 23 The shares of the iShares Dow Jones U.S. Consumer Goods Sector Index Fund are traded on the Exchange. *Dow Jones U.S. Consumer Services Index.* The Dow Jones U.S. Consumer Services Index measures the performance of consumer spending in the services industry of the U.S. equity market. Component companies include airlines, broadcasting and entertainment companies, apparel and broadline retailers, food and drug retailers, media agencies, publishing companies, gambling companies, hotels, restaurants and bars, and travel and tourism companies. This Underlying Index 24 is the basis for an ETF. 24 The shares of the iShares Dow Jones U.S. Consumer Services Sector Index Fund are traded on the Exchange. *Dow Jones U.S. Financials Index.* The Dow Jones U.S. Financials Index measures the performance of the financial services industry of the U.S. equity market. Component companies include regional banks, major U.S. domiciled international banks, full line, life, and property and casualty insurance companies, companies that invest, directly or indirectly, in real estate, diversified financial companies such as Fannie Mae, credit card issuers, check cashing companies, mortgage lenders, and investment advisers, securities brokers and dealers, including investment banks, merchant banks, and online brokers, and publicly traded stock exchanges. This Underlying Index 25 is the basis for an ETF. 25 The shares of the iShares Dow Jones U.S. Financial Services Index Fund are traded on the Exchange. *Dow Jones U.S. Health Care Index.* The Dow Jones U.S. Health Care Index measures the performance of the healthcare industry of the U.S. equity market. Component companies include health care providers, biotechnology companies, medical supply companies, and companies related to advanced medical devices and pharmaceuticals. This Underlying Index 26 is the basis for an ETF. 26 The shares of the iShares Dow Jones U.S. Healthcare Sector Index Fund are traded on the Exchange. *Dow Jones U.S. Industrials Index.* The Dow Jones U.S. Industrials Index measures the performance of the industrial industry of the U.S. equity market. This Underlying Index includes component companies in sectors related to building materials, heavy construction, factory equipment, heavy machinery, industrial services, pollution control, containers and packaging, industrial diversified, air freight, marine transportation, railroads, trucking, land-transportation equipment, shipbuilding, transportation services, advanced industrial equipment, electronic components and equipment, and aerospace. This Underlying Index 27 is the basis for an ETF. 27 The shares of the iShares Dow Jones U.S. Industrial Sector Index Fund are traded on the Exchange. *Dow Jones U.S. Oil & Gas Index.* The Dow Jones U.S. Oil & Gas Index measures the performance of the oil and gas industry of the U.S. equity market. Component companies include oil drilling equipment and service companies, oil companies-major, oil companies-secondary, pipeline companies, liquid, solid, or gaseous fossil fuel producers, and related service companies. This Underlying Index 28 is the basis for an ETF. 28 The shares of the iShares Dow Jones U.S. Energy Sector Index Fund are listed and traded on the Exchange. *Dow Jones U.S. Real Estate Index.* The Dow Jones U.S. Real Estate Index measures the performance of the real estate sector of the U.S. equity market. Component companies include those that invest directly or indirectly in the development, management, or ownership of shopping malls, apartment buildings and housing developments, and real estate investment trusts (“REITs”), which invest in apartments and office and retail properties. REITs are passive investment vehicles that invest primarily in income-producing real estate or real estate related loans or interests. This Underlying Index 29 has been approved for options trading and is also the basis for an ETF. 29 The shares of the iShares Dow Jones U.S. Real Estate Index Fund are listed and traded on the Exchange. *Dow Jones U.S. Semiconductor Index.* The Dow Jones U.S. Semiconductor Index measures the performance of the semiconductor sub-sector of the U.S. equity market. Component companies are engaged in the production of semiconductors and other integrated chips, as well as other related products such as semiconductor capital equipment and mother-boards. 30 30 Amex represents that the Dow Jones U.S. Semiconductor Index meets the Exchange's generic standards under Amex Rule 1000A, Commentary .02. *Dow Jones U.S. Technology Index.* The Dow Jones U.S. Technology Index measures the performance of the technology industry of the U.S. equity market. Component companies include those involved in computers and office equipment, software, communications technology, semiconductors, diversified technology services, and Internet services. This Underlying Index 31 is the basis for an ETF. 31 The shares of the iShares Dow Jones U.S. Technology Sector Index Fund are listed and traded on the Exchange. *Dow Jones U.S. Utilities Index.* The Dow Jones U.S. Utilities Index measures the performance of the utilities industry of the U.S. equity market. Component companies include electric utilities, gas utilities, and water utilities. This Underlying Index 32 is the basis for an ETF. 32 The shares of the iShares Dow Jones U.S. Utilities Sector Index Fund are traded on the Exchange. *Russell 2000® Index.* The Russell 2000® Index is a measure of small-cap U.S. stock market performance. It is an adjusted, market capitalization-weighted index containing approximately 2,000 of the smallest companies in the Russell 3000® Index or approximately 8% of the total market capitalization of the Russell 3000® Index, which in turn represents approximately 98% of the investable U.S. equity market. All U.S. companies listed on the New York Stock Exchange (“NYSE”), Amex, or The Nasdaq Stock Market meeting an initial minimum ($1) price are considered for inclusion. Reconstitution occurs annually. Securities are not replaced if they leave the index; however, new issue securities meeting other membership requirements may be added on a quarterly basis. This Underlying Index 33 has been approved for options trading and is also the basis for an ETF. 33 The shares of the iShares Russell 2000 Index Fund are traded on the Exchange. *Russell Midcap® Index.* The Russell Midcap® Index measures the performance of the 800 smallest companies in the Russell 1000® Index, which represent approximately 30% of the total market capitalization of the Russell 1000® Index. As of the latest reconstitution, the average market capitalization was approximately $5.2 billion; the median market capitalization was approximately $3.9 billion. The largest company in the index had an approximate market capitalization of $14.8 billion. This Underlying Index is the basis for an ETF. 34 34 The shares of the iShares Russell Midcap Index Fund are traded on the Exchange. *Russell Midcap® Growth Index.* The Russell Midcap® Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000® Growth Index. This Underlying Index 35 is the basis for an ETF . 35 The shares of the iShares Russell Midcap Growth Index Fund are traded on the Exchange. *Russell Midcap® Value Index.* The Russell Midcap® Value Index measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000® Value Index. This Underlying Index 36 is the basis for an ETF . 36 The shares of the iShares Russell Midcap Value Index Fund are traded on the Exchange. *Russell 1000® Index.* The Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000® Index, which represents approximately 92% of the total market capitalization of the Russell 3000® Index. As of the latest reconstitution, the average market capitalization was approximately $13.8 billion; the median market capitalization was approximately $4.9 billion. The smallest company in the index had an approximate market capitalization of $1.9 billion. This Underlying Index 37 is the basis for an ETF . 37 The shares of the iShares Russell 1000 Index Fund are traded on the Exchange. *Russell 1000® Growth Index.* The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. This Underlying Index 38 is the basis for an ETF . 38 The shares of the iShares Russell 1000 Growth Index Fund are traded on the Exchange. *Russell 1000® Value Index.* The Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. This Underlying Index 39 is the basis for an ETF . 39 The shares of the iShares Russell 1000 Value Index Fund are traded on the Exchange. *Russell 2000® Growth Index.* The Russell 2000® Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. This Underlying Index 40 is the basis for an ETF . 40 The shares of the iShares Russell 2000 Growth Index Fund are traded on the Exchange. *Russell 2000® Value Index.* The Russell 2000® Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. This Underlying Index 41 is the basis for an ETF . 41 The shares of the iShares Russell 2000 Value Index Fund are traded on the Exchange. Investment Objective of the Funds Each Bullish Fund will seek investment results that correspond, before fees and expenses, to twice (200%) the daily performance of an Underlying Index and will invest its assets based upon the same strategies as conventional index funds. Rather than holding positions in equity securities and certain financial instruments intended to create exposure to 100% of the daily performance of an Underlying Index, these Funds will hold positions in equity securities and certain financial instruments designed to create exposure equal to twice (200%), before fees and expenses, the daily performance of an Underlying Index. These Bullish Funds generally will hold at least 85% of their assets in the component equity securities of the relevant Underlying Index. The remainder of assets will be devoted to certain financial instruments 42 and money market instruments 43 that are intended to create the additional needed exposure to such Underlying Index necessary to pursue its investment objective. 42 The financial instruments to be held by any of the Funds may include stock index futures contracts, options on futures contracts, options on securities and indices, equity caps, collars and floors, as well as swap agreements, forward contracts, repurchase agreements, and reverse repurchase agreements (the “Financial Instruments”). 43 Money market instruments include U.S. government securities and repurchase agreements (the “Money Market Instruments”). Repurchase agreements held by the Funds will be consistent with Rule 2a-7 of the 1940 Act, *i.e.* , remaining maturities of 397 days or less and rated investment-grade. The Bearish Funds will seek daily investment results, before fees and expenses, of the inverse or opposite (−100%) of the Underlying Index, in the case of the Short Funds, or twice the inverse or opposite (−200%) of the daily performance of the Underlying Index, in the case of the UltraShort Funds. Each of these Bearish Funds will not invest directly in the component securities of the relevant Underlying Index, but instead, will create short exposure to such Underlying Index. Each Bearish Fund will rely on establishing positions in Financial Instruments that provide, on a daily basis, the inverse or opposite of, or twice the inverse or opposite of, as the case may be, the performance of the relevant Underlying Index. Normally, 100% of the value of the portfolios of each Bearish Fund will be devoted to Financial Instruments and Money Market Instruments. While the Advisor will attempt to minimize any “tracking error” between the investment results of a particular Fund and the performance (and specified multiple thereof) or the inverse performance (and specified multiple thereof) of its Underlying Index, certain factors may tend to cause the investment results of a Fund to vary from such relevant Underlying Index or specified multiple thereof. 44 The Bullish Funds are expected to be highly correlated to each respective Underlying Index and investment objective (0.95 or greater). The Bearish Funds are expected to be highly inversely correlated to each respective Underlying Index and investment objective (−0.95 or greater). 45 In each case, the Funds are expected to have a daily tracking error of less than 5% (500 basis points) relative to the specified multiple or inverse multiple of the performance of the relevant Underlying Index. 44 Several factors may cause a Fund to vary from the relevant Underlying Index and investment objective including:
(1)A Fund's expenses, including brokerage fees (which may be increased by high portfolio turnover) and the cost of the investment techniques employed by that Fund;
(2)less than all of the securities in the benchmark index being held by a Fund and securities not included in the benchmark index being held by a Fund;
(3)an imperfect correlation between the performance of instruments held by a Fund, such as futures contracts, and the performance of the underlying securities in the cash market;
(4)bid-ask spreads (the effect of which may be increased by portfolio turnover);
(5)holding instruments traded in a market that has become illiquid or disrupted;
(6)a Fund's share prices being rounded to the nearest cent;
(7)changes to the benchmark Underlying Index that are not disseminated in advance;
(8)the need to conform a Fund's portfolio holdings to comply with investment restrictions or policies or regulatory or tax law requirements; and
(9)early and unanticipated closings of the markets on which the holdings of a Fund trade, resulting in the inability of the Fund to execute intended portfolio transactions. 45 Correlation is the strength of the relationship between
(1)the change in a Fund's NAV and
(2)the change in the benchmark Underlying Index (investment objective). The statistical measure of correlation is known as the “correlation coefficient.” A correlation coefficient of +1 indicates a perfect positive correlation while a value of −1 indicates a perfect negative (inverse) correlation. A value of zero would mean that there is no correlation between the two variables. The Portfolio Investment Methodology The Advisor will seek to establish an investment exposure in each portfolio corresponding to each Fund's investment objective based on its “Portfolio Investment Methodology,” as described below. The Exchange states that the Portfolio Investment Methodology is a mathematical model based on well-established principles of finance that are widely used by investment practitioners, including conventional index fund managers. As set forth in the Application, the Portfolio Investment Methodology was designed to determine for each Fund the portfolio investments needed to achieve its stated investment objectives. The Portfolio Investment Methodology takes into account a variety of specified criteria and data, the most important of which are:
(1)Net assets (taking into account creations and redemptions) in each Fund's portfolio at the end of each trading day,
(2)the amount of required exposure to the Underlying Index, and
(3)the positions in equity securities, Financial Instruments, and/or Money Market Instruments at the beginning of each trading day. The Advisor pursuant to the methodology will then mathematically determine the end-of-day positions to establish the required amount of exposure to the Underlying Index (the “Solution”), which will consist of equity securities, Financial Instruments, and/or Money Market Instruments. The difference between the start-of-day positions and the required end-of-day positions is the actual amount of equity securities, Financial Instruments, and/or Money Market Instruments that must be bought or sold for the day. The Solution represents the required exposure and, when necessary, is converted into an order or orders to be filled that same day. Generally, portfolio trades effected pursuant to the Solution are reflected in the NAV on the first business day (T+1) after the date the relevant trade is made. Therefore, the NAV calculated for a Fund on a given day should reflect the trades executed pursuant to the prior day's Solution. For example, trades pursuant to the Solution calculated on a Monday afternoon are executed on behalf of the Fund in question on that day. These trades will then be reflected in the NAV for that Fund that is calculated as of 4 p.m. Eastern Time (“ET”) on Tuesday. The timeline for the Portfolio Investment Methodology is as follows. Authorized Participants (“APs” or “Authorized Participants”) 46 have a 3 p.m. ET cut-off for orders submitted by telephone, facsimile, and other electronic means of communication and a 4 p.m. ET cut-off for orders received via mail. AP orders by mail are exceedingly rare. Orders are received by the Distributor and relayed to the Advisor within ten
(10)minutes. The Advisor will know by 3:10 p.m. ET the number of creation/redemption orders by APs for that day. Orders are then placed at approximately 3:40 p.m. ET as market-on-close orders. At 4 p.m. ET, the Advisor will again look at the exposure to make sure that the orders placed are consistent with the Solution, and as described above, the Advisor will execute any other transactions in Financial Instruments to assure that the Fund's exposure is consistent with the Solution. 46 An Authorized Participant is either
(1)a broker-dealer or other participant in the continuous net settlement system of the NSCC or
(2)a DTC participant who has entered into a participant agreement with the Distributor. Description of Investment Techniques In attempting to achieve its individual investment objectives, a Fund may invest its assets in equity securities, Financial Instruments, and Money Market Instruments. The Bullish Funds will hold between 85-100% of their total assets in the equity securities contained in the relevant Underlying Index. The remainder of assets, if any, will be devoted to Financial Instruments and Money Market Instruments that are intended to create additional needed exposure to such Underlying Index necessary to pursue the Bullish Funds' investment objectives. The Bearish Funds generally will not invest in equity securities related to the applicable Underlying Index, but rather will hold only Financial Instruments and Money Market Instruments. To the extent, applicable, each Fund will comply with the requirements of the 1940 Act with respect to “cover” for Financial Instruments and thus may hold a significant portion of its assets in liquid instruments in segregated accounts. Each Fund may engage in transactions in futures contracts on designated contract markets where such contracts trade and will only purchase and sell futures contracts traded on a U.S. futures exchange or board of trade. Each Fund will comply with the requirements of Rule 4.5 of the regulations promulgated by the Commodity Futures Trading Commission (the “CFTC”). 47 47 The CFTC Rule 4.5 provides an exclusion for investment companies registered under the 1940 Act from the definition of the term “commodity pool operator” upon the filing of a notice of eligibility with the National Futures Association. Each Fund may enter into swap agreements and/or forward contracts for the purposes of attempting to gain exposure to the equity securities of its Underlying Index without actually transacting such securities. The Exchange states that the counterparties to the swap agreements and/or forward contracts will be major broker-dealers and banks. The creditworthiness of each potential counterparty is assessed by the Advisor's credit committee pursuant to guidelines approved by the Board. Existing counterparties are reviewed periodically by the Board. Each Fund may also enter into repurchase and reverse repurchase agreements with terms of less than one year and will only enter into such agreements with
(i)members of the Federal Reserve System,
(ii)primary dealers in U.S. government securities, or
(iii)major broker-dealers. Each Fund may also invest in Money Market Instruments, in pursuit of its investment objectives, as “cover” for Financial Instruments, as described above, or to earn interest. The Trust will adopt certain fundamental policies consistent with the 1940 Act, and each Fund will be classified as “non-diversified” under the 1940 Act. Each Fund, however, intends to maintain the required level of diversification and otherwise conduct its operations so as to qualify as a “regulated investment company” or “RIC” for purposes of the Internal Revenue Code (the “Code”), in order to relieve the Trust and the Funds of any liability for Federal income tax to the extent that its earnings are distributed to shareholders. 48 48 In order for a Fund to qualify for tax treatment as a RIC, it must meet several requirements under the Code. Among these is the requirement that, at the close of each quarter of the Fund's taxable year,
(i)at least 50% of the market value of the Fund's total assets must be represented by cash items, U.S. government securities, securities of other RICs, and other securities, with such other securities limited for purposes of this calculation in respect of any one issuer to an amount not greater than 5% of the value of the Fund's assets and not greater than 10% of the outstanding voting securities of such issuer, and
(ii)not more than 25% of the value of its total assets may be invested in the securities of any one issuer, or two or more issuers that are controlled by the Fund (within the meaning of Section 851 (b)(4)(B) of the Code) and that are engaged in the same or similar trades or businesses or related trades or businesses (other than U.S. government securities or the securities of other RICs). Availability of Information about the Shares and Underlying Indexes The Trust's Internet Web site ( *http://www.proshares.com* ), which is and will be publicly accessible at no charge, will contain the following information for each Fund's Shares:
(a)The prior business day's closing NAV, the reported closing price, and a calculation of the premium or discount of such price in relation to the closing NAV;
(b)data for a period covering at least the four previous calendar quarters (or the life of a Fund, if shorter) indicating how frequently each Fund's Shares traded at a premium or discount to NAV based on the daily closing price and the closing NAV, and the magnitude of such premiums and discounts,
(c)its prospectus and product description, and
(d)other quantitative information, such as daily trading volume. The prospectus and/or product description for each Fund will inform investors that the Trust's Internet Web site has information about the premiums and discounts at which the Fund's Shares have traded. 49 49 The Application requests relief from Section 24(d) of the 1940 Act, which would permit dealers to sell Shares in the secondary market unaccompanied by a statutory prospectus when prospectus delivery is not required by the Securities Act of 1933. Additionally, if a product description is being provided in lieu of a prospectus, Commentary .03 of Amex Rule 1000A requires that Amex members and member organizations provide to all purchasers of a series of Index Fund Shares a written description of the terms and characteristics of such securities, in a form prepared by the open-end management investment company issuing such securities, not later than the time of confirmation of the first transaction in such series is delivered to such purchaser. Furthermore, any sales material will reference the availability of such circular and the prospectus. The Amex will disseminate for each Fund on a daily basis by means of the Consolidated Tape Association (“CT”) and CQ High Speed Lines information with respect to an Indicative Intra-Day Value (the “IIV”) (as defined and discussed herein), recent NAV, shares outstanding, and the estimated cash amount and total cash amount per Creation Unit. The Exchange will make available on its Internet Web site at *http://www.amex.com* daily trading volume, the closing price, the NAV, and the final dividend amounts to be paid for each Fund. Each Fund's total portfolio composition will be disclosed on the Internet Web site of the Trust ( *http://www.proshares.com* or another relevant Internet Web site as determined by the Trust) and/or the Exchange ( *http://www.amex.com* ). The Trust expects that Internet Web site disclosure of portfolio holdings will be made daily and will include, as applicable, the names and number of shares held of each specific equity security, the specific types of Financial Instruments and characteristics of such Financial Instruments, and the cash equivalents and amount of cash held in the portfolio of each Fund. This public Internet Web site disclosure of the portfolio composition of each Fund will coincide with the disclosure by the Advisor of the “IIV File” (as described below) and the portfolio composition file or “PCF” (as described below). Therefore, the same portfolio information (including accrued expenses and dividends) will be provided on the public Internet Web site as well as in the IIV File and PCF provided to Authorized Participants. The format of the public Internet Web site disclosure and the IIV File and PCF will differ because the public Internet Web site will list all portfolio holdings, while the IIV File and PCF will similarly provide the portfolio holdings, but in a format appropriate for Authorized Participants, *i.e.* , the exact components of a Creation Unit. 50 Accordingly, each investor will have access to the current portfolio composition of each Fund through the Trust's Internet Web site, at *http://www.proshares.com* , and/or at the Exchange's Internet Web site at *http://www.amex.com.* 50 The composition will be used to calculate the NAV later that day. Beneficial owners of Shares (“Beneficial Owners”) will receive all of the statements, notices, and reports required under the 1940 Act and other applicable laws. They will receive, for example, annual and semi-annual Fund reports, written statements accompanying dividend payments, proxy statements, annual notifications detailing the tax status of Fund distributions, and Form 1099-DIVs. Some of these documents will be provided to Beneficial Owners by their brokers, while others will be provided by the Fund through the brokers. The daily closing index value and the percentage change in the daily closing index value for each Underlying Index will be publicly available on various Internet Web sites, such as at *http://www.bloomberg.com.* Data regarding each Underlying Index is also available from the respective Underlying Index provider to subscribers. Several independent data vendors also package and disseminate Underlying Index data in various value-added formats (including vendors displaying both securities and index levels and vendors displaying index levels only). The value of each Underlying Index will be updated intra-day on a real time basis as its individual component securities change in price. These intra-day values of each Underlying Index will be disseminated at least every 15 seconds throughout the trading day by Amex or another organization authorized by the relevant Underlying Index provider in accordance with Commentary .02(c) to Amex Rule 1000A. Creation and Redemption of Shares Each Fund will issue and redeem Shares only in aggregations of at least 50,000 (“Creation Units”). Purchasers of Creation Units will be able to separate the Creation Units into individual Shares. Once the number of Shares in a Creation Unit is determined, it will not change thereafter (except in the event of a stock split or similar revaluation). The initial value of a Share for each of the Bullish Funds and Bearish Funds is expected to be in the range of $50-$250. At the end of each business day, the Trust will prepare the list of names and the required number of shares of each Deposit Security (as defined herein) to be included in the next trading day's Creation Unit for each Bullish Fund (the “Deposit List”). The Trust will then add to the Deposit List the cash information effective as of the close of business on that business day and create a PCF for each Fund, which it will transmit to NSCC before the open of business the next business day. The information in the PCF will be available to all participants in the NSCC system. Because the NSCC's system for the receipt and dissemination to its participants of the PCF is not currently capable of processing information with respect to Financial Instruments, the Advisor has developed an “IIV File,” which it will use to disclose the Funds” holdings of Financial Instruments. 51 The IIV File will contain, for each Bullish Fund (to the extent that it holds Financial Instruments) and Bearish Fund, information sufficient by itself or in connection with the PCF and other available information for market participants to calculate a Fund's IIV and effectively arbitrage such Fund. 51 The Trust or the Advisor will post the IIV File to a password-protected Internet Web site before the opening of business on each business day, and all Authorized Participants and the Exchange will have access to a password and the Internet Web site containing the IIV File. The Funds, however, will disclose each business day to the public identical information, but in a format appropriate to public investors, at the same time the Funds disclose the IIV File and PCF, as applicable, to industry participants. For example, the following information would be provided in the IIV File for a Bullish Fund holding equity securities and Financial Instruments such as swaps and futures contracts and a Bearish Fund holding swaps and futures contracts:
(A)The total value of the equity securities held by the Bullish Fund,
(B)the notional value of the swaps held by such Funds (together with an indication of the Underlying Index on which such swap is based and whether the Funds' position is long or short),
(C)the most recent valuation of the swaps held by the Funds,
(D)the notional value of any futures contracts (together with an indication of the Underlying Index on which such contract is based, whether the Funds' position is long or short and the contract's expiration date) held by the Funds,
(E)the number of futures contracts held by the Funds (together with an indication of the Underlying Index on which such contract is based, whether the Funds' position is long or short and the contract's expiration date),
(F)the most recent valuation of the futures contracts held by the Funds,
(G)the total assets and total shares outstanding of each Fund, and
(H)a “net other assets” figure reflecting expenses and income of the Funds to be accrued during and through the following business day and accumulated gains or losses on the Funds' Financial Instruments through the end of the business day immediately preceding the publication of the IIV File. To the extent that any Bullish or Bearish Fund holds cash or cash equivalents about which information is not available in a PCF, information regarding such Fund's cash and cash equivalent positions will be disclosed in the IIV File for such Fund. The information in the IIV File will be sufficient for participants in the NSCC system to calculate the IIV for Bearish Funds and, together with the information on equity securities contained in the PCF, will be sufficient for calculation of the IIV for Bullish Funds, during such next business day. The IIV File, together with the applicable information in the PCF in the case of Bullish Funds, will also be the basis for the next business day's NAV calculation. Under normal circumstances, the Bullish Funds will be created and redeemed either entirely for cash and/or for a deposit basket of equity securities (“Deposit Securities”), *plus* a Balancing Amount (as defined herein), as described below. Under normal circumstances, the Bearish Funds will be created and redeemed entirely for cash. The IIV File published before the open of business on a business day will, however, permit NSCC participants to calculate (by means of calculating the IIV) the amount of cash required to create a Creation Unit , and the amount of cash that will be paid upon redemption of a Creation Unit, for each Bearish Fund for that business day. For the Bullish Funds, the PCF will be prepared by the Trust after 4 p.m. ET and transmitted by the Index Receipt Agent to the NSCC by 6:30 p.m. ET. All Authorized Participants and the Exchange will have access to the Internet Web site containing the IIV File. The IIV File will reflect the trades made on behalf of a Bullish Fund that business day and the creation/redemption orders for that business day. Accordingly, by 6:30 p.m. ET, Authorized Participants will know the composition of the Bullish Fund's portfolio for the next trading day. *Creation of the Bullish Funds.* Typically, persons 52 purchasing Creation Units from a Bullish Fund must make an in-kind deposit of a basket of Deposit Securities consisting of the securities selected by the Advisor from among those securities contained in the Fund's portfolio, together with an amount of cash specified by the Advisor (the “Balancing Amount”), plus the applicable transaction fee (the “Transaction Fee”). The Deposit Securities and the Balancing Amount collectively are referred to as the “Creation Deposit.” The Balancing Amount is a cash payment designed to ensure that the value of a Creation Deposit is identical to the value of the Creation Unit. The Balancing Amount is an amount equal to the difference between the NAV of a Creation Unit and the market value of the Deposit Securities. 53 52 Authorized Participants are the only persons who may place orders to create and redeem Creation Units. Authorized Participants must be registered broker-dealers or other securities market participants, such as banks and other financial institutions, that are exempt from registration as broker-dealers to engage in securities transactions and who are participants in DTC. *See supra* note 46. 53 While not typical, if the market value of the Deposit Securities is greater than the NAV of a Creation Unit, then the Balancing Amount will be a negative number, in which case the Balancing Amount will be paid by the Bullish Fund to the purchaser, rather than vice-versa. The Balancing Amount will be determined shortly after 4 p.m. ET each business day. Although the Balancing Amount for most exchange-traded funds is a small amount reflecting accrued dividends and other distributions, for the Bullish Funds it is expected to be larger due to changes in the value of the Financial Instruments, *i.e.* , daily mark-to-market. For example, assuming a basket of Deposit Securities is valued at $5 million for a Bullish Fund, if the market increases 10%, such basket of Deposit Securities would be equal to $5.5 million at 4 p.m. ET. The value of the Bullish Fund shares would increase by 20% or $1 million to equal $6 million total. With such basket of Deposit Securities valued at $5.5 million, the Balancing Amount would be $500,000. The values of the next day's basket of Deposit Securities and Balancing Amount are announced between 5:30 p.m. ET and 6 p.m. ET each business day. The Balancing Amount may, at times, represent a significant portion of the aggregate purchase price (or in the case of redemptions, the redemption proceeds). This may occur because the mark-to-market value of the Financial Instruments held by the Bullish Funds, if any, is included in the Balancing Amount. The Transaction Fee is a fee imposed by the Bullish Funds on investors purchasing (or redeeming) Creation Units. The Trust will make available through the DTC or the Distributor on each business day, prior to the opening of trading on the Exchange, the Deposit List indicating the Deposit Securities to be included in the Creation Deposit for each Bullish Fund. 54 The Trust also will make available on a daily basis information about the previous day's Balancing Amount. 54 In accordance with the Advisor's Code of Ethics, personnel of the Advisor with knowledge about the composition of a Creation Deposit will be prohibited from disclosing such information to any other person, except as authorized in the course of their employment, until such information is made public. The Bullish Funds reserve the right to permit or require an Authorized Participant to substitute an amount of cash and/or a different security to replace any prescribed Deposit Security. 55 Substitutions might be permitted or required, for example, because one or more Deposit Securities may be unavailable, or may not be available in the quantity needed to make a Creation Deposit. Brokerage commissions incurred by a Fund to acquire any Deposit Security not part of a Creation Deposit are expected to be immaterial, and in any event, the Adviser may adjust the relevant Transaction Fee to ensure that the Fund collects the extra expense from the purchaser. Orders to create or redeem Shares of the Bullish Funds must be placed through an Authorized Participant. 55 In certain limited instances, a Bullish Fund may require a purchasing investor to purchase a Creation Unit entirely for cash. For example, on days when a substantial rebalancing of a Fund's portfolio is required, the Advisor might prefer to receive cash rather than in-kind stocks so that it has liquid resources on hand to make the necessary purchases. As noted below, the Exchange will disseminate through the facilities of the CT, at least every 15 seconds during the Exchange's regular trading hours, the IIV on a per Fund Share basis. The Exchange states that the Funds will not be involved in, or responsible for, the calculation or dissemination of any such amount and will make no warranty as to its accuracy. *Redemption of the Bullish Funds.* Bullish Fund Shares in Creation Unit-size aggregations will be redeemable on any day on which the NYSE is open in exchange for a basket of securities (“Redemption Securities”). As it does for Deposit Securities, the Trust will make available to Authorized Participants on each business day prior to the opening of trading a list of the names and number of shares of Redemption Securities for each Fund. The Redemption Securities given to redeeming investors in most cases will be the same as the Deposit Securities required of investors purchasing Creation Units on the same day. 56 Depending on whether the NAV of a Creation Unit is higher or lower than the market value of the Redemption Securities, the redeemer of a Creation Unit will either receive from or pay to the Bullish Fund a cash amount equal to the difference (the “Redemption Balancing Amount”). In the typical situation where the Redemption Securities are the same as the Deposit Securities, this cash amount will be equal to the Balancing Amount described above in the creation process involving Deposit Securities. The redeeming investor also must pay to the Bullish Fund a transaction fee (“Redemption Transaction Fee”) to cover transaction costs. 57 56 There may be circumstances, however, where the Deposit Securities and Redemption Securities could differ. For example, if ABC stock were replacing XYZ stock in a Fund's Underlying Index at the close of a day's trading session, the day's prescribed Deposit Securities might include ABC, but not XYZ, while the day's prescribed Redemption Securities might include XYZ but not ABC. 57 Redemptions in which cash is substituted for one or more Redemption Securities may be assessed a higher Redemption Transaction Fee to offset the transaction cost to the Fund of selling those particular Redemption Securities. This Redemption Transaction Fee is expected to be between $500 and $1,000. A Bullish Fund has the right to make redemption payments in cash, in kind, or a combination of each, provided that the value of its redemption payments equals the NAV of the Shares tendered at the time of tender, and the Redemption Balancing Amount. The Adviser currently contemplates that Creation Units of each Bullish Fund will be redeemed principally in kind with respect to the Redemption Securities and the Redemption Balancing Amount in cash largely resulting from the value of the Financial Instruments included in the Bullish Fund. In order to facilitate delivery of Redemption Securities, each redeeming Authorized Participant, acting on behalf of a Beneficial Owner or a DTC participant, must have arrangements with a broker-dealer, bank, or other custody provider in each jurisdiction in which any of the Redemption Securities are customarily traded. If neither the redeeming Beneficial Owner nor the Authorized Participant has such arrangements, and it is not otherwise possible to make other arrangements, the Bullish Fund may, in its discretion, redeem the Bullish Fund Shares for cash. *Creation and Redemption of the Bearish Funds.* The Bearish Funds will be purchased and redeemed entirely for cash (“All-Cash Payments”). The use of an All-Cash Payment for the purchase and redemption of Creation Unit aggregations of the Bearish Funds is due to the limited transferability of Financial Instruments. The Exchange believes that Shares will not trade at a material discount or premium to the underlying securities held by a Fund based on potential arbitrage opportunities. The arbitrage process, which provides the opportunity to profit from differences in prices of the same or similar securities, increases the efficiency of the markets and serves to prevent potentially manipulative efforts. If the price of a Share deviates enough from the Creation Unit, on a per share basis, to create a material discount or premium, an arbitrage opportunity is created allowing the arbitrageur to either buy Shares at a discount, immediately cancel them in exchange for the Creation Unit, and sell the underlying securities in the cash market at a profit, or sell Shares short at a premium and buy the Creation Unit in exchange for the Shares to deliver against the short position. In both instances the arbitrageur locks in a profit and the markets move back into line. 58 58 In their 1940 Act Application, the Applicants stated that they do not believe that All-Cash Payments will affect arbitrage efficiency. This is because the Applicants believe it makes little difference to an arbitrageur whether Creation Unit aggregations are purchased in exchange for a basket of securities or cash. The important function of the arbitrageur is to bid the share price of any Fund up or down until it converges with the NAV. Applicants note that this can occur regardless of whether the arbitrageur is allowed to create in cash or with a basket of Deposit Securities. In either case, the arbitrageur can effectively hedge a position in a Fund in a variety of ways, including the use of market-on-close contracts to buy or sell the Financial Instruments. *Placement of Creation Unit Purchases and Redemption Orders.* Creation Unit aggregations of the Funds will be purchased at NAV, *plus* a Transaction Fee. For the Bearish Funds, the purchaser will make a cash payment by 12 p.m. ET on the third business day following the date on which the request was made (T+3). For the Bullish Funds, the purchaser will make an in-kind payment and/or all cash payment generally on the third business day following the date on which the request was made (T+3). Purchasers of either Fund in Creation Unit aggregations must satisfy certain creditworthiness criteria established by the Advisor and approved by the Board, as provided in the participation agreement (“Participation Agreement”) between the Trust and Authorized Participants. Creation Unit aggregations of the Bullish Funds will be redeemable either in-kind or all in cash equal to the NAV, *less* the Redemption Transaction Fee. Creation Unit aggregations of the Bearish Funds will be redeemable for an All-Cash Payment equal to the NAV, *less* the Redemption Transaction Fee. A Bullish Fund has the right to make redemption payments in cash, in kind, or a combination of each, provided that the value of its redemption payments equals the NAV of the Shares tendered for redemption at the time of tender. 59 59 The Exchange states that, in the event an Authorized Participant has submitted a redemption request in good order and is unable to transfer all or part of a Creation Unit aggregation for redemption, a Fund may nonetheless accept the redemption request in reliance on the Authorized Participant's undertaking to deliver the missing Fund Shares as soon as possible, which undertaking shall be secured by the Authorized Participant's delivery and maintenance of collateral. The Authorized Participant's Participation Agreement will permit the Fund to buy the missing Shares at any time and will subject the Authorized Participant to liability for any shortfall between the cost to the Fund of purchasing the Shares and the value of the collateral. Dividends Dividends, if any, from net investment income will be declared and paid at least annually by each Fund in the same manner as by other open-end investment companies. Certain Funds may pay dividends on a semi-annual or more frequent basis. Distributions of realized securities gains, if any, generally will be declared and paid once a year. Dividends and other distributions on the Shares of each Fund will be distributed, on a *pro rata* basis to Beneficial Owners of such Shares. Dividend payments will be made through the DTC and the DTC participants to Beneficial Owners then of record with proceeds received from each Fund. The Trust will not make the DTC book-entry Dividend Reinvestment Service (the “Dividend Reinvestment Service”) available for use by Beneficial Owners for reinvestment of their cash proceeds, but certain individual brokers may make a Dividend Reinvestment Service available to Beneficial Owners. The SAI will inform investors of this fact and direct interested investors to contact such investor's broker to ascertain the availability and a description of such a service through such broker. The SAI will also caution interested Beneficial Owners that they should note that each broker may require investors to adhere to specific procedures and timetables in order to participate in the service, and such investors should ascertain from their broker such necessary details. Shares acquired pursuant to such service will be held by the Beneficial Owners in the same manner and subject to the same terms and conditions as for original ownership of Shares. Brokerage commissions, charges, and other costs, if any, incurred in purchasing Shares in the secondary market with the cash from the distributions generally will be an expense borne by the individual Beneficial Owners participating in reinvestment through such service. Dissemination of Indicative Intra-Day Value
(IIV)In order to provide updated information relating to each Fund for use by investors, professionals, and persons wishing to create or redeem Shares, the Exchange will disseminate through the facilities of the CT:
(i)Continuously throughout the trading day, the market value of a Share, and
(ii)at least every 15 seconds throughout the trading day, a calculation of the Indicative Intra-Day Value or “IIV” 60 as calculated by the Exchange (the “IIV Calculator”). 61 Comparing these two figures helps an investor to determine whether, and to what extent, the Shares may be selling at a premium or a discount to NAV. 60 The IIV is also referred to by other issuers as an “Estimated NAV,” “Underlying Trading Value,” “Indicative Optimized Portfolio Value (IOPV),” and “Intraday Value” in various places such as the prospectus and marketing materials for different exchange-traded funds. 61 The Exchange will calculate the IIV for each Fund. The IIV Calculator (the Exchange) will calculate an IIV for each Fund in the manner discussed below. The IIV is designed to provide investors with a reference value that can be used in connection with other related market information. The IIV does not necessarily reflect the precise composition of the current portfolio held by each Fund at a particular point in time. Therefore, the IIV on a per Share basis disseminated during Amex trading hours should not be viewed as a real time update of the NAV of a particular Fund, which is calculated only once a day. While the IIV that will be disseminated by Amex is expected to be close to the most recently calculated Fund NAV on a per share basis, it is possible that the value of the portfolio held by a Fund may diverge from the IIV during any trading day. In such case, the IIV will not precisely reflect the value of the Fund portfolio. *IIV Calculation for the Bullish Funds.* The IIV Calculator (the Exchange) will disseminate the IIV throughout the trading day for the Bullish Funds holding equity securities and Financial Instruments, if any. The IIV Calculator (the Exchange) will determine such IIV by:
(i)Calculating the estimated current value of equity securities held by such Fund by
(a)calculating the percentage change in the value of the Deposit Securities indicated on the Deposit List (as provided by the Trust) and applying that percentage value to the total value of the equity securities in the Fund as of the close of trading on the prior trading day (as provided by the Trust) or
(b)calculating the current value of all of the equity securities held by the Fund (as provided by the Trust);
(ii)calculating the mark-to-market gains or losses from the Fund's total return equity swap exposure based on the percentage change to the Underlying Index and the previous day's notional values of the swap contracts, if any, held by such Fund (which previous day's notional value will be provided by the Trust);
(iii)calculating the mark-to-market gains or losses from futures, options, and other Financial Instrument positions by taking the difference between the current value of those positions held by the Fund, if any (as provided by the Trust), and the previous day's value of such positions;
(iv)adding the values from (i), (ii), and
(iii)above to an estimated cash amount provided by the Trust (which cash amount will include the swap costs), to arrive at a value; and
(v)dividing that value by the total shares outstanding (as provided by the Trust) to obtain current IIV. *IIV Calculation for the Bearish Funds.* The IIV Calculator (the Exchange) will disseminate the IIV throughout the trading day for the Bearish Funds. The IIV Calculator (the Exchange) will determine such IIV by:
(i)Calculating the mark-to-market gains or losses from the Fund's total return equity swap exposure based on the percentage change to the Underlying Index and the previous day's notional values of the swap contracts, if any, held by such Fund (which previous day's notional value will be provided by the Trust);
(ii)calculating the mark-to-market gains or losses from futures, options, and other Financial Instrument positions by taking the difference between the current value of those positions held by the Fund, if any (as provided by the Trust), and the previous day's value of such positions;
(iii)adding the values from
(i)and
(ii)above to an estimated cash amount provided by the Trust (which cash amount will include the swap costs), to arrive at a value; and
(iv)dividing that value by the total shares outstanding (as provided by the Trust) to obtain current IIV. Criteria for Initial and Continued Listing The Shares are subject to the criteria for initial and continued listing of Index Fund Shares under Amex Rule 1002A. A minimum of two Creation Units (at least 100,000 Shares) will be required to be outstanding at the start of trading. This minimum number of Shares required to be outstanding at the start of trading will be comparable to requirements that have been applied to previously listed series of Portfolio Depositary Receipts and Index Fund Shares. The Exchange believes that the proposed minimum number of Shares outstanding at the start of trading is sufficient to provide market liquidity. The Exchange, pursuant to Amex Rule 1002A(a)(ii), will obtain a representation from the Trust (for each Fund), prior to listing, that the NAV per share for each Fund will be calculated daily and made available to all market participants at the same time. The continued listing criteria provides for the delisting or removal from listing of the Shares under any of the following circumstances: • If, following the initial twelve-month period after commencement of trading on the Exchange of a series of Index Fund Shares, there are fewer than 50 beneficial holders of the series of Index Fund Shares for 30 or more consecutive trading days; or • If the value of the applicable Underlying Index or portfolio is no longer calculated or available on at least a 15-second delayed basis through one or more major market data vendors during the time the Shares trade on the Exchange; or • The IIV is no longer made available on at least a 15-second delayed basis; 62 or 62 In the event an IIV is no longer calculated or disseminated by one or more major market data vendors, the Exchange will immediately contact the Commission. • 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 will file a proposed rule change pursuant to Rule 19b-4 under the Act seeking approval to continue trading the Shares of a Fund and, unless approved, the Exchange will commence delisting the Shares of such Fund if: • The Underlying Index provider substantially changes either the Underlying Index component selection methodology or the weighting methodology; or • A successor or substitute index is used in connection with the Shares. 63 63 If the Trust uses a successor or substitute index, the Exchange's 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. Furthermore, Amex Rule 1002A(b)(ii) establishes that, if the IIV or the Underling Index value applicable to that series of Index Fund Shares is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the IIV or the Underlying Index value occurs. If the interruption to the dissemination of the IIV or the Underlying 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. The Exchange represents the Trust is required to comply with Rule 10A-3 under the Act for the initial and continued listing of the Shares. Original and Annual Listing Fees The Amex original listing fee applicable to the listing of the Funds is $5,000 for each Fund. In addition, the annual listing fee applicable to the Funds under Section 141 of the Amex *Company Guide* will be based upon the year-end aggregate number of outstanding shares in all Funds of the Trust listed on the Exchange. Amex Trading Rules The Shares are equity securities subject to Amex rules governing the trading of equity securities, including, among others, rules governing priority, parity and precedence of orders, specialist responsibilities, and account opening and customer suitability (Amex Rule 411). 64 64 Telephone conversation between Jeffrey P. Burns, Associate General Counsel, Amex, Nyieri Nazarian, Assistant General Counsel, Amex, and Edward Cho, Special Counsel, Division of Market Regulation, Commission, on December 14, 2006 (clarifying Amex trading rules applicable to the Shares). *Stop and Stop Limit Orders.* Amex Rule 154, Commentary .04(c), provides that stop and stop limit orders to buy or sell a security (other than an option, which is covered by Amex Rule 950(f) and Commentary thereto) the price of which is derivatively priced based upon another security or index of securities, may, with the prior approval of a floor official, be elected by a quotation, as set forth in Commentary .04(c)(i)-(v). The Exchange has designated Index Fund Shares, including the Shares, as eligible for this treatment. 65 65 *See* Securities Exchange Act Release No. 29063 (April 10, 1991), 56 FR 15652 (April 17, 1991) at note 9, regarding the Exchange's designation of equity derivative securities as eligible for such treatment under Amex Rule 154, Commentary .04(c). *Amex Rule 190.* Amex Rule 190, Commentary .04, applies to Index Fund Shares listed on the Exchange, including the Shares. Commentary .04 states that nothing in Rule 190(a) should be construed to restrict a specialist registered in a security issued by an investment company from purchasing and redeeming the listed security or securities that can be subdivided or converted into the listed security from the issuer as appropriate to facilitate the maintenance of a fair and orderly market. Prospectus Delivery The Exchange, in an Information Circular to Exchange members and member organizations, prior to the commencement of trading, will inform members and member organizations of the application of Commentary .03 of Amex Rule 1000A to the Funds. The Circular will further inform members and member organizations of the prospectus and/or product description delivery requirements that apply to the Funds. The Application included a request that the exemptive order also grant relief from Section 24(d) of the 1940 Act. Any product description used in reliance on Section 24(d) exemptive relief will comply with all representations and conditions set forth in the Application. 66 66 *See supra* note 49 and accompanying text. Trading Halts In addition to other factors that may be relevant, the Exchange may consider factors such as those set forth in Amex Rule 918C(b) in exercising its discretion to halt or suspend trading in Index Fund Shares. These factors include, but are not limited to,
(1)the extent to which trading is not occurring in securities comprising an Underlying Index and/or the Financial Instruments of a Fund; or
(2)whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In the case of the Financial Instruments held by a Fund, the Exchange represents that a notification procedure will be implemented so that timely notice from the Advisor is received by the Exchange when a particular Financial Instrument is in default or shortly to be in default. Notification from the Advisor will be made by phone, facsimile, or e-mail. The Exchange would then determine on a case-by-case basis whether a default of a particular Financial Instrument justifies a trading halt of the Shares. Trading in shares of the Funds will also be halted if the circuit breaker parameters under Amex Rule 117 have been reached. As noted above, Amex Rule 1002A(b)(ii) sets forth the trading halt parameters with respect to Index Fund Shares. If the IIV or the Underlying Index value applicable to that series of Index Fund Shares is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the IIV or the Underlying Index value occurs. If the interruption to the dissemination of the IIV or the Underlying 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. Suitability and Information Circular Prior to commencement of trading, the Exchange will issue an Information Circular to its members and member organizations providing guidance with regard to member firm compliance responsibilities (including suitability obligations) when effecting transactions in the Shares and highlighting the special risks and characteristics of the Funds and Shares as well as applicable Exchange rules. This Information Circular will set forth the requirements relating to Commentary .05 to Amex Rule 411 (Duty to Know and Approve Customers). Specifically, the Information Circular will remind members of their obligations in recommending transactions in the Shares so that members have a reasonable basis to believe that
(1)the recommendation is suitable for a customer given reasonable inquiry concerning the customer's investment objectives, financial situation, needs, and any other information known by such member, and
(2)that the customer can evaluate the special characteristics, and is able to bear the financial risks, of such investment. In connection with the suitability obligation, the Information Circular will also provide that members make reasonable efforts to obtain the following information:
(a)The customer's financial status;
(b)the customer's tax status;
(c)the customer's investment objectives; and
(d)such other information used or considered to be reasonable by such member or registered representative in making recommendations to the customer. Purchases and Redemptions in Creation Unit Size In the Information Circular referenced above, Amex members and member organizations will be informed that procedures for purchases and redemptions of Shares in Creation Units are described in each Fund's prospectus and SAI, and that Shares are not individually redeemable, but are redeemable only in Creation Unit aggregations or multiples thereof. Surveillance The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Shares. Specifically, Amex will rely on its existing surveillance procedures governing Index Fund Shares, which have been deemed adequate under the Act. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. Hours of Trading/Minimum Price Variation The Funds will trade on the Exchange until 4:15 p.m. ET each business day. Shares will trade with a minimum price variation of $.01. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 67 in general, and furthers the objectives of Section 6(b)(5), 68 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 regulating, clearing, settling, processing information with respect to, and facilitating transaction in securities, and, in general, to protect investors and the public interest. 67 15 U.S.C. 78f(b). 68 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes the proposed rule change, as amended, will 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 The Exchange did not receive any written comments on the proposed rule change, as amended. 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 Amex 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. The Commission is considering granting accelerated approval of the proposed rule change, as amended, at the end of a 15-day comment period. 69 69 Amex has requested accelerated approval of this proposed rule change, as amended, prior to the 30th day after the date of publication of the notice of the filing thereof, following the conclusion of a 15-day comment period. 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-2006-101 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-2006-101. 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-Amex-2006-101 and should be submitted on or before January 11, 2007. 70 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 70 Nancy M. Morris, Secretary. [FR Doc. E6-22093 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54963; File No. SR-CHX-2006-30] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change To Permit Routing From the Matching System to a Destination Selected by a Participant December 19, 2006. I. Introduction On October 19, 2006, the Chicago Stock Exchange, Inc. (“CHX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to permit CHX participants to identify a destination to which an order should be routed when its execution would improperly trade through other markets or its display would improperly lock or cross other markets. The proposed rule change was published for comment in the **Federal Register** on October 30, 2006. 3 The Commission received no comments regarding the proposal. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54642 (October 23, 2006), 71 FR 63372. II. Description of the Proposal The proposal would allow the Exchange to follow a participant's instructions to route an order to a destination of the participant's choice instead of cancelling the order back to the participant when an execution could not take place in the Matching System because the execution would improperly trade through another market 4 or the display of an order would improperly lock or cross another market. 5 The Exchange proposes to provide these routing services pursuant to a separate agreement between the Exchange and each participant on whose behalf orders would be routed. The participant would be responsible for ensuring that it has a relationship with its chosen destination to permit the requested access. The Exchange would not be involved in the execution of the order nor would the Exchange take responsibility for handling of the order by the destination selected by the participant. 6 The Exchange, however, would report any execution or cancellation of the order by the destination to the participant that submitted the order and would notify the destination of any cancellations or changes to the order submitted by the order-sending participant. The Exchange's routing service would be a facility of the Exchange subject to the Exchange's rules and fees. The destinations chosen by each participant would not constitute Exchange facilities. 4 The Exchange's rules currently provide that the Exchange's Matching System will not execute an order if its execution would cause an improper trade-through of another ITS market or, when Regulation NMS is implemented, if its execution would be improper under Rule 611 of Regulation NMS (together, an “improper trade-through”). *See* CHX Article 20, Rule 5; *see also* 17 CFR 242.611. 5 The Exchange's rules currently provide that the Matching System will not display an order if its display would improperly lock or cross other markets. *See* CHX Article 20, Rule 6. 6 *See* CHX Article 20, Rule 5, proposed Interpretation and Policy .03(b). III. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with Section 6(b)(5) of the Act, 7 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 8 7 15 U.S.C. 78f(b)(5). 8 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition and capital formation. *See* 15 U.S.C. 78c(f). The Commission believes that the proposed rule change may increase the efficiency of CHX participants in seeking to execute their customers' orders that are ineligible for execution or display in the CHX Matching System. In particular, orders that otherwise would be cancelled back to a participant may be sent directly to a destination chosen by the participant for handling. The Commission notes that fees and charges for the Exchange's routing service must be consistent with the Act, 9 and the Exchange must provide its routing service in compliance with, among other things, the provisions of the Act requiring the rules of a national securities exchange not to permit unfair discrimination between customers, issuers, brokers, or dealers. 10 9 *See* 15 U.S.C. 78f(b)(4). 10 *See* 15 U.S.C. 78f(b)(5). IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 11 that the proposed rule change (SR-CHX-2006-30) is approved. 11 15 U.S.C. 78S(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E6-22082 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54964; File No. SR-FICC-2006-16] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change to Replace the Government Securities Division Clearing Fund Calculation Methodology With a Yield-Driven Value-at-Risk Methodology December 19, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on October 4, 2006, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) and on November 14, 2006, amended the proposed rule change as described in Items I, II, and III below, which items have been prepared by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 1 15 U.S.C. 78s(b)(1). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change FICC is seeking to replace the Government Securities Division (“GSD”) margin calculation methodology with a value-at-risk (“VaR”) methodology. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FICC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of these statements. 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 Netting members of FICC's GSD are required to maintain clearing fund deposits. Each member's required clearing fund deposit is calculated daily to ensure that enough funds are available to cover the risks associated with that member's activities. The purposes served by the clearing fund are to:
(i)have on deposit from each member clearing fund sufficient to satisfy any losses that may be incurred by FICC or its members resulting from the default by a member and the resultant close out of that member's settlement positions and
(ii)ensure that FICC has sufficient liquidity at all times to meet its payment and delivery obligations. FICC proposes to replace the current clearing fund methodology, which uses haircuts and offsets, with a VaR methodology that is expected to better reflect market volatility and more thoroughly distinguish the levels of risk presented by individual securities. Specifically, FICC is proposing to replace the existing GSD margin calculation methodology with a yield-driven VaR model. VaR is defined to be the maximum amount of money that may be lost on a portfolio over a given period of time within a given level of confidence. With respect to the GSD, FICC is proposing a 99 percent three-day VaR. 3 3 Category 2 Dealers and Category 2 Futures Commission Merchants will be subject to higher confidence levels than other Netting Members. The changes to the components that comprise the current clearing fund calculation compared to the proposed VaR methodology in relation to the risks addressed by the components are summarized below. Existing methodology Risk addressed Proposed methodology 4 Receive/Deliver component using margin factors Fluctuation in security prices Interest rate or index-driven model, as appropriate 5 Repo Volatility component Fluctuation in repo interest rates Repo index-driven model 6 Funds Adjustment Deposit component (based on the average size of the member's 20 highest funds-only settlement amounts over the most recent 75 business days) Uncertainty of whether a member will satisfy its funds-only settlement obligation Margin Requirement Differential (“MRD”) (a portion of which is based on the historical size of a member's funds-only settlement obligation) Average Post Offset Margin Amount component (based on the 20 highest margin amounts derived from all outstanding net settlement positions over the most recent 75 business days) Uncertainty of whether a member will satisfy its next clearing fund call MRD (a portion of which is based on the historical variability a member's clearing fund requirement) Not specifically covered Intraday risk and additional exposure due to portfolio variation and potential loss in unlikely situations beyond the model's effective range Coverage Component (if necessary, applies additional minimum charge to bring coverage to the applicable confidence level) 4 Under the current GSD rules, Category 1 Inter-Dealer Brokers are subject to a $5 million clearing fund requirement. This proposed rule change does not alter that requirement. 5 FICC would have the discretion to not apply the interest rate model to classes of securities whose volatility is less amenable to statistical analysis, which is usually due to a lack of pricing history. In lieu of such a calculation, the required charge with respect to such positions would be determined based on a historic index volatility model. 6 FICC is proposing a new definition for “Term Repo Transaction” to clarify the types of transactions covered by this component. As proposed, Term Repo Transaction would mean, on any particular Business Day, a Repo Transaction for which settlement of the Close Leg “is scheduled to occur two or more Business Days after the scheduled settlement of the Start Leg.” In addition, the existing definition for “Term GCF Repo Transaction” is being revised to conform to the proposed language for “Term Repo Transaction” as the new definition provides greater clarity as to transactions covered. In addition, FICC may include in a member's clearing fund requirement a “special charge” as determined by FICC based on such factors as it determines to be appropriate from time to time such as price fluctuations, volatility, or lack of liquidity of any security. The proposed VaR methodology, if approved, would necessitate a change to the risk management consequences of the late allocation of repo substitution collateral. 7 Because offset classes and margin rates will no longer be present in the GSD's rules as proposed, FICC would base the margining for such a generic CUSIP on the same calculation as that used for securities whose volatility is less amenable to statistical analysis. 7 Securities Exchange Act Release No. 53534 (March 21, 2006), 71 FR 15781 [File No. SR-FICC-2005-18]. This rule change created a generic CUSIP offset and applicable margin rate for determining clearing fund consequences for such late allocations. The VaR methodology will not include calculations that are incorporated in the GSD's current cross-margining programs with The Clearing Corporation (“TCC”) and the Chicago Mercantile Exchange (“CME”). In order to provide for continuity of cross-margining following the implementation of the VaR methodology and because certain key calculations required for cross-margining are unique to cross-margining, the GSD will continue to perform the applicable cross-margining calculations outside of the VaR model. The GSD would then adjust the cross-margining clearing fund calculation using a scaling ratio of the VaR clearing fund calculation to the cross-margining clearing fund calculation so that the clearing fund amount available for cross-margining is appropriately aligned with the VaR model. The proposed changes described herein would necessitate amendments to FICC's cross-margining agreements with TCC and CME as follows: 1. The definition of FICC's “Margin Rate” in each of the agreements would be amended to reflect that the margin rate will no longer be based on margin factors published in the current rules (as these would no longer be applied under the VaR methodology). Instead, they would be determined based on a percentage that would be determined using the same parameters and data ( *e.g.* , confidence level and historic indices) as those used to generate margin factors in the current rules. 2. Section 5(a) of each cross-margining agreement would be amended to state that FICC's residual margin amount would be calculated as specified in the agreement and would be adjusted, if necessary, to correct for differences between the methodology of calculating the residual margin amount as described in the agreement and the VaR methodology. This change is necessary to account for the deletion of relevant margin factor and disallowance schedules (which, like the margin factors, are incorporated into the agreements by reference) from the GSD rules and to adjust for the possibility that the new VaR methodology could generate a charge that would otherwise allow for a cross-margining reduction that is greater than the margin requirement. FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 8 and the rules and regulations thereunder applicable to FICC because it should assure the safeguarding of securities and funds in FICC's custody or control or for which it is responsible by enabling FICC to more effectively manage risk presented by members' activity. 8 15 U.S.C. 78q-1.
(B)Self-Regulatory Organization's Statement on Burden on Competition FICC does not believe that the proposed rule change would 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 have not been solicited with respect to the proposed rule change, and none have been received. 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 thirty-five days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will:
(A)By order approve such proposed rule change or
(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, 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-FICC-2006-16 on the subject line. Paper Comments: • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-FICC-2006-16. 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 FICC and on FICC's Web site at *http://www.ficc.com/gov/gov.docs.jsp?NS-query* . All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-FICC-2006-16 and should be submitted on or before January 17, 2007. 9 17 CFR 200.30-3(a)(12). For the Commission by the Division of Market Regulation, pursuant to delegated authority. 9 Florence E. Harmon, Deputy Secretary. [FR Doc. E6-22085 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54969; File No. SR-FICC-2006-15] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change To Modify its Rules To Diversify and Standardize Clearing Fund Collateral Requirements Across the Divisions To Improve Liquidity and Minimize Risk for Its Members December 19, 2006. I. Introduction On October 4, 2006, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-FICC-2006-15 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”). 1 Notice of the proposal was published in the **Federal Register** on November 9, 2006. 2 A correction and extension of the comment period was published in the **Federal Register** on November 22, 2006. 3 No comment letters were received. For the reasons discussed below, the Commission is approving the proposed rule change as amended. 1 15 U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 54682 (November 1, 2006), 71 FR 65855. 3 Securities Exchange Act Release No. 54682A (November 17, 2006), 71 FR 67667. The correction addressed a typographical error in the original release. II. Description FICC seeks to modify the rules of both of the Government Securities Division (“GSD”) and the Mortgage-Backed Securities Division (“MBSD”) (collectively, “Divisions”) to diversify and standardize Clearing Fund 4 collateral requirements across the Divisions in order to improve liquidity and minimize risk for FICC and its members. 4 The GSD Rules refer to member collateral deposits as the “Clearing Fund” while the MBSD rules refer to these deposits as the “Participants Fund.” The term “Clearing Fund” in this order will refer to both. Presently, both GSD and MBSD members may satisfy their Clearing Fund requirements with cash deposits. Members may also satisfy a portion of their Clearing Fund requirements with an open account indebtedness fully secured by certain types of securities and/or letters of credit. FICC is modifying its rules to:
(1)Expand the types of securities members may deposit to satisfy their Clearing Fund requirements (“Eligible Clearing Fund Securities”);
(2)establish concentration limits with regard to members' use of Eligible Clearing Fund Securities;
(3)create a correlating range of haircuts to be applied to the expanded types of Eligible Clearing Fund Securities; and
(4)eliminate letters of credit as a generally acceptable form of collateral securing members' open account Clearing Fund indebtedness. A. Revised Clearing Fund Components
(1)Cash Currently the rules of GSD require that the greater of $100,000 or ten percent of a member's Clearing Fund requirement with a maximum of $500,000 be made in the form of cash. 5 The rules of MBSD currently do not contain a minimum cash requirement. For both Divisions, the proposed new cash collateral component will be the lesser of $5,000,000 or ten percent of a member's Clearing Fund requirement with a minimum of $100,000. 5 GSD Rule 4, Section 2(b)(ii).
(2)Securities Currently each Division of FICC accepts different types of securities as Clearing Fund collateral. For example, GSD accepts Agency securities but not mortgage-backed securities, and MBSD accepts mortgage-backed securities but not Agency securities. In addition, there are currently no concentration limits placed on securities deposited as Clearing Fund collateral at either Division. In an effort to standardize the securities that are eligible as Clearing Fund collateral across the Divisions, FICC is modifying the rules of both Divisions by adding a definition, “Eligible Clearing Fund Securities” (for GSD) and “Eligible Participants Fund Securities” (for MBSD) to each Division's rules. 6 As defined, Eligible Clearing Fund Securities and Eligible Participants Fund Securities will be unmatured bonds which are either an “Eligible Clearing Fund Agency Security,” an “Eligible Clearing Fund Mortgage-Backed Security” or an “Eligible Clearing Fund Treasury Security.” 7 “Eligible Clearing Fund Agency Security” would be defined as a direct obligation of those U.S. agencies or government sponsored enterprises as FICC may designate from time to time that satisfies the criteria set forth in notices issued by FICC from time to time. “Eligible Clearing Fund Mortgage-Backed Security” would be defined as a mortgage-backed pass through obligation issued by those U.S. agencies or government sponsored enterprises as FICC may designate from time to time that satisfies the criteria set forth in notices issued by FICC from time to time. “Eligible Clearing Fund Treasury Security” would be defined as a direct obligation of the U.S. government that satisfies the criteria set forth in notices issued by FICC from time to time. 6 Initial eligibility criteria for each type of Eligible Clearing Fund Securities and Eligible Participants Fund Securities will be announced to members through an Important Notice prior to the effective date of this proposed rule change. Any future changes to the eligibility criteria will also be announced to members through Important Notices in advance of such changes becoming effective. 7 In the MBSD Rules, these terms would be as follows: “Eligible Participants Fund Agency Security,” “Eligible Participants Fund Mortgage-Backed Security,” and “Eligible Participants Fund Treasury Security.”
(3)Security Concentration Provisions FICC is also establishing security concentration limits for Clearing Fund deposits. A minimum of forty percent of a member's required Clearing Fund deposit will have to be in cash or Eligible Clearing Fund Treasury Securities. The remainder of a member's deposit can be secured by cash or the pledge of Eligible Clearing Fund Securities. However any deposits of Eligible Clearing Fund Agency Securities or Eligible Clearing Fund Mortgage-Backed Securities in excess of twenty-five percent of a member's required Clearing Fund deposit will be subject to an additional haircut equal to twice the percentage specified in the haircut schedule. Furthermore, no more than twenty percent of a member's required Clearing Fund deposit can be secured by pledged Eligible Clearing Fund Agency Securities of a single issuer. Lastly, no member will be permitted to post as Clearing Fund collateral Eligible Clearing Fund Agency Securities for which it is the issuer. 8 8 However, a member will be permitted to pledge Eligible Clearing Fund Mortgage-Backed Securities for which it is the issuer subject to a haircut specified in the haircut schedule. Initially the haircut will be fourteen percent. If the member exceeded the twenty-five percent concentration limit, the haircut initially will be twenty-one percent.
(4)Letters of Credit and Other Adequate Assurances The provisions in the Divisions' Rules that pertain to Letter of Credit Issuers are being modified to reflect that letters of credit are no longer a generally accepted form of Clearing Fund collateral. 9 Effective April 1, 2007 (the regular expiration date of letters of credit), members that have letters of credit posted as collateral (other than members, if any, that have been required to post letters of credit for legal risk), will be required to replace the portion of the Clearing Fund collateralized by letters of credit with either cash or Eligible Clearing Fund Securities. 9 FICC has found that in practice letters of credit are not as liquid as cash and securities and therefore pose more risk to FICC and its members when pledged as Clearing Fund collateral. FICC is, however, reserving the right to require letters of credit from members in those instances where a particular member has been found, by FICC in its discretion, to present legal risk. GSD Rule 4, Section 2(o) and MBSD Rule 2, Section 4 of Article IV.
(5)Implementation Timeframes The foregoing rule changes will become effective thirty days after an Important Notice is issued to members informing them that FICC's systems are ready to accommodate such changes. The corresponding changes to FICC's rules will be made at that time. On April 1, 2007, changes pertaining to letters of credit will be made to FICC's rules.
(6)Alternative Proportions of Eligible Collateral As is currently the case under FICC's rules, FICC continues to reserve the right to require different proportions of the Clearing Fund collateral components as necessary to address any heightened legal or insolvency risks presented by a member. 10 10 GSD Rule 4, Section 2(o) and MBSD Rule 2, Section 4 of Article IV. III. Discussion Section 19(b) of the Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. 11 Section 17A(b)(3)(F) 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. 12 The Commission finds that FICC's rule change is consistent with these requirements because by revising its rules governing the acceptable forms of Clearing Fund collateral deposits to increase the liquidity of its Clearing Fund and to minimize risk to FICC and its members, the proposed rule change should better enable FICC to assure the safeguarding of securities and funds in its custody or control or for which it is responsible. 13 11 15 U.S.C. 78s(b). 12 15 U.S.C. 78q-1(b)(3)(F). 13 In approving the proposed rule change, the Commission considered the proposal's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular Section 17A of the Act and the rules and regulations thereunder. *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 14 that the proposed rule change (File No. SR-FICC-2006-15) be and hereby is approved. 14 15 U.S.C. 78s(b)(2). For the Commission by the Division of Market Regulation, pursuant to delegated authority. 15 Florence E. Harmon, Deputy Secretary. 15 17 CFR 200.30-3(a)(12). [FR Doc. E6-22089 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54957; File No. SR-FICC-2006-07] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving a Proposed Rule Change Relating To Providing Certain Reports to Its Members December 18, 2006. On April 21, 2006, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”). 1 Notice of the proposal was published in the **Federal Register** on October 4, 2006. 2 No comment letters were received. For the reasons discussed below, the Commission is approving the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 54570 (Oct. 4, 2006), 71 FR 60591. I. Description The proposed rule change clarifies the frequency of certain reports that FICC will provide to its members. FICC conforms the rules of both its divisions, the Government Securities Division and the Mortgage Backed Securities Division (“MBSD”), regarding FICC's providing financial reports to members to the equivalent rule of FICC's affiliated clearing agency, The Depository Trust Company (“DTC”). 3 FICC's revised rules will state that quarterly unaudited financial statements will only be provided to members/participants for the first three quarters of the calendar year. 4 In addition, in conformity to DTC's rules, FICC is deleting the time frames from its rules for providing the financial reports to its members/participants. Nevertheless, FICC will attempt to continue to make its annual audited financial statements available to its members within 60 days of the fiscal year end and will attempt to continue to make its quarterly unaudited financial statements available within 30 days of the quarter end. 3 DTC Rule 15. 4 An annual audited financial statement is provided to members after the last calendar quarter of each year. FICC is also changing the time frame in Article V, Rule 5, Section 3 of MBSD's Clearing Rulebook and EPN Rulebook regarding providing its participants with the independent auditors' annual study and evaluation of MBSD's internal accounting controls. While FICC will delete these rule provisions in their entirety, FICC will make this study and evaluation available to its members within a reasonable time after it receives it from its independent accountants, which is DTC's practice. II. Discussion Section 17A(b)(3)(F) of the Act 5 requires that the rules of a clearing agency to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions. The Commission finds that the proposed rule change is consistent with this obligation because the proposed rule change conforms FICC's rules regarding providing unaudited quarterly financial statements and the independent auditor's annual study of internal controls with those of DTC and as such should promote the national clearance and settlement system. 5 15 U.S.C. 78q-1(b)(3)(F). III. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 6 and the rules and regulations thereunder. 6 15 U.S.C. 78q-1. *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR-FICC-2006-07) be, and hereby is , approved. 7 7 In approving the proposed rule change, the Commission considered the proposal's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). For the Commission by the Division of Market Regulation, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E6-22091 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54968; File No. SR-NASDAQ-2006-058] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Permit Orders to Peg to the Midpoint of the Best Bid and Best Offer December 19, 2006. Pursuant to the provisions of Section 19(b)(1) under the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 The NASDAQ Stock Market LLC (“Nasdaq”) is filing with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by Nasdaq. The Exchange 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 the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq is proposing to enable orders to peg to the midpoint between the best bid and best offer (“Midpoint Peg”). The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nasdaq.complinet.com* ), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq proposes to modify the rule language pertaining to pegged orders (“Pegged Orders”) to enable orders to peg to the midpoint of the best bid and best offer. Nasdaq currently offers pegged functionality, adjusting the price of the order based upon changes in the best bid and offer in the national market system (“National Market System”). A market participant entering a Pegged Order currently can specify that its price will equal the inside quote on the same side of the market (“Primary Peg”) or the opposite side of the market (“Market Peg”). The Primary Peg and Market Peg Orders may establish their pricing relative to the appropriate bids or offers by the selection of one or more offset amounts that will adjust the price of the order by the offset amount selected. Additionally, a new timestamp is created for the order each time it is automatically adjusted. The proposed rule change is in accordance with Rule 612 of Regulation NMS, 5 which governs sub-penny quoting of National Market System stocks 6 (the “Sub-Penny Rule”). The proposed rule change would not result in the display, rank, or acceptance of a bid or offer, an order, quotation, or indication of interest in any NMS stock that is priced in an increment smaller than $0.01 per share, unless the price of the bid or offer, order, indication of interest is priced less than $1.00 per share. 7 5 17 CFR 242.600 *et seq. See also* Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005) (“Regulation NMS Adopting Release”). 6 An NMS stock is any non-option security for which transaction reports are collected, processed, and made available pursuant to an effective transaction reporting plan. *See* 17 CFR 242.600(b)(46) and (47). 7 If the bid or offer, order, or indication of interest is priced less than $1.00 per share, the minimum allowable increment is $0.0001 per share. *See* 17 CFR 242.612(b). The following examples illustrate how the proposed rule change would operate (note that the price of the order updates in response to changes in the best bid and best offer, excluding the order's own impact on the best bid or best offer): Example 1 The best bid is $20.00 and the best offer is $20.06. The Midpoint Peg Order to buy will be priced at $20.03. The best offer updates to $20.08. The price of the Midpoint Peg Order will update to $20.04. Example 2 The best bid is $20.00 and the best offer is $20.03. The price of the Midpoint Peg Order to buy will be $20.01. The true midpoint would be $20.015, but to avoid pricing the order in a sub-penny increment the bid is rounded down. However, if the order instead was a sell order the offer would be rounded up. The best offer updates to $20.08. The price of the Midpoint Peg Order will be $20.04. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 8 in general, and with Section 6(b)(5) of the Act, 9 in particular, in that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(6) thereunder 11 in that it:
(i)Does not significantly affect the protection of investors or the public interest;
(ii)does not impose any significant burden on competition; and
(iii)by its terms, does not become operative for 30 days after the date of the filing. 12 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). 12 As required by Rule 19b-4(f)(6)(iii), on November 28, 2006, Nasdaq provided the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change. A proposed rule changed filed under Rule 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 13 However, Rule 19b-4(f)(6)(iii) 14 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. Nasdaq has requested that the Commission waive the 30-day operative delay, which would make the rule change operative immediately. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed rule change provides a potentially useful enhancement for investors to utilize in executing their trades. 15 13 17 CFR 240.19b-4(f)(6)(iii). 14 *Id.* 15 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of a rule change pursuant to Section 19(b)(3)(A) of the Act, the Commission may summarily abrogate the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2006-058 in the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2006-058. 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 Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2006-058 and should be submitted on or before January 17, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E6-22081 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54965; File No. SR-NASDAQ-2006-052] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Waive Distributor Fee for Specific Data Element December 19, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on December 7, 2006, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by Nasdaq. Nasdaq has filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 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). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to allow for the unlimited, free distribution of Nasdaq's aggregate best bid and offer quotation for Nasdaq's quoting in stocks listed on the New York Stock Exchange LLC (“NYSE”) and the American Stock Exchange LLC (“Amex”). Below is the text of the proposed rule change. Proposed new language is *italicized.* 7023. Nasdaq TotalView (a)-(b) No change.
(c)OpenView *(1)* The OpenView entitlement package consists of all individual Nasdaq Market Center participant quoting quotes and orders in *non-Nasdaq* exchange-listed securities in the system. There shall be a charge of $6 per month per controlled device for OpenView. *(2) The OpenView Top-of-File (“OpenView TOF”) entitlement package consists of the Nasdaq aggregate best bid and offer quotation for non-Nasdaq exchange-listed securities in the system. There shall be no fee for the distribution of the OpenView TOF.*
(d)No change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose To encourage more competition in the trading and quoting of NYSE- and Amex-listed stocks, as well as to encourage subscribership to Nasdaq's full-depth products, Nasdaq proposes new Nasdaq Rule 7023(c)(2) to institute a fee waiver for firms wishing to distribute the OpenView Top-of-File, which consists of Nasdaq's aggregate real-time best bid and offer quote for NYSE- and Amex-listed stocks. The aggregate best bid and offer is a single data element within Nasdaq OpenView. That element can be extracted from OpenView and, under this proposal, can be separately distributed free of charge. Nasdaq believes that this will promote wider distribution of data and benefit investors wishing to use that data in making investment decisions. Nasdaq has filed this proposal as a change to the rule manual of The NASDAQ Stock Market LLC. As such, it will be operative when Nasdaq begins operating as an exchange with respect to the trading of NYSE- and Amex-listed securities. 5 5 Telephone conversation among John Roeser, Assistant Director, Division of Market Regulation (“Division”), Commission, David Liu, Special Counsel, Division, Commission, and Jeffrey Davis, Vice President-Deputy General Counsel, Nasdaq, on December 18, 2006. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 6 in general, and with Sections 6(b)(5) of the Act, 7 in particular, in that waiving the distribution fee for Nasdaq's aggregate best bid and offer in NYSE and Amex securities will encourage broader dissemination of that data and thereby increase transparency in those securities. 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change is subject to Section 19(b)(3)(A)(iii) of the Act 8 and Rule 19b-4(f)(6) thereunder 9 because the proposal:
(i)does not significantly affect the protection of investors or the public interest;
(ii)does not impose any significant burden on competition; and
(iii)does not become operative prior to 30 days after the date of filing or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that Nasdaq has given the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. 10 8 15 U.S.C. 78s(b)(3)(A)(iii). 9 17 CFR 240.19b-4(f)(6). 10 Nasdaq has satisfied the five-day pre-filing requirement. 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2006-052 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2006-052. 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 Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2006-052 and should be submitted on or before January 17, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E6-22086 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54959; File No. SR-NASDAQ-2006-056] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To Establish Nasdaq Custom Data Feeds December 18, 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 December 12, 2006, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared substantially by Nasdaq. 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 Nasdaq proposes to establish a new data filtration service—Nasdaq Custom Data Feeds—that will permit entities to request and receive customized data feeds containing data elements from Nasdaq's current data feeds. The text of the proposed rule change is available at *http://nasdaq.complinet.com/file_store/pdf/rulebooks/SR-NASDAQ-2006-056.pdf* , at Nasdaq, and at the Commission's Public Reference Room. 3 3 Changes are marked to the rule text that appears in the electronic NASDAQ Manual found at *http://www.nasdaqtrader.com.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose As quoting and trading have become increasingly automated, the rate of market data traffic has increased materially. For example, the rate of message traffic on TotalView has increased by more than 250% since January 1, 2004. Nasdaq notes that the integration of INET, Brut and Nasdaq execution systems into a single system has increased message traffic further. The data feeds of all markets are seeing similar, and in some cases more pronounced, increases in message traffic. These increases strain the capacity of brokers and vendors in two ways, at significant expense. First, the telecommunications bandwidth a firm purchases must be increased to handle the message traffic without material increases in latency or dropped information. Second, once the data is received it must be processed, with resulting hardware expenses. As a result, participants are seeking to “filter” or reduce the amount of data received without losing information necessary for their trading activities. A service that can filter the data without impacting data performance or integrity is considered valuable, given the savings obtained from lower telecommunications and hardware costs. Moreover, some firms prefer that Nasdaq undertake the filtering prior to delivery rather than accept the full data and filter it themselves. Firms are willing to pay in kind to have “irrelevant” data removed from their data stream, avoiding superfluous, recurring payments to telecommunication providers for what they consider to be “noise.” To respond to this demand, Nasdaq proposes to establish Nasdaq Custom Data Feeds, a customized data feed service that would allow Nasdaq to accommodate particular subscribers' requests for market data feeds containing a pre-specified combination of data elements otherwise delivered on multiple data feeds. Customized data feeds would allow a customer to receive an entirely unique combination of functionality and content. There is a variety of firm types that could be interested in customized data feeds. For example, firms whose trading of Nasdaq securities is specific to particular subsets of securities might elect to receive only data associated with those securities. A common example is a trading desk that specializes in trading only Nasdaq-100 securities and corresponding index products. For such firms, receipt of data pertaining to stocks outside the Nasdaq-100 is unnecessary and costly from a hardware and software perspective. Another example would be a firm whose program trading models exclusively track liquidity patterns at the first five price levels on the bid-side and ask-side of the market. For such a firm, receipt of liquidity measures beyond the fifth price level is again unnecessary, resource intensive, and wasteful. Traditional market data vendors, specializing in providing all data to their customers, are poor candidates for either of these types of customized feeds. Additionally, firms have specific protocols or formats that they prefer when receiving data feeds. Nasdaq, historically, has delivered all data feeds in a uniform format and protocol, but now has the ability to offer more flexibility in the delivery mechanisms. Therefore, Nasdaq would also customize the data using protocols the customer specifies to Nasdaq. For example, market data vendors or subscriber firms having made particular technology architecture investments may benefit from receipt of the Nasdaq data in particular formats. For example, firms having invested in late-model, high-speed processors may very much prefer to receive single-channel data feeds inclusive of every data point. Such a feed would have the advantage of being much easier and efficient to deploy into single-box architecture. By contrast, firms with earlier-model technology, and/or an architecture with multiple applications reading the data feeds, may prefer “highly channelized” data feeds, such as one channel for securities beginning with the letter A, one for securities beginning with the letter B, etc. This allows the firm to utilize existing capacity and technology investments in a way reflective of the firm's particular needs. There are many different customized data feeds that could be requested, though the actual usefulness of customized feeds will ultimately be determined by how technology and bandwidth trends continue to evolve. By charging a fee for the customized data feeds, market participants and market data vendors are expected to request and deploy customized data feeds only in cases where there is a great deal of economic value conferred on the recipient. Customized data feeds will be delivered through Nasdaq's existing data dissemination architecture under the technological conditions applicable to recipients of the un-filtered data feeds. Nasdaq will make available the data delivered via any customized data feed at the same time it is made available via its regular data feeds. This fact alone does not determine the speed with which the data would be received at the distributor firm. There are many factors that determine the time that a firm receives, processes, acts upon market data—regardless of when the data is sent or whether the data feed is customized. For example, regardless of the data feed, the amount of bandwidth the firm has purchased will impact how quickly the market data is received. Furthermore, the sheer number of miles and the number of routers and switches between the origin of a data feed and its terminus will impact the time it is ultimately received and processed. Further, the size of the messages (measured in bits), in conjunction with the processing power of the equipment inside the network and at the subscriber firm also impact the time a firm receives and acts upon the data. In the end, a firm receiving a customized data feed could ultimately receive and process the data via its customized data feed either prior to or subsequent to when it would receive this data from a traditional data feed. It is dependent on all of the above factors. To reiterate, Nasdaq will make available data via both traditional and customized data feeds at the same time. Nasdaq has based its fee schedule for the customized data feeds on an array of considerations:
(1)What types of requests are most likely to be made;
(2)the composition and hardware, software, and man-hour costs associated with accommodating those requests—noting that there could be significant variety between the requests; and
(3)a minimum level of initial and ongoing support associated with the initiation and maintenance of the customized data feeds. In general, these proposed fees are intended to approximate the average costs for the prospective customized feeds, rather than the cost of any specific customized feed. It is expected that some customized feeds could cost more and some could cost less to build than the initial fee. The price for customized data feeds will have three components:
(1)A $50,000 initial set-up fee for the establishment and creation of the unique feed;
(2)the user and distributor fees for the underlying data entitlement from which the customized data is extracted; and an additional fee of $1000 per month, per filtered feed. For example, if a firm requests a feed that contains specific data elements from TotalView plus some data elements from the Nasdaq Index Dissemination Feed (“NIDS”), the firm would pay the TotalView distributor fee (currently between $1,000 and $5,000 per month), plus the NIDS distributor fee (currently between $1,500 and $2,000 per month) plus an additional fee of $1000 per month for receiving the data in filtered format, in addition to the $50,000 set-up fee. This is an optional data product that would only be purchased if a potential customer determines that the perceived benefit of one of these data products outweighs the cost of obtaining it. In other words, supply and demand will determine the ultimate success of these data products. Nasdaq believes this is consistent with, and critical to, the operation of a fair and competitive marketplace. In the order approving Regulation NMS, the Commission voiced its support for proposals that “would allow investors and vendors greater freedom to make their own decisions regarding the data they need.” 4 Nasdaq believes that the Nasdaq Custom Data Feeds service is precisely the type of product that the Commission envisioned when it determined to grant greater flexibility in the provision and purchase of market data. 4 Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 at 37566 (June 29, 2005). 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 5 in general, and with Section 6(b)(4) of the Act, 6 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which Nasdaq operates or controls, and it does not unfairly discriminate between customers, issuers, brokers or dealers. Use of the Custom Data Feeds service is voluntary and the subscription fees will be imposed on all purchasers equally based on the level of service selected. The proposed fees will cover the costs associated with establishing the service, responding to customer requests, configuring Nasdaq's systems, programming to user specifications, and administering the service, among other things. 5 15 U.S.C. 78f. 6 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. As a general matter, the Commission has long held the view that “competition and innovation are essential to the health of the securities markets. Indeed, competition is one of the hallmarks of the national market system.” 7 The Commission has also stated “that the notion of competition is inextricably tied with the notion of economic efficiency, and the Act seeks to encourage market behavior that promotes such efficiency, lower costs, and better service in the interest of investors and the general public.” 8 7 Securities Exchange Act Release No. 43863 (January 19, 2001), 66 FR 8020 (January 26, 2001). 8 Securities Exchange Act Release No. 54155 (July 20, 2006), 71 FR 41291 at 41298. The Commission goes on to state its belief “that the appropriate analysis to determine a proposal's competitive impact is to weigh the proposal's overall benefits and costs to competition based on the particular facts involved, such as examining whether the proposal would promote economically efficient execution of securities and fair competition between and among exchange markets and other market centers, as well as fair competition between the participants of a particular market.” 9 9 *Id.* The Nasdaq Custom Data Feeds service is designed to increase the efficiency of executions by enabling vendors to provide market data in the manner they deem most cost efficient. Vendors will only utilize the service if they conclude that it is economically beneficial to them and to their users. There is significant competition for the provision of market data to broker-dealers and other market data consumers, as well as competition for the orders that generate the data. Nasdaq fully expects its competitors to quickly copy this innovative new service as they have copied other Nasdaq data products in the past. 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. 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-NASDAQ-2006-056 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-NASDAQ-2006-056. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2006-056 and should be submitted on or before January 17, 2007. 10 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 Florence E. Harmon, Deputy Secretary. [FR Doc. E6-22087 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54958; File No. SR-NSCC-2006-13] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Harmonizing Administrative Provisions With Affiliated Clearing Agencies December 18, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on November 3, 2006, the National Securities Clearing Corporation (“NSCC”) 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 NSCC. NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 2 and Rule 19b-4(f)(4) 3 thereunder so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78s(b)(3)(A)(iii). 3 17 CFR 240.19b-4(f)(4). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purpose of this filing is to harmonize various administrative aspects of NSCC's rules with the rules of its clearing agency affiliates, the Fixed Income Clearing Corporation (“FICC”) and The Depository Trust Company (“DTC”). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in Sections A, B, and C below of the most significant aspects of such statements. 4 4 The Commission has modified the text of the summaries prepared by NSCC. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. OFAC Status and Securities Eligibility NSCC's Rule 3 sets forth criteria relating to the eligibility of securities and other financial instruments that underlie contracts that may be cleared through NSCC. NSCC proposes to add new Section 11 to this rule that will contain language that is similar to language in FICC's and DTC's rules. Specifically, the revised rule would provide that securities or other financial instruments of an issuer listed on the Office of Foreign Assets Control (“OFAC”) list of specially designated nationals distributed by the U.S. Department of the Treasury or of an issuer that is incorporated in a country that is on the OFAC list of countries subject to comprehensive sanctions may not be:
(a)Submitted to NSCC by a member for processing or
(b)requested by members for inclusion on lists of securities or other financial instruments maintained by NSCC pursuant to Rule 3. 2. Forms Currently, NSCC's Rule 28 states that the delivery of forms of lists, notices, and other documents may be delivered by the use of any media, such as magnetic tape, discs, or cards, as shall be prescribed in NSCC's Procedures. NSCC proposes to remove the language “such as magnetic tape, discs or cards” because such modes of delivery are outdated. 3. Signatures NSCC proposes to amend Rule 32 with respect to acceptable forms of signatures. Currently, this rule permits NSCC to accept documents from members that have been executed using mechanically reproduced facsimile signatures. The proposed rule change modernizes this rule by permitting NSCC, at its option, to rely on any other electronic, optical, or other similar forms of signatures in lieu of original signatures. The new language is adapted from similar language contained in the rule of DTC and both of FICC's divisions (the Government Securities Division and the Mortgage-Backed Securities Division). In addition, NSCC will revise the title of this rule from “Facsimile Signatures” to “Signatures” in order to remain consistent with the above-mentioned changes. NSCC believes that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder because they are concerned solely with the administration of NSCC and do not affect the safeguarding of securities or funds in the custody or control of NSCC or for which it is responsible. B. Self-Regulatory Organization's Statement on Burden on Competition NSCC believes that the proposed rule change will have no 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 NSCC has not solicited or received written comments relating to the proposed rule change. NSCC will notify the Commission of any written comments it receives. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(iii) 5 of the Act and Rule 19b-4(f)(4) 6 thereunder because it effects a change in an existing service of a registered clearing agency that does not adversely affect the safeguarding of securities or funds in the custody or control of the clearing agency or for which it is responsible and does not significantly affect the respective rights or obligations of the clearing agency or person using the service. 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. 5 15 U.S.C. 78s(b)(3)(A)(iii). 6 17 CFR 240.19b-4(f)(4). 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-NSCC-2006-13 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-1090. All submissions should refer to File No. SR-NSCC-2006-13. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at NSCC's principal office and on NSCC's Web site at *http://www.nscc.com/legal/index.html.* 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-NSCC-2006-13 and should be submitted on or before January 17, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E6-22084 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54955; File No. SR-NYSE-2006-89] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Require Member Organizations To Use Their Own Mnemonics When Entering Orders December 18, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on December 1, 2006, the New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared principally by the NYSE. The Exchange filed this proposal as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A) of the Act, 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. 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-4(f)(6). 5 The Exchange requested that the Commission waive the five-day pre-filing notice requirement specified in Rule 19b(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to add Rule 131A (A Member Organization Shall Use Its Own Mnemonic When Entering Orders) to require that member organizations obtain and use mnemonics in their own name to accurately identify the member organization submitting orders. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nyse.com* ), at the Exchange's Office of the Secretary and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange provides its member organizations with unique identifiers referred to as mnemonics. The Exchange, at its discretion, may assign multiple mnemonics to a member organization. Member organizations often use different mnemonics as an internal order management tool or for other administrative purposes. Member organizations are required to input one of their mnemonics in the “entering firm” field when submitting an order to the NYSE. The Exchange proposes to add Rule 131A to require that member organizations use mnemonics that accurately identify the member organization entering an order at the Exchange. The purpose for this change is three-fold. First, the Exchange's ability to accurately identify the member organization entering an order is necessary to properly attribute trade volume to the correct member organization for direct billing purposes. Second, the proposed rule change will strengthen the Exchange's ability to meet its obligations as a self-regulatory organization by providing additional and readily accessible information regarding the entering member organization. Third, the proposed rule change will clarify the use of mnemonics by member organizations. With respect to the need to clarify the use of mnemonics; currently, clearing member organizations at times request mnemonics from the NYSE on behalf of member organizations for which they clear. Some of these requests are made in the name of the clearing member organization instead of the entering member organization. As a result, member organizations may use mnemonics that the NYSE recognizes as that of the clearing member organization instead of the member organization submitting the order. Additionally, some member organizations that handle the execution of orders for another member organization on the Floor of the Exchange do not use the mnemonic of the member organization on whose behalf they are handling the order. The result is that the member organization where the order originated is not identified as the entering firm. Additionally, some member organizations fail to use their own mnemonic to identify themselves as the entering firm when handling an order for a non-member. The proposed rule will create a uniform standard of use pertaining to mnemonics. It will also accomplish the stated business and regulatory goals of the Exchange and provide a basis for disciplinary action in instances where deviation from that standard is found. The Exchange does not anticipate that there will be any significant system or program changes required of its member organizations in order to comply with the Rule. Pursuant to the Rule, member organizations will be required to use mnemonics issued in their own name. Any member organization that currently uses mnemonics in the name of its clearing member organization must obtain new mnemonics in its own name or change the name of the entering member organization on its existing mnemonics so that the existing mnemonic will thereafter accurately identify the name of the member organization. The Exchange retains the responsibility of issuing new mnemonics or changing the name of the entering member organization on its existing mnemonics. Clearing member organizations may continue to request mnemonics on behalf of a member organization that enters orders on the Exchange, but such mnemonics must be in the entering member organization's name. Proposed Rule 131A requires member organizations submitting orders to the Exchange to enter a mnemonic issued in their own name in the order's “entering firm” field. For example, in the case of a Floor-based execution where a Floor broker for member organization
(A)requests that an independent Floor broker handle the order for execution, the independent Floor broker must use the mnemonic of member organization
(A)as the entering firm. Similarly, if member organization
(B)uses its order entry systems to submit the order of member organization
(C)to the Exchange, member organization
(B)must use its own mnemonic to identify itself as the entering firm. The proposed rule does not change the way in which member organizations currently conduct their business. Moreover, the Exchange does not believe that the Rule hinders its member organization's ability to compete. The proposed rule merely changes the way in which the Exchange attributes trade volume for direct billing purposes. 2. Statutory Basis The Exchange states that the basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) 6 that an exchange have rules that are designed to promote just and equitable principles of trade, to serve to remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, to protect investors and the public interest. The Exchange states that the proposed rule will provide more accurate order identification. 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange states 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 The Exchange states that 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 Because the foregoing proposed rule change:
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 7 and Rule 19b-4(f)(6) thereunder. 8 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b-4(f)(6). The Exchange requests that the Commission waive the provision in Rule 19b-4(e)(6)(iii) 9 requiring written notice of the NYSE's intent to file the proposed rule change at least five days prior to the filing date. The Commission grants the Exchange's request to waive the pre-filing requirement because a similar version this proposal was filed previously with the Commission. 9 17 CFR 240.19b-4(e)(6)(iii). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-NYSE-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 No. SR-NYSE-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 will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-NYSE-2006-89 and should be submitted on or before January 17, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-22090 Filed 12-26-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54966; File No. SR-NYSEArca-2006-89] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Exchange Fees and Charges December 19, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”). 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on December 1, 2006, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items, I, II, and III below, which Items have been substantially prepared by NYSE Arca. On December 15, 2006, the Exchange submitted Amendment No. 1 to the proposed rule change. NYSE Arca has filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, 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)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend its Schedule of Fees and Charges For Exchange Services (“Schedule”) to make a minor change to the Firm Transaction Fee, eliminate certain obsolete fees, and make a non-substantive formatting change to the Schedule. The text of the proposed rule change is available on NYSE Arca's Web site at *http://www.nysearca.com* , at the principal office of NYSE Arca, 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, NYSE Arca 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 the these statements may be examined at the places specified in Item IV below. NYSE Arca has prepared summaries, set forth in sections, A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Schedule in order to make a minor change to the Firm Transaction Fee, eliminate certain obsolete fees, and make a non-substantive formatting change. Changes to the Firm Transaction Fee NYSE Arca charges transaction fees associated with all option contracts that are executed on the Exchange. The current Firm Transaction Fee applies to OTP Firm 5 proprietary trades that have a customer of that firm on the contra side of the transaction. The Exchange offers this rate as an incentive to OTP Firms to direct their customer orders to NYSE Arca for execution. NYSE Arca applies the Firm Transaction Fee to all trades between an OTP Firm and a customer of the same OTP Firm, whenever a proprietary account of the firm is used. This includes market makers that trade against orders that their affiliated firm represents for customers. The Firm Transaction Fee became applicable for certain market maker transactions upon the filing of a proposed rule change with the commission. 6 At that time the Market Maker Transaction Fee was $0.26 per contract and the Firm Transaction Fee was $0.15 per contract. As stated above, the cost savings was offered as a incentive for Firms to send addition customer orders to NYSE Arca. As part of a more recent proposed rule change, 7 the Market Maker Transaction Fee was lowered to $0.16 per contract, representing a savings of almost 40% over the previous fee. Because of the reduction in the Market Maker Transaction Fee, the additional savings afforded by the application of the Firm Transaction Fee in certain instances, is no longer significant. In order to simplify the billing process, all market maker transactions will now be billed the same the fee of $0.16 per contract. While this change represents a modest $0.01 increase in certain cases, the Exchange believes that it is more than compensated for by the previous reduction in the Market Maker Transaction Fee. 5 *See* NYSE Arca Rule (1(r). 6 *See* Securities Exchange Act Release No. 53165 (January 22, 2006), 71 FR 4955 (January 30, 2006) (SR-PCX-2005-136.. 7 *See* Securities Exchange Act Release No. 54309 (August 11, 2006), 71 FR 48571 (August 21, 2006) (SR-NYSEArca-2006-25). The change to this fee will be reflected in the footnote associated with the Firm Transaction Fee on the Schedule. Elimination of Obsolete Fees Due to changes in the market structure at NYSE Arca certain fees have become outdate and obsolete. The Exchange proposes to eliminate these fees from the Schedule. • *Order Cancellation Fee* —This fee was applied to orders were cancelled on the PCX Plus automated trading system. This system is no longer in use and accordingly the fee no longer applies. • *Booth WorkStation Fee* —This fee was assessed to OTP Firms operating on the floor of the Exchange that used certain Exchange provided workstations. These workstations have been replaced by firm proprietary systems; therefore the fee no longer applies. • *Printer Fee* —Prior to the introduction of the OX system, 8 the Exchange provided printers that would generate order tickets in certain cases where orders were not electronically executed or represented. OX is a fully automated system and does not need to print order tickets. The printers are no longer in use and therefore the user fee no longer applies. 8 *See* Securities Exchange Act Release No. 54238 (July 28, 2006), 71 FR 44758 (August 7, 2006)(SR-NYSEArca-2006-13). • *Market Maker Held Fees* —Market Makers on the floor of the Exchange now use proprietary trading systems to interface with the OX system. The Market Maker Hand Held system is no longer in use on NYSE Area; accordingly the fees associated with it no longer apply. Administrative Changes the Exchange also proposes a change to the formatting of the Schedule. Presently, the Schedule shows a list of explanatory end notes on the last page of the Schedule. With the new format, the end notes will be moved to the appropriate page that shows the corresponding fee or charge. Except where previously noted, the language in the reference notes will remain the same, just the formatting of the reference note will change. The Exchange believes that by having the reference notes on the same page as the corresponding charge or fee, the Schedule will be more user friendly and easier to read. 2. Statutory Basis The Exchange believes that the proposal is consistent with the provisions of Section 6 of the Act, 9 in general, and with Section 6(b)(4) of the Act, 10 in particular, in that the proposal provides for the equitable allocation of reasonable dues, fees, and other charges among its OTP Holders 11 and OTP Firms trading option contracts on NYSE Arca. 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(4). 11 *See* NYSE Arca rule 1(q). 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 The foregoing proposed rule change is subject to Section 19(b)(3)(A)(ii) of the Act 12 and subparagraph (f)(2) of Rule 19b-4 thereunder 13 because it establishes or changes a due, fee, or other charge applicable only to a member imposed by the self-regulatory organization. Accordingly, the proposal is effective upon Commission receipt of the filing. 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. 14 12 15 U.S.C. 78s(b)(3)(A)(ii). 13 17 CFR 240.19bn-4(f)(2). 14 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposal, the Commission considers the period to commence on December 15, 2006, the date on which the Exchange submitted Amendment No. 1. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment from ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSEArca-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-NYSEArca-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 the filing also will be available for inspection and copying at the principal office of NYSE Arca. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2006-89 and should be submitted on or before January 17, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. 06-9864 Filed 12-26-06; 8:45 am]
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  • 340 U.S. 474
  • 201 F.3d 1264
  • 703 F.2d 447
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  • 528 U.S. 167
  • 455 U.S. 283
  • 345 U.S. 629
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  • 141 F.3d 224
  • 884 F.2d 1367
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  • 423 U.S. 122
  • 26 USC 2813
  • Pub. L. 104-13
  • Pub. L. 92-463
  • 12 CFR 792
  • 3 CFR 1954
  • 3 CFR 1959
  • Pub. L. 104-193
  • 5 USC 5701-5752
  • EO 11012
  • 5 USC 4101-4118
  • 29 CFR 1960
  • 15 USC 1601-1693
  • 28 USC 2671-2680
  • Pub. L. 105-264
  • 5 CFR 630.913
  • 17 CFR 240.19
  • 15 USC 78S(b)(2)
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cites case law
Notices
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U.S.C.§ 557
U.S.C.§ 556
C.F.R.§ 1316.59
C.F.R.§ 1308.13
C.F.R.§ 1308.14
C.F.R.§ 1308.12
C.F.R.§ 1301.52
U.S.C.§ 824
C.F.R.§ 1306.04
SCOTUS340 U.S. 474
F. App'x201 F.3d 1264
F. App'x703 F.2d 447
Cites 73 · showing 12Cited by 0 across 0 sources
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