Notices. Grant of Individual Exemptions

35,443 words·~161 min read·/register/2007/03/20/07-1338

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BILLING CODE 4410-11-M DEPARTMENT OF LABOR Employee Benefits Security Administration [Prohibited Transaction Exemption 2007-04; Exemption Application Nos. D-11345, and D-11370] Grant of Individual Exemptions Involving; D-11342, Mellon Financial Corporation (Mellon); and D-11370, Amendment to Prohibited Exemption

(PTE)2000-58 and

(PTE)2002-41 Involving Bear Stearns & Co. Inc., Prudential Securities Incorporated, et al. to add Dominion Bond Rating Service Limited and Dominion Bond Rating Service, Inc. AGENCY: Employee Benefits Security Administration, Labor. ACTION: Grant of Individual Exemptions. SUMMARY: This document contains exemptions issued by the Department of Labor (the Department) from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). A notice was published in the **Federal Register** of the pendency before the Department of a proposal to grant such exemption. The notice set forth a summary of facts and representations contained in the application for exemption and referred interested persons to the application for a complete statement of the facts and representations. The application has been available for public inspection at the Department in Washington, DC. The notice also invited interested persons to submit comments on the requested exemption to the Department. In addition the notice stated that any interested person might submit a written request that a public hearing be held (where appropriate). The applicant has represented that it has complied with the requirements of the notification to interested persons. No requests for a hearing were received by the Department. Public comments were received by the Department as described in the granted exemption. The notice of proposed exemption was issued and the exemption is being granted solely by the Department because, effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the Secretary of the Treasury to issue exemptions of the type proposed to the Secretary of Labor. Statutory Findings In accordance with section 408(a) of the Act and/or section 4975(c)(2) of the Code and the procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990) and based upon the entire record, the Department makes the following findings:

(a)The exemption is administratively feasible;

(b)The exemption is in the interests of the plan and its participants and beneficiaries; and

(c)The exemption is protective of the rights of the participants and beneficiaries of the plan. Mellon Financial Corporation (Mellon), Located in Pittsburgh, PA [Prohibited Transaction Exemption 2007-04; Exemption Application No. D-11342] Exemption Section I—Exemption for In-Kind Redemption of Assets The restrictions in sections 406(a)(1)(A) through

(D)and 406(b)(1) and (b)(2) of the Act, and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) through

(E)of the Code, shall not apply, effective November 30, 2005, to certain in-kind redemptions (the Redemption(s)) by the Mellon 401(k) Retirement Savings Plan or by any other employee benefit plan sponsored by Mellon or an affiliate (the Plan(s)), of shares (the Shares) of certain proprietary mutual funds in which the Plans were invested as of November 30, 2005 (the Funds), for which Mellon or an affiliate (collectively, referred to also as Mellon) provides investment advisory and other services, provided that the following conditions are satisfied:

(A)The Plan pays no sales commissions, redemption fees, or other similar fees in connection with the Redemption—other than customary transfer charges paid to parties other than Mellon;

(B)The assets transferred to the Plan pursuant to the Redemption consist entirely of cash and Transferable Securities, as such term is defined in Section II, below. Notwithstanding the foregoing, Transferable Securities that are odd lot securities, fractional shares, and accruals on such securities may be distributed in cash;

(C)With certain exceptions described below, the Plan receives in any Redemption its pro rata portion of the securities of the Funds equal in value to that of the number of Shares redeemed, as determined in a single valuation (using sources independent of Mellon) performed in the same manner and as of the close of business on the same day, in accordance with the procedures established by the Fund pursuant to Rule 2a-4 under the Investment Company Act of 1940, as amended from time to time (the 1940 Act), and the then-existing procedures established by the board of the Funds that are in compliance with the rules administered by the Securities Exchange Commission (SEC);

(D)Mellon does not receive any direct or indirect compensation or any fees, including any fees payable pursuant to Rule 12b-1 under the 1940 Act, in connection with any Redemption of the Shares;

(E)Prior to a Redemption, Mellon provides in writing to an independent fiduciary (Independent Fiduciary, as such term is defined in Section II, below), a full and detailed written disclosure of information regarding the Redemption;

(F)The Independent Fiduciary provides written authorization in advance of the Redemption to Mellon, such authorization being terminable at any time prior to the date of the Redemption without penalty to the Plan, provided that the termination is effectuated by the close of business following the date of receipt by Mellon of written or electronic notice regarding such termination (unless circumstances beyond the control of Mellon delay termination for no more than one additional business day);

(G)Before approving a Redemption, based on the disclosures provided by the Funds to the Independent Fiduciary and discussions with appropriate operational personnel of the Plan, the Independent Fiduciary determines that the terms of the Redemption are fair to the Plan and comparable to, and no less favorable than, terms obtainable at arm’s length between unaffiliated parties, and that the Redemption is in the best interests of the Plan and its participants and beneficiaries;

(H)Mellon makes a “make-whole payment” to ensure that the dollar value of the interests received by the Plan from the collective investment funds is not diminished by transaction costs nor by valuation differences as a result of the Redemption;

(I)No later than thirty

(30)business days after the completion of a Redemption, Mellon or the relevant Funds provides to the Independent Fiduciary a written confirmation regarding such Redemption containing:

(i)The number of Shares held by the Plan immediately before the Redemption and the related per Share net asset value and the total dollar value of the Shares held;

(ii)The identity and related aggregate dollar value of each security provided to the Plan pursuant to the Redemption, including each security valued (using sources independent of Mellon) in accordance with Rule 2a-4 under the 1940 Act and the then-existing procedures established by the board of the Fund for obtaining current prices from independent pricing services or market-makers;

(iii)The current market price of each security received by the Plan pursuant to the Redemption; and

(iv)The identity of each pricing service or market-maker consulted in determining the value of such securities;

(J)The value of the securities and cash received by the Plan for each redeemed Share equals the net asset value of such Share at the time of the transaction, and such value equals the value that would have been received by any other investor for shares of the same class of the relevant Fund at that time;

(K)Subsequent to a Redemption, the Independent Fiduciary performs a post-transaction review which will include, among other things, testing a sampling of material aspects of the Redemption deemed in its judgment to be representative, including pricing;

(L)Each of the Plan's dealings with the Funds, the principal underwriter for the Funds, or any affiliate thereof, or with Mellon, are on a basis no less favorable to the Plan than dealings between the Funds and other shareholders holding shares of the same class as the Shares;

(M)Mellon maintains, or causes to be maintained, for a period of six years from the date of any covered transaction, such records as are necessary to enable the persons described in paragraph (N)(1)(i)-(v), below, to determine whether the conditions described in this Section I have been met, except that:

(i)if the records necessary to enable the persons described in paragraph (N)(1)(i)-(v), below, to determine whether the conditions of this exemption have been met are lost, or destroyed, due to circumstances beyond the control of Mellon, then no prohibited transaction will be considered to have occurred, solely on the basis of the unavailability of those records; and

(ii)no party in interest with respect to the Plan other than Mellon shall be subject to the civil penalty that may be assessed under section 502(i) of the Act, or to the taxes imposed by section 4975(a) and

(b)of the Code, if such records are not maintained or are not available for examination as required by paragraph

(N)below. (N)(1) Except as provided in subparagraph

(2)of this paragraph (N), and notwithstanding any provisions of section 504(a)(2) and

(b)of the Act, the records referred to in paragraph (M), above, are unconditionally available at their customary locations for examination during normal business hours by:

(i)any duly authorized employee or representative of the Department, the Internal Revenue Service, or the SEC,

(ii)any fiduciary of the Plan or any duly authorized representative of such fiduciary,

(iii)any participant or beneficiary of the Plan or duly authorized representative of such participant or beneficiary,

(iv)any employer whose employees are covered by the Plan, and

(v)any employee organization whose members are covered by such Plan;

(2)None of the persons described in paragraphs (N)(1)(ii) through

(v)shall be authorized to examine trade secrets of Mellon or the Funds, or commercial or financial information which is privileged or confidential; and

(3)Should Mellon or the Funds refuse to disclose information on the basis that such information is exempt from disclosure pursuant to paragraph (N)(2) above, Mellon or the Funds shall, by the close of the 30th day following the request, provide a written notice advising that person of the reasons for the refusal and that the Department may request such information. Section II—Definitions

(A)The term “affiliate” means:

(1)Any person (including a corporation or partnership) directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with the person;

(2)Any officer, director, employee, relative, or partner in any such person; and

(3)Any corporation or partnership of which such person is an officer, director, partner, or employee.

(B)The term “control” means the power to exercise a controlling influence over the management or policies of a person other than an individual.

(C)The term “net asset value” means the amount for purposes of pricing all purchases and sales calculated by dividing the value of all securities, determined by a method as set forth in the Fund's prospectus and statement of additional information, and other assets belonging to the Fund, less the liabilities charged to each such Fund, by the number of outstanding shares.

(D)The term “Independent Fiduciary” means a fiduciary who is:

(i)Independent of and unrelated to Mellon and its affiliates, and

(ii)Appointed to act on behalf of the Plan with respect to the in-kind transfer of assets from one or more Funds to, or for the benefit of, the Plan. A fiduciary will not be independent of, and unrelated to, Mellon if:

(i)Such fiduciary directly or indirectly controls, is controlled by or is under common control with, Mellon;

(ii)Such fiduciary, directly or indirectly, receives any compensation or other consideration in connection with any transaction described herein (except that an Independent Fiduciary may receive compensation from Mellon in connection with the transactions contemplated herein, if the amount or payment of such compensation is not contingent upon, or in any way affected by any decision made by the Independent Fiduciary); or

(iii)More than 1 percent (1%) of such fiduciary's gross income, for federal income tax purposes, in its prior tax year, will be paid by Mellon in the fiduciary's current tax year.

(E)The term “Transferable Securities” means securities—

(1)for which market quotations are readily available, as determined pursuant to procedures established by the Funds under Rule 2a-4 of the 1940 Act; and

(2)that are not:

(i)Securities that, if publicly offered or sold, would require registration under the Securities Act of 1933;

(ii)Securities issued by entities in countries that

(a)restrict or prohibit the holding of securities by non-nationals other than through qualified investment vehicles, such as the Funds, or

(b)permit transfers of ownership of securities to be effected only by transactions conducted on a local stock exchange;

(iii)Certain portfolio positions (such as forward foreign currency contracts, futures and options contracts, swap transactions, certificates of deposit and repurchase agreements) that, although liquid and marketable, involve the assumption of contractual obligations, require special trading facilities, or can be traded only with the counter-party to the transaction to effect a change in beneficial ownership;

(iv)Cash equivalents (such as certificates of deposit, commercial paper, and repurchase agreements);

(v)Other assets that are not readily distributable (including receivables and prepaid expenses), net of all liabilities (including accounts payable); and

(vi)Securities subject to “stop transfer” instructions or similar contractual restrictions on transfer.

(F)The term “relative” means a “relative” as that term is defined in section 3(15) of the Act (or a “member of the family,” as that term is defined in section 4975(e)(6) of the Code), or a brother, sister, or a spouse of a brother or a sister. *Effective Date:* This exemption is effective as of November 30, 2005. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the notice of proposed exemption published on August 21, 2006 at 71 FR 48781. Written Comments The Department received three written comments with respect to the notice of proposed exemption (the Proposal). The comments were submitted by the applicant and by two Plan participants. The comment by the applicant first raises an issue concerning the scope of exemptive relief provided in the Proposal from sections 406(a)(1)(A) through

(D)and 406(b)(2) of the Act. The applicant had originally requested relief from all of sections 406(a) and 406(b), consistent with prior exemptions for similar in-kind redemption transactions. The Department informed the applicant that the current policy is to provide relief as narrow as possible and requested an explanation of the need for the requested relief; the applicant responded with a letter dated July 14, 2006 focusing on a potential violation of section 406(b)(2). The applicant notes, however, that the Department included language in the Summary of Facts and Representations (the Summary), at Item 4 (71 FR 48784, column 3), describing the in-kind redemptions “as raising the possibility of self-dealing,” implying a need for relief from section 406(b)(1), as well. The applicant requests, therefore, that the Department either expand this exemption to include relief from section 406(b)(1) or clarify that the transactions do not raise the possibility of self-dealing. To resolve this issue, the Department has revised the exemption to provide relief from section 406(b)(1) of the Act. The applicant further notes that the Department has defined “Mellon” in Section I of the Proposal to include Mellon affiliates. However, there are two places requiring revision to avoid reaching affiliates of Mellon affiliates. To resolve this issue, the Department has revised Section I(L) (71 FR 48782, column 1) and the definition of “Independent Fiduciary” at Section II(D) (71 FR 48782, column 2) of the exemption as follows (with underlining indicating new language and italics for deleted language). “(L) Each of the Plan's dealings with the Funds, *Mellon,* the principal underwriter for the Funds, or any affiliate thereof, *or with Mellon,* are on a basis no less favorable to the Plan than dealings between the Funds and other shareholders holding shares of the same class as the Shares;” and “(D)(iii) More than 1 percent (1%) of such fiduciary's gross income, for federal income tax purposes, in its prior tax year, will be paid by Mellon *and its affiliates* in the fiduciary's current tax year.” The applicant also notes certain formatting problems with the two charts in the Summary as printed in the **Federal Register** , such that it is unclear how the information in the first column of the chart related to the information in the second column. To resolve this issue, the Department notes the applicant's corrections as follows. In the first chart (71 FR 48783), under the title “Actively Managed Funds,” “Dreyfus LifeTime Portfolios” appears on the same line as “Mellon Stable Value,” making it appear as if the two are a single Fund holding $92.6 million in assets. The $92.6 million should be attributed solely to the Mellon Stable Value Fund. “Dreyfus LifeTime Portfolios” is the name of a subgroup of Dreyfus Funds that consists of the following three Funds on the list—Income Portfolio, Growth and Income Portfolio and Growth Portfolio. The second chart (71 FR 48784) fails to make clear which Actively Managed Funds are mapped into which recipient basic funds. The following chart shows the mapping: Fund Transfer or “Mapping” Chart Actively managed fund ▸ Recipient basic fund Dreyfus LifeTime Portfolios, Inc. Income Portfolio ▸ Daily Liquidity Asset Allocation Fund. Growth and Income Portfolio Growth Portfolio Dreyfus Appreciation Dreyfus Premier Core Value Dreyfus Disciplined Stock ▸ Daily Liquidity Stock Index. Dreyfus Premier Third Century Fund, Inc. Dreyfus Premier Technology Growth Dreyfus Founders Growth Dreyfus Premier New Leaders Dreyfus Founders Discovery ▸ Daily Liquidity Small Cap Stock Index. Dreyfus Founders Worldwide Growth Dreyfus Premier International Value ▸ Daily Liquidity International Stock Index. The Boston Company International Small Cap Finally, the applicant notes that, as printed in the **Federal Register** , footnote 21 erroneously references footnotes 3 and 4, due to the inadvertent failure to adjust the cross-references to reflect the continuation of footnote numbers from other proposed exemption notices in the same package. To resolve this issue, the Department revises the cross-references in footnote 21 so that the original footnote 3 is now footnote 19 and the original footnote 4 is now footnote 20. In the second comment, a Plan participant notes his displeasure about the change in investment options offered under the Mellon Plan:

(a)The literature describing the change in funds was confusing so that the participant did not understand the need to take immediate action in order to be able to fully utilize the self-directed brokerage account feature;

(b)Following the transfer, the self-directed brokerage account would be permanently unavailable for amounts greater than 50% of his account. Those assets can only be reallocated within the “core” Basic Funds, limiting the potential for investment gains;

(c)Public information regarding the Basic Funds is limited—they do not appear in daily/weekly newspapers;

(d)The effect of the changes was self-serving, done in the interests of Mellon, because it has required 50% of the Plan's assets to be tied up in Mellon collective funds, increasing Mellon's assets under management. The participant requested a hearing and hoped that Mellon would be forced to rescind the entire transfer of assets to the Basic Funds and to make up any losses to participants. In the third comment, another Plan participant expressed the following concerns:

(a)The Plan trustees should not have engaged in a non-permitted transaction without first obtaining an exemption, as they should have known of the need for an exemption several months in advance;

(b)He questioned the need to adhere to an “arbitrary” date that exposed the Plan to potential risk should the exemption not be granted. He questioned whether the rush to complete the transaction was done to benefit outside parties, or perhaps Mellon Plan committee members that served on the boards of other companies with a financial interest in the transactions;

(c)He requested that a penalty be imposed that would send a message to the financial/legal community that no financial institution is above the law. The applicant responds that both commenters misunderstood the nature of the transfers and the reasons underlying the transfers, as well as the nature of the exemption process. As described in the Summary, there were two reasons for the changes in Plan investment options that were made at the end of 2005:

(a)To simplify the investment offerings by eliminating the “Actively Managed Funds” category, which overlapped in several respects with the “Basic Funds” category—the third category, a self-directed brokerage window, was not affected;

(b)to reduce investment management expenses borne by participants, as Mellon absorbs all the costs for the Basic Funds (as they are Mellon collective investment funds) but did not absorb the internal costs of the Actively Managed Funds. The applicant also asserts that no financial interest of Mellon, any related company, or any Plan committee member was served through these changes. To the contrary, the changes were undertaken with the goal of better serving the interests of the Plan participants and beneficiaries, in accordance with the fiduciary responsibilities of the Plan committee, by simplifying investments and reducing costs in the manner described above. In fact, as several of the Actively Managed Funds that were eliminated are advised by Mellon affiliates, those affiliates will receive reduced Plan-related income (to the extent that participants chose to continue to invest in those Funds in the self-directed brokerage account). Furthermore, as the Plan committee members do not serve on the boards of other financial services companies, one commenter's concern that committee members were enriched by the change in fund line-up through their outside board affiliations has no basis in fact. The applicant adds that information about the Basic Funds is not available in public newspapers because they are collective funds, available only to institutional investors. However, the information is readily available to Plan participants and beneficiaries on Mellon's 401(k) Plan website, the address for which is included in participant statements and other mailings. The website includes fund closing prices for the prior business day and performance information for each fund for the preceding quarter, year-to-date, and for the prior one-year, three-year and five-year periods. As represented in the Summary, Plan participants were notified of the changes in investment offerings by an announcement (Exhibit E to the application) distributed on or about October 6, 2005. The new fund line-up was to be implemented December 1st, with the increased self-directed account limit available until December 30th. The Plan committee believes that the three-page announcement was clearly written and sufficiently explained that the 50% limitation on investment in the self-directed brokerage window would be suspended only for a limited time period (see the bottom of page 2). Even so, to assure that its employees understood the changes, Mellon provided the same information in several additional ways prior to the December 30th deadline. A list of “Frequently Asked Questions” regarding the changes was posted on the Mellon intranet site, accessible through an “In the Spotlight” section that contains information for employees, and the changes also were the subject of a three-page article in a December employee newsletter, “EC News.” In addition, Mellon Human Resources sponsored “in person” and web-based presentations on the changes, giving employees the opportunity to ask questions of a knowledgeable presenter. As a result, the Plan participants had notice in several formats of what was taking place and almost three months to preserve their investments in the Actively Managed Funds that were being removed as designated investment options. The applicant states that the fund change deadline of December 1st had already been communicated to the participants and beneficiaries when it became clear that exemptive relief would be necessary, as a result of the discovery by the Plan committee that two of the Fund transfers would have to be made in kind. It would have been detrimental to the interests of the participants and beneficiaries to have delayed the transfers at that point because they had already received the October notices and may have begun to make adjustments or taken (or not taken) other action in light of the upcoming changes. Therefore, the Plan committee decided to proceed and to request retroactive relief. The risks of the exemption's not being granted were on Mellon and the Plan committee, as they, not the Plan, would be liable for any losses or prohibited transaction excise taxes in the event that the Fund transfers were prohibited without coverage under an exemption. Finally, the applicant explains that the 50% limitation on the investment of a participant's account in the self-directed brokerage window was imposed by the Plan committee when the brokerage window was first added to the Plan in 2001. The committee's view was that the Funds available as designated investment options under the Plan offered a broad range of well-performing and diverse investments and that participants should not be permitted to place more than half of their assets in potentially higher-risk investments. While the number of designated investment options has been reduced as a result of the 2005 changes, it is the committee's view that the remaining Funds still provide a range of well-performing and diverse investments. Therefore, it has kept in place the 50% limitation, subject to the one-time, limited exception to permit participants to preserve their existing investments in the Funds being removed as Plan investment options. After a careful consideration of the entire record, including the written comments and the applicant's responses thereto, the Department has determined that a public hearing in this instance is unwarranted and that the proposed exemption should be granted as modified herein. FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department, telephone

(202)693-8557. (This is not a toll-free number.) Amendment to Prohibited Transaction Exemption

(PTE)2000-58, 65 FR 67765 (November 13, 2000) and PTE 2002-41, 67 FR 54487 (August 22, 2002) Involving Bear, Stearns & Co. Inc., Prudential Securities Incorporated, et al. to add Dominion Bond Rating Service Limited and Dominion Bond Rating Service, Inc. to the Definition of “Rating Agency” [Prohibited Transaction Exemption 2007-05; Application Number D-11370] Exemption In accordance with section 408(a) of the Act and section 4975(c)(2) of the Code and the procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, August 10, 1990) and based upon the entire record, the Department amends the following individual Prohibited Transaction Exemptions (PTEs), as set forth below: PTE 89-88, 54 FR 42582 (October 17, 1989); PTE 89-89, 54 FR 42569 (October 17, 1989); PTE 89-90, 54 FR 42597 (October 17, 1989); PTE 90-22, 55 FR 20542 (May 17, 1990); PTE 90-24, 55 FR 20548 (May 17, 1990); PTE 90-28, 55 FR 21456 (May 24, 1990); PTE 90-29, 55 FR 21459 (May 24, 1990); PTE 90-30, 55 FR 21461 (May 24, 1990); PTE 90-32, 55 FR 23147 (June 6, 1990); PTE 90-36, 55 FR 25903 (June 25, 1990); PTE 90-39, 55 FR 27713 (July 5, 1990); PTE 90-59, 55 FR 36724 (September 6, 1990); PTE 90-83, 55 FR 50250 (December 5, 1990); PTE 90-84, 55 FR 50252 (December 5, 1990); PTE 90-88, 55 FR 52899 (December 24, 1990); PTE 91-14, 55 FR 48178 (February 22, 1991); PTE 91-22, 56 FR 03277 (April 18, 1991); PTE 91-23, 56 FR 15936 (April 18, 1991); PTE 91-30, 56 FR 22452 (May 15, 1991); PTE 91-62, 56 FR 51406 (October 11, 1991); PTE 93-31, 58 FR 28620 (May 5, 1993); PTE 93-32, 58 FR 28623 (May 14, 1993); PTE 94-29, 59 FR 14675 (March 29, 1994); PTE 94-64, 59 FR 42312 (August 17, 1994); PTE 94-70, 59 FR 50014 (September 30, 1994); PTE 94-73, 59 FR 51213 (October 7, 1994); PTE 94-84, 59 FR 65400 (December 19, 1994); PTE 95-26, 60 FR 17586 (April 6, 1995); PTE 95-59, 60 FR 35938 (July 12, 1995); PTE 95-89, 60 FR 49011 (September 21, 1995); PTE 96-22, 61 FR 14828 (April 3, 1996); PTE 96-84, 61 FR 58234 (November 13, 1996); PTE 96-92, 61 FR 66334 (December 17, 1996); PTE 96-94, 61 FR 68787 (December 30, 1996); PTE 97-05, 62 FR 1926 (January 14, 1997); PTE 97-28, 62 FR 28515 (May 23, 1997); PTE 98-08, 63 FR 8498 (February 19, 1998); PTE 99-11, 64 FR 11046 (March 8, 1999); PTE 2000-19, 65 FR 25950 (May 4, 2000); PTE 2000-33, 65 FR 37171 (June 13, 2000); PTE 2000-41, 65 FR 51039 (August 22, 2000); PTE 2000-55, 65 FR 37171 (November 13, 2000); PTE 2002-19, 67 FR 14979 (March 28, 2002); PTE 2003-31, 68 FR 59202 (October 14, 2003); and PTE 2006-07, 71 FR 32134 (June 2, 2006), each as subsequently amended by PTE 97-34, 62 FR 39021 (July 21, 1997) and PTE 2000-58, 65 FR 67765 (November 13, 2000) and for certain of the exemptions, amended by PTE 2002-41, 67 FR 54487 (August 22, 2002) (collectively, the Underwriter Exemptions). In addition, the Department notes that it is also granting individual exemptive relief for: Deutsche Bank A.G., New York Branch and Deutsche Morgan Grenfell/C.J. Lawrence Inc., Final Authorization Number

(FAN)97-03E (December 9, 1996); Credit Lyonnais Securities

(USA)Inc., FAN 97-21E (September 10, 1997); ABN AMRO Inc., FAN 98-08E (April 27, 1998); Ironwood Capital Partners Ltd., FAN 99-31E (December 20, 1999) (supersedes FAN 97-02E (November 25, 1996)); William J. Mayer Securities LLC, FAN 01-25E (October 15, 2001); Raymond James & Associates Inc. & Raymond James Financial Inc., FAN 03-07E (June 14, 2003); WAMU Capital Corporation, FAN 03-14E (August 24, 2003); and Terwin Capital LLC, FAN 04-16E (August 18, 2004); which received the approval of the Department to engage in transactions substantially similar to the transactions described in the Underwriter Exemptions pursuant to PTE 96-62, 61 FR 39988 (July 31, 1996). I. Transactions A. Effective for transactions occurring on or after April 5, 2006, the restrictions of sections 406(a) and 407(a) of the Act, and the taxes imposed by sections 4975(a) and

(b)of the Code, by reason of section 4975(c)(1)(A) through

(D)of the Code shall not apply to the following transactions involving Issuers and Securities evidencing interests therein:

(1)The direct or indirect sale, exchange or transfer of Securities in the initial issuance of Securities between the Sponsor or Underwriter and an employee benefit plan when the Sponsor, Servicer, Trustee or Insurer of an Issuer, the Underwriter of the Securities representing an interest in the Issuer, or an Obligor is a party in interest with respect to such plan;

(2)The direct or indirect acquisition or disposition of Securities by a plan in the secondary market for such Securities; and

(3)The continued holding of Securities acquired by a plan pursuant to subsection I.A.(1) or (2). Notwithstanding the foregoing, section I.A. does not provide an exemption from the restrictions of sections 406(a)(1)(E), 406(a)(2) and 407 of the Act for the acquisition or holding of a Security on behalf of an Excluded Plan by any person who has discretionary authority or renders investment advice with respect to the assets of that Excluded Plan. 1 1 Section I.A. provides no relief from sections 406(a)(1)(E), 406(a)(2) and 407 of the Act for any person rendering investment advice to an Excluded Plan within the meaning of section 3(21)(A)(ii) of the Act, and regulation 29 CFR 2510.3-21(c). B. Effective for transactions occurring on or after April 5, 2006, the restrictions of sections 406(b)(1) and 406(b)(2) of the Act and the taxes imposed by sections 4975(a) and

(b)of the Code, by reason of section 4975(c)(1)(E) of the Code, shall not apply to:

(1)The direct or indirect sale, exchange or transfer of Securities in the initial issuance of Securities between the Sponsor or Underwriter and a plan when the person who has discretionary authority or renders investment advice with respect to the investment of plan assets in the Securities is

(a)an Obligor with respect to 5 percent or less of the fair market value of obligations or receivables contained in the Issuer, or

(b)an Affiliate of a person described in (a); if:

(i)The plan is not an Excluded Plan;

(ii)Solely in the case of an acquisition of Securities in connection with the initial issuance of the Securities, at least 50 percent of each class of Securities in which plans have invested is acquired by persons independent of the members of the Restricted Group and at least 50 percent of the aggregate interest in the Issuer is acquired by persons independent of the Restricted Group;

(iii)A plan's investment in each class of Securities does not exceed 25 percent of all of the Securities of that class outstanding at the time of the acquisition; and

(iv)Immediately after the acquisition of the Securities, no more than 25 percent of the assets of a plan with respect to which the person has discretionary authority or renders investment advice are invested in Securities representing an interest in an Issuer containing assets sold or serviced by the same entity. 2 For purposes of this paragraph

(iv)only, an entity will not be considered to service assets contained in an Issuer if it is merely a Subservicer of that Issuer; 2 For purposes of this Underwriter Exemption, each plan participating in a commingled fund (such as a bank collective trust fund or insurance company pooled separate account) shall be considered to own the same proportionate undivided interest in each asset of the commingled fund as its proportionate interest in the total assets of the commingled fund as calculated on the most recent preceding valuation date of the fund.

(2)The direct or indirect acquisition or disposition of Securities by a plan in the secondary market for such Securities, provided that the conditions set forth in paragraphs (i),

(iii)and

(iv)of subsection I.B.(1) are met; and

(3)The continued holding of Securities acquired by a plan pursuant to subsection I.B.(1) or (2). C. Effective for transactions occurring on or after April 5, 2006, the restrictions of sections 406(a), 406(b) and 407(a) of the Act, and the taxes imposed by section 4975(a) and

(b)of the Code by reason of section 4975(c) of the Code, shall not apply to transactions in connection with the servicing, management and operation of an Issuer, including the use of any Eligible Swap transaction; or the defeasance of a mortgage obligation held as an asset of the Issuer through the substitution of a new mortgage obligation in a commercial mortgage-backed Designated Transaction, provided:

(1)Such transactions are carried out in accordance with the terms of a binding Pooling and Servicing Agreement;

(2)The Pooling and Servicing Agreement is provided to, or described in all material respects in the prospectus or private placement memorandum provided to, investing plans before they purchase Securities issued by the Issuer; 3 and 3 In the case of a private placement memorandum, such memorandum must contain substantially the same information that would be disclosed in a prospectus if the offering of the securities were made in a registered public offering under the Securities Act of 1933. In the Department's view, the private placement memorandum must contain sufficient information to permit plan fiduciaries to make informed investment decisions. For purposes of this exemption, references to “prospectus” include any related prospectus supplement thereto, pursuant to which Securities are offered to investors.

(3)The defeasance of a mortgage obligation and the substitution of a new mortgage obligation in a commercial mortgage-backed Designated Transaction meet the terms and conditions for such defeasance and substitution as are described in the prospectus or private placement memorandum for such Securities, which terms and conditions have been approved by a Rating Agency and does not result in the Securities receiving a lower credit rating from the Rating Agency than the current rating of the Securities. Notwithstanding the foregoing, section I.C. does not provide an exemption from the restrictions of section 406(b) of the Act or from the taxes imposed by reason of section 4975(c) of the Code for the receipt of a fee by a Servicer of the Issuer from a person other than the Trustee or Sponsor, unless such fee constitutes a Qualified Administrative Fee. D. Effective for transactions occurring on or after April 5, 2006, the restrictions of sections 406(a) and 407(a) of the Act, and the taxes imposed by section 4975(a) and

(b)of the Code by reason of section 4975(c)(1)(A) through

(D)of the Code, shall not apply to any transactions to which those restrictions or taxes would otherwise apply merely because a person is deemed to be a party in interest or disqualified person (including a fiduciary) with respect to a plan by virtue of providing services to the plan (or by virtue of having a relationship to such service provider described in section 3(14)(F), (G),

(H)or

(I)of the Act or section 4975(e)(2)(F), (G),

(H)or

(I)of the Code), solely because of the plan's ownership of Securities. II. General Conditions A. The relief provided under section I. is available only if the following conditions are met:

(1)The acquisition of Securities by a plan is on terms (including the Security price) that are at least as favorable to the plan as they would be in an arm's-length transaction with an unrelated party;

(2)The rights and interests evidenced by the Securities are not subordinated to the rights and interests evidenced by other Securities of the same Issuer, unless the Securities are issued in a Designated Transaction;

(3)The Securities acquired by the plan have received a rating from a Rating Agency at the time of such acquisition that is in one of the three (or in the case of Designated Transactions, four) highest generic rating categories;

(4)The Trustee is not an Affiliate of any member of the Restricted Group, other than an Underwriter. For purposes of this requirement:

(a)The Trustee shall not be considered to be an Affiliate of a Servicer solely because the Trustee has succeeded to the rights and responsibilities of the Servicer pursuant to the terms of a Pooling and Servicing Agreement providing for such succession upon the occurrence of one or more events of default by the Servicer; and

(b)Subsection II.A.(4) will be deemed satisfied notwithstanding a Servicer becoming an Affiliate of the Trustee as the result of a merger or acquisition involving the Trustee, such Servicer and/or their Affiliates which occurs after the initial issuance of the Securities, provided that:

(i)Such Servicer ceases to be an Affiliate of the Trustee no later than six months after the date such Servicer became an Affiliate of the Trustee; and

(ii)Such Servicer did not breach any of its obligations under the Pooling and Servicing Agreement, unless such breach was immaterial and timely cured in accordance with the terms of such agreement, during the period from the closing date of such merger or acquisition transaction through the date the Servicer ceased to be an Affiliate of the Trustee;

(5)The sum of all payments made to and retained by the Underwriters in connection with the distribution or placement of Securities represents not more than Reasonable Compensation for underwriting or placing the Securities; the sum of all payments made to and retained by the Sponsor pursuant to the assignment of obligations (or interests therein) to the Issuer represents not more than the fair market value of such obligations (or interests); and the sum of all payments made to and retained by the Servicer represents not more than Reasonable Compensation for the Servicer's services under the Pooling and Servicing Agreement and reimbursement of the Servicer's reasonable expenses in connection therewith;

(6)The plan investing in such Securities is an “accredited investor” as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act of 1933; and

(7)In the event that the obligations used to fund an Issuer have not all been transferred to the Issuer on the Closing Date, additional obligations of the types specified in subsection III.B.(1) may be transferred to the Issuer during the Pre-Funding Period in exchange for amounts credited to the Pre-Funding Account, provided that:

(a)The Pre-Funding Limit is not exceeded;

(b)All such additional obligations meet the same terms and conditions for determining the eligibility of the original obligations used to create the Issuer (as described in the prospectus or private placement memorandum and/or Pooling and Servicing Agreement for such Securities), which terms and conditions have been approved by a Rating Agency. Notwithstanding the foregoing, the terms and conditions for determining the eligibility of an obligation may be changed if such changes receive prior approval either by a majority vote of the outstanding securityholders or by a Rating Agency;

(c)The transfer of such additional obligations to the Issuer during the Pre-Funding Period does not result in the Securities receiving a lower credit rating from a Rating Agency upon termination of the Pre-Funding Period than the rating that was obtained at the time of the initial issuance of the Securities by the Issuer;

(d)The weighted average annual percentage interest rate (the average interest rate) for all of the obligations held by the Issuer at the end of the Pre-Funding Period will not be more than 100 basis points lower than the average interest rate for the obligations which were transferred to the Issuer on the Closing Date;

(e)In order to ensure that the characteristics of the receivables actually acquired during the Pre-Funding Period are substantially similar to those which were acquired as of the Closing Date, the characteristics of the additional obligations will either be monitored by a credit support provider or other insurance provider which is independent of the Sponsor or an independent accountant retained by the Sponsor will provide the Sponsor with a letter (with copies provided to the Rating Agency, the Underwriter and the Trustee) stating whether or not the characteristics of the additional obligations conform to the characteristics of such obligations described in the prospectus, private placement memorandum and/or Pooling and Servicing Agreement. In preparing such letter, the independent accountant will use the same type of procedures as were applicable to the obligations which were transferred as of the Closing Date;

(f)The Pre-Funding Period shall be described in the prospectus or private placement memorandum provided to investing plans; and

(g)The Trustee of the Trust (or any agent with which the Trustee contracts to provide Trust services) will be a substantial financial institution or trust company experienced in trust activities and familiar with its duties, responsibilities and liabilities as a fiduciary under the Act. The Trustee, as the legal owner of the obligations in the Trust or the holder of a security interest in the obligations held by the Issuer, will enforce all the rights created in favor of securityholders of the Issuer, including employee benefit plans subject to the Act;

(8)In order to insure that the assets of the Issuer may not be reached by creditors of the Sponsor in the event of bankruptcy or other insolvency of the Sponsor:

(a)The legal documents establishing the Issuer will contain:

(i)Restrictions on the Issuer's ability to borrow money or issue debt other than in connection with the securitization;

(ii)Restrictions on the Issuer merging with another entity, reorganizing, liquidating or selling assets (other than in connection with the securitization);

(iii)Restrictions limiting the authorized activities of the Issuer to activities relating to the securitization;

(iv)If the Issuer is not a Trust, provisions for the election of at least one independent director/partner/member whose affirmative consent is required before a voluntary bankruptcy petition can be filed by the Issuer; and

(v)If the Issuer is not a Trust, requirements that each independent director/partner/member must be an individual that does not have a significant interest in, or other relationships with, the Sponsor or any of its Affiliates; and

(b)The Pooling and Servicing Agreement and/or other agreements establishing the contractual relationships between the parties to the securitization transaction will contain covenants prohibiting all parties thereto from filing an involuntary bankruptcy petition against the Issuer or initiating any other form of insolvency proceeding until after the Securities have been paid; and

(c)Prior to the issuance by the Issuer of any Securities, a legal opinion is received which states that either:

(i)A “true sale” of the assets being transferred to the Issuer by the Sponsor has occurred and that such transfer is not being made pursuant to a financing of the assets by the Sponsor; or

(ii)In the event of insolvency or receivership of the Sponsor, the assets transferred to the Issuer will not be part of the estate of the Sponsor;

(9)If a particular class of Securities held by any plan involves a Ratings Dependent or Non-Ratings Dependent Swap entered into by the Issuer, then each particular swap transaction relating to such Securities:

(a)Shall be an Eligible Swap;

(b)Shall be with an Eligible Swap Counterparty;

(c)In the case of a Ratings Dependent Swap, shall provide that if the credit rating of the counterparty is withdrawn or reduced by any Rating Agency below a level specified by the Rating Agency, the Servicer (as agent for the Trustee) shall, within the period specified under the Pooling and Servicing Agreement:

(i)Obtain a replacement swap agreement with an Eligible Swap Counterparty which is acceptable to the Rating Agency and the terms of which are substantially the same as the current swap agreement (at which time the earlier swap agreement shall terminate); or

(ii)Cause the swap counterparty to establish any collateralization or other arrangement satisfactory to the Rating Agency such that the then current rating by the Rating Agency of the particular class of Securities will not be withdrawn or reduced. In the event that the Servicer fails to meet its obligations under this subsection II.A.(9)(c), plan securityholders will be notified in the immediately following Trustee's periodic report which is provided to securityholders, and sixty days after the receipt of such report, the exemptive relief provided under section I.C. will prospectively cease to be applicable to any class of Securities held by a plan which involves such Ratings Dependent Swap; provided that in no event will such plan securityholders be notified any later than the end of the second month that begins after the date on which such failure occurs.

(d)In the case of a Non-Ratings Dependent Swap, shall provide that, if the credit rating of the counterparty is withdrawn or reduced below the lowest level specified in section III.GG., the Servicer (as agent for the Trustee) shall within a specified period after such rating withdrawal or reduction:

(i)Obtain a replacement swap agreement with an Eligible Swap Counterparty, the terms of which are substantially the same as the current swap agreement (at which time the earlier swap agreement shall terminate); or

(ii)Cause the swap counterparty to post collateral with the Trustee in an amount equal to all payments owed by the counterparty if the swap transaction were terminated; or

(iii)Terminate the swap agreement in accordance with its terms; and

(e)Shall not require the Issuer to make any termination payments to the counterparty (other than a currently scheduled payment under the swap agreement) except from Excess Spread or other amounts that would otherwise be payable to the Servicer or the Sponsor;

(10)Any class of Securities, to which one or more swap agreements entered into by the Issuer applies, may be acquired or held in reliance upon this Underwriter Exemption only by Qualified Plan Investors; and

(11)Prior to the issuance of any debt securities, a legal opinion is received which states that the debt holders have a perfected security interest in the Issuer's assets. B. Neither any Underwriter, Sponsor, Trustee, Servicer, Insurer or any Obligor, unless it or any of its Affiliates has discretionary authority or renders investment advice with respect to the plan assets used by a plan to acquire Securities, shall be denied the relief provided under section I., if the provision of subsection II.A.(6) is not satisfied with respect to acquisition or holding by a plan of such Securities, provided that

(1)such condition is disclosed in the prospectus or private placement memorandum; and

(2)in the case of a private placement of Securities, the Trustee obtains a representation from each initial purchaser which is a plan that it is in compliance with such condition, and obtains a covenant from each initial purchaser to the effect that, so long as such initial purchaser (or any transferee of such initial purchaser's Securities) is required to obtain from its transferee a representation regarding compliance with the Securities Act of 1933, any such transferees will be required to make a written representation regarding compliance with the condition set forth in subsection II.A.(6). III. Definitions For purposes of this exemption: A. “Security” means:

(1)A pass-through certificate or trust certificate that represents a beneficial ownership interest in the assets of an Issuer which is a Trust and which entitles the holder to payments of principal, interest and/or other payments made with respect to the assets of such Trust; or

(2)A security which is denominated as a debt instrument that is issued by, and is an obligation of, an Issuer; with respect to which the Underwriter is either

(i)the sole underwriter or the manager or co-manager of the underwriting syndicate, or

(ii)a selling or placement agent. B. “Issuer” means an investment pool, the corpus or assets of which are held in trust (including a grantor or owner Trust) or whose assets are held by a partnership, special purpose corporation or limited liability company (which Issuer may be a Real Estate Mortgage Investment Conduit (REMIC) or a Financial Asset Securitization Investment Trust (FASIT) within the meaning of section 860D(a) or section 860L, respectively, of the Code); and the corpus or assets of which consist solely of: (1)(a) Secured consumer receivables that bear interest or are purchased at a discount (including, but not limited to, home equity loans and obligations secured by shares issued by a cooperative housing association); and/or

(b)Secured credit instruments that bear interest or are purchased at a discount in transactions by or between business entities (including, but not limited to, Qualified Equipment Notes Secured by Leases); and/or

(c)Obligations that bear interest or are purchased at a discount and which are secured by single-family residential, multi-family residential and/or commercial real property (including obligations secured by leasehold interests on residential or commercial real property); and/or

(d)Obligations that bear interest or are purchased at a discount and which are secured by motor vehicles or equipment, or Qualified Motor Vehicle Leases; and/or

(e)Guaranteed governmental mortgage pool certificates, as defined in 29 CFR 2510.3-101(i)(2) 4 ; and/or

(f)Fractional undivided interests in any of the obligations described in clauses (a)-(e) of this subsection B.(1). 5

(1)Notwithstanding the foregoing, residential and home equity loan receivables issued in Designated Transactions may be less than fully secured, provided that:

(i)the rights and interests evidenced by the Securities issued in such Designated Transactions (as defined in section III.DD.) are not subordinated to the rights and interests evidenced by Securities of the same Issuer;

(ii)such Securities acquired by the plan have received a rating from a Rating Agency at the time of such acquisition that is in one of the two highest generic rating categories; and

(iii)any obligation included in the corpus or assets of the Issuer must be secured by collateral whose fair market value on the Closing Date of the Designated Transaction is at least equal to 80% of the sum of:

(I)the outstanding principal balance due under the obligation which is held by the Issuer and

(II)the outstanding principal balance(s) of any other obligation(s) of higher priority (whether or not held by the Issuer) which are secured by the same collateral.

(2)Property which had secured any of the obligations described in subsection III.B.(1); (3)(a) Undistributed cash or temporary investments made therewith maturing no later than the next date on which distributions are made to securityholders; and/or

(b)Cash or investments made therewith which are credited to an account to provide payments to securityholders pursuant to any Eligible Swap Agreement meeting the conditions of subsection II.A.(9) or pursuant to any Eligible Yield Supplement Agreement; and/or

(c)Cash transferred to the Issuer on the Closing Date and permitted investments made therewith which:

(i)Are credited to a Pre-Funding Account established to purchase additional obligations with respect to which the conditions set forth in paragraphs (a)-(g) of subsection II.A.(7) are met; and/or

(ii)Are credited to a Capitalized Interest Account; and

(iii)Are held by the Issuer for a period ending no later than the first distribution date to securityholders occurring after the end of the Pre-Funding Period. For purposes of this paragraph

(c)of subsection III.B.(3), the term “permitted investments” means investments which:

(i)are either:

(x)direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof, provided that such obligations are backed by the full faith and credit of the United States or

(y)have been rated (or the Obligor has been rated) in one of the three highest generic rating categories by a Rating Agency;

(ii)are described in the Pooling and Servicing Agreement; and

(iii)are permitted by the Rating Agency.

(4)Rights of the Trustee under the Pooling and Servicing Agreement, and rights under any insurance policies, third-party guarantees, contracts of suretyship, Eligible Yield Supplement Agreements, Eligible Swap Agreements meeting the conditions of subsection II.A.(9) or other credit support arrangements with respect to any obligations described in subsection III.B.(1). Notwithstanding the foregoing, the term “Issuer” does not include any investment pool unless:

(i)the assets of the type described in paragraphs (a)-(f) of subsection III.B.(1) which are contained in the investment pool have been included in other investment pools,

(ii)Securities evidencing interests in such other investment pools have been rated in one of the three (or in the case of Designated Transactions, four) highest generic rating categories by a Rating Agency for at least one year prior to the plan's acquisition of Securities pursuant to this Underwriter Exemption, and

(iii)Securities evidencing interests in such other investment pools have been purchased by investors other than plans for at least one year prior to the plan's acquisition of Securities pursuant to this Underwriter Exemption. C. “Underwriter” means:

(1)An entity defined as an Underwriter in subsection III.C.(1) of each of the Underwriter Exemptions that are being amended by this exemption. In addition, the term Underwriter includes Deutsche Bank AG, New York Branch and Deutsche Morgan Grenfell/C.J. Lawrence Inc, Credit Lyonnais Securities

(USA)Inc., ABN AMRO Inc., Ironwood Capital Partners Ltd., William J. Mayer Securities LLC, Raymond James & Associates Inc. & Raymond James Financial Inc., WAMU Capital Corporation, and Terwin Capital LLC (which received the approval of the Department to engage in transactions substantially similar to the transactions described in the Underwriter Exemptions pursuant to PTE 96-62);

(2)Any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such entity; or

(3)Any member of an underwriting syndicate or selling group of which a person described in subsections III.C.(1) or

(2)is a manager or co-manager with respect to the Securities. D. “Sponsor” means the entity that organizes an Issuer by depositing obligations therein in exchange for Securities. E. “Master Servicer” means the entity that is a party to the Pooling and Servicing Agreement relating to assets of the Issuer and is fully responsible for servicing, directly or through Subservicers, the assets of the Issuer. F. “Subservicer” means an entity which, under the supervision of and on behalf of the Master Servicer, services loans contained in the Issuer, but is not a party to the Pooling and Servicing Agreement. G. “Servicer” means any entity which services loans contained in the Issuer, including the Master Servicer and any Subservicer. H. “Trust” means an Issuer which is a trust (including an owner trust, grantor trust or a REMIC or FASIT which is organized as a Trust). I. “Trustee” means the Trustee of any Trust which issues Securities and also includes an Indenture Trustee. “Indenture Trustee” means the Trustee appointed under the indenture pursuant to which the subject Securities are issued, the rights of holders of the Securities are set forth and a security interest in the Trust assets in favor of the holders of the Securities is created. The Trustee or the Indenture Trustee is also a party to or beneficiary of all the documents and instruments transferred to the Issuer, and as such, has both the authority to, and the responsibility for, enforcing all the rights created thereby in favor of holders of the Securities, including those rights arising in the event of default by the Servicer. J. “Insurer” means the insurer or guarantor of, or provider of other credit support for, an Issuer. Notwithstanding the foregoing, a person is not an insurer solely because it holds Securities representing an interest in an Issuer which are of a class subordinated to Securities representing an interest in the same Issuer. K. “Obligor” means any person, other than the Insurer, that is obligated to make payments with respect to any obligation or receivable included in the Issuer. Where an Issuer contains Qualified Motor Vehicle Leases or Qualified Equipment Notes Secured by Leases, “Obligor” shall also include any owner of property subject to any lease included in the Issuer, or subject to any lease securing an obligation included in the Issuer. L. “Excluded Plan” means any plan with respect to which any member of the Restricted Group is a “plan sponsor” within the meaning of section 3(16)(B) of the Act. M. “Restricted Group” with respect to a class of Securities means:

(1)Each Underwriter;

(2)Each Insurer;

(3)The Sponsor;

(4)The Trustee;

(5)Each Servicer;

(6)Any Obligor with respect to obligations or receivables included in the Issuer constituting more than 5 percent of the aggregate unamortized principal balance of the assets in the Issuer, determined on the date of the initial issuance of Securities by the Issuer;

(7)Each counterparty in an Eligible Swap Agreement; or

(8)Any Affiliate of a person described in subsections III.M.(1)-(7). N. “Affiliate” of another person includes:

(1)Any person directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such other person;

(2)Any officer, director, partner, employee, relative (as defined in section 3(15) of the Act), a brother, a sister, or a spouse of a brother or sister of such other person; and

(3)Any corporation or partnership of which such other person is an officer, director or partner. O. “Control” means the power to exercise a controlling influence over the management or policies of a person other than an individual. P. A person will be “independent” of another person only if:

(1)Such person is not an Affiliate of that other person; and

(2)The other person, or an Affiliate thereof, is not a fiduciary who has investment management authority or renders investment advice with respect to any assets of such person. Q. “Sale” includes the entrance into a Forward Delivery Commitment, provided:

(1)The terms of the Forward Delivery Commitment (including any fee paid to the investing plan) are no less favorable to the plan than they would be in an arm's-length transaction with an unrelated party;

(2)The prospectus or private placement memorandum is provided to an investing plan prior to the time the plan enters into the Forward Delivery Commitment; and

(3)At the time of the delivery, all conditions of this Underwriter Exemption applicable to sales are met. R. “Forward Delivery Commitment” means a contract for the purchase or sale of one or more Securities to be delivered at an agreed future settlement date. The term includes both mandatory contracts (which contemplate obligatory delivery and acceptance of the Securities) and optional contracts (which give one party the right but not the obligation to deliver Securities to, or demand delivery of Securities from, the other party). S. “Reasonable Compensation” has the same meaning as that term is defined in 29 CFR 2550.408c-2. T. “Qualified Administrative Fee” means a fee which meets the following criteria:

(1)The fee is triggered by an act or failure to act by the Obligor other than the normal timely payment of amounts owing in respect of the obligations;

(2)The Servicer may not charge the fee absent the act or failure to act referred to in subsection III.T.(1);

(3)The ability to charge the fee, the circumstances in which the fee may be charged, and an explanation of how the fee is calculated are set forth in the Pooling and Servicing Agreement; and

(4)The amount paid to investors in the Issuer will not be reduced by the amount of any such fee waived by the Servicer. U. “Qualified Equipment Note Secured By A Lease” means an equipment note:

(1)Which is secured by equipment which is leased;

(2)Which is secured by the obligation of the lessee to pay rent under the equipment lease; and

(3)With respect to which the Issuer's security interest in the equipment is at least as protective of the rights of the Issuer as the Issuer would have if the equipment note were secured only by the equipment and not the lease. V. “Qualified Motor Vehicle Lease” means a lease of a motor vehicle where:

(1)The Issuer owns or holds a security interest in the lease;

(2)The Issuer owns or holds a security interest in the leased motor vehicle; and

(3)The Issuer's security interest in the leased motor vehicle is at least as protective of the Issuer's rights as the Issuer would receive under a motor vehicle installment loan contract. W. “Pooling and Servicing Agreement” means the agreement or agreements among a Sponsor, a Servicer and the Trustee establishing a Trust. “Pooling and Servicing Agreement” also includes the indenture entered into by the Issuer and the Indenture Trustee. X. “Rating Agency” means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.; Moody's Investors Service, Inc.; FitchRatings, Inc.; Dominion Bond Rating Service Limited, or Dominion Bond Rating Service, Inc.; or any successors thereto. Y. “Capitalized Interest Account” means an Issuer account:

(i)which is established to compensate securityholders for shortfalls, if any, between investment earnings on the Pre-Funding Account and the interest rate payable under the Securities; and

(ii)which meets the requirements of paragraph

(c)of subsection III.B.(3). Z. “Closing Date” means the date the Issuer is formed, the Securities are first issued and the Issuer's assets (other than those additional obligations which are to be funded from the Pre-Funding Account pursuant to subsection II.A.(7)) are transferred to the Issuer. AA. “Pre-Funding Account” means an Issuer account:

(i)Which is established to purchase additional obligations, which obligations meet the conditions set forth in paragraph (a)-(g) of subsection II.A.(7); and

(ii)which meets the requirements of paragraph

(c)of subsection III.B.(3). BB. “Pre-Funding Limit” means a percentage or ratio of the amount allocated to the Pre-Funding Account, as compared to the total principal amount of the Securities being offered, which is less than or equal to 25 percent. CC. “Pre-Funding Period” means the period commencing on the Closing Date and ending no later than the earliest to occur of:

(i)The date the amount on deposit in the Pre-Funding Account is less than the minimum dollar amount specified in the Pooling and Servicing Agreement;

(ii)the date on which an event of default occurs under the Pooling and Servicing Agreement; or

(iii)the date which is the later of three months or ninety days after the Closing Date. DD. “Designated Transaction” means a securitization transaction in which the assets of the Issuer consist of secured consumer receivables, secured credit instruments or secured obligations that bear interest or are purchased at a discount and are:

(i)Motor vehicle, home equity and/or manufactured housing consumer receivables; and/or

(ii)motor vehicle credit instruments in transactions by or between business entities; and/or

(iii)single-family residential, multi-family residential, home equity, manufactured housing and/or commercial mortgage obligations that are secured by single-family residential, multi-family residential, commercial real property or leasehold interests therein. For purposes of this section III.DD., the collateral securing motor vehicle consumer receivables or motor vehicle credit instruments may include motor vehicles and/or Qualified Motor Vehicle Leases. EE. “Ratings Dependent Swap” means an interest rate swap, or (if purchased by or on behalf of the Issuer) an interest rate cap contract, that is part of the structure of a class of Securities where the rating assigned by the Rating Agency to any class of Securities held by any plan is dependent on the terms and conditions of the swap and the rating of the counterparty, and if such Security rating is not dependent on the existence of the swap and rating of the counterparty, such swap or cap shall be referred to as a “Non-Ratings Dependent Swap”. With respect to a Non-Ratings Dependent Swap, each Rating Agency rating the Securities must confirm, as of the date of issuance of the Securities by the Issuer, that entering into an Eligible Swap with such counterparty will not affect the rating of the Securities. FF. “Eligible Swap” means a Ratings Dependent or Non-Ratings Dependent Swap:

(1)Which is denominated in U.S. dollars;

(2)Pursuant to which the Issuer pays or receives, on or immediately prior to the respective payment or distribution date for the class of Securities to which the swap relates, a fixed rate of interest, or a floating rate of interest based on a publicly available index (e.g., LIBOR or the U.S. Federal Reserve's Cost of Funds Index (COFI)), with the Issuer receiving such payments on at least a quarterly basis and obligated to make separate payments no more frequently than the counterparty, with all simultaneous payments being netted;

(3)Which has a notional amount that does not exceed either:

(i)the principal balance of the class of Securities to which the swap relates, or

(ii)the portion of the principal balance of such class represented solely by those types of corpus or assets of the Issuer referred to in subsections III.B.(1),

(2)and (3);

(4)Which is not leveraged (i.e., payments are based on the applicable notional amount, the day count fractions, the fixed or floating rates designated in subsection III.FF.(2), and the difference between the products thereof, calculated on a one to one ratio and not on a multiplier of such difference);

(5)Which has a final termination date that is either the earlier of the date on which the Issuer terminates or the related class of securities is fully repaid; and

(6)Which does not incorporate any provision which could cause a unilateral alteration in any provision described in subsections III.FF.(1) through

(4)without the consent of the Trustee. GG. “Eligible Swap Counterparty” means a bank or other financial institution which has a rating, at the date of issuance of the Securities by the Issuer, which is in one of the three highest long-term credit rating categories, or one of the two highest short-term credit rating categories, utilized by at least one of the Rating Agencies rating the Securities; provided that, if a swap counterparty is relying on its short-term rating to establish eligibility under the Underwriter Exemption, such swap counterparty must either have a long-term rating in one of the three highest long-term rating categories or not have a long-term rating from the applicable Rating Agency, and provided further that if the class of Securities with which the swap is associated has a final maturity date of more than one year from the date of issuance of the Securities, and such swap is a Ratings Dependent Swap, the swap counterparty is required by the terms of the swap agreement to establish any collateralization or other arrangement satisfactory to the Rating Agencies in the event of a ratings downgrade of the swap counterparty. HH. “Qualified Plan Investor” means a plan investor or group of plan investors on whose behalf the decision to purchase Securities is made by an appropriate independent fiduciary that is qualified to analyze and understand the terms and conditions of any swap transaction used by the Issuer and the effect such swap would have upon the credit ratings of the Securities. For purposes of the Underwriter Exemption, such a fiduciary is either:

(1)A “qualified professional asset manager” (QPAM), 6 as defined under Part V(a) of PTE 84-14, 49 FR 9494, 9506 (March 13, 1984), as amended by 70 FR 49305 (August 23, 2005); 6 PTE 84-14 provides a class exemption for transactions between a party in interest with respect to an employee benefit plan and an investment fund (including either a single customer or pooled separate account) in which the plan has an interest, and which is managed by a QPAM, provided certain conditions are met. QPAMs (e.g., banks, insurance companies, registered investment advisers with total client assets under management in excess of $85 million) are considered to be experienced investment managers for plan investors that are aware of their fiduciary duties under ERISA.

(2)An “in-house asset manager” (INHAM), 7 as defined under Part IV(a) of PTE 96-23, 61 FR 15975, 15982 (April 10, 1996); or 7 PTE 96-23 permits various transactions involving employee benefit plans whose assets are managed by an INHAM, an entity which is generally a subsidiary of an employer sponsoring the plan which is a registered investment adviser with management and control of total assets attributable to plans maintained by the employer and its affiliates which are in excess of $50 million.

(3)A plan fiduciary with total assets under management of at least $100 million at the time of the acquisition of such Securities. II. “Excess Spread” means, as of any day funds are distributed from the Issuer, the amount by which the interest allocated to Securities exceeds the amount necessary to pay interest to securityholders, servicing fees and expenses. JJ. “Eligible Yield Supplement Agreement” means any yield supplement agreement, similar yield maintenance arrangement or, if purchased by or on behalf of the Issuer, an interest rate cap contract to supplement the interest rates otherwise payable on obligations described in subsection III.B.(1). Such an agreement or arrangement may involve a notional principal contract provided that:

(1)It is denominated in U.S. dollars;

(2)The Issuer receives on, or immediately prior to the respective payment date for the Securities covered by such agreement or arrangement, a fixed rate of interest or a floating rate of interest based on a publicly available index (e.g., LIBOR or COFI), with the Issuer receiving such payments on at least a quarterly basis;

(3)It is not “leveraged” as described in subsection III.FF.(4);

(4)It does not incorporate any provision which would cause a unilateral alteration in any provision described in subsections III.JJ.(1)-(3) without the consent of the Trustee;

(5)It is entered into by the Issuer with an Eligible Swap Counterparty; and

(6)It has a notional amount that does not exceed either:

(i)the principal balance of the class of Securities to which such agreement or arrangement relates, or

(ii)the portion of the principal balance of such class represented solely by those types of corpus or assets of the Issuer referred to in subsections III.B.(1),

(2)and (3). IV. Modifications For the Underwriter Exemptions provided to Residential Funding Corporation, Residential Funding Mortgage Securities, Inc., et al. and GE Capital Mortgage Services, Inc. and GECC Capital Markets (the Applicants) (PTEs 94-29 and 94-73, respectively); A. Section III.A. of this exemption is modified to read as follows: A. “Security” means:

(2)A security which is denominated as a debt instrument that is issued by, and is an obligation of, an Issuer; with respect to which

(i)one of the Applicants or any of its Affiliates is the Sponsor, [and] an entity which has received from the Department an individual prohibited transaction exemption relating to Securities which is similar to this exemption, is the sole underwriter or the manager or co-manager of the underwriting syndicate or a selling or placement agent or

(ii)one of the Applicants or any of its Affiliates is the sole underwriter or the manager or co-manager of the underwriting syndicate, or a selling or placement agent. B. Section III.C. of this exemption is modified to read as follows: C. Underwriter means:

(2)Any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such entity;

(3)Any member of an underwriting syndicate or selling group of which a person described in subsections III.C.(1) or

(2)above is a manager or co-manager with respect to the Securities; or

(4)Any entity which has received from the Department an individual prohibited transaction exemption relating to Securities which is similar to this exemption. *Effective Date:* This amendment is effective for transactions occurring on or after April 5, 2006. For a more complete statement of the facts and representations supporting the Department's decision to amend the Underwriter Exemptions, refer to the notice of proposed exemption that was published on January 24, 2007 in the **Federal Register** at 72 FR 3152. FOR FURTHER INFORMATION CONTACT: Wendy M. McColough of the Department, telephone

(202)693-8540. (This is not a toll-free number.) General Information The attention of interested persons is directed to the following:

(1)The fact that a transaction is the subject of an exemption under section 408(a) of the Act and/or section 4975(c)(2) of the Code does not relieve a fiduciary or other party in interest or disqualified person from certain other provisions to which the exemption does not apply and the general fiduciary responsibility provisions of section 404 of the Act, which among other things require a fiduciary to discharge his duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with section 404(a)(1)(B) of the Act; nor does it affect the requirement of section 401(a) of the Code that the plan must operate for the exclusive benefit of the employees of the employer maintaining the plan and their beneficiaries;

(2)This exemption is supplemental to and not in derogation of any other provisions of the Act and/or the Code, including statutory or administrative exemptions and transactional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction; and

(3)The availability of this exemption is subject to the express condition that the material facts and representations contained in the application accurately describes all material terms of the transaction which is the subject of the exemption. Signed at Washington, DC this 14th day of March, 2007. Ivan Strasfeld Director of Exemption Determinations, Employee Benefits Security Administration, Department of Labor. [FR Doc. E7-4982 Filed 3-19-07; 8:45 am] BILLING CODE 4510-29-P NATIONAL ARCHIVES AND RECORDS ADMINISTRATION Advisory Committee on the Electronic Records Archives AGENCY: National Archives and Records Administration. ACTION: Notice of meeting. SUMMARY: In accordance with the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), the National Archives and Records Administration

(NARA)announces a meeting of the Advisory Committee on the Electronic Records Archives (ACERA). The committee serves as a deliberative body to advise the Archivist of the United States on technical, mission, and service issues related to the Electronic Records Archives (ERA). This includes, but is not limited to, advising and making recommendations to the Archivist on issues related to the development, implementation, and use of the ERA system. *Date of Meeting:* April 4-5, 2007. *Time of Meeting:* 9 a.m.-4 p.m. *Place of Meeting:* 700 Pennsylvania Avenue, NW., Washington, DC 20408-0001. This meeting will be open to the public. However, due to space limitations and access procedures, the name and telephone number of individuals planning to attend must be submitted to the Electronic Records Archives Program at *era.program@nara.gov.* SUPPLEMENTARY INFORMATION: Agenda • Opening Remarks • Approval of Minutes • Committee Updates • Activity Reports • Adjournment FOR FURTHER INFORMATION CONTACT: Lewis Bellardo, Deputy Archivist of the United States and Chief of Staff;

(301)837-1600. Dated: March 15, 2007. Mary Ann Hadyka, Committee Management Officer. [FR Doc. E7-5068 Filed 3-19-07; 8:45 am] BILLING CODE 7515-01-P NATIONAL INSTITUTE FOR LITERACY National Institute for Literacy Advisory Board AGENCY: National Institute for Literacy. ACTION: Notice of open meeting with partially closed session (amended). SUMMARY: On March 8, 2007, the Secretary published in the **Federal Register** a notice of open meeting with a partially closed session for National Institute for Literacy. This notice amends the March 8, 2007, notice by changing the meeting to a one-day only meeting. This amended notice is appearing in the **Federal Register** less than 15 days before the meeting due to scheduling difficulties within the Agency. This notice sets forth the schedule and a summary of the agenda for an upcoming meeting of the National Institute for Literacy Advisory Board (Board). The notice also describes the functions of the Board. Notice of this meeting is required by section 10(a)(2) of the Federal Advisory Committee Act. This document is intended to notify the general public of their opportunity to attend the meeting. Individuals who will need accommodations for a disability in order to attend the meeting ( *e.g.* , interpreting services, assistive listening devices, or materials in alternative format) should notify Steve Langley at telephone number

(202)233-2043. We will attempt to meet requests for accommodations after this date but cannot guarantee their availability. The meeting site is accessible to individuals with disabilities. Date and Time: *Open session* —March 28, 2007, from 8:30 a.m. to 5:30 p.m. *Closed session* —March 28, 2007, from 5:30 p.m. to 6 p.m. ADDRESSES: The National Institute for Literacy, 1775 I Street, NW., Suite 730, Washington, DC 20006. FOR FURTHER INFORMATION CONTACT: Steve Langley, National Institute for Literacy, 1775 I Street, NW., Suite 730, Washington, DC 20006; telephone number:

(202)233-2043; e-mail: *slangley@nifl.gov.* SUPPLEMENTARY INFORMATION: The Board is established under section 242 of the Workforce Investment Act of 1998, Public Law 105-220 (20 U.S.C. 9252). The Board consists of ten individuals appointed by the President with the advice and consent of the Senate. The Board advises and makes recommendations to the Interagency Group that administers the Institute. The Interagency Group is composed of the Secretaries of Education, Labor, and Health and Human Services. The Interagency Group considers the Board's recommendations in planning the goals of the Institute and in implementing any programs to achieve those goals. Specifically, the Board performs the following functions:

(a)Makes recommendations concerning the appointment of the Director and the staff of the Institute;

(b)provides independent advice on operation of the Institute; and

(c)receives reports from the Interagency Group and the Institute's Director. The National Institute for Literacy Advisory Board will meet March 28, 2007. On March 28, 2007 from 8:30 a.m. to 5:30 p.m. the Board will meet in open session to discuss strategic planning and the dissemination plan for the National Early Literacy Panel Report. On March 28, 2007 from 5:30 p.m. to 6 p.m., the Board will meet in closed session to discuss personnel issues. This discussion will relate to the Institute's internal personnel practices, including consideration of the Director's performance and salary. The discussion is likely to disclose information of personal nature where disclosure would constitute a clearly unwarranted invasion of personnel privacy. The discussion must therefore be held in closed session under exemptions 2 and 6 of the Government in the Sunshine Act, 5 U.S.C. 552b(c)(2) and (6). A summary of the activities at the closed session and related matters that are informative to the public and consistent with the policy of 5 U.S.C. 552b will be available to the public within 14 days of the meeting. Records are kept of all Advisory Board proceedings and are available for public inspection at the National Institute for Literacy, 1775 I Street, NW., Suite 730, Washington, DC 20006, from 8:30 a.m. to 5 p.m. Dated: March 15, 2007. Sandra L. Baxter, Director. [FR Doc. E7-5024 Filed 3-19-07; 8:45 am] BILLING CODE 6055-01-P NUCLEAR REGULATORY COMMISSION Notice of Environmental Assessment and Finding of No Significant Impact for Exemption, in Accordance With 10 CFR 30.11, From NRC Licensing Requirements That May Otherwise Be Applicable With Respect to the Receipt and Disposal of Cesium Contaminated Emission Control Dust Located at the LeTourneau, Inc. Steel Mill in Longview, Texas at the U.S. Ecology Idaho Disposal Facility AGENCY: U.S. Nuclear Regulatory Commission. ACTION: Environmental Assessment and Finding of no significant impact for exemption from NRC regulations pursuant to 10 CFR 30.11. FOR FURTHER INFORMATION CONTACT: James Shaffner, Project Manager, Low-Level Waste Branch, Environmental Protection and Performance Assessment Directorate, Division of Waste Management and Environmental Protection, FSME, U.S. NRC; telephone:

(301)415-5496; fax number:

(301)415-5397; or by e-mail at *jas11@nrc.gov.* SUPPLEMENTARY INFORMATION: I. Introduction The U. S. Nuclear Regulatory Commission

(NRC)is considering, pursuant to 10 CFR 30.11, the issuance of an exemption from NRC licensing requirements that would otherwise be associated with U.S. Ecology Idaho's

(USEI)receipt and disposal of emission control dust contaminated with minor concentrations of Cesium 137 resulting from the accidental melting of a Cesium sealed source. The contaminated material is the property of LeTourneau Inc., the owner of a steel mill near Longview, TX. A Texas licensee, Earth-Tech, is managing the material on behalf of LeTourneau consistent with Earth-Tech's Texas Radioactive Materials License (LO5449). None of the parties involved in the proposed action are NRC licensees. Issuance of the proposed exemption, in conjunction with an action by the State of Texas to approve the removal of the wastes from the LeTourneau site, will allow for transfer of the material, by rail car, to USEI's Resource Conservation and Recovery

(RCRA)Subtitle C facility near Grand View, Idaho for processing (stabilization) and disposal. Material would be processed and disposed of in accordance with the requirements of USEI's RCRA permit. Pursuant to the proposed exemption, the material, upon its receipt at USEI's disposal facility, would not be subject to NRC licensing and would not be subject to NRC regulation. II. Environmental Assessment Identification of Proposed Action 10 CFR 30.11 provides that “* * * the Commission may, upon application of any interested person or upon its own initiative, grant such exemptions from the requirements of the regulations in this part * * * as it determines are authorized by law and will not endanger life or property or the common defense and security and are otherwise in the public interest.” The proposed action would exempt USEI from NRC licensing requirements contained in 10 CFR Part 30 that would otherwise be associated with the receipt, processing, and disposal of material contaminated with small concentrations (less than 25 picocuries per gram) of Cesium 137, a radioactive byproduct material. This action is in conjunction with a concurrent action by the Texas Department of State Health Services

(DSHS)to approve the transfer of the material (per Title 25, Texas Administrative Code § 289.252(cc)(2)(E)) from the LeTourneau site notwithstanding the provisions of Title 25, Texas Administrative Code § 289.202(ff)(20)(A) related to the stabilization of these materials. It would allow the transfer of approximately 250 tons of emissions control dust

(K061)from the LeTourneau facility in Longview, Texas to the USEI facility near Grand View, Idaho. Pursuant to the proposed exemption, the material, upon its receipt at USEI's disposal facility, would not be subject to NRC licensing and would not be subject to NRC regulation. USEI would then process (stabilize) the material for disposal at its facility consistent with the requirements of its RCRA Subtitle C permit. Need for the Proposed Action This exemption is necessary to allow the timely disposal of 250 tons of K061 material that is slightly contaminated (less than 25 picocuries per gram) with Cs 137 at the USEI disposal facility near Grand View, Idaho, which is permitted under RCRA, Subtitle C. NRC is fulfilling its responsibilities under the Atomic Energy Act to make a timely decision on the proposed exemption that ensures protection of public health and safety and the environment. Environmental Impacts of the Proposed Action In its October 27, 2006 letter and technical report, LeTourneau included a description of disposal site characteristics, a description of the waste, and radiological assessments of potential dose to transport workers, USEI site workers and future occupants of the disposal site after site closure. The NRC staff has reviewed the evaluations performed by LeTourneau, as well as related Texas DSHS correspondence (dated November 14, 2006, and February 1, 2007) in order to determine whether the criteria for granting the exemption are met. Staff has found that the potential doses to members of the public, either through proximity to material in transport, as a worker at the USEI facility, or as a current or future resident around the USEI facility, are less than “a few mrem” and consistent with NRC's policy which would be applicable to NRC licensees regarding 10 CFR 20.2002 approvals. Staff also considered the risk associated with possible transportation accidents associated with the waste material in a readily dispersable form. Staff concludes that risk will be insignificant because of:

(1)Low doses associated with low concentrations; and

(2)the low accident rate associated with rail transport. Further, the staff has determined that the affected environment and environmental impacts associated with the proposed action will not significantly increase the probability or consequences of accidents. USEI has received for processing and disposal similar material in the past. No changes are being made in the types of effluents that may be released off of the USEI site, nor is there significant potential for increase in public radiation exposure (for this evaluation USEI workers are considered members of the public). Based on its review, the NRC staff considered the impact of residual radioactivity at the disposal facility. The NRC has identified no other radiological or non-radiological activities in the area that could result in cumulative impacts, and concludes that the proposed action will not have a significant effect on the quality of the environment. Environmental Impacts of the Alternatives to the Proposed Action Due to the small amounts of radioactive material involved, the environmental impacts of the proposed action are small. Therefore, the only alternative that the staff considered is the no-action alternative, under which the NRC would maintain status quo by refusing to grant this exemption. This would require either leaving the material in place near Longview or sending it to an alternative facility that is permitted to receive it. In the case of the former, projected radiological impacts on members of the public are projected to be greater than those associated with the proposed action. In the case of the latter, radiological impacts and transportation risks would be similar to those associated with the proposed action with higher implementation costs. Conclusion The NRC staff has concluded that the proposed action will not significantly impact the quality of the human environment, and that the proposed action is the preferred alternative. Agencies and Persons Consulted NRC provided a draft of this Environmental Assessment to the State of Idaho Department of Environmental Quality and the Texas Department of State Health Services for review on February 5, 2007. Minor comments received from both agencies via e-mail have been incorporated herein or otherwise resolved. The NRC staff has determined that the transportation of the subject material over preexisting rail transportation routes for disposal at a preexisting facility is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of the habitat of such species. Therefore, no further consideration is required under Section 7 of the Endangered Species Act. The NRC staff has also determined that the proposed action is not the type of activity that has the potential to cause effects on historic properties. Therefore, no further consultation is required under Section 106 of the National Historic Preservation Act. III. Finding of No Significant Impact The NRC staff has prepared this EA in support of the proposed action. On the basis of this EA, the NRC finds that there are no significant environmental impacts resulting from the proposed action and that preparation of an environmental impact statement is not warranted. Accordingly, the NRC has determined that a Finding of No Significant Impact is appropriate. IV. Further Information Documents related to this action are available electronically in the NRC's Reading Room at *http://www.nrc.gov/reading-rm/adams.html* . From this site, you can access NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The documents associated with this action are:

(1)Letter dated October 27, 2006, from LeTourneau to Texas DSHS and NRC requesting exemptions to allow transfer of material to USEI for processing and disposal. (ML063260540),

(2)Letter dated November 14, 2006, from E. Bailey, Texas DSHS to W. Maier, NRC Region IV requesting NRC determination whether or not wastes may be disposed of at USEI facility and a condition for DSHS approval of waste removal. (ML070540192),

(3)Letter dated February 1, 2007, from E. Bailey, Texas DSHS to W. Maier, NRC Region IV clarifying terms of approval for waste removal. (ML070540194),

(4)Technical Review and Safety Evaluation Report of LeTourneau proposal by NRC staff dated February 22, 2007 (ML070530623),

(5)Title 10, Code of Federal Regulations, part 30, “Rules of General Applicability to Domestic Licensing of Byproduct Material.” If you do not have access to ADAMS, or if there are problems accessing documents located in ADAMS, contact the NRC Public Document Room

(PDR)Reference Staff at 1-800-397-4209, 301-415-4737 or e-mail *pdr@nrc.gov.* These documents may also be viewed electronically on the public computers located at the NRC's PDR, O-1F21, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852. The PDR reproduction contractor will copy documents for a fee. Dated at Rockville, Maryland, this 13th Day of March, 2007. For the Nuclear Regulatory Commission. Scott Flanders, Deputy Director, Environmental Protection and Performance Assessment Directorate, Division of Waste Management and Environmental Protection, Office of Federal and State Materials and Environmental Management. [FR Doc. E7-5034 Filed 3-19-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 50-400] Notice of Opportunity for Hearing, and Notice of Intent To Prepare an Environmental Impact Statement and Conduct the Scoping Process for Facility Operating License No. NPF-63 for an Additional 20-Year Period Carolina Power & Light Company Shearon Harris Nuclear Power Plant, Unit 1 The U.S. Nuclear Regulatory Commission (NRC or the Commission) is considering an application for the renewal of operating license NPF-63, which authorizes the Carolina Power & Light Company (CP&L), doing business as Progress Energy Carolinas, Inc., to operate the Shearon Harris Nuclear Power Plant, (HNP), Unit 1, at 2900 megawatts thermal. The renewed license would authorize the applicant to operate the HNP, Unit 1, for an additional 20 years beyond the period specified in the current license. HNP, Unit 1, is located in Wake County, North Carolina, and its current operating license expires on October 24, 2026. On November 16, 2006, the Commission's staff received an application from CP&L to renew operating license NPF-63 for HNP, Unit 1, pursuant to Title 10 of the Code of Federal Regulations, Part 54 (10 CFR Part 54). A notice of receipt and availability of the license renewal application

(LRA)was published in the **Federal Register** on December 11, 2006 (71 FR 71586). A notice of acceptance for docketing of the application for renewal of the facility operating license was published in the **Federal Register** on January 12, 2007, (72 FR 1562). The license renewal process proceeds along two tracks, one for review of safety issues (10 CFR Part 54) and another for environmental issues (10 CFR Part 51). An applicant must provide the NRC an evaluation that addresses the technical aspects of plant aging and describes the aging management programs and activities that will be relied on to manage aging. In addition, to support plant operation for the additional 20 years, the licensee must prepare an evaluation of the potential impact on the environment. The NRC reviews the application, documents its reviews in a safety evaluation report and supplemental environmental impact statement, and performs verification inspections at the applicant's facilities. If the NRC approves a renewed license, the licensee must continue to comply with all existing regulations and commitments associated with the current operating license as well as those additional activities required as a result of license renewal. The licensee's activities continue to be subject to NRC oversight in the period of extended operation. Before issuance of the requested renewed license, the NRC will have made the findings required by the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. In accordance with 10 CFR 54.29, the NRC may issue a renewed license on the basis of its review if it finds that actions have been identified and have been or will be taken with respect to:

(1)Managing the effects of aging during the period of extended operation on the functionality of structures and components that have been identified as requiring aging management review; and

(2)time-limited aging analyses that have been identified as requiring review, such that there is reasonable assurance that the activities authorized by the renewed license will continue to be conducted in accordance with the current licensing basis (CLB), and that any changes made to the plant's CLB will comply with the Act and the Commission's regulations. In addition, the Commission must find that applicable requirements of Subpart A of 10 CFR Part 51 have been satisfied, and that matters raised under 10 CFR 2.335 have been addressed. Within 60 days after the date of publication of this **Federal Register** notice, any person whose interest may be affected by this proceeding and who desires to participate as a party in the proceeding must file a written request for a hearing or a petition for leave to intervene with respect to the renewal of the license. Interested parties must file requests for a hearing or a petition for leave to intervene in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings and Issuance of Orders” described in 10 CFR Part 2. Those interested should consult a current copy of 10 CFR 2.309, which is available at the Commission's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852 and is accessible through the Internet at *http://www.nrc.gov/reading-rm/doc-collections/cfr/part002/part002-0309.html* . Persons who do not have access to the Internet or who encounter problems in accessing the documents should contact the NRC's PDR Reference staff by telephone at 1-800-397-4209, or 301-415-4737, or via e-mail at *PDR@nrc.gov* . If a request for a hearing or a petition for leave to intervene is filed within the 60-day period, the Commission or a presiding officer designated by the Commission or by the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel will rule on the request and/or petition, and the Secretary or the Chief Administrative Judge of the Atomic Safety and Licensing Board will issue a notice of a hearing or an appropriate order. If no request for a hearing or petition for leave to intervene is filed within the 60-day period, the NRC may, upon completion of its evaluations and upon making the findings required under 10 CFR Parts 51 and 54, renew the license without further notice. As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding, taking into consideration the limited scope of matters that may be considered pursuant to 10 CFR Parts 51 and 54. The petition must specifically explain the reasons why intervention should be permitted with particular reference to:

(1)The requester/petitioner's right under the Act to be made a party to the proceeding;

(2)the nature and extent of the requester/petitioner's property, financial, or other interest in the proceeding; and

(3)the possible effect of any decision or order which may be entered in the proceeding on the requester/petitioner's interest. The petition must also set forth the specific contentions that the petitioner/requester seeks to have litigated at the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the requester/petitioner shall briefly explain the bases of each contention and concisely state the alleged facts or the expert opinion that supports the contention on which the requester/petitioner intends to rely in proving the contention at the hearing. The requester/petitioner must also provide references to those specific sources and documents of which the requester/petitioner is aware and on which the requester/petitioner intends to rely to establish those facts or expert opinion. The requester/petitioner must provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the action under consideration. The contention must be one that, if proven, would entitle the requester/petitioner to relief. A requester/petitioner who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party. The Commission requests that each contention be given a separate numeric or alpha designation within one of the following groups:

(1)Technical (primarily related to safety concerns),

(2)environmental, or

(3)miscellaneous. As specified in 10 CFR 2.309, if two or more requesters/petitioners seek to co-sponsor a contention or propose substantially the same contention, the requesters/petitioners must jointly designate a representative who shall have the authority to act for the requesters/petitioners with respect to that contention. Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing. A request for a hearing or a petition for leave to intervene must be filed by either:

(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff;

(2)courier, express mail, and expedited delivery services to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852, Attention: Rulemaking and Adjudications Staff;

(3)e-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *hearingdocket@nrc.gov* ; or

(4)facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, Attention: Rulemaking and Adjudications Staff at 301-415-1101 (verification number is 301-415-1966). 1 Requesters/petitioners must send a copy of the request for hearing and petition for leave to intervene to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; copies should be transmitted either by facsimile to 301-415-3725 or via e-mail to *OGCMailCenter@nrc.gov* . Requesters/petitioners must also send a copy of the request for hearing and petition for leave to intervene to the attorney for the licensee, Mr. John H. O'Neil, Jr., Pillsbury Winthrop Shaw Pittman, 2300 N Street, NW., Washington, DC 20037. 1 If the request/petition is filed by e-mail or facsimile, an original and two copies of the document must be mailed within 2

(two)business days thereafter to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; Attention: Rulemaking and Adjudications Staff. Untimely requests and/or petitions and contentions will not be entertained absent a determination by the Commission, the presiding officer, or the Atomic Safety and Licensing Board that the petition, request and/or contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(c)(1)(i) through (viii). In addition, this notice informs the public that the NRC will be preparing an environmental impact statement

(EIS)related to the review of the LRA and provides the public an opportunity to participate in the environmental scoping process, as defined in 10 CFR 51.29. In accordance with 10 CFR 51.95(c), the NRC will prepare an EIS that will be used as a supplement to the Commission's NUREG-1437, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants” (GEIS), dated May 1996. Pursuant to 10 CFR 51.26, and as part of the environmental scoping process, the NRC staff intends to hold a public scoping meeting. In addition, as outlined in 36 CFR 800.8(c), “Coordination with the National Environmental Policy Act,” the NRC plans to coordinate compliance with Section 106 of the National Historic Preservation Act in meeting the requirements of the National Environmental Policy Act of 1969 (NEPA). In accordance with 10 CFR 51.53(c) and 10 CFR 54.23, CP&L prepared and submitted the environmental report

(ER)as part of the LRA. The LRA and the ER are publicly available at the NRC's PDR, located at One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852, or from ADAMS. The ADAMS Accession Numbers for the LRA and the ER are ML063350270 and ML063350276, respectively. The public may also view the LRA and the ER on the Internet at *http://www.nrc.gov/reactors/operating/licensing/renewal/applications.html* . In addition, the LRA and the ER are available to the public near HNP, Unit 1, at the Eva. H. Perry Library, 2100 Shepherd's Vineyard Drive, Apex, North Carolina 27502. Alternatives to the proposed action include no action and reasonable alternative energy sources. The NRC is required by 10 CFR 51.95(c) to prepare a supplement to the GEIS in connection with the renewal of an operating license. This notice is being published in accordance with 10 CFR 51.26. The NRC staff will first conduct a scoping process for the supplement to the GEIS and, as soon as practicable thereafter, will prepare a draft supplement to the GEIS for public comment. Participation in the scoping process by members of the public and local, State, tribal, and Federal Government agencies is encouraged. As described in 10 CFR 51.29, the NRC staff will use the scoping process for the supplement to the GEIS to accomplish the following: a. Define the proposed action which is to be the subject of the supplement to the GEIS. b. Determine the scope of the supplement to the GEIS and identify the significant issues to be analyzed in depth. c. Identify and eliminate from detailed study those issues that are peripheral or insignificant. d. Identify any environmental assessments and other ElSs that are being or will be prepared that are related to, but are not part of, the scope of the supplement to this GEIS. e. Identify other environmental review and consultation requirements related to the proposed action. f. Indicate the relationship between the timing of the preparation of the environmental analyses and the Commission's tentative planning and decision-making schedule. g. Identify any cooperating agencies and, as appropriate, allocate assignments for preparation and schedules for completing the supplement to the GEIS to the NRC and any cooperating agencies. h. Describe how the NRC will prepare the supplement to the GEIS and any contractor assistance to be used. The NRC invites the following entities to participate in scoping: a. The applicant, CP&L. b. Any Federal agency that has jurisdiction by law or special expertise with respect to any environmental impact involved, or that is authorized to develop and enforce relevant environmental standards. c. Affected State and local government agencies, including those authorized to develop and enforce relevant environmental standards. d. Any affected Indian tribe. e. Any person who requests or has requested an opportunity to participate in the scoping process. f. Any person who has petitioned or intends to petition for leave to intervene. In accordance with 10 CFR 51.26, the scoping process for an EIS may include a public scoping meeting to help identify significant issues related to a proposed activity and to determine the scope of issues to be addressed in an EIS. The NRC will hold public meetings for the HNP, Unit 1, license renewal supplement to the GEIS, at the New Horizons Fellowship, 820 East Williams St., Apex, North Carolina 27502 on Wednesday, April 18, 2007. There will be two identical meetings to accommodate interested parties. The first meeting will convene at 1:30 p.m. and will continue until 4:30 p.m., as necessary. The second meeting will convene at 7 p.m. and will continue until 10 p.m., as necessary. Both meetings will be transcribed and will include:

(1)An overview by the NRC staff of the NRC's license renewal review process;

(2)an overview by the NRC staff of the NEPA environmental review process, the proposed scope of the supplement to the GEIS, and the proposed review schedule; and

(3)the opportunity for interested government agencies, organizations, and individuals to submit comments or suggestions on the environmental issues or the proposed scope of the supplement to the GEIS. Additionally, the NRC staff will host informal discussions 1 hour before the start of each session at the same location. The staff will not accept formal comments on the proposed scope of the supplement to the GEIS during these informal discussions. For comments to be considered, persons must provide them either at the transcribed public meetings or in writing, as discussed below. For more information about the proposed action, the scoping process, and the EIS, interested persons should contact the NRC Environmental Project Manager, Mr. Samuel Hernandez, at Mail Stop O-11F1, U.S. Nuclear Regulatory Commission, 11555 Rockville Pike, Rockville, Maryland 20852; by telephone at 1-800-368-5642, extension 4049; or via e-mail at *shq@nrc.gov* . Persons may register to attend or present oral comments at the meetings on the scope of the NEPA review by contacting Mr. Hernandez. Members of the public may also register to speak at the meeting within 15 minutes of the start of each meeting. Individual oral comments may be limited by the time available, depending on the number of persons who register. Members of the public who have not registered may also have an opportunity to speak, if time permits. The NRC will consider public comments in the scoping process for the supplement to the GEIS. If members of the public need special equipment or accommodations to attend or present information at the public meeting, they should contact Mr. Hernandez no later than April 11, 2007, so that the NRC staff can determine if it can accommodate the request. Members of the public may send written comments on the environmental scope of the HNP, Unit 1, license renewal review to: Chief, Rules and Directives Branch, Division of Administrative Services, Office of Administration, Mail Stop T-6D59, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and should cite the publication date and page number of this **Federal Register** notice. The public may also deliver comments to the U.S. Nuclear Regulatory Commission, Mail Stop T-6D59, Two White Flint North, 11545 Rockville Pike, Rockville, Maryland 20852, from 7:30 a.m. to 4:15 p.m. during Federal workdays. To be considered in the scoping process, written comments should be postmarked within 60 days after the date of publication of this **Federal Register** Notice. Electronic comments may be sent by e-mail to the NRC at *ShearonHarrisEIS@nrc.gov* , and should be sent no later than 60 days after the date of publication of this **Federal Register** Notice, to be considered in the scoping process. Comments will be available electronically and accessible through ADAMS. Participation in the scoping process for the supplement to the GEIS does not entitle participants to become parties to the proceeding to which the supplement to the GEIS relates. Matters related to participation in any hearing are outside the scope of matters to be discussed at this public meeting. At the conclusion of the scoping process, the NRC will prepare a concise summary of the determination and conclusions reached, including the significant issues identified, and will send a copy of the summary to each participant in the scoping process. The public may also view the summary in ADAMS. The staff will then prepare and issue for comment the draft supplement to the GEIS, which will be the subject of separate notices and separate public meetings. Copies will be available for public viewing at the above-mentioned addresses, and one copy per request will be provided free of charge, to the extent of supply. After receipt and consideration of the comments, the NRC will prepare a final supplement to the GEIS, which will also be available for public viewing. Information about the supplement to the GEIS, and the scoping process may be obtained from Mr. Hernandez at the telephone number or e-mail address given previously. Dated at Rockville, Maryland, this 14th day of March, 2007. For the Nuclear Regulatory Commission. Pao-Tsin Kuo, Director, Division of License Renewal, Office of Nuclear Reactor Regulation. [FR Doc. E7-5033 Filed 3-19-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Advisory Committee on Reactor Safeguards (ACRS); Subcommittee Meeting on Materials, Metallurgy, and Reactor Fuels; Notice of Meeting The ACRS Subcommittee on Materials, Metallurgy, and Reactor Fuels will hold a meeting on April 3, 2007, Room T-2B3, 11545 Rockville Pike, Rockville, Maryland. The entire meeting will be open to public attendance. The agenda for the subject meeting shall be as follows: Tuesday, April 3, 2007—8:30 a.m. Until the Conclusion of Business. The Subcommittee will review the NRC staff's proposed revisions to Standard Review Plan Section 4.2, “Fuel Designs.” The Subcommittee will hear presentations by and hold discussions with representatives of the NRC staff, their contractors, representatives of the nuclear industry, and other interested persons regarding this matter. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the full Committee. Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official, Mr. Ralph Caruso (telephone 301/415-8065) five days prior to the meeting, if possible, so that appropriate arrangements can be made. Electronic recordings will be permitted. Further information regarding this meeting can be obtained by contacting the Designated Federal Official between 7:15 a.m. and 5 p.m. (ET). Persons planning to attend this meeting are urged to contact the above named individual at least two working days prior to the meeting to be advised of any potential changes to the agenda. Dated: March 14, 2007. Cayetano Santos, Acting Branch Chief, ACRS. [FR Doc. E7-5035 Filed 3-19-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Advisory Committee on Reactor Safeguards; Subcommittee Meeting on Planning and Procedures; Notice of Meeting The ACRS Subcommittee on Planning and Procedures will hold a meeting on April 4, 2007, Room T-2B1, 11545 Rockville Pike, Rockville, Maryland. The entire meeting will be open to public attendance, with the exception of a portion that may be closed pursuant to 5 U.S.C. 552b ( c)

(2)and

(6)to discuss organizational and personnel matters that relate solely to the internal personnel rules and practices of the ACRS, and information the release of which would constitute a clearly unwarranted invasion of personal privacy. The agenda for the subject meeting shall be as follows: Wednesday, April 4, 2007, 8:30 a.m.-10 a.m. The Subcommittee will discuss proposed ACRS activities and related matters. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the full Committee. Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official, Mr. Sam Duraiswamy (telephone: 301-415-7364) between 7:30 a.m. and 4 p.m.

(ET)five days prior to the meeting, if possible, so that appropriate arrangements can be made. Electronic recordings will be permitted only during those portions of the meeting that are open to the public. Further information regarding this meeting can be obtained by contacting the Designated Federal Official between 7:30 a.m. and 4 p.m. (ET). Persons planning to attend this meeting are urged to contact the above named individual at least two working days prior to the meeting to be advised of any potential changes in the agenda. Dated: March 14, 2007. Cayetano Santos, Acting Branch Chief, ACRS. [FR Doc. E7-5036 Filed 3-19-07; 8:45 am] BILLING CODE 7590-01-P OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE Trade Policy Staff Committee: Seeking Resubmission of Any Comments from the Public Transmitted Prior to March 14, 2007 on the 2005 WTO Ministerial Decision on Duty-Free Quota-Free Market Access for the Least Developed Countries AGENCY: Office of the United States Trade Representative. ACTION: Request for resubmission of comments. SUMMARY: The Trade Policy Staff Committee

(TPSC)is advising the public of a technical malfunction in the e-mail address contained in the original notice requesting comments on considerations relating to the Decision that Members adopted at the Sixth Ministerial Conference of the World Trade Organization

(WTO)in December 2005 on duty-free, quota-free

(DFQF)market access for the least-developed countries (LDCs). The original notice was published on January 18, 2007 ( **Federal Register** Volume 72, Number 11, pages 2316-2317). Any submission transmitted prior to March 14, 2007 was not received. The malfunction in the email address has been corrected and the TPSC is requesting the public to resubmit any written comments submitted prior to March 14, 2007. DATES: Comments are due by April 15, 2007. ADDRESSES: *Submissions by electronic mail: FR0704@USTR.EOP.GOV. Submissions by facsimile:* Gloria Blue, Executive Secretary, Trade Policy Staff Committee, at

(202)395-6143. The public is strongly encouraged to submit documents electronically rather than by facsimile. (See requirements for submissions below.) FOR FURTHER INFORMATION CONTACT: General inquiries should be made to the USTR Office of WTO and Multilateral Affairs at

(202)395-6843; calls on individual subjects will be transferred as appropriate. Procedural inquiries concerning the public comment process should be directed to Gloria Blue, Executive Secretary, Trade Policy Staff Committee, Office of the U.S. Trade Representative (USTR),

(202)395-3475. *Written Submissions:* Persons resubmitting comments may either send one copy by fax to Gloria Blue, Executive Secretary, Trade Policy Staff Committee, at

(202)395-6143 or transmit a copy electronically to *FR0704@USTR.EOP.GOV* , with “Duty-Free, Quota-Free” in the subject line. For documents sent by fax, USTR requests that the submitter provide a confirmation copy electronically. The public is strongly encouraged to submit documents electronically rather than by facsimile. USTR encourages the use of Adobe PDF format to submit 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. Comments should be submitted electronically no later than April 15, 2007. Business confidential information will be subject to the requirements of 15 CFR 2003.6. Any business confidential material must be clearly marked as such and must be accompanied by a non-confidential summary thereof. A justification as to why the information contained in the submission should be treated confidentially should also be contained in the submission. In addition, any submissions containing business confidential information must clearly be marked “Business Confidential” at the top and bottom of the cover page (or letter) and each succeeding page of the submission. The version that does not contain business confidential information should also be clearly marked at the top and bottom of each page, “Public Version” or “Non-Confidential.” Written comments submitted in connection with this request, except for information granted “business confidential” status pursuant to 15 CFR 2003.6 will be available for public inspection in the USTR Reading Room, Office of the United States Trade Representative. An appointment to review the file can be made by calling

(202)395-6186. The Reading Room is open to the public from 10 a.m. to 12 noon and from 1 p.m. to 4 p.m. Monday through Friday. Dated: March 15, 2007. Carmen C. Suro-Bredie, Assistant USTR for Policy Coordination. [FR Doc. E7-5032 Filed 3-19-07; 8:45 am] BILLING CODE 3190-W7-P SECURITIES AND EXCHANGE COMMISSION [Securities Act of 1933; Release No. 8789/March 14, 2007; Securities Exchange Act of 1934; Release No. 55469/March 14, 2007] Order Regarding Review of FASB Accounting Support Fee For 2007 Under Section 109 of The Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 (the “Act”) establishes criteria that must be met in order for the accounting standards established by an accounting standard-setting body to be recognized as “generally accepted” for purposes of the federal securities laws. Section 109 of the Act provides that all of the budget of an accounting standard-setting body satisfying these criteria shall be payable from an annual accounting support fee assessed and collected against each issuer, as may be necessary or appropriate to pay for the budget and provide for the expenses of the standard setting body, and to provide for an independent, stable source of funding, subject to review by the Securities and Exchange Commission (“Commission”). Under Section 109(f) of the Act, the annual accounting support fee shall not exceed the amount of the standard setter's “recoverable budget expenses.” Section 109(h) amends Section 13(b)(2) of the Securities Exchange Act of 1934 to require issuers to pay the allocable share of a reasonable annual accounting support fee or fees, determined in accordance with Section 109 of the Act. On April 25, 2003, the Commission issued a policy statement concluding that the Financial Accounting Standards Board (“FASB”) and its parent organization, the Financial Accounting Foundation (“FAF”), satisfied the criteria for an accounting standard-setting body under the Act, and recognizing the FASB's financial accounting and reporting standards as “generally accepted” under Section 108 of the Act. 1 As a consequence of that recognition, the Commission undertook a review of the FASB's accounting support fee for calendar year 2007. In connection with its review, the Commission also reviewed the proposed budget for the FAF and the FASB for calendar year 2007. 1 Financial Reporting Release No. 70. Section 109 of the Act also provides that the standard setting body can have additional sources of revenue for its activities, such as earnings from sales of publications, provided that each additional source of revenue shall not jeopardize the actual or perceived independence of the standard setter. In this regard, the Commission also considered the interrelation of the operating budgets of the FAF, the FASB and the Governmental Accounting Standards Board (“GASB”), the FASB's sister organization, which sets accounting standards used by state and local government entities. The Commission has been advised by the FAF that neither the FAF, the FASB nor the GASB accept contributions from the accounting profession. After its review, the Commission determined that the 2007 annual accounting support fee for the FASB is consistent with Section 109 of the Act. Accordingly, It is ordered, pursuant to Section 109 of the Act, that the FASB may act in accordance with this determination of the Commission. By the Commission. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-5003 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55459; File No. SR-Amex-2007-28] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Transaction Charges for Equities, ETFs, and Nasdaq UTP Securities March 13, 2007. 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 March 1, 2007, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to revise its Equities, Exchange Traded Funds and Trust Issued Receipts (“ETFs”), and Nasdaq UTP Fee Schedules (collectively, the “Fee Schedule”). The text of the proposed rule change is available on the Exchange's Web site ( *http://www.amex.com* ), at the Exchange's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange recently revised its Equities, ETFs, and Nasdaq UTP Fee Schedules. 3 The Exchange is now proposing to make some additional changes to each of the fee schedules. The Equity Fee Schedule will be amended to

(1)clarify that Amex transaction charges assessed for orders routed through the NMS Linkage Plan apply only to orders routed to Amex and not to orders routed from Amex to another market center; and

(2)provide that there will be no transaction charge for equities executed at a per-share price below $1.00. The ETF Fee Schedule will be amended to

(1)decrease the rate charged to member firms for customer account transactions from $0.34 to $0.30 per 100 shares;

(2)eliminate the Value Based Fee currently charged for transactions for the accounts of non-member competing market makers;

(3)clarify that Amex transaction charges assessed for orders routed through the NMS Linkage Plan apply only to orders routed to Amex and not to orders routed from Amex to another market center; and

(4)provide that there will be no transaction charge for ETFs executed at a per-share price below $1.00. The Nasdaq UTP Fee Schedule will be amended to provide that there will be no transaction charge for Nasdaq UTP securities executed at a per-share price below $1.00. 3 *See* SR-Amex-2007-23 filed on February 22, 2007. 2. Statutory Basis The proposed fee change is consistent with Section 6(b)(4) of the Act 4 regarding the equitable allocation of reasonable dues, fees, and other charges among exchange members and other persons using exchange facilities. 4 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 5 and Rule 19b-4(f)(2) thereunder 6 because it establishes or changes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 5 15 U.S.C. 78s(b)(3)(A)(ii). 6 17 CFR 19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-Amex-2007-28 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2007-28. 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 Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2007-28 and should be submitted on or before April 10, 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. E7-4977 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55460; File No. SR-Amex-2007-30] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Transaction Charges for Equities and ETFs March 13, 2007. 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 March 8, 2007, 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 and II below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to revise Equities and Exchange Traded Funds and Trust Issued Receipts (“ETFs”) Fee Schedules (collectively, the “Fee Schedule”). The text of the proposed rule change is available on the Exchange's Web site ( *http://www.amex.com* ), at the Exchange's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange recently revised its Equities, ETFs, and Nasdaq UTP Fee Schedules. 3 The Exchange is now proposing to make some additional changes to the Equities and ETFs Fee Schedules. The Equity Fee Schedule currently provides a waiver of transaction charges for orders of up to 500 shares entered electronically into the Amex Order File from off the floor (“System Orders”). This transaction charge waiver does not apply to the System Orders of a member or member organization trading as an agent for the account of a non-member competing market maker. 4 The Exchange is now proposing to extend the transaction charge waiver to System Orders for the accounts of non-member competing market makers. Thus, the Equity Fee Schedule is being amended to eliminate the second and third sentences of Item 3 on the schedule. 3 *See* SR-Amex-2007-23 filed on February 22, 2007 and SR-Amex-2007-28 filed on March 1, 2007. 4 A competing market maker is defined for purposes of the Equity and ETF Fee Schedules as a specialist or market maker registered as such on a registered stock exchange (other than Amex), or a market maker bidding and offering over-the-counter, in an Amex-traded security. The ETF Fee Schedule also provides a waiver of transaction charges for orders entered electronically into the Amex Order File from off the floor. However for ETFs, orders up to 2,400 shares are deemed to be System Orders for which transaction charges are waived. Again, the transaction charge waiver currently does not apply to the System Orders of a member or member organization trading as an agent for the account of a non-member competing market maker. The Exchange is now proposing to extend the transaction charge waiver to System Orders for the accounts of non-member competing market makers. Thus, the ETF Fee Schedule is being amended to eliminate the second and third sentences of Note 1 on the schedule. The Exchange is also proposing to apply the waiver of transaction charges for System Orders in equities and ETFs for the accounts of non-member competing market makers retroactively, beginning March 1, 2007. 2. Statutory Basis The proposed fee change is consistent with Section 6(b)(4) of the Act 5 regarding the equitable allocation of reasonable dues, fees, and other charges among exchange members and other persons using exchange facilities. 5 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective immediately pursuant to Section 19(b)(3)(A)(iii) of the Act 6 and Rule 19b-4(f)(6) 7 thereunder because it does not:

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

(ii)impose any significant burden on competition;

(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate. 8 6 15 U.S.C. 78s(b)(3)(A)(iii). 7 17 CFR 240.19b-4(f)(6). 8 Rule 19b-4(f)(6) also requires the self-regulatory organization to give 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 designed by the Commission. The Commission has determined to waive the five-day pre-filing requirement. The Commission has determined to waive the 30-day operative delay. The Commission believes that doing so is consistent with the protection of investors and the public interest because eligible parties will be able to obtain the benefit of the fee waivers immediately. Accordingly, the Commission designates the proposal to be operative upon filing with the Commission. 9 9 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the propose 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 such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary of appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-Amex-2007-30 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2007-30. 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 Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2007-30 and should be submitted on or before April 10, 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. E7-4978 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55464; File No. SR-Amex-2007-08] Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval of a Proposed Rule Change to Establish a Passive Price Improvement Order for Specialists and Registered Traders March 13, 2007. I. Introduction On January 19, 2007, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder. 2 The proposed rule change was published for comment in the **Federal Register** on February 2, 2007. 3 The Commission received one comment letter. 4 On March 12, 2007, Amex submitted a response to the comment letter. 5 This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Release Act 55179 (January 26, 2007), 72 FR 05091 (February 2, 2007). 4 *See* Letter from Christopher Cornette, Member, Amex, to Florence E. Harmon, Deputy Secretary, Commission, received February 14, 2007. 5 *See* Letter from Claire P. McGrath, Senior Vice President & General Counsel, Amex, to Nancy M. Morris, Secretary, Commission, dated March 12, 2007 (“Amex Response Letter”). II. Description of the Proposal Amex proposes to amend the rules for its AEMI trading platform 6 to add a Passive Price Improvement (“PPI”) order type. PPI orders are undisplayed orders that, to execute, would have to be inside the automated best bid and offer of the Exchange (also referred to as the “Amex Published Quote” or “APQ”) by at least a tick. They would be the only method for Specialists and Registered Traders to offer price improvement electronically. A Specialist or Registered Trader would have to have at least one active quote on a particular side of a security on the AEMI book to enter and maintain a PPI order in the same security on the same side. A Specialist or Registered Trader that meets this quoting requirement could enter only one PPI order on each side for a security. A PPI order could not form part of the APQ and would be visible only to the entering Specialist or Registered Trader (or his firm). 6 *See* Securities Exchange Act Release No. 54552 (September 29, 2006), 71 FR 59546 (October 10, 2006). AEMI would make a PPI order eligible for execution if at least one of the following conditions were met: 1. The Specialist's or Registered Trader's displayed quote is at the APQ on the side of the PPI order that would be executed. In this case, the PPI order would be executed up to

(a)the size of the Specialist's or Registered Trader's displayed quote on that side or

(b)the size of the incoming order, whichever is smaller. 2. The Specialist's or Registered Trader's displayed quote is one tick away from the APQ on the side of the PPI order that would be executed. In this case, the PPI order would be executed up to

(a)half of the size of the Specialist's or Registered Trader's displayed quote on that side or

(b)the size of the incoming order, whichever is smaller. The AEMI system would ignore ( *i.e.* , make ineligible for execution against an otherwise marketable aggressing order, without canceling) the remaining size of a PPI order beyond the thresholds described above. 7 The AEMI system would also ignore a PPI order in the following circumstances: 7 For example, assume that a Specialist's bid for 1,000 shares is part of the Amex best bid and there are no better-priced protected quotations at other trading centers. The Specialist has a PPI order to buy 3,000 shares priced one tick better than the Amex best bid. Assume that an incoming market order to sell 3,000 shares is received by AEMI. The system would execute 1,000 shares against the Specialist's PPI order, and the remainder would execute one tick down at the Amex best bid (based on the Exchange's rules of priority and parity). The remaining size of the PPI order (2,000 shares) is ignored because the PPI order may execute only up to the size of the Specialist's displayed bid at the APQ. • The PPI order locks or crosses the automated NBBO or APQ as a result of a change in the automated NBBO or APQ; • The PPI order equals the APQ on the same side of the market; • There is a negotiated trade; or • AEMI's auto-execution functionality is disabled. In addition, the AEMI system would cancel a PPI order in three circumstances:

(1)if the Specialist's or Registered Trader's best quote is withdrawn;

(2)at the end of the day; or

(3)there is a trading halt in the security. If there were multiple PPI orders at the same price, the Specialist's PPI order would have priority, and any remaining size of an aggressing order would be executed against Registered Trader PPI orders in time priority. Intermarket sweep orders would be generated as necessary to clear any better-priced protected quotations at other trading centers before executing any PPI orders on the AEMI system. To reflect the proposed rule change as described above, changes are proposed to the following AEMI rules: Rule 123-AEMI (Manner of Bidding and Offering), Rule 131-AEMI (Types of Orders), Rule 157-AEMI (Orders with More than One Broker), and Rule 170-AEMI (Registration and Functions of Specialists). III. Summary of Comments and Amex Response The Commission received one comment letter opposing the proposed rule change. The commenter argued that limiting the use of PPI Orders to Specialists and Registered Traders gives them “an unfair advantage” and thus is not consistent with Section 6(b) of the Act. The commenter noted that the Specialist would have access to aggressing orders that could be price-improved but Floor Brokers would not. The commenter suggested that there would be many instances where Floor Brokers would be willing to provide price improvement but would not publicly display such interest in order to minimize any potential market impact. The commenter also suggested that PPI Orders could be misused to trade ahead of a Floor Broker's marketable orders instead of providing price improvement. In its response to comments, Amex asserted that Floor Brokers are able to operate effectively and compete with Specialists and Registered Traders. For example, Amex pointed out that Floor Brokers have the exclusive use of certain order types on AEMI ( *e.g.* , percentage orders and reserve orders). Amex also emphasized that the use of PPI Orders would be monitored and policed electronically. Amex stated that its regulatory program would be able to detect possible unfair trading practices. Finally, Amex represented that it “is in the process of developing the means by which other market participants, including floor brokers, would have the ability to systematically provide such price improvement.” 8 8 Amex Response Letter at 1. IV. Discussion and Commission's Findings After careful consideration, 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. 9 In particular, the Commission finds that the proposal is consistent with the requirements of Section 6(b)(5) of the Act, 10 which requires, among other things, that the Exchange's rules 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. 9 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). The Commission previously has found similar exchange rules to be consistent with the Act. 11 The Commission does not believe that the comment raises any issue that would preclude approval of the current proposal. As the Commission noted in the NYSE Hybrid Approval Order, Specialists today are permitted to offer price improvement to incoming orders in the auction market. 12 In this proposal, Amex seeks to provide its Specialists and Registered Traders with the ability to continue to offer price improvement in an electronic environment, but only if certain conditions are met. A Specialist's or Registered Trader's PPI order is eligible for execution only if its quote on the same side of the market is at or one tick away from the APQ. If the Specialist's or Registered Trader's quotation is at the APQ, a PPI order is eligible to execute up to the same size as its quotation; if it is one tick away from the APQ, the PPI order is eligible to execute up to one half the size of its quotation. A PPI order will be ignored if the Specialist's or Registered Trader's quotation is more than one tick away from the APQ. Thus, a Specialist's ability to benefit from the PPI order is directly correlated with the extent to which it quotes competitive markets in size. The Commission notes, moreover, that Amex has represented that it “is in the process of developing the means by which other market participants, including floor brokers, would have the ability to systematically provide such price improvement.” 13 11 *See* Securities Exchange Act Release Nos. 53539 (March 22, 2006), 71 FR 16353, 16381-82 (March 31, 2006) (“NYSE Hybrid Approval Order”) and 54511 (September 25, 2006), 71 FR 58460 (October 3, 2006). 12 *See* 71 FR at 16382. 13 Amex Response Letter at 1. The Commission further notes that a PPI order could execute only against a marketable incoming limit order. An incoming order that is not marketable against a PPI order (or a protected quotation) and that improves the APQ would be quoted as part of the new APQ. V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 14 that the proposed rule change (SR-Amex-2007-08), be, and it 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 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-5005 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55450; File No. SR-BSE-2007-11] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Existing Fee Schedules March 13, 2007. 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 March 2, 2007, the Boston Stock Exchange, Inc. (“BSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been substantially prepared by the Exchange. The BSE has designated this proposal as one changing a due, fee, or other charge under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The BSE proposes amending the Boston Equities Exchange (“BeX”) fee schedule to include a transaction fee to be charged to BSE Members who request a BeX purchase & Sale Blotter reflecting the transaction information related to the execution of a single order, part of which was executed on BeX and part of which was executed at an away Trading Center. The text of the proposed rule change is available at *http://www.bostonstock.com* , at the BSE, 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 On November 20, 2006, the BSE filed BSE-2006-44, a rule filing that amended the existing BSE fee schedule and established a fee schedule for the BeX, a facility of the Exchange. BSE-2006-44 resulted in, among other things, the deletion of all Transaction Fees, Electronic File Access and Processing Fees, and Floor Operation Fees from the BSE fee schedule. The Transaction Fees and Electronic File Access and Processing Fees that were deleted from the BSE fee schedule were transferred to the BeX fee schedule. The purpose of this proposed rule change is to amend the BeX fee schedule to include a transaction fee that was deleted from the BSE fee schedule but not transferred to the BeX fee schedule as a part of BSE-2006-44. Specifically, the BSE fee schedule contained a transaction fee titled “Floor Brokered non-BSE executions.” The fee for Floor Brokered non-BSE executions was $0.0005, or $0.05 per 100 shares. BSE Members were charged the Floor Brokered non-BSE execution fee when the Member requested that the information related to the execution of a single order, only a part of which had been executed on the BSE with the remaining portion executed at an away Trading Center, be reflected on a BSE Purchase & Sale Blotter rather than having only the portion executed at the BSE reflected on the BSE Purchase & Sale Blotter. In order to include the information related to the portion of an order executed at the Trading Center other than the BSE on a BSE Purchase & Sale Blotter, in other words, in order to consolidate the transaction information on a single report, the BSE performed the necessary back office operations on behalf of the BSE Member so the transaction information, including the information related to the portion of the order executed at an away Trading Center, would appear on a BSE Purchase & Sale Blotter reflecting the transaction information related to the execution of a single order, part of which was executed on BeX and part of which was executed at an away Trading Center. The fee would now be titled “Non-BeX executed trades” and would appear on the BeX fee schedule. As such, what had been known as the Floor Brokered non-BSE executions fee on the BSE schedule will now appear on the BeX fee schedule as the Non-BeX executed trades fee and will apply in the BeX environment. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b) of the Act, 5 in general, and furthers the objectives of Section 6(b)(4) of the Act, 6 in particular, in that it is designated to provide for the equitable allocation of reasonable dues, fees and other charges among Exchange members and issuers and other persons using Exchange facilities. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 7 and Rule 19b-4(f)(2) thereunder, 8 because it establishes or changes a due, fee or other charge imposed by the Exchange. Accordingly, the proposal will take effect upon filing with the Commission. 7 15 U.S.C. 78s(b)(3)(A)(ii). 8 17 CFR 240.19b-4(f)(2). At any time within 60 days of the filing of the proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-BSE-2007-11 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-BSE-2007-11. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the BSE. 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-BSE-2007-11 and should be submitted on or before April 10, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-4976 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55471; File No. SR-NASD-2007-013] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Portfolio Margin March 14, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on February 12, 2007, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by NASD. NASD has filed the proposed rule as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD proposes to amend NASD Rule 2520 to permit members to margin certain products according to a prescribed portfolio margin methodology on a pilot basis. NASD further proposes to amend NASD Rule 2860 to require that a disclosure statement and written acknowledgement for use with the proposed portfolio margin program be furnished to customers using a portfolio margin account. Below is the text of the proposed rule change. Proposed new rule language is in italics. 2520. Margin Requirements

(a)through

(f)No Change. *(g) Portfolio Margin* *As an alternative to the “strategy-based” margin requirements set forth in paragraphs

(a)through

(f)of this Rule, members may elect to apply the portfolio margin requirements set forth in this paragraph

(g)to all margin equity securities,* 1 *listed options, security futures products (as defined in Section 3(a)(56) of the Exchange Act), unlisted derivatives, warrants, index warrants and related instruments, provided that the requirements of paragraph (g)(6)(B)(i) of this Rule are met.* *In addition, a member, provided that it is a Futures Commission Merchant (“FCM”) and is either a clearing member of a futures clearing organization or has an affiliate that is a clearing member of a futures clearing organization, is permitted under this paragraph

(g)to combine an eligible participant's related instruments as defined in paragraph (g)(2)(D), with listed index options, unlisted derivatives, options on exchange traded funds (“ETF”), index warrants and underlying instruments and compute a margin requirement for such combined products on a portfolio margin basis.* *The portfolio margin provisions of this Rule shall not apply to Individual Retirement Accounts (“IRAs”).* *(1) Monitoring.—Members must monitor the risk of portfolio margin accounts and maintain a comprehensive written risk analysis methodology for assessing the potential risk to the member's capital over a specified range of possible market movements of positions maintained in such accounts. The risk analysis methodology shall specify the computations to be made, the frequency of computations, the records to be reviewed and maintained, and the person(s) within the organization responsible for the risk function. This risk analysis methodology must be filed with NASD, or the member's designated examining authority (“DEA”) if other than NASD, and submitted to the Commission prior to the implementation of portfolio margining. In performing the risk analysis of portfolio margin accounts required by this Rule, each member shall include in the written risk analysis methodology procedures and guidelines for:* *(A) obtaining and reviewing the appropriate account documentation and financial information necessary for assessing the amount of credit to be extended to eligible participants;* *(B) the determination, review and approval of credit limits to each eligible participant, and across all eligible participants, utilizing a portfolio margin account;* *(C) monitoring credit risk exposure to the member from portfolio margin accounts, on both an intra-day and end of day basis, including the type, scope and frequency of reporting to senior management;* *(D) the use of stress testing of portfolio margin accounts in order to monitor market risk exposure from individual accounts and in the aggregate;* *(E) the regular review and testing of these risk analysis procedures by an independent unit such as internal audit or other comparable group;* *(F) managing the impact of credit extended related to portfolio margin accounts on the member's overall risk exposure;* *(G) the appropriate response by management when limits on credit extensions related to portfolio margin accounts have been exceeded; and* *(H) determining the need to collect additional margin from a particular eligible participant, including whether that determination was based upon the creditworthiness of the participant and/or the risk of the eligible product.* *Moreover, management must periodically review, in accordance with written procedures, the member's credit extension activities for consistency with these guidelines. Management must periodically determine if the data necessary to apply this paragraph

(g)is accessible on a timely basis and information systems are available to adequately capture, monitor, analyze and report relevant data.* *(2) Definitions.—For purposes of this paragraph (g), the following terms shall have the meanings specified below:* *(A) The term “listed option” means any equity-based or equity index-based option traded on a registered national securities exchange or automated facility of a registered national securities association.* *(B) The term “portfolio” means any eligible product, as defined in paragraph (g)(6)(B)(i), grouped with its underlying instruments and related instruments.* *(C) The term “product group” means two or more portfolios of the same type (see table in paragraph (g)(2)(F)below) for which it has been determined by SEC Rule 15c3-1a that a percentage of offsetting profits may be applied to losses at the same valuation point.* *(D) The term “related instrument” within a security class or product group means broad-based index futures and options on broad-based index futures covering the same underlying instrument. The term “related instrument” does not include security futures products.* *(E) The term “security class” refers to all listed options, security futures products, unlisted derivatives, and related instruments covering the same underlying instrument and the underlying instrument itself.* *(F) The term “theoretical gains and losses” means the gain and loss in the value of individual eligible products and related instruments at ten equidistant intervals (valuation points) ranging from an assumed movement (both up and down) in the current market value of the underlying instrument. The magnitude of the valuation point range shall be as follows:* Portfolio type Up/down market move (high & low valuation points) *High Capitalization, Broad-based Market Index * 2 *+6% / −8%* *Non-High Capitalization, Broad-based Market Index * 3 *±10%* *Any other eligible product that is, or is based on, an equity security or a narrow-based index* *± 15%* *(G) The term “underlying instrument” means a security or security index upon which any listed option, unlisted derivative, security future, or broad-based index future is based.* *(H) The term “unlisted derivative” means any equity-based or equity index-based unlisted option, forward contract, or security-based swap that can be valued by a theoretical pricing model approved by the Commission.* *(3) Approved Theoretical Pricing Models.—Theoretical pricing models must be approved by the Commission.* *(4) Eligible Participants.—The application of the portfolio margin provisions of this paragraph

(g)is limited to the following:* *(A) any broker or dealer registered pursuant to Section 15 of the Exchange Act;* *(B) any member of a national futures exchange to the extent that listed index options, unlisted derivatives, options on ETFs, index warrants or underlying instruments hedge the member's index futures; and* *(C) any person or entity not included in paragraphs (g)(4)(A) and (g)(4)(B) above approved for uncovered options and, if transactions in security futures are to be included in the account, approval for such transactions is also required. However, an eligible participant under this paragraph (g)(4)(C) may not establish or maintain positions in unlisted derivatives unless minimum equity of at least five million dollars is established and maintained with the member. For purposes of this minimum equity requirement, all securities and futures accounts carried by the member for the same eligible participant may be combined provided ownership across the accounts is identical. A guarantee pursuant to paragraph (f)(4) of this Rule is not permitted for purposes of the minimum equity requirement.* *(5) Opening of Accounts* *(A) Members must notify and receive approval from NASD, or the member's DEA if other than NASD, prior to establishing a portfolio margin methodology for eligible participants.* *(B) Only eligible participants that have been approved to engage in uncovered short option contracts pursuant to NASD Rule 2860, or the rules of the member's DEA if other than NASD, are permitted to utilize a portfolio margin account.* *(C) On or before the date of the initial transaction in a portfolio margin account, a member shall:* *(i) furnish the eligible participant with a special written disclosure statement describing the nature and risks of portfolio margining which includes an acknowledgement for all portfolio margin account owners to sign, attesting that they have read and understood the disclosure statement, and agree to the terms under which a portfolio margin account is provided (see NASD Rule 2860(c)); and* *(ii) obtain the signed acknowledgement noted above from the eligible participant and record the date of receipt.

(6)Establishing Account and Eligible Positions.* *(A) For purposes of applying the portfolio margin requirements prescribed in this paragraph (g), members are to establish and utilize a specific securities margin account, or sub-account of a margin account, clearly identified as a portfolio margin account that is separate from any other securities account carried for an eligible participant.* *A margin deficit in the portfolio margin account of an eligible participant may not be considered as satisfied by excess equity in another account. Funds and/or securities must be transferred to the deficient account and a written record created and maintained. However, if a portfolio margin account is carried as a sub-account of a margin account, excess equity in the margin account (determined in accordance with the rules applicable to a margin account other than a portfolio margin account) may be used to satisfy a margin deficit in the portfolio margin sub-account without having to transfer any funds and/or securities.* *(B) Eligible Products* *(i) For eligible participants as described in paragraphs (g)(4)(A) through (g)(4)(C), a transaction in, or transfer of, an eligible product may be effected in the portfolio margin account. Eligible products under this paragraph

(g)consist of:* *(a) a margin equity security (including a foreign equity security and option on a foreign equity security, provided the foreign equity security is deemed to have a “ready market” under SEC Rule 15c3-1 or a “no-action” position issued thereunder, and a control or restricted security, provided the security has met the requirements in a manner consistent with SEC Rule 144 or a Commission “no-action” position issued thereunder, sufficient enough to permit the sale of the security, upon exercise or assignment of any listed option or unlisted derivative written or held against it, without restriction);* *(b) a listed option on an equity security or index of equity securities;* *(c) a security futures product;* *(d) an unlisted derivative on an equity security or index of equity securities;* *(e) a warrant on an equity security or index of equity securities; and* *(d) a related instrument as defined in paragraph (g)(2)(D).* *(7) Margin Required.—The amount of margin required under this paragraph

(g)for each portfolio shall be the greater of:* *(A) the amount for any of the ten equidistant valuation points representing the largest theoretical loss as calculated pursuant to paragraph (g)(8) below; or* *(B) for eligible participants as described in paragraph (g)(4)(A) through (g)(4)(C), $.375 for each listed option, unlisted derivative, security future product, and related instrument, multiplied by the contract's or instrument's multiplier, not to exceed the market value in the case of long contracts in eligible products.* *(C) Account guarantees pursuant to paragraph (f)(4) of this Rule are not permitted for purposes of meeting margin requirements.* *(D) Positions other than those listed in Paragraph (g)(6)(B)(i) above are not eligible for portfolio margin treatment. However, positions not eligible for portfolio margin treatment (except for ineligible related instruments) may be carried in a portfolio margin account, provided the member has the ability to apply the applicable strategy-based margin requirements promulgated under this Rule. Shares of a money market mutual fund may be carried in a portfolio margin account, also subject to the applicable strategy-based margin requirement under this Rule provided that:* *(i) the customer waives any right to redeem shares without the member's consent;* *(ii) the member (or, if the shares are deposited with a clearing organization, the clearing organization) obtains the right to redeem shares in cash upon request;* *(iii) the fund agrees to satisfy any conditions necessary or appropriate to ensure that the shares may be redeemed in cash, promptly upon request; and* *(iv) the member complies with the requirements of Section 11(d)(1) of the Exchange Act and SEC Rule 11d1-2 thereunder.* *(8) Method of Calculation* *(A) Long and short positions in eligible products, including underlying instruments and related instruments, are to be grouped by security class; each security class group being a “portfolio.” Each portfolio is categorized as one of the portfolio types specified in paragraph (g)(2)(F) above, as applicable.* *(B) For each portfolio, theoretical gains and losses are calculated for each position as specified in paragraph (g)(2)(F) above. For purposes of determining the theoretical gains and losses at each valuation point, members shall obtain and utilize the theoretical values of eligible products as described in this paragraph

(g)rendered by an approved theoretical pricing model.* *(C) Offsets. Within each portfolio, theoretical gains and losses may be netted fully at each valuation point. Offsets between portfolios within the eligible product groups, as described in paragraph (g)(2)(F), may then be applied as permitted by SEC Rule 15c3-1a.* *(D) After applying the offsets above, the sum of the greatest loss from each portfolio is computed to arrive at the total margin required for the account (subject to the per contract minimum).* *(E) In addition, if a security that is convertible, exchangeable, or exercisable into a security that is an underlying instrument requires the payment of money or would result in a loss if converted, exchanged, or exercised at the time when the security is deemed an underlying instrument, the full amount of the conversion loss is required.* *(9) Portfolio Margin Minimum Equity Deficiency* *(A) If, as of the close of business, the equity in the portfolio margin account of an eligible participant as described in paragraph (g)(4)(C), declines below the five million dollar minimum equity required, if applicable, and is not restored to at least five million dollars within three business days by a deposit of funds and/or securities or through favorable market action, members are prohibited from accepting new opening orders beginning on the fourth business day, except that new opening orders entered for the purpose of reducing market risk may be accepted if the result would be to lower margin requirements. This prohibition shall remain in effect until,* *(i) equity of five million dollars is established, or* *(ii) all unlisted derivatives are liquidated or transferred from the portfolio margin account to the appropriate securities account.* *(B) Members will not be permitted to deduct any portfolio margin minimum equity deficiency amount from Net Capital in lieu of collecting the minimum equity required.* *(10) Portfolio Margin Deficiency* *(A) If, as of the close of business, the equity in the portfolio margin account of an eligible participant, as described in paragraph (g)(4)(A) through (g)(4)(C), is less than the margin required, the eligible participant may deposit additional funds and/or securities or establish a hedge to meet the margin requirement within three business days. After the three business day period, members are prohibited from accepting new opening orders, except that new opening orders entered for the purpose of reducing market risk may be accepted if the result would be to lower margin requirements. In the event an eligible participant fails to hedge existing positions or deposit additional funds and/or securities in an amount sufficient to eliminate any margin deficiency after three business days, the member must liquidate positions in an amount sufficient to, at a minimum, lower the total margin required to an amount less than or equal to the account equity.* *(B) If the portfolio margin deficiency is not met by the close of business on the next business day after the business day on which such deficiency arises, members will be required to deduct the amount of the deficiency from Net Capital until such time the deficiency is satisfied or positions are liquidated pursuant to paragraph (g)(10)(A) above.* *(C) Members will not be permitted to deduct any portfolio margin deficiency amount from Net Capital in lieu of collecting the margin required.* *(D) NASD, or the member's DEA if other than NASD, may grant additional time for an eligible participant to meet a portfolio margin deficiency upon written request, which is expected to be granted in extraordinary circumstances only.* *(E) Notwithstanding the provisions of subparagraph

(B)above, members should not permit an eligible participant to make a practice of meeting a portfolio margin deficiency by liquidation. Members must have procedures in place to identify accounts that periodically liquidate positions to eliminate margin deficiencies, and the member is expected to take appropriate action when warranted. Liquidation to eliminate margin deficiencies that are caused solely by adverse price movements may be disregarded.* *(11) Determination of Value for Margin Purposes.—For the purposes of this paragraph (g), all eligible products shall be valued at current market prices. Account equity for the purposes of paragraphs (g)(9)(A) and (g)(10)(A) shall be calculated separately for each portfolio margin account by adding the current market value of all long positions, subtracting current market value of all short positions, and adding the credit (or subtracting the debit) balance in the account.* *(12) Net Capital Treatment of Portfolio Margin Accounts* *

(A)No member that requires margin in any portfolio account pursuant to paragraph

(g)of this Rule shall permit the aggregate portfolio margin requirements to exceed ten times its Net Capital for any period exceeding three business days. The member shall, beginning on the fourth business day, cease opening new portfolio margin accounts until compliance is achieved. * *(B) If, at any time, a member's aggregate portfolio margin requirements exceed ten times its Net Capital, the member shall immediately transmit telegraphic or facsimile notice of such deficiency to the principal office of the Commission in Washington, D.C., the district or regional office of the Commission for the district or region in which the member maintains its principal place of business; and to NASD, or the member's DEA if other than NASD. Notice to NASD shall be in such form as NASD may prescribe.* *(13) Day Trading Requirements.—The day trading restrictions promulgated under paragraph (f)(8)(B) of this Rule shall not apply to portfolio margin accounts that establish and maintain at least five million dollars in equity, provided that a member has the ability to monitor the intra-day risk associated with day trading. Portfolio margin accounts that do not establish and maintain at least five million dollars in equity will be subject to the day trading restrictions under paragraph (f)(8)(B) of this Rule, provided the member has the ability to apply the applicable day trading requirement under this Rule. However, if the position or positions day traded were part of a hedge strategy, the day trading restrictions will not apply. A “hedge strategy” for purposes of this Rule means a transaction or a series of transactions that reduces or offsets a material portion of the risk in a portfolio. Members are expected to monitor these portfolio margin accounts to detect and prevent circumvention of the day trading requirements.* *(14) Requirements to Liquidate* *(A) A member is required immediately either to liquidate, or transfer to another broker-dealer eligible to carry portfolio margin accounts, all portfolio margin accounts with positions in related instruments if the member is:* *(i) insolvent as defined in section 101 of title 11 of the United States Code, or is unable to meet its obligations as they mature;* *(ii) the subject of a proceeding pending in any court or before any agency of the United States or any State in which a receiver, trustee, or liquidator for such debtor has been appointed;* *(iii) not in compliance with applicable requirements under the Exchange Act or rules of the Commission or any self-regulatory organization with respect to financial responsibility or hypothecation of eligible participant's securities; or* *(iv) unable to make such computations as may be necessary to establish compliance with such financial responsibility or hypothecation rules.* *(B) Nothing in this paragraph (g)(14) shall be construed as limiting or restricting in any way the exercise of any right of a registered clearing agency to liquidate or cause the liquidation of positions in accordance with its by-laws and rules.* *(15) Members must ensure that portfolio accounts are in compliance with Rule 2860.* ________ 1 *For purposes of this paragraph

(g)of the Rule, the term “margin equity security” utilizes the definition at Section 220.2 of Regulation T of the Board of Governors of the Federal Reserve System.* 2 *In accordance with paragraph (b)(1)(i)(B) of SEC Rule 15c3-1a (Appendix A to SEC Rule 15c3-1), 17 CFR 240.15c3-1a(b)(1)(i)(B).* 3 *See footnote 2.* 2860. Options

(a)through

(b)No Change. *(c) Portfolio Margining Disclosure Statement and Acknowledgement* *The special written disclosure statement describing the nature and risks of portfolio margining, and acknowledgement for an eligible participant signature, required by Rule 2520(g)(5)(C) shall be in a format prescribed by NASD or in a format developed by the member, provided it contains substantially similar information as in the prescribed NASD format and has received the prior written approval of NASD.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NASD has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose *Background.* Section 7(a) of the Act 5 authorizes the Board of Governors of the Federal Reserve System to prescribe the rules and regulations regarding credit that may be extended by broker-dealers on securities to their customers as set forth in Regulation T. Currently, Rule 2520 (Margin Requirements) prescribes minimum maintenance margin requirements for customer accounts held by members based on position or strategy-based margin requirements. This methodology applies prescribed margin percentage requirements to each security position and/or strategy, either long or short, held in a customer's account. 5 15 U.S.C. 78g. The Board of Governors of the Federal Reserve System in its amendments to Regulation T in 1998 permitted self-regulatory organizations to implement portfolio margin rules, subject to Commission approval. 6 Accordingly, NASD is filing the proposed rule change to allow members to extend a portfolio margin methodology to eligible participants as an alternative to the current margin requirements. 6 *See* Federal Reserve System, “Securities Credit Transactions; Borrowing by Broker and Dealers”; Regulations G, T, U and X; Dockets Nos. R-0905, R-0923 and R-0944, 63 FR 2806 (January 16, 1998). As further detailed herein, the proposed rule change would amend NASD Rule 2520 on a pilot basis to allow members, subject to specified conditions, to elect to apply a portfolio margin methodology to all margin equity securities, 7 listed options, security futures products, 8 unlisted derivatives, 9 warrants, index warrants, and related instruments. 10 In addition, a member, provided that it is a futures commission merchant (“FCM”) and is either a clearing member of a futures clearing organization or has an affiliate that is a clearing member of a futures clearing organization, would be permitted to combine an eligible participant's related instruments with listed index options, unlisted derivatives, options on exchange traded funds (“ETF”), index warrants, and underlying instruments 11 and compute a margin requirement for such combined products on a portfolio margin basis. 7 For purposes of the rule, the term “margin equity security” uses the definition at Section 220.2 of Regulation T of the Board of Governors of the Federal Reserve System. 8 For purposes of the rule, “security futures product” uses the definition at Section 3(a)(56) of the Act. 9 For purposes of the rule, the term “unlisted derivatives” is defined in Rule 2520(g)(2)(H). 10 For purposes of the rule, the term “related instrument” is defined in Rule 2520(g)(2)(D). 11 For purposes of the rule, the term “underlying instrument” is defined in Rule 2520(g)(2)(G). The proposed rule change is substantially similar to recent margin rule amendments by the New York Stock Exchange (“NYSE”) and the Chicago Board Options Exchange (“CBOE”), which were approved by the Commission. 12 Consistent with the NYSE and CBOE programs, the proposed rule change would be available as a pilot beginning on April 2, 2007 and ending on July 31, 2007, unless the Commission approves an extension of the pilot or adoption of the program on a permanent basis. 12 *See* Securities Exchange Act Release No. 54918 (December 12, 2006), 71 FR 75790 (December 18, 2006) (SR-NYSE-2006-13, relating to further amendments to the NYSE's portfolio margin pilot program); Securities Exchange Act Release No. 54125 (July 11, 2006), 71 FR 40766 (July 18, 2006) (SR-NYSE-2005-93, relating to amendments to the NYSE's portfolio margin pilot program); Securities Exchange Act Release No. 52031 (July 14, 2005), 70 FR 42130 (July 21, 2005) (SR-NYSE-2002-19, relating to the NYSE's original portfolio margin pilot). *See also* Securities Exchange Act Release No. 54919 (December 12, 2006), 71 FR 75781 (December 18, 2006) (SR-CBOE-2006-014, relating to amendments to the CBOE's portfolio margin pilot); Securities Exchange Act Release No. 52032 (July 14, 2005), 70 FR 42118 (July 21, 2005) (SR-CBOE-2002-03, relating to the CBOE's original portfolio margin pilot). *Portfolio Margin.* Portfolio margining is a margin methodology that sets margin requirements for an account based on the greatest projected net loss of all positions in a product class or group 13 using computer modeling to perform risk analysis using multiple pricing scenarios. These scenarios are designed to measure the theoretical loss of the positions given changes in both the underlying price and implied volatility inputs to the model. Accordingly, the margin required is based on the greatest loss that would be incurred in a portfolio if the value of its components move up or down by a predetermined amount. 13 Products would be grouped into a single portfolio that is based on the same index or issuer. *Margin Calculation.* Under the proposed rule change, a gain or loss on each position in the portfolio would be calculated on each of ten equidistant points along a range representing a potential percentage increase and decrease in the value of the instrument or underlying instrument in the case of a derivative product. For portfolios of only highly capitalized broad-based indexes, the range would be between a market increase of 6% and a decrease of 8%. For non-highly capitalized broad-based indexes the range would be +/−10%. For portfolios of equity options, narrow-based index options and/or security futures, the risk-array for computing the portfolio margin requirement would be up/down market moves of +/−15%. Options having the same underlying security (or index in the case of an index option), the underlying security itself, and any related futures, options on futures or security futures products could be combined as a portfolio for purposes of computing a portfolio margin requirement. The Commission approved theoretical options pricing model would be used to derive position values at each valuation point for the purpose of determining the gain or loss. 14 The gains and losses are netted to derive a potential portfolio gain or loss for the point. The margin requirement for the portfolio is the amount of the greatest loss among the calculation points. Certain portfolios would be allowed offsets such that, at the same valuation point, a gain in one portfolio may reduce or offset the loss in another portfolio. The amount of offset allowed between portfolios would be the same as permitted under SEC Rule 15c3-1a for computing a broker-dealer's net capital. The margin requirement for each portfolio would then be added together to calculate the total margin requirement for the portfolio margin account. 14 Currently, the only model that is approved by the Commission is The Options Clearing Corporation's Theoretical Intermarket Margining System (TIMS). In addition, the proposed rule change prescribes a minimum margin requirement of $.375 for each listed option, unlisted derivative, security futures product, and related instrument multiplied by the contract or instrument's multiplier. This minimum amount of margin ensures that a certain level of margin is required from the customer in the event that the greatest loss among the valuation points is a de minimis amount. Generally, a customer benefits from portfolio margining in that margin requirements calculated on net position risk are generally lower than strategy-based margin methodologies currently in place. In permitting margin computation based on actual net risk, members would no longer be required to compute a margin requirement for each individual position or strategy in a customer's account. *Monitoring and Risk Management.* However, as a pre-condition to permitting portfolio margining, the member would be required to establish comprehensive written risk analysis methodology to assess the potential risk to the member's capital over a specified range of possible market movements. In performing the risk analysis, the member would be required to include in the written risk analysis methodology procedures and guidelines for

(1)obtaining and reviewing account documentation and financial information to assess the amount of credit to be extended to eligible participants;

(2)the determination, review, and approval of credit limits to each eligible participant, and across all eligible participants, utilizing a portfolio margin account;

(3)monitoring credit risk exposure to the member's capital, on both a intra-day and end of day basis, including the type, scope and frequency of reporting to senior management;

(4)the use of stress testing of portfolio margin accounts in order to monitor market risk exposure from individual accounts and in the aggregate;

(5)the regular review and testing of the procedures by an independent unit;

(6)managing the impact of credit extended related to portfolio margin accounts on the member's overall risk exposure;

(7)the appropriate response by management when credit extensions have been exceeded; and

(8)determining when additional margin may need to be collected. Members would be required to periodically review their credit extension activities for consistency with their guidelines and determine if the data necessary to apply portfolio margining is accessible on a timely basis and information systems are available to adequately capture, monitor, analyze and report relevant data. The risk analysis methodology must be filed with NASD, or the member's designated examining authority (“DEA”) if other than NASD, and submitted to the Commission prior to implementation of portfolio margining. The proposed rule change also requires members to notify and receive approval from NASD or the member's DEA if other than NASD, prior to establishing a portfolio margin methodology for eligible participants. *Eligible Participants.* The proposed rule change would permit the following persons to engage in portfolio margining:

(1)Any broker or dealer registered pursuant to Section 15 of the Act;

(2)any member of a national futures exchange to the extent that listed index options, unlisted derivatives, options on ETFs, index warrants or underlying instruments hedge the member's index futures; and

(3)any person approved to engage in uncovered option contracts, and if security futures are to be included in the account, approval for such transactions is also required. However, an eligible participant under category

(3)may not establish or maintain positions in unlisted derivatives unless minimum equity of at least five million dollars is established and maintained with the member. If the account of a participant subject to the five million dollar requirement falls below such minimum requirement, it must be restored within three business days. A member would be prohibited from accepting new opening orders beginning on the fourth business day, except for new opening orders entered solely for the purpose of reducing market risk, where the result would be to lower margin requirements. *Margin Deficiencies.* Under the proposed rule change, participants would be required to satisfy a margin deficiency in a portfolio margin account within three business days by the deposit of additional funds and/or securities or by the establishment of a hedge that would reduce margin requirements. In the event the deficiency is not satisfied after three business days, the member must liquidate positions to eliminate the deficiency. A member would be required to deduct from its net capital the amount of any margin deficiency not satisfied by the close of business on the next business day after the business day on which the deficiency arises and continuing until the deficiency is satisfied. Members should not permit an eligible participant to make a practice of meeting a portfolio margin deficiency by liquidation and would be required to identify accounts that periodically liquidate positions to eliminate margin deficiencies. *Establishing Account.* Members would be permitted to use a specific securities margin account or a sub-account of a margin account clearly identified as a portfolio margin account. The account must be separate from any other securities account. In the event a portfolio margin account is a subaccount of a regular margin account, a member would be allowed to use excess equity in the regular margin account to meet a margin deficiency in the portfolio margin account. In addition, securities, including money market funds, that are not eligible for portfolio margin treatment would be allowed to be carried in a portfolio margin account for their collateral value, subject to the margin requirement applicable in a regular securities margin account. *Day Trading.* The day trading restrictions in Rule 2520 would not apply to portfolio margin accounts that establish and maintain at least five million dollars in equity, provided that a member has the ability to monitor the intra-day risk associated with day trading. Portfolio margin accounts that do not establish and maintain at least five million dollars in equity would otherwise be subject to the day trading restrictions. However, if the position or positions day traded were part of a hedge strategy, the day trading restrictions would not apply. A “hedge strategy” for purposes of the rule means a transaction or a series of transactions that reduces or offsets a material portion of the risk in a portfolio. Members would be expected to monitor portfolio accounts to detect and prevent circumvention of the day trading requirements. *Net Capital Treatment.* The proposed rule change would provide that the aggregate portfolio margin and maintenance requirements may not exceed ten times the member's net capital, as computed under SEC Rule 15c3-1. This requirement places a ceiling on the amount of portfolio margin a broker-dealer can extend to its customers. *Disclosure Document.* NASD Rule 2860(b)(11) prescribes requirements for the delivery of options disclosure documents concerning the opening of customer accounts. Under the proposed rule change, members would be required to provide every portfolio margin customer with a written risk disclosure statement at or prior to the initial transaction in a portfolio margin account. The disclosure would be in a format prescribed by NASD or in a format developed by the member, provided it contains substantially similar information as in the prescribed NASD format and has received the prior written approval of NASD. NASD will issue a Notice to Members to set forth the language required in the written disclosure statement. NASD has filed the proposed rule change for immediate effectiveness. As noted above, the proposed rule change would establish a pilot program that would begin on April 2, 2007 and end on July 31, 2007 to conform to the time periods of the similar portfolio margin pilot programs of the NYSE and CBOE. 15 15 *See supra* note 12. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, 16 which requires, among other things, that NASD rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD believes that the proposed rule change will better align the margin requirements with actual risk. 16 15 U.S.C. 78o-3(b)(6). B. Self-Regulatory Organization's Statement on Burden on Competition NASD does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change is subject to Section 19(b)(3)(A)(iii) of the Act 17 and Rule 19b-4(f)(6) 18 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 NASD 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, or such shorter time as designated by the Commission. 19 17 15 U.S.C. 78s(b)(3)(A)(iii). 18 17 CFR 240.19b-4(f)(6). 19 NASD 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-NASD-2007-013 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASD-2007-013. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASD-2007-013 and should be submitted on or before April 10, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 20 20 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-4973 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55446; File No. SR-NYSEArca-2006-51] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change Relating to Amendments to Registration Rules of NYSE Arca, Inc March 12, 2007. I. Introduction On November 14, 2006, NYSE Arca, Inc. (“NYSE Arca” 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 relating to amendments to registration rules of the Exchange. NYSE Arca filed Amendment No. 1 to the proposed rule change on January 12, 2007. The proposed rule change, as amended, was published for comment in the **Federal Register** on February 7, 2007. 3 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55215 (January 31, 2007), 72 FR 5783 (February 7, 2007). II. Description of the Proposal The Exchange proposed to amend certain NYSE Arca Rules governing registration procedures and ongoing compliance obligations for Options Trading Permit (“OTP”) Holders 4 and employees of OTP Firms 5 in order to

(i)clarify registration procedures and make them consistent with the procedures of other self-regulatory organizations (“SROs”) and with the operation of the Central Registration Depository (“CRD”) system maintained by the National Association of Securities Dealers, Inc. (“NASD”) and

(ii)include an additional registration category in connection with the Exchange's new options trading platform, OX. 6 4 *See* NYSE Arca Rule 1.1(q). 5 *See* NYSE Arca Rule 1.1(r). 6 *See* Securities Exchange Act Release No. 54238 (July 28, 2006), 71 FR 44758 (August 7, 2006) (SR-NYSEArca-2006-13). Specifically, the Exchange proposed to amend Rule 2.5(b)(10)(A) to provide for a new category, the Market Maker Authorized Trader, for individuals who perform market making activity on behalf of an OTP Firm on the OX trading facility. The amendment to that Rule also includes certain exceptions to the examination requirements. The Exchange also proposed to amend Rule 2.5(c), its waiver standards, so that the Exchange's practices are generally consistent with the criterion in NASD Rule 1070(d) and Supplementary Material .15(1)(b) to NYSE Rule 345. The Exchange also proposed to amend Rule 2.23 to provide manual registration procedures for registration categories ( *e.g.* , floor clerk) for which CRD does not provide electronic registration. In addition, the Exchange is consolidating its continuing education requirements in paragraph

(d)of Rule 2.23 and deleting the continuing education requirements in Rule 9.27(c) and

(d)to avoid needless repetition and risk of inconsistencies. Finally, the Exchange proposes to amend Rules 6.33 and 6.34A(b)(2) to require Market Maker and Market Maker Authorized Trader applicants who have previously successfully completed the required examination but who have not been registered with the Exchange for six months or more to complete an orientation program prescribed by the Exchange. III. Discussion and Commission Findings The Commission has reviewed carefully the proposed rule change and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 7 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 8 which, among other things, requires that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating 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. 7 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). 8 15 U.S.C. 78f(b)(5). The Commission believes that clarifying the registration procedures and ongoing compliance obligations and making the registration procedures consistent with the procedures of the other SROs will benefit OTP Holders and employees of OTP Firms by making the registration process easier and more efficient. Furthermore, amending Exchange rules to be generally consistent with the rules of other SROs, market practices, and the operation of the CRD should help simplify the procedures and administrative matters for OTP Holders and employees of OTP Firms. Finally, the Commission believes that requiring Market Makers and Market Maker Authorized Traders to attend an orientation session when such persons have not been employed in those capacities for six months or more will be beneficial to those persons, the Exchange, and the investing public. IV. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 9 that the proposed rule change (SR-NYSEArca-2006-51), as amended, be, and hereby is, approved. 9 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-4974 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55447; File No. SR-NYSEArca-2006-50] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change Relating to Amendments to Registration Rules of NYSE Arca Equities, Inc. March 12, 2007. I. Introduction On November 14, 2006, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”), through its wholly owned subsidiary NYSE Arca Equities, Inc. (“NYSE Arca Equities” or “Corporation”), 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 relating to amendments to registration rules of the Corporation. NYSE Arca filed Amendment No. 1 to the proposed rule change on January 12, 2007. The proposed rule change, as amended, was published for comment in the **Federal Register** on February 7, 2007. 3 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55214 (January 31, 2007), 72 FR 5780 (February 7, 2007). II. Description of the Proposal The Exchange, through its wholly owned subsidiary NYSE Arca Equities, proposed to amend certain NYSE Arca Equities Rules governing registration procedures and ongoing compliance obligations for Equity Trading Permit (“ETP”) Holders 4 and their registered persons in order to clarify registration procedures and make them consistent with the procedures of other self-regulatory organizations (“SROs”) and with the operation of the Central Registration Depository (“CRD”) system maintained by the National Association of Securities Dealers, Inc. (“NASD”). 4 *See* NYSE Arca Equities Rule 1.1(n). Specifically, the Exchange proposed to amend Rule 2.4(c), its waiver standards, so that the Exchange's practices are generally consistent with the criterion in NASD Rule 1070(d) and Supplementary Material .15(1)(b) to NYSE Rule 345. The Exchange also proposed to amend Rule 2.21 to provide manual registration procedures for registration categories ( *e.g.* , floor clerk) for which CRD does not provide electronic registration. In addition, the Exchange is consolidating its continuing education requirements in Rule 2.21(d) and deleting the continuing education requirements in Rule 9.27(c) and

(d)to avoid needless repetition and risk of inconsistencies. III. Discussion and Commission Findings The Commission has reviewed carefully the proposed rule change and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 5 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 6 which, among other things, requires that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating 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. 5 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). 6 15 U.S.C. 78f(b)(5). The Commission believes that clarifying the registration procedures and ongoing compliance obligations and making the registration procedures consistent with the procedures of the other SROs will benefit ETP Holders and their registered persons by making the registration process easier and more efficient. Furthermore, amending Exchange rules to be generally consistent with other SROs' rules, market practices, and the operation of the CRD should help simplify such procedures and administrative matters for ETP Holders and their registered persons. IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 7 that the proposed rule change (SR-NYSEArca-2006-50), as modified by Amendment No. 1, be, and hereby is, approved. 7 15 U.S.C. 78s(b)(2). 8 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-4975 Filed 3-19-07; 8:45 am] BILLING CODE 8010-01-P DEPARTMENT OF STATE [Public Notice 5725] International Security Advisory Board

(ISAB)Meeting Notice; Closed Meeting In accordance with section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. app 2 § 10(a)(2), the Department of State announces a meeting of the International Security Advisory Board

(ISAB)to take place on April 25, 2007, at the Department of State, Washington, DC. Pursuant to section 10(d) of the Federal Advisory Committee Act, 5 U.S.C. app 2 § 10(d), and 5 U.S.C. 552b(c)(1), it has been determined that this Board meeting will be closed to the public in the interest of national defense and foreign policy because the Board will be reviewing and discussing matters classified in accordance with Executive Order 12958. The purpose of the ISAB is to provide the Department with a continuing source of independent advice on all aspects of arms control, disarmament and international security, and related aspects of public diplomacy. The agenda for this meeting includes classified discussions related to the Board's ongoing studies on current U.S. policy and issues regarding nuclear proliferation, space policy, and related aspects of public diplomacy. For more information, contact Matthew Zartman, Deputy Executive Director of the International Security Advisory Board, Department of State, Washington, DC 20520, telephone:

(202)736-4244. Dated: March 2, 2007. George W. Look, Executive Director, International Security Advisory Board, Department of State. [FR Doc. E7-5023 Filed 3-19-07; 8:45 am] BILLING CODE 4710-27-P DEPARTMENT OF TRANSPORTATION Office of the Secretary Aviation Proceedings, Agreements Filed the Week Ending March 9, 2007 The following Agreements were filed with the Department of Transportation under Sections 412 and 414 of the Federal Aviation Act, as amended (49 U.S.C. 1383 and 1384) and procedures governing proceedings to enforce these provisions. Answers may be filed within 21 days after the filing of the application. *Docket Number:* OST-2007-27527. *Date Filed:* March 6, 2007. *Parties:* Members of the International Air Transport Association. *Subject:* PTC COMP Mail Vote 528, Resolution 011a Mileage Manual Non-TC Member/Non-Iata Carrier Sectors (Memo 1375). Intended effective date: 15 March 2007. *Docket Number:* OST-2007-27535. *Date Filed:* March 7, 2007. *Parties:* Members of the International Air Transport Association. *Subject:* Mail Vote 527—Resolution 010k, TC3 Japan, Korea-South East Asia, Special Passenger Amending Resolution between Korea (Rep. of) and China excluding Hong Kong SAR and Macao SAR, Mongolia, Philippines (Memo 1064). Intended effective date: 15 March 2007. *Docket Number:* OST-2007-27564. *Date Filed:* March 9, 2007. *Parties:* Members of the International Air Transport Association. *Subject:* TC2 Europe-Africa, Expedited Resolution 002dg (Memo 0245). Intended effective date: 1 April 2007. *Docket Number:* OST-2007-27568. *Date Filed:* March 9, 2007. *Parties:* Members of the International Air Transport Association. *Subject:* PTC COMP Mail Vote 529, Cancellation of Composite Resolutions 001m, 001o, 001w, 002dd, 005aa, 035, 048, 125, 210, 211, 785a (Memo 1377). Intended effective date: 1 April 2007. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E7-5025 Filed 3-19-07; 8:45 am] BILLING CODE 4910-9X-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Summary Notice No. PE-2007-09] Petitions for Exemption; Summary of Petitions Received AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of petitions for exemption received. SUMMARY: Pursuant to FAA's rulemaking provisions governing the application, processing, and disposition of petitions for exemption part 11 of Title 14, Code of Federal Regulations (14 CFR), this notice contains a summary of certain petitions seeking relief from specified requirements of 14 CFR. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of the FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of any petition or its final disposition. DATES: Comments on petitions received must identify the petition docket number involved and must be received on or before April 9, 2007. ADDRESSES: You may submit comments [identified by DOT DMS Docket Number FAA-2006-26238] by any of the following methods: • Web site: *http://dms.dot.gov* . Follow the instructions for submitting comments on the DOT electronic docket site. • *Fax:* 1-202-493-2251. • *Mail:* Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-001. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 am and 5 pm, Monday through Friday, except Federal Holidays. *Docket:* For access to the docket to read background documents or comments received, go to *http://dms.dot.gov* at any time or to Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 am and 5 pm, Monday through Friday, except Federal Holidays. FOR FURTHER INFORMATION CONTACT: Tim Adams

(202)267-8033, Tyneka Thomas

(202)267-7626 , or Frances Shaver

(202)267-9681, Office of Rulemaking (ARM-1), Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591. This notice is published pursuant to 14 CFR 11.85 and 11.91. Issued in Washington, DC, on March 9, 2007. Pamela Hamilton-Powell, Director, Office of Rulemaking. Petitions for Exemption *Docket No.:* FAA-2006-26238. *Petitioner:* International Council of Air Shows, Inc. *Section of 14 CFR Affected:* 14 CFR 61.3

(a)and (c). *Description of Relief Sought:* International Council of Air Shows, Inc., seeks an exemption, to the extent necessary, to allow its pilots to operate civil aircraft without having a pilot certificate or medical certificate in his or her possession during the flight. [FR Doc. E7-5061 Filed 3-19-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Environmental Impact Statement; Nueces County, TX AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Revised Notice of Intent (NOI). SUMMARY: The FHWA is issuing this revised notice to advise the public that an environmental impact statement

(EIS)is being prepared for the proposed U.S. Highway 181 Harbor Bridge replacement/State Highway

(SH)286 (Crosstown Expressway) improvement highway project in Nueces County, Texas, and that the project and study limits described in the May 20, 2005, Notice of Intent

(NOI)have been expanded. FOR FURTHER INFORMATION CONTACT: Donald E. Davis, District Engineer, Federal Highway Administration—Texas Division, 300 East 8th Street, Austin, Texas 78701. Telephone: 512-536-5960. SUPPLEMENTARY INFORMATION: The FHWA, in cooperation with the Texas Department of Transportation (TxDOT), is preparing an EIS for a proposal to replace the existing US 181 Harbor Bridge and construct improvements to SH 286 in Nueces County, Texas. The proposed improvements described in the original NOI would involve replacement of the existing Harbor Bridge and approaches where US 181 crosses the Corpus Christi Ship Channel for a roadway distance of approximately 2.25 miles. Since the original NOI was published on May 20, 2005, the project and study limits have been expanded to accommodate added capacity that may include managed lanes or various tolling strategies. The project limits are defined as the limits of the schematic design effort and the study limits are defined as the limits of potential impacts from the proposed action. The new project limits are as follows: the northern limit is the US 181 and Beach Avenue interchange located north of the Corpus Christi Ship Channel but south of the Nueces Bay Causeway; the southern limit is the SH 286 and SH 358 (South Padre Island Drive) interchange; the eastern limit is the Interstate Highway

(IH)37/US 181 intersection with Shoreline Boulevard; and the western limit is the IH 37 and Nueces Bay Boulevard interchange. The new project limits total approximately 7.5 miles in length from north to south along US 181 and SH 286, and 2.1 miles in length from east to west along IH 37. The new study limits are as follows: the northern limit is the US 181 and SH 35 interchange just south of Gregory; the southern limit is the SH 286 and SH 358 (South Padre Island Drive) interchange; the eastern limit is Shoreline Boulevard; and the western limit is the IH 37 and SH 358 (North Padre Island Drive) interchange. The proposed Harbor Bridge and SH 286 improvements are based on several needs: safety concerns, lack of capacity, connectivity to local roadways, poor level of service and increasing traffic demand. In addition to those needs, the bridge's existing structure also has deficiencies, including high maintenance costs and shipping height restrictions. The improvements to both the Harbor Bridge and SH 286 will address the structural deficiencies and improve safety, connectivity, and level of service, while identifying future plans for the US 181 and SH 286 roadway structure, and the areas served by these two highways. Alternatives under consideration include

(1)Taking no action, and

(2)replacing the existing US 181 Harbor Bridge and approach roads, including SH 286, with a facility that meets current highway standards. A Feasibility Study completed in 2003 evaluated four corridor alternatives along existing alignments—new location alignments and a No-build alternative—resulting in the identification of a recommended study corridor for the bridge replacement component. Capacity improvements and interchange design alternatives will be evaluated along the SH 286 corridor. A reasonable number of alignment alternatives will be identified and evaluated in the EIS, as well as the No-build Alternative, based on input from federal, state, and local agencies, as well as private organizations and concerned citizens. Alternative designs and funding alternatives will include tolling options or new managed lanes. Impacts caused by the construction and operation of the proposed improvements would vary according to the alternative alignment utilized. Impacts generally would include the following: Impacts to residences and businesses, including potential relocation; impacts to parkland; transportation impacts (construction detours, construction traffic, and mobility improvement); air and noise impacts from construction equipment and operation of the roadway; social and economic impacts, including impacts to minority and low-income residences; impacts to historic cultural resources; endangered and threatened species and impacts to waters of the U.S. including wetlands from right-of-way encroachment; and potential indirect and cumulative impacts. A letter that describes the proposed action and a request for comments will be sent to appropriate federal, state, and local agencies, and to private organizations and citizens who have previously expressed interest in the proposal. In conjunction with the Feasibility Study completed in June 2003, TxDOT developed a public involvement plan, sponsored three citizens' advisory committee

(CAC)meetings, held two public meetings, and distributed two newsletters. Initial agency and public scoping meetings were held in June 2005. An agency scoping meeting will be held by TxDOT on May 17, 2007, to brief agency representatives on the revised limits of the project area, introduce project team members, obtain comments pertaining to the scope of the EIS, identify important issues, set goals, and respond to questions. A continuing public involvement program will include a project mailing list, project Web site, project newsletters, a May 17, 2007, public scoping meeting (public notice will be given of the time and place), and numerous informal meetings with interested citizens and stakeholders. In addition, a public hearing will be held after the publication of the Draft EIS. Public notice will be given of the time and place of the hearing. The Draft EIS will be available for public and agency review and comment prior to the public hearing. To ensure that the full range of issues related to this proposed action is addressed and all significant issues identified, comments and suggestions are invited from all interested parties. Comments or questions concerning this proposed action and the EIS should be directed to the FHWA at the address provided above. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Research, Planning, and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program) Issued on: March 14, 2007. Donald E. Davis, District Engineer, Austin, Texas. [FR Doc. 07-1338 Filed 3-19-07; 8:45 am]

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