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Code · REGISTER · 2007-05-01 · Bureau of Land Management, Interior · Notices

Notices. Notice of competitive coal lease sale

44,062 words·~200 min read·/register/2007/05/01/07-2112·

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

BILLING CODE 4140-01-M DEPARTMENT OF THE INTERIOR Bureau of Land Management [WY-920-1320-EL, WYW160394] Notice of Competitive Coal Lease Sale, Wyoming AGENCY: Bureau of Land Management, Interior. ACTION: Notice of competitive coal lease sale. SUMMARY: Notice is hereby given that certain coal resources in the Pit 14 Coal Tract described below in Sweetwater County, Wyoming, will be offered for competitive lease by sealed bid in accordance with the provisions of the Mineral Leasing Act of 1920, as amended (30 U.S.C. 181 *et seq.* ).
DATES: The lease sale will be held at 10 a.m., on Tuesday, June 5, 2007. Sealed bids must be submitted on or before 4 p.m., on Monday, June 4, 2007. ADDRESSES: The lease sale will be held in the First Floor Conference Room (Room 107), of the Bureau of Land Management
(BLM)Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, WY 82003. Sealed bids must be submitted to the Cashier, BLM Wyoming State Office, at the address given above. FOR FURTHER INFORMATION CONTACT: Mavis Love, Land Law Examiner, or Robert Janssen, Coal Coordinator, at 307-775-6258, and 307-775-6206, respectively. SUPPLEMENTARY INFORMATION: This coal lease sale is being held in response to a lease by application
(LBA)filed by Black Butte Coal Company, Point of Rocks, Wyoming. The coal resources to be offered consist of all reserves recoverable by surface mining methods in the following-described lands located in Sweetwater County, 28 miles southeast of Rock Springs, Wyoming, approximately 14 miles south of Interstate 80, about 3 miles east of Black Butte Creek, and just southwest of the permit boundary of the existing Black Butte surface mine: T. 17 N., R. 101 W., 6th P.M., Wyoming Section 2: Lots 3, 4, SW 1/4 NW 1/4 ; Section 4: Lots 1, 2, S 1/2 NE 1/4 , SE 1/4 NW 1/4 , NE 1/4 SW 1/4 , S 1/2 SW 1/4 , SE4 1/4 ; Section 10: NW 1/4 , N 1/2 SW 1/4 ; T. 18 N., R. 101 W., 6th P.M., Wyoming Section 34: E 1/2 , E 1/2 NW 1/4 , SW 1/4 ; Containing 1,399.48 acres more or less. All of the acreage applied for has been determined to be suitable for surface mining. There are no existing surface facilities or structures that will be impacted by the proposed pit. There are no producing oil and/or gas wells on the tract. All of the surface and mineral estate on the LBA tract is controlled by the BLM. The tract contains surface mineable coal reserves within the Upper Cretaceous Almond Formation. In the LBA area, the coal cropline extends roughly southwest to northeast along the northwestern edge of the proposed pit. Mining is expected to begin along this cropline. The coal seams dip more rapidly than the ground surface toward the southeast and an economic cutoff of about 200 feet of overburden is projected for the final mine cut. Numerous coal seams occur in the immediate area, but only four are considered to be mineable within the proposed pit. These are identified, in descending order, as the AG, AF, AFL, and AE seams. The AG is the uppermost seam and is the most consistent over the LBA, generally ranging from 4-6 feet thick. The interburden between the AG and AF seams ranges from about 5-40 feet thick on the LBA. The AF seam ranges from 2-12 feet thick on the LBA and is joined with the AE seam near the cropline in Section 4. The AFL seam is a localized split that is largely confined to Section 34. The parting between the AF and AFL seams ranges from 0-20 feet thick and the AFL seam itself ranges from 2-3 feet thick on the LBA. The interburden between the AF and AE seams ranges from 0-45 feet thick on the LBA. The AE seam varies from 2-8 feet thick on the LBA. The composite mineable coal thickness ranges from 10-20 feet thick over the LBA. The LBA tract contains an estimated 11,218,740 tons of mineable coal in the four seams described above that could be recovered by surface mining methods. This mineable reserve is based on a minimum 20 foot overburden thickness to avoid any coal oxidation areas, a minimum coal thickness of 2 feet, and a maximum stripping ratio of 14.6:1 (bank cubic yards per ton of coal). Other coal seams and splits are found in the LBA area, but these have not been included in this reserve estimate due to thickness, depth, poor quality, limited areal extent, or any combination of factors. Potential bidders must establish their own practicable criteria for mining, including their estimate of recoverable reserves based on multiple seams and thin seam mining. The Pit 14 LBA coal is ranked as subbituminous B. The overall average quality is approximately 9965 BTU/lb with about 7.57% ash and 0.54% sulfur. These quality averages are generally higher than those for the coal reserves currently being mined at the adjacent surface mine. The tract will be leased to the qualified bidder of the highest cash amount provided that the high bid meets or exceeds the BLM's estimate of the fair market value of the tract. The minimum bid for the tract is $100 per acre or fraction thereof. The bids should be sent by certified mail, return receipt requested, or be hand delivered. The Cashier will issue a receipt for each hand-delivered bid. Bids received after 4 p.m., on Monday, June 4, 2007, will not be considered. The minimum bid is not intended to represent fair market value. The fair market value of the tract will be determined by the Authorized Officer after the sale. The lease issued as a result of this offering will provide for payment of an annual rental of $3.00 per acre, or fraction thereof, and of a royalty payment to the United States of 12.5 percent of the value of coal produced by strip or auger mining methods and 8 percent of the value of the coal produced by underground mining methods. The value of the coal will be determined in accordance with 30 CFR 206.250. Bidding instructions for the tract offered and the terms and conditions of the proposed coal lease are available from the BLM Wyoming State Office at the addresses above. Case file documents, WYW160394, are available for inspection at the BLM Wyoming State Office. Dated: March 8, 2007. Alan Rabinoff, Deputy State Director, Minerals and Lands. [FR Doc. E7-7842 Filed 4-30-07; 8:45 am] BILLING CODE 4310-22-P INTERNATIONAL TRADE COMMISSION [Investigation No. 731-TA-932 (Review)] Certain Folding Metal Tables and Chairs From China AGENCY: United States International Trade Commission. ACTION: Institution of a five-year review concerning the antidumping duty order on certain folding metal tables and chairs from China. SUMMARY: The Commission hereby gives notice that it has instituted a review pursuant to section 751(c) of the Tariff Act of 1930 (19 U.S.C. 1675(c)) (the Act) to determine whether revocation of the antidumping duty order on certain folding metal tables and chairs from China would be likely to lead to continuation or recurrence of material injury. Pursuant to section 751(c)(2) of the Act, interested parties are requested to respond to this notice by submitting the information specified below to the Commission; 1 to be assured of consideration, the deadline for responses is June 20, 2007. Comments on the adequacy of responses may be filed with the Commission by July 16, 2007. For further information concerning the conduct of this review and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207). 1 No response to this request for information is required if a currently valid Office of Management and Budget
(OMB)number is not displayed; the OMB Number is 3117-0016/USITC No. 07-5-169, expiration date June 30, 2008. Public reporting burden for the request is estimated to average 10 hours per response. Please send comments regarding the accuracy of this burden estimate to the Office of Investigations, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436. DATES: *Effective Date:* May 1, 2007. FOR FURTHER INFORMATION CONTACT: Mary Messer (202-205-3193), Office of Investigations, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its Internet server ( *http://www.usitc.gov* ). The public record for this review may be viewed on the Commission's electronic docket
(EDIS)at *http://edis.usitc.gov.* SUPPLEMENTARY INFORMATION: *Background.* —On June 27, 2002, the Department of Commerce issued an antidumping duty order on imports of certain folding metal tables and chairs from China (67 FR 43277). The Commission is conducting a review to determine whether revocation of the order would be likely to lead to continuation or recurrence of material injury to the domestic industry within a reasonably foreseeable time. It will assess the adequacy of interested party responses to this notice of institution to determine whether to conduct a full review or an expedited review. The Commission's determination in any expedited review will be based on the facts available, which may include information provided in response to this notice. *Definitions.* —The following definitions apply to this review:
(1)*Subject Merchandise* is the class or kind of merchandise that is within the scope of the five-year review, as defined by the Department of Commerce.
(2)The *Subject Country* in this review is China.
(3)The *Domestic Like Product* is the domestically produced product or products which are like, or in the absence of like, most similar in characteristics and uses with, the Subject Merchandise. In its original determination, the Commission found two Domestic Like Products corresponding to Commerce's scope: certain folding metal chairs, encompassing both “residential” and “commercial” folding chairs, and certain folding metal tables, including only residential folding metal tables. The Commission did not include banquet tables in its definition of the Domestic Like Product for folding metal tables. The Commission also found that an expansion of the Domestic Like Products to include “other rigid-frame casual tables and chairs” was not warranted.
(4)The *Domestic Industry* is the U.S. producers as a whole of the Domestic Like Product, or those producers whose collective output of the Domestic Like Product constitutes a major proportion of the total domestic production of the product. In its original determination, the Commission defined the Domestic Industry for folding metal chairs to include all producers of folding metal chairs in the United States, and the Domestic Industry for certain folding metal tables to include all producers of residential folding metal tables in the United States.
(5)The *Order Date* is the date that the antidumping duty order under review became effective. In this review, the Order Date is June 27, 2002.
(6)An *Importer* is any person or firm engaged, either directly or through a parent company or subsidiary, in importing the Subject Merchandise into the United States from a foreign manufacturer or through its selling agent. *Participation in the review and public service list.* —Persons, including industrial users of the Subject Merchandise and, if the merchandise is sold at the retail level, representative consumer organizations, wishing to participate in the review as parties must file an entry of appearance with the Secretary to the Commission, as provided in section 201.11(b)(4) of the Commission's rules, no later than 21 days after publication of this notice in the **Federal Register** . The Secretary will maintain a public service list containing the names and addresses of all persons, or their representatives, who are parties to the review. Former Commission employees who are seeking to appear in Commission five-year reviews are reminded that they are required, pursuant to 19 CFR 201.15, to seek Commission approval if the matter in which they are seeking to appear was pending in any manner or form during their Commission employment. The Commission's designated agency ethics official has advised that a five-year review is the “same particular matter” as the underlying original investigation for purposes of 19 CFR 201.15 and 18 U.S.C. 207, the post employment statute for Federal employees. Former employees may seek informal advice from Commission ethics officials with respect to this and the related issue of whether the employee's participation was “personal and substantial.” However, any informal consultation will not relieve former employees of the obligation to seek approval to appear from the Commission under its rule 201.15. For ethics advice, contact Carol McCue Verratti, Deputy Agency Ethics Official, at 202-205-3088. *Limited disclosure of business proprietary information
(BPI)under an administrative protective order
(APO)and APO service list.* —Pursuant to section 207.7(a) of the Commission's rules, the Secretary will make BPI submitted in this review available to authorized applicants under the APO issued in the review, provided that the application is made no later than 21 days after publication of this notice in the **Federal Register** . Authorized applicants must represent interested parties, as defined in 19 U.S.C. 1677(9), who are parties to the review. A separate service list will be maintained by the Secretary for those parties authorized to receive BPI under the APO. *Certification.* —Pursuant to section 207.3 of the Commission's rules, any person submitting information to the Commission in connection with this review must certify that the information is accurate and complete to the best of the submitter's knowledge. In making the certification, the submitter will be deemed to consent, unless otherwise specified, for the Commission, its employees, and contract personnel to use the information provided in any other reviews or investigations of the same or comparable products which the Commission conducts under Title VII of the Act, or in internal audits and investigations relating to the programs and operations of the Commission pursuant to 5 U.S.C. Appendix 3. *Written submissions.* —Pursuant to section 207.61 of the Commission's rules, each interested party response to this notice must provide the information specified below. The deadline for filing such responses is June 20, 2007. Pursuant to section 207.62(b) of the Commission's rules, eligible parties (as specified in Commission rule 207.62(b)(1)) may also file comments concerning the adequacy of responses to the notice of institution and whether the Commission should conduct an expedited or full review. The deadline for filing such comments is July 16, 2007. All written submissions must conform with the provisions of sections 201.8 and 207.3 of the Commission's rules and any submissions that contain BPI must also conform with the requirements of sections 201.6 and 207.7 of the Commission's rules. The Commission's rules do not authorize filing of submissions with the Secretary by facsimile or electronic means, except to the extent permitted by section 201.8 of the Commission's rules, as amended, 67 FR 68036 (November 8, 2002). Also, in accordance with sections 201.16(c) and 207.3 of the Commission's rules, each document filed by a party to the review must be served on all other parties to the review (as identified by either the public or APO service list as appropriate), and a certificate of service must accompany the document (if you are not a party to the review you do not need to serve your response). *Inability to provide requested information.* —Pursuant to section 207.61(c) of the Commission's rules, any interested party that cannot furnish the information requested by this notice in the requested form and manner shall notify the Commission at the earliest possible time, provide a full explanation of why it cannot provide the requested information, and indicate alternative forms in which it can provide equivalent information. If an interested party does not provide this notification (or the Commission finds the explanation provided in the notification inadequate) and fails to provide a complete response to this notice, the Commission may take an adverse inference against the party pursuant to section 776(b) of the Act in making its determination in the review. *Information to be Provided in Response to this Notice of Institution:* Please provide the requested information separately for each Domestic Like Product, as defined by the Commission in its original determination, and for each of the products identified by Commerce as Subject Merchandise. As used below, the term “firm” includes any related firms.
(1)The name and address of your firm or entity (including World Wide Web address if available) and name, telephone number, fax number, and E-mail address of the certifying official.
(2)A statement indicating whether your firm/entity is a U.S. producer of the Domestic Like Product, a U.S. union or worker group, a U.S. importer of the Subject Merchandise, a foreign producer or exporter of the Subject Merchandise, a U.S. or foreign trade or business association, or another interested party (including an explanation). If you are a union/worker group or trade/business association, identify the firms in which your workers are employed or which are members of your association.
(3)A statement indicating whether your firm/entity is willing to participate in this review by providing information requested by the Commission.
(4)A statement of the likely effects of the revocation of the antidumping duty order on the Domestic Industry in general and/or your firm/entity specifically. In your response, please discuss the various factors specified in section 752(a) of the Act (19 U.S.C. 1675a(a)) including the likely volume of subject imports, likely price effects of subject imports, and likely impact of imports of Subject Merchandise on the Domestic Industry.
(5)A list of all known and currently operating U.S. producers of the Domestic Like Product. Identify any known related parties and the nature of the relationship as defined in section 771(4)(B) of the Act (19 U.S.C. 1677(4)(B)).
(6)A list of all known and currently operating U.S. importers of the Subject Merchandise and producers of the Subject Merchandise in the Subject Country that currently export or have exported Subject Merchandise to the United States or other countries since the Order Date.
(7)If you are a U.S. producer of the Domestic Like Product, provide the following information on your firm's operations on that product during calendar year 2006 (report quantity data in units and value data in U.S. dollars, f.o.b. plant). If you are a union/worker group or trade/business association, provide the information, on an aggregate basis, for the firms in which your workers are employed/which are members of your association.
(a)Production (quantity) and, if known, an estimate of the percentage of total U.S. production of the Domestic Like Product accounted for by your firm's(s') production;
(b)The quantity and value of U.S. commercial shipments of the Domestic Like Product produced in your U.S. plant(s); and
(c)The quantity and value of U.S. internal consumption/company transfers of the Domestic Like Product produced in your U.S. plant(s).
(8)If you are a U.S. importer or a trade/business association of U.S. importers of the Subject Merchandise from the Subject Country, provide the following information on your firm's(s') operations on that product during calendar year 2006 (report quantity data in units and value data in U.S. dollars). If you are a trade/business association, provide the information, on an aggregate basis, for the firms which are members of your association.
(a)The quantity and value (landed, duty-paid but not including antidumping or countervailing duties) of U.S. imports and, if known, an estimate of the percentage of total U.S. imports of Subject Merchandise from the Subject Country accounted for by your firm's(s') imports;
(b)The quantity and value (f.o.b. U.S. port, including antidumping and/or countervailing duties) of U.S. commercial shipments of Subject Merchandise imported from the Subject Country; and
(c)The quantity and value (f.o.b. U.S. port, including antidumping and/or countervailing duties) of U.S. internal consumption/company transfers of Subject Merchandise imported from the Subject Country.
(9)If you are a producer, an exporter, or a trade/business association of producers or exporters of the Subject Merchandise in the Subject Country, provide the following information on your firm's(s') operations on that product during calendar year 2006 (report quantity data in units and value data in thousands of U.S. dollars, landed and duty-paid at the U.S. port but not including antidumping or countervailing duties). If you are a trade/business association, provide the information, on an aggregate basis, for the firms which are members of your association.
(a)Production (quantity) and, if known, an estimate of the percentage of total production of Subject Merchandise in the Subject Country accounted for by your firm's(s') production; and
(b)The quantity and value of your firm's(s') exports to the United States of Subject Merchandise and, if known, an estimate of the percentage of total exports to the United States of Subject Merchandise from the Subject Country accounted for by your firm's(s') exports.
(10)Identify significant changes, if any, in the supply and demand conditions or business cycle for the Domestic Like Product that have occurred in the United States or in the market for the Subject Merchandise in the Subject Country since the Order Date, and significant changes, if any, that are likely to occur within a reasonably foreseeable time. Supply conditions to consider include technology; production methods; development efforts; ability to increase production (including the shift of production facilities used for other products and the use, cost, or availability of major inputs into production); and factors related to the ability to shift supply among different national markets (including barriers to importation in foreign markets or changes in market demand abroad). Demand conditions to consider include end uses and applications; the existence and availability of substitute products; and the level of competition among the Domestic Like Product produced in the United States, Subject Merchandise produced in the Subject Country, and such merchandise from other countries.
(11)(Optional) A statement of whether you agree with the above definitions of the Domestic Like Product and Domestic Industry; if you disagree with either or both of these definitions, please explain why and provide alternative definitions. Authority: This review is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.61 of the Commission's rules. Issued: April 25, 2007. By order of the Commission. Marilyn R. Abbott, Secretary to the Commission. [FR Doc. E7-8147 Filed 4-30-07; 8:45 am] BILLING CODE 7020-02-P DEPARTMENT OF JUSTICE [AAG/A Order No. 012-2007] Privacy Act of 1974; Removal of a System of Records Notice Pursuant to the provisions of the Privacy Act of 1974 (5 U.S.C. 552a), the Department of Justice
(DOJ)is removing the published notice of a Privacy Act system of records entitled “Master Index File of Names, DAG-005,” last published in the **Federal Register** on October 21, 1985, at 50 FR 42606. The “Master Index File of Names” was a system for tracking individuals covered by the following systems of records: Appointed Assistant U.S. Attorneys Personnel System; Assistant U.S. Attorney Applicant Records; Presidential Appointee Candidate Records System; Presidential Appointee Records System; Special Candidates for Presidential Appointments Records System; and U.S. Judges Records System. The “Master Index File of Names” consisted of paper file cards containing individually identifiable information such as: date of birth; date of entry on duty in Federal Service; date of termination of Federal Service; and disposition of the records folder. The file cards designated as “Master Index File of Names, DAG-005” were destroyed in accordance with National Archives and Records Administration
(NARA)guidelines. The underlying records from which the information on these cards was extracted are all covered by other systems of records notices. Therefore, the notice of “DAG-005, Master Index File of Names” is removed from the Department's listing of Privacy Act systems of records notices, effective on the date of publication of this notice in the **Federal Register** . Dated: April 19, 2007. Lee J. Lofthus, Assistant Attorney General for Administration. [FR Doc. E7-8273 Filed 4-30-07; 8:45 am] BILLING CODE 4410-CG-P DEPARTMENT OF JUSTICE Bureau of Alcohol, Tobacco, Firearms and Explosives [OMB Number 1140-0037] Agency Information Collection Activities: Proposed Collection; Comments Requested ACTION: 60-day notice of information collection under review: letter application to obtain authorization for the assembly of a non-sporting rifle or non-sporting shotgun for the purpose of testing or evaluation. The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will be submitting the following information collection request to the Office of Management and Budget
(OMB)for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection is published to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted for “sixty days” until July 2, 2007. This process is conducted in accordance with 5 CFR 1320.10. If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Larry White, Firearms and Explosives Services Division, Room 7400, 650 Massachusetts Avenue, NW., Washington, DC 20226 Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points: —Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; —Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; —Enhance the quality, utility, and clarity of the information to be collected; and —Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , permitting electronic submission of responses. *Overview of this information collection:*
(1)*Type of Information Collection:* Extension of a currently approved collection.
(2)*Title of the Form/Collection:* Letter Application to Obtain Authorization for the Assembly of a Non-sporting Rifle or Non-sporting Shotgun for the Purpose of Testing and Evaluation.
(3)*Agency form number, if any, and the applicable component of the Department of Justice sponsoring the collection: Form Number:* None. Bureau of Alcohol, Tobacco, Firearms and Explosives.
(4)*Affected public who will be asked or required to respond, as well as a brief abstract: Primary:* Business or other for-profit. *Other:* None. The information is required by ATF to provide a means to obtain authorization for the assembly of a non-sporting rifle or non-sporting shotgun for the purpose of testing or evaluation.
(5)*An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond:* It is estimated that 5 respondents will complete a written letter in 30 minutes.
(6)*An estimate of the total public burden (in hours) associated with the collection:* There are an estimated 3 annual total burden hours associated with this collection. *If additional information is required contact:* Lynn Bryant, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, Department of Justice, Patrick Henry Building, Suite 1600, 601 D Street, NW., Washington, DC 20530. Dated: April 25, 2007. Lynn Bryant, Department Clearance Officer, PRA, Department of Justice. [FR Doc. E7-8270 Filed 4-30-07; 8:45 am] BILLING CODE 4410-FY-P DEPARTMENT OF JUSTICE Bureau of Alcohol, Tobacco, Firearms and Explosives [OMB Number 1140-0038] Agency Information Collection Activities: Proposed Collection; Comments Requested ACTION: 60-day notice of information collection under review: Application for Federal Firearms License (Collector of Curios and Relics). The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will be submitting the following information collection request to the Office of Management and Budget
(OMB)for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection is published to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted for “sixty days” until July 2, 2007. This process is conducted in accordance with 5 CFR 1320.10. If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Patricia Power, Chief, Federal Firearms Licensing Center, 2600 Century Parkway, NE., Suite 110, Atlanta, GA 30345. Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points: —Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; —Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; —Enhance the quality, utility, and clarity of the information to be collected; and —Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , permitting electronic submission of responses. *Overview of this information collection:*
(1)*Type of Information Collection:* Extension of a currently approved collection.
(2)*Title of the Form/Collection:* Application for Federal Firearms License (Collector of Curios and Relics.
(3)*Agency form number, if any, and the applicable component of the Department of Justice sponsoring the collection: Form Number:* ATF F 7CR (5310.16). Bureau of Alcohol, Tobacco, Firearms and Explosives.
(4)*Affected public who will be asked or required to respond, as well as a brief abstract: Primary:* Individuals or households. *Other:* None. The form is used by the public when applying for a Federal firearms license to collect curios and relics to facilitate a personal collection in interstate and foreign commerce. The information requested on the form establishes eligibility for the license.
(5)*An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond:* It is estimated that 7,300 respondents will complete a 15 minute form.
(6)*An estimate of the total public burden (in hours) associated with the collection:* There are an estimated 1,825 annual total burden hours associated with this collection. *If additional information is required contact:* Lynn Bryant, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, Department of Justice, Patrick Henry Building, Suite 1600, 601 D Street, NW., Washington, DC 20530. Dated: April 25, 2007. Lynn Bryant, Department Clearance Officer, PRA, Department of Justice. [FR Doc. E7-8271 Filed 4-30-07; 8:45 am] BILLING CODE 4410-FY-P DEPARTMENT OF JUSTICE Bureau of Alcohol, Tobacco, Firearms and Explosives [OMB Number 1140-0032] Agency Information Collection Activities: Proposed Collection; Comments Requested ACTION: 60-day notice of information collection under review: Records of acquisition and disposition, collectors of firearms. The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will be submitting the following information collection request to the Office of Management and Budget
(OMB)for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection is published to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted for “sixty days” until July 2, 2007. This process is conducted in accordance with 5 CFR 1320.10. If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Thomas McDermott, Firearms Programs Division, Room 7400, 650 Massachusetts Avenue, NW., Washington, DC 20226. Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points: —Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; —Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; —Enhance the quality, utility, and clarity of the information to be collected; and —Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , permitting electronic submission of responses. *Overview of this information collection:*
(1)*Type of Information Collection:* Extension of a currently approved collection.
(2)*Title of the Form/Collection:* Records of Acquisition and Disposition, Collectors of Firearms.
(3)*Agency form number, if any, and the applicable component of the Department of Justice sponsoring the collection:* *Form Number:* None. Bureau of Alcohol, Tobacco, Firearms and Explosives.
(4)*Affected public who will be asked or required to respond, as well as a brief abstract: Primary:* Individuals or households. *Other:* None. The record keeping requirement is for the purpose of facilitating ATF's authority to inquire into the disposition of any firearm in the course of a criminal investigation.
(5)*An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond:* It is estimated that it takes 3 hours per year for line by line entry and that approximately 45,973 licensees will participate.
(6)*An estimate of the total public burden (in hours) associated with the collection:* There are an estimated 137,919 annual total burden hours associated with this collection. *If additional information is required contact:* Lynn Bryant, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, Department of Justice, Patrick Henry Building, Suite 1600, 601 D Street, NW., Washington, DC 20530. Dated: April 25, 2007. Lynn Bryant, Department Clearance Officer, PRA, Department of Justice. [FR Doc. E7-8272 Filed 4-30-07; 8:45 am] BILLING CODE 4410-FY-P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 4-41] Samuel S. Jackson, D.D.S.; Grant of Application Procedural History On April 21, 2004, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Samuel S. Jackson, D.D.S. (Respondent) of Nashville, Tennessee. The Show Cause Order proposed to deny Respondent's pending application for a certificate of registration as a practitioner on three grounds:
(1)That Respondent had materially falsified his application, *see* 21 U.S.C. 824(a)(1);
(2)that Respondent had been convicted of a controlled substances related felony, *see id.* § 824(a)(2); and
(3)that Respondent's registration would be inconsistent with the public interest. *See id.* 824(a)(4); *see also* Show Cause Order at 1. The Show Cause Order alleged that Respondent had entered into a conspiracy with a drug trafficker, who was then wanted on federal charges, and a confidential informant, whom Respondent also believed to be a fugitive, to help them avoid apprehension. Show Cause Order at 2. More specifically, the Show Cause order alleged that Respondent had agreed to perform cosmetic dental work on these individuals and to arrange for plastic surgery on them for the purpose of altering their appearance so that they could evade arrest. *Id.* The Show Cause Order alleged that Respondent further admitted to authorities that he knew that the fugitive was a “big time hoodlum” and that Respondent had “intentionally sought to participate in activity which placed the public at risk for further distribution of illegal controlled substances.” *Id.* The Show Cause Order alleged that Respondent subsequently pled guilty in the United States District Court for the Middle District of Tennessee on one count of conspiracy, a crime under 18 U.S.C. 371, and was sentenced to a term of imprisonment for 30 months. *See id.* The Show Cause Order also alleged that on October 1, 2002, Respondent's then-existing DEA registration was revoked by order of the then Deputy Administrator. *Id.* at 1. The Show Cause Order alleged that on October 20, 2003, Respondent applied for a new DEA registration. *Id.* The Show Cause Order alleged that in completing the application, Respondent stated that he had “voluntarily surrendered [his] DEA # to prescribe medications,” when, in fact, his registration had been revoked, and that this constituted a material falsification of his application. *Id.* at 1-2. The Show Cause Order further alleged that, in completing his application, Respondent had also answered “No” to the question whether he had ever been convicted of a drug-related felony. *Id.* at 2. The Show Cause Order thus concluded that Respondent's material falsification of his application and his conviction rendered his registration inconsistent with the public interest. *Id.* Respondent, through his counsel, timely requested a hearing. The case was assigned to Administrative Law Judge
(ALJ)Gail Randall, who conducted a hearing in Nashville on May 3 and 4, 2005. At the hearing, both parties called witnesses to testify and introduced documentary evidence. Following the hearing, the Government submitted a brief containing its proposed findings of fact, conclusions of law, and argument. On May 26, 2006, the ALJ issued her recommended findings of fact, conclusions of law, and decision. In that decision, the ALJ concluded that Respondent did not intentionally falsify his application. ALJ at 28. The ALJ further found that while Respondent “was less than completely candid and forthcoming” in his testimony regarding his criminal conduct, there were several mitigating factors including Respondent's having cooperated with law enforcement officials and his having “accepted full responsibility for his past conduct.” *Id.* at 30. The ALJ thus concluded that the denial of Respondent's application “would be too severe a sanction,” and that while Respondent should be reprimanded for providing “less than truthful and complete information,” his application should be granted. *Id.* at 30-31. The Government filed exceptions to the ALJ's recommended decision. Specifically, the Government contended that Respondent had not credibly testified “as to the essential elements of [his] felony conviction,” and that he had given falsified answers on his application. Gov. Exceptions at 11-12. The Government further maintained that granting Respondent's application would not be consistent with DEA precedents which require that an applicant (or registrant) truthfully testify and accept full responsibility for his misconduct. Respondent did not file exceptions. Having considered the record as a whole, I hereby issue this decision and final order. I adopt the ALJ's findings of fact except as expressly noted herein. I hold that the Government has not proved by substantial evidence that Respondent materially falsified his application. I further hold that the Government has not proved by substantial evidence that Respondent has failed to accept responsibility for his criminal conduct. I thus conclude that Respondent's registration would not be inconsistent with the public interest and order that his application be granted. Findings Respondent is a 1997 graduate of the Meharry Medical College School of Dentistry. Tr. 148. Respondent currently holds a license from the State of Tennessee to practice dentistry. Resp. Exh. 1. Respondent previously held a DEA Certificate of Registration as a practitioner. On October 1, 2002, my predecessor ordered that Respondent's DEA registration be revoked (effective November 22, 2002) on the ground that Respondent had entered into an agreed order with the Tennessee Department of Health which resulted in the revocation of his state license and therefore was not entitled to maintain a DEA registration. *Samuel Silas Jackson* , 67 FR 65145 (2002). 1 1 While the final order relied solely on this ground, the order further noted the findings of the state board that Respondent had entered into a conspiracy with a known drug trafficker and fugitive as well as a confidential informant whom Respondent believed to also be a drug trafficker and fugitive for the purpose of assisting these persons to avoid apprehension. Gov. Exh. 2B, at 2. Specifically, the Tennessee board found that Respondent agreed to perform dental work on them and to arrange for them to obtain plastic surgery in California and have a safe place to hide while recovering from the surgery for the purpose of altering their appearance and enabling them to evade apprehension. *Id.* The Tennessee board also found that even after the authorities arrested the fugitive, Respondent nonetheless agreed to provide the services to the confidential informant for a price of $ 150,000. *Id.* at 3. Furthermore, according to the findings of the Tennessee board, Respondent met with the confidential informant and received a piece of luggage which he believed contained $150,000 in cash. *Id.* As explained below, the impetus for these actions was Respondent's entering into a conspiracy under which Respondent agreed to help Paul Woods, an indicted drug trafficker who was then at large, as well as a confidential informant
(CI)whom Respondent also believed was wanted by the authorities, to avoid apprehension. According to the record, in 1997 a Nashville-based DEA task force began an investigation into the criminal activities of Woods and his organization. Tr. 73. The investigation established that Woods and his organization were involved in the distribution of multi-kilo amounts of cocaine in the Nashville area. *Id.* at 74. The investigation ultimately resulted in the indictments of over thirty persons including Woods, on charges of cocaine distribution, firearms violations, money laundering and conspiracy. *Id.* Woods was charged in July 1999, in the initial wave of indictments. *Id.* The authorities were, however, unable to arrest Woods who had fled. *Id.* at 83. The authorities then approached an individual who was a lower-tier distributor and a secondary target of the investigation; this person agreed to work as an informant and to assist the authorities in locating Woods. *Id.* at 84. To gain the confidence of Woods, the authorities portrayed the informant as a fugitive. *Id.* Among other things, the informant specifically agreed to record his telephone calls with Woods and to provide a copy of the tape to the authorities. *Id.* at 81. During one of these phone calls, which occurred in December 1999, Respondent came to the attention of the authorities when Woods and the informant began discussing a scheme to alter their appearance by having dental work and plastic surgery done. *Id.* at 81-82. At the time of the investigation, Respondent was dating a woman whose niece was Woods' live-in girlfriend and the mother of one of Woods' children. *Id.* at 134-35. Respondent's girlfriend asked him to assist Woods to help him “avoid apprehension.” *Id.* at 150. Respondent testified that he was not coerced into helping Woods and that he understood that it was a crime to do so. *Id.* Respondent agreed to perform cosmetic dental work on both Woods and the informant to alter their appearance and to help them avoid detection. *Id.* at 86-87. Respondent also agreed to arrange for Woods and the informant to obtain plastic surgery in California and to find a secure location at which Woods and the informant could safely recover from the surgery. *Id.* ; see also Gov. Exh. 11b at 4. Furthermore, the transcript of a December 15, 1999, three-way phone call between Respondent, Woods, and the informant, establishes that Respondent knew that Woods and the informant were fugitives. Gov. Exh. 11b at 6-7; Tr. at 113-15. Finally, according to an affidavit summarizing one of the recorded conversations between Woods and the informant, the price was to have been $180,000 each. Gov. Exh. 4, at 7. The ALJ further found that Respondent was aware that Woods and the informant were drug traffickers at the time he agreed to assist them. *See* ALJ at 5 (FOF 16); *id.* 6 (FOF 21). Moreover, the ALJ also found not credible Respondent's testimony that he was unaware that Woods and the Respondent were drug traffickers during this period. *Id.* at 9 (FOF 37). In making these findings, the ALJ relied on what she termed “the extensive media coverage of these events,” and the testimony of a Task Force Officer interpreting the street slang of a single transcript of a telephone conversation between Respondent, Woods and the informant. *Id.* I conclude, however, that this evidence does no more than create a suspicion that Respondent knew that Woods and the informant were engaged in drug trafficking at the time he agreed to assist them and that the Government has not proved this fact by substantial evidence. *See NLRB* v. *Columbia Enameling & Stamping Co., Inc.* , 306 U.S. 292, 300
(1939)(“Substantial evidence is more than a scintilla, and must do more than create a suspicion of the existence of the fact to be established.”) As for the media coverage of the events, the Lead Task Force Officer testified that the Task Force's inability to arrest Woods following his indictment “was covered on the three local stations as well as in * * * the paper.” Tr. 134. That was the extent of the evidence; the Government did not produce any evidence to show how many days the story was covered by TV stations and the paper. Moreover, the Government did not even show that Respondent was in the Nashville area on the days that the media covered the story, let alone that he reads the paper or watches the news on TV. In short, the media coverage is too thin a reed to support the inference that Respondent knew that Woods and the informant were drug dealers. Nor does Respondent's participation in the December 15, 1999 phone conversation provide substantial evidence that he knew Woods and the informant were drug dealers. At the hearing, the Lead Task Force Officer testified as to his interpretation of the street slang used in the December 15, 1999 conversation between Respondent, Woods and the informant. Specifically, the Task Force Officer testified that Woods' comments that the informant was “like cool as [expletive 2 ] on the street,” and “holds a lot of weight,” establish that the informant was involved in drug dealing. Tr. 113-14. 2 The expletive is more commonly used to refer to a sex act. The Government did not prove, however, that Respondent interpreted the language as a reference to drug dealing as opposed to other forms of criminal activity. Indeed, it bears noting that the Government introduced only this single phone call to support the contention and even the Task Force Officer apparently did not draw the inference that Respondent knew that Woods and the informant were drug dealers. *See id.* at 134 (testimony of Task Force Officer; “we don't know whether or not [Respondent] knew [that Woods] was under indictment for drug dealing”). Moreover, the Government did not otherwise establish that Respondent was familiar with and understood drug slang. Again, the phone call evidence creates no more than a suspicion that Respondent knew that Woods and the informant were engaged in drug trafficking. *See Columbia Enameling* , 306 U.S. at 300. Finally, the substantial evidence test requires that the Agency “ ‘tak[e] into account contradictory evidence or evidence from which conflicting inferences could be drawn.’ ” *Morall* v. *DEA* , 412 F.3d 165, 177 (DC Cir. 2005) (quoting *Universal Camera Corp.* v. *NLRB* , 340 U.S. 474, 487 (1951)) (int. quotations and other citation omitted). Significantly, the Lead Task Force officer testified that “we don't know whether or not [Respondent] knew [that Woods] was under indictment for drug dealing. We do know that he knew that Mr. Woods was a bad guy, a thug.” *Id.* at 134. The same officer subsequently testified that Respondent “was totally truthful” during an interview which occurred on the day of his arrest. *Id.* at 141. Of consequence, during that interview, Respondent admitted only to knowing that “Woods was a ‘big time hoodlum’ and that he was in big trouble.” Gov. Exh. 6, at 3. Respondent did not admit to knowing that Woods and the informant were drug traffickers, a position he has consistently maintained. 3 See *Id.* The ALJ's decision “entirely ignored [this] relevant evidence,” *Morall,* 366 U.S. at 178, which was part of the Government's case. 3 The Government also points to the Agreed Order of Revocation as establishing that Respondent knew that Woods and the informant were drug traffickers at the time he agreed to assist them. See Gov. Exceptions at 5. The ALJ did not rely on this exhibit in making her finding. Respondent was already imprisoned at the time he entered into the Order and did so under the advice of counsel. Tr. 155. Moreover, the information filed by the U.S. Attorney made no such allegation. See Gov. Exh. 4 at 1-2. Considering all the evidence on the issue, I consider the Task Force Officer's testimony that Respondent “was totally truthful” regarding his involvement with Woods and the informant to be the most persuasive. On January 13, 2000, Woods was arrested by U.S. Marshals. Gov. Exh. 4 at 7. Thereafter, on January 17, 2000, the informant called Respondent to determine whether he was still willing to assist the informant in evading capture. Tr. 86. Respondent agreed to do so. *Id.* During the conversation, Respondent and the informant again discussed the price for the services and agreed on $150,000. Gov. Exh. 4, at 8. On January 18, 2000, the informant called Respondent and told him that “he needed to get his money together.” *Id.* The informant advised Respondent that he would call him later to make arrangements to pay him. *Id.* Several hours later, the informant called Respondent back and the two agreed to meet in a store parking lot. *Id.* Later that day, Respondent arrived at the parking lot and entered the informant's car. *Id.* The informant and Respondent drove to a different part of the parking lot where the informant gave Respondent a bag containing $52,000 in cash. 4 *Id.* Task Force officers surrounded Respondent; Respondent threw the bag away claiming that he did not own it. *Id.* Respondent was then arrested and taken to the Nashville DEA office. *Id.* 4 The authorities provided only $52,000 in cash because they did not have the full amount. That evening, Respondent agreed to an interview. The interview was conducted by an Assistant United States Attorney and several law officers. Gov. Exh. 6. During the interview, Respondent fully discussed the circumstances surrounding his involvement with Woods. During the interview, Respondent described Woods as a “big time hoodlum” and that he was in trouble. *Id.* at 3. Respondent further stated that his girlfriend had told him that her niece's boyfriend “was in trouble and that people were after him.” *Id.* Respondent also stated that while “he knew Woods was in trouble [he] did not know for sure what kind of trouble.” *Id.* Respondent further stated to the investigators that while the informant was to pay him $150,000, “he was not going to make anything off this deal but hoped to get some dental referrals.” *Id.* at 4. According to the interview report, Respondent contacted an acquaintance in California to find a plastic surgeon; the acquaintance subsequently called Respondent back and told him the cost for the surgery and after-care would be $150,000. *Id.* Later, Respondent acknowledged that “he was going to do a full mouth reconstruction” on the informant “which meant probably 10 to 20 crowns at $650” each. *Id.* at 5. Respondent also stated that “he was ‘greedy and stupid.’ ” *Id.* At the hearing, the lead Task Force Officer testified that Respondent “was totally truthful” with the interviewers and that the information he provided was consistent with other information obtained in the investigation. Tr. 141. Respondent also agreed to cooperate with the investigation by making phone calls to another suspect and wearing a wire. *Id.* at.136-37, 152. Finally, the lead Task Force Officer testified that there was no indication that Respondent was involved in the buying and selling/distribution of cocaine and had no prior criminal record. *Id.* at 130. The United States Attorney subsequently charged Respondent with one count of conspiring to violate 18 U.S.C. 3, the “accessory after the fact” statute. Gov. Exh. 4; *see* 18 U.S.C. 371. The accessory after the fact statute makes it a criminal offense to knowingly provide assistance to an “offender in order to hinder or prevent his apprehension, trial or punishment.” 18 U.S.C. 3. The information specifically alleged that Respondent had “agreed to provide or arrange for plastic surgery and dental work for * * * Woods and others after * * * Woods' indictment on federal drug, money laundering, and firearms felonies.” Gov. Exh. 4, at 1-2. On July 20, 2001, Respondent pled guilty and was sentenced to a term of thirty months imprisonment and a term of three years of supervised release. Gov. Exh. 3. Respondent received sentence reduction points for his cooperation with law enforcement officials and for accepting responsibility for his conduct. Tr. 137. Respondent subsequently served approximately twenty-two months at the Federal Correctional Institute, Forest City, Arkansas, before being transferred to a halfway house. *Id.* at 158, 160. According to Respondent's unchallenged testimony, prison officials allowed him to attend continuing education classes at the University of Tennessee, College of Dentistry, in Memphis. *Id.* at 158-59. Following his release from prison, Respondent applied for reinstatement of his state dental license. *Id.* at 161. Respondent appeared before the Tennessee Board of Dentistry, which voted unanimously to reinstate his license. *Id.* at 161-65. After the Tennessee Board's decision, Respondent contacted the DEA office in Atlanta, Georgia, to determine the status of his registration. *Id.* at 200. During this conversation, Respondent was told that his DEA number had been revoked and that he needed to apply for a new registration. *Id.* Thereafter, on October 3, 2003, Respondent re-applied for a DEA registration. Gov. Exh. 5, at 2. On the application, Respondent was asked whether he had “ever been convicted of a crime in connection with controlled substances under state or federal law?” *Id.* at 1. Respondent answered: “No.” *Id.* The application also asked whether Respondent had “ever surrendered or had a federal controlled substance registration revoked, suspended, restricted or denied?” *Id.* Respondent answered: “Yes.” Finally, Respondent answered “yes” to the question of whether he had “ever surrendered or had a state professional license or controlled substance registration revoked, suspended, denied, restricted, or placed on probation?” *Id.* The application also requires that an applicant give an explanation for a “yes” answer to these questions. In this block, Respondent wrote: I voluntarily surrendered my license to practice dentistry in the State of Tennessee as a result of my conviction for accessory after the fact. I also voluntarily surrendered my DEA # to prescribe medications. The board of * * * Tennessee voted unanimously to reinstate my license to practice dentistry in the State of Tennessee on 9/19/03. *Id.* at 2. Respondent's Testimony Regarding the Operative Events Respondent testified regarding his criminal conduct. When asked by his counsel whether he had committed a crime, Respondent answered: “Absolutely.” Tr. 150. Respondent further testified that he “agreed to help arrange for him [Woods] to avoid apprehension, and as much as I want to blame other people for that, I can't. The onus is firmly and squarely on my shoulders, and I take full responsibility for that.” *Id.* Respondent also further stated that his girlfriend did not coerce him into committing the act, and acknowledged that he understood he was committing a crime when he did it. *Id.* Respondent also testified that his conduct in agreeing to help Woods “was the absolute worst thing—the only thing I could have done worse was actually murder someone. * * * [I]t's just a terrible, terrible thing.” *Id.* at 184. Later, when asked whether he was “wrong in [his] actions?,” Respondent stated: “I was absolutely wrong. I made a terrible, terrible mistake. I've paid dearly for that, and I make no excuses. * * *” *Id.* at 188. Finally, when asked by the ALJ why he agreed to assist the informant after Woods was arrested, Respondent answered: “Stupid. Absolutely stupid.” *Id.* at 223. Respondent further testified that at the time he committed the act, he was aware that Woods was a criminal, a “hoodlum,” and a “hustler.” *Id.* at 151-52. Respondent maintained, however, that he was unaware of Wood's money laundering activities and what firearms offenses he committed. *Id.* at 151. Furthermore, Respondent denied that he was aware that Woods and the confidential informant were cocaine dealers at the time he committed his crime. *Id.* at 190; *see also id.* at 195. Respondent further maintained that while he was familiar with the term “hustler,” the term “doesn't necessarily mean a person who sells drugs,” but rather, means “any person that's doing something illegal.” *Id.* at 210. During its cross-examination, the Government asked Respondent about his motive. Specifically, the Government asked Respondent whether “making a lot of money off of this was” his motive. *Id.* at 208. Respondent initially answered that “[i]t wasn't a moneymaking scheme for me at all,” and that he agreed to help because his girlfriend asked him “to help her niece's boyfriend, and it just kind of snowballed after that.” *Id.* at 209. Respondent further maintained that the $150,000 cash payment (for the informant) was to be shipped to the person in California who arranged for the plastic surgery. *Id.* When pressed by the Government as to whether he was to receive any money out of this, Respondent testified that his California contact was “going to do something nice for” him. *Id.* Respondent maintained, however, that there was no agreement under which he would receive a particular percentage of the payment. *Id.* at 210. Respondent also testified regarding his application. Specifically, Respondent testified that he believed that he had voluntarily surrendered his DEA registration because “at no time did we put up any resistance to the process.” *Id.* at 180. Respondent further testified that he thought a voluntary surrender and a revocation “were one [and] the same.” *Id.* at 181. On cross-examination, however, Respondent admitted that he had not signed any form in which he had agreed to surrender his DEA registration. *Id.* at 207. Respondent further testified that he had “no” intent to mislead DEA regarding the status of his previous registration when he made the statement that he had voluntarily surrendered his DEA number. *Id.* at 181. The ALJ specifically found that “Respondent credibly testified that at the time he completed his application, he believed he had voluntarily surrendered his previous * * * registration and that he was responding truthfully.” ALJ Dec. at 15 (FOF 64). I adopt this finding. *See Universal Camera* , 340 U.S. at 496. Regarding the application's criminal history question, Respondent testified that he answered “no” because he did not think that he had committed a drug-related felony. *Id.* at 182. Respondent further testified that he was not “involved” in selling drugs, that the prosecutor had not charged him with that, and that the extent of his role was in helping Woods “evade capture.” 5 *Id.* at 184. Respondent further stated that he was “absolutely not” trying to conceal anything or misrepresent anything from DEA. *Id.* 5 On cross-examination, Respondent further explained that he answered “no” because he believed “that I was charged with one count of accessory after the fact, conspiracy to harbor a fugitive. There was no mention of anything as it relates to my involvement with the drug conspiracy. I had absolutely no involvement with the drug conspiracy.” *Id.* at 196-97. Later, Respondent testified: The question was, [h]as the applicant even been convicted of a crime in connection with a controlled substance? * * * I didn't feel like I was convicted of that crime. I wasn't charged with that crime. I wasn't charged with a drug crime or a drug-related crime. I wasn't involved in any of that activity at any time. I've never been accused of that, ever. *Id.* at 213-14. The ALJ specifically credited Respondent's testimony on both issues. *See* ALJ at 15-16 (FOF 67). In light of the fact that Respondent fully disclosed his “conviction for accessory after the fact,” Gov. Ex. 5, at 2, I find no basis to reject the ALJ's findings. I further note that there is no evidence that Respondent has ever illegally used controlled substances. Relatedly, there is no evidence that Respondent ever used his previous DEA registration to prescribe a controlled substance for an unlawful purpose. Discussion Section 303(f) of the Controlled Substances Act provides that an application for a practitioner's registration may be denied upon a determination “that the issuance of such registration would be inconsistent with the public interest.” 21 U.S.C. 823(f). In making the public interest determination, the CSA requires the consideration of the following factors:
(1)The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2)The applicant's experience in dispensing * * * controlled substances.
(3)The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4)Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5)Such other conduct which may threaten the public health and safety. *Id.* “These factors are * * * considered in the disjunctive.” *Robert A. Leslie, M.D.,* 68 FR 15227, 15230 (2003). I “may rely on any one or a combination of factors, and may give each factor the weight [I] deem[ ] appropriate in determining whether * * * an application for registration [should be] denied.” *Id.* Moreover, case law establishes that I am “not required to make findings as to all of the factors.” *Hoxie* v. *DEA* , 419 F.3d 477, 482 (6th Cir. 2005); *see also Morall,* 412 F.3d at 173-74. Furthermore, DEA precedent establishes that the various grounds for revocation or suspension of an existing registration that Congress enumerated in section 304(a), 21 U.S.C. 824(a), are also properly considered in deciding whether to grant or deny an application under section 303. *See Anthony D. Funches,* 64 FR 14267, 14268 (1999); *Alan R. Schankman,* 63 FR 45260 (1998); *Kuen H. Chen,* 58 FR 65401, 65402 (1993). Thus, the allegation that Respondent materially falsified his application is properly considered in this proceeding. For reasons explained below, I conclude that the Government has not proved that Respondent materially falsified his application. Furthermore, while I am deeply troubled by Respondent's criminal conduct, I am satisfied that he has accepted responsibility for it and reject the Government's assertion to the contrary. The Material Falsification Allegations The Government maintains that Respondent materially falsified his application in two respects. First, by answering “no” to the application's question as to whether Respondent had “ever been convicted of a crime in connection with controlled substances,” and second, by stating that he had “voluntarily surrendered” his DEA number. Gov. Exceptions at 7-9. As explained above, the ALJ found that Respondent did not intentionally falsify his application in either instance. DEA precedents make clear that culpability short of intentional falsification is actionable in these proceedings. *See, e.g., Samuel Arnold,* 63 FR 8687, 8688
(1998)(“[I]n finding that there has been a material falsification for purposes of 21 U.S.C. 824(a)(1), it must be determined that the applicant knew or should have known that the response given to the liability question was false.”). But even if Respondent should have known that his statements were false, the Government must still show that each statement was material. Accordingly, while I hold that Respondent's conviction is a “a crime in connection with controlled substances” and that Respondent should have provided a “yes” answer on the application, the Government has not established the materiality of the statement because it ignores relevant evidence. As an initial matter, I conclude that the liability question is not limited to a conviction in which one is directly involved in drug dealing. The “in connection with * * * controlled substances” language is broad in its scope; its intent is to provide the Agency with the information necessary to determine whether an applicant/registrant has committed a felony that may preclude his registration under the CSA. *See* 21 U.S.C. 824(a)(2). The text of section 404(a)(2) makes plain that it is not limited to a felony which directly involves drug dealing. As the provision states, a registration may be revoked based on a “convict[ion] of a felony under this subchapter [the CSA] or subchapter II of this chapter [the Controlled Substances Import and Export Act] *or any other law of the United States, or of any State, relating to any substance defined in this subchapter as a controlled substance.* ” *Id.* 824(a)(2) (emphasis added). While it is true that Respondent was not convicted of a felony under the CSA or the Import/Export Act, his conviction for the felony offense of conspiring to be an accessory after the fact is a conviction under “any other law of the United States.” *Id.* And his conviction is related to a controlled substance because his criminal conduct involved providing assistance to a person engaged in the unlawful distribution of cocaine which, if successful, would have allowed the drug dealer to evade apprehension and continue his illegal activity. *Cf. Smith* v. *United States,* 508 U.S. 223, 237
(1993)(quoting Webster's New International Dictionary 2102 (2d ed. 1939) (“[t]he phrase ‘in relation to’ is expansive” and “means ‘with reference to’ or ‘as regards’) (other citation omitted). Respondent's crime was therefore also—in the words of the application—“in connection with * * * controlled substances.” Respondent was thus required to provide a “yes” answer to the liability question. This conclusion does not, however, close the inquiry because it must also be determined whether Respondent's answer was material. “The most common formulation” of the concept of materiality is that “a concealment or misrepresentation is material if it ‘has a natural tendency to influence, or was capable of influencing, the decision of' the decisionmaking body to which it was addressed.” *Kungys* v. *United States,* 485 U.S. 759, 770
(1988)(quoting *Weinstock* v. *United States,* 231 F.2d 699, 701 (DC Cir. 1956)) (other citation omitted); see also *United States* v. *Wells,* 519 U.S. 482, 489
(1997)(quoting *Kungys,* 485 U.S. at 770). The evidence must be “clear, unequivocal, and convincing.” *Kungys,* 485 U.S. at 772. Taken in isolation, Respondent's answer is material because this Agency “relies upon such answers to determine whether an investigation is needed prior to granting the application.” *Martha Hernandez,* 62 FR 61145, 61146 (1997). In almost every case, it is clear that a false answer to the question of whether one has “been convicted of a crime in connection with controlled substances,” Gov. Exh. 5., has “the natural tendency to influence” the reviewing official to grant the application because most applicants do not provide any further explanation. This, however, is not such a case. Here, Respondent disclosed his criminal “conviction for accessory after the fact” on the application and this description is an accurate representation of the crime he was charged with and pled guilty to. *Id.* at 2. The Government offered no evidence to show how Respondent's “no” answer would—in light of his additional disclosure—nonetheless have “the natural tendency to influence” agency personnel to grant his application without further investigation. The Government has thus failed to prove that Respondent materially falsified his application in answering the criminal conviction question. The Government also alleges that Respondent materially falsified his application by stating that “I also voluntarily surrendered my DEA # to prescribe medications.” *Id.* Here, however, Respondent had previously answered “yes” to the question whether he had “ever surrendered or had a federal controlled substances registration revoked, suspended, restricted or denied?” *Id.* at 1. Again, the information Respondent provided raised a red flag for agency personnel involved in reviewing his application. The Government argues, however, that Respondent's statement was a material falsification because Respondent's DEA “number actually was revoked pursuant to a final order.” Gov. Exceptions at 9. The Government further points to the ALJ's finding that “ ‘Respondent's mere failure to request a hearing or to contest the revocation proceedings is insufficient for a finding of a voluntary surrender of his DEA’ ” registration. *Id.* (quoting ALJ at 25). It is true that Respondent's registration was revoked pursuant to a final order and was not voluntarily surrendered. But neither the CSA nor DEA's regulations define the respective terms and no agency precedent explains that there are consequential differences between them. Most significantly, even if the statement would—if viewed in isolation—be capable of influencing the decision by inducing a more favorable view of Respondent's application—the fact remains that the statement immediately followed Respondent's factually accurate representation that he had surrendered his state license “as a result of [his] conviction for accessory after the fact.” Gov. Ex. 5, at 2. In short, viewed in context, Respondent's statements clearly placed agency personnel on notice that his application should not be summarily approved, but rather, subjected to an investigation. I thus hold that even though Respondent's statement was false, it was not capable of influencing the decision and is thus not material. I therefore conclude that the Government's allegations that Respondent materially falsified his application are without merit and turn to the public interest factors. The Public Interest Factors As explained above, in Section 303(f), Congress directed that I consider five factors in determining whether granting Respondent's registration would be “inconsistent with the public interest.” 21 U.S.C. 823(f). While I consider Respondent's criminal conduct to be outrageous, having considered all of the factors and our precedents, I conclude that he is entitled to be registered. Factor One—The State Board's Recommendation As the ALJ found, following his release from prison, the Tennessee Board of Dentistry reinstated Respondent's license without conditions. While this factor is not dispositive, see *John H. Kennedy,* 71 FR 35705, 35708 (2006), in this case it does support the granting of his application. Factors Two and Three—The Applicant's Experience in Dispensing Controlled Substances and the Applicant's Conviction Record Relating to the Distribution or Dispensing of Controlled Substances Significantly, there is no evidence in the record that Respondent ever used his previous DEA registration to illegally dispense a controlled substance. Furthermore, there is no evidence in the record that Respondent ever used his registration to divert controlled substances for personal use. Relatedly, Respondent has never been convicted of a crime directly involving the distribution or dispensing of controlled substances. Thus, both factors support the granting of Respondent's application. Factors Four and Five—Respondent's Record of Compliance With Applicable Laws Relating to Controlled Substances and Such Other Conduct Which May Threaten Public Health and Safety As explained above, Respondent committed a federal criminal offense in violation of 18 U.S.C. 3 and 371, when he entered into a conspiracy with Woods and an informant in which he agreed to assist them in altering their appearance and thereby help them avoid apprehension. Furthermore, even after Woods was apprehended, Respondent agreed to assist the informant. These are truly outrageous acts of criminality. Proceedings under sections 303 and 304 of the CSA are, however, non-punitive. *See Leo R. Miller,* 53 FR 21931, 21932 (1988). The purpose of this proceeding is not to impose punishment in addition to the sentence handed down by the federal district court. As previously recognized, this proceeding “is a remedial measure, based upon the public interest and the necessity to protect the public from those individuals who have misused controlled substances or their DEA Certificate of Registration, and who have not presented sufficient mitigating evidence to assure the Administrator that they can be trusted with the responsibility carried by such a registration.” 6 *Id.* ; *see also Robert M. Golden,* 61 FR 24808, 24812 (1996). 6 This is not to say that the revocation of a registration is limited to those situations where a registrant has either engaged in personal abuse of a controlled substance or illegally dispensed a controlled substance. Both sections 303(f) and 304(a) make clear that Respondent's criminal conduct is properly considered in this proceeding. See 21 U.S.C. 823(f)(4) & (5), id. 824(a)(2). As egregious as his conduct is, Respondent committed his crimes more than seven years ago. In the interim, Respondent has served his sentence and there is no evidence that he has violated the terms of his period of supervised release. Respondent pled guilty to the offense, was found by the federal district court to have accepted responsibility, and cooperated with the Task Force in its investigation. Moreover, in this proceeding, Respondent stated that he had “absolutely” committed a crime, that he could not “blame other people for” his decision to help Woods avoid capture, and that he took “full responsibility for that.” Tr. 150. Of note, Respondent also testified that his conduct “was the absolute worst thing—the only thing I could have done worse was actually murder someone.” *Id.* at 184. Respondent added that “I was absolutely wrong,” and that “I made a terrible, terrible mistake.” *Id.* at 188. Finally, Respondent described his actions in agreeing to assist the informant after Woods' arrest as “[s]tupid[,] [a]bsolutely stupid.” *Id.* at 223. That it was. The Government nonetheless contends that Respondent has not sufficiently accepted responsibility. In the Government's view, Respondent “has not been candid about the facts surrounding his conviction,” Gov. Exceptions at 6, because he has maintained in this proceeding that he did not know that Woods and the informant were drug traffickers. The Government also maintains that Respondent was not candid about his motive. The Government's first contention is disposed of by my finding that the Government's evidence only creates a suspicion that Respondent knew that Woods and the informant were engaged in drug trafficking. Having failed to adduce substantial evidence proving this as a fact, the Government is precluded from arguing that Respondent has not been candid about his knowledge of Woods' and the informant's criminal activities. The Government further argues that Respondent lacked candor because he “asserted at the hearing that he had no pecuniary motive.” *Id.* at 7. Ultimately, however, Respondent did admit that he had a pecuniary motive. Tr. 210. True enough, to obtain this admission, the Government was forced to engage in the legal equivalent of pulling teeth. But the Government offered no evidence to establish the amount that Respondent was to receive. While I find Respondent's testimony on this point disturbing, the record does not contain sufficient evidence to support a finding that Respondent lacked candor and has not accepted responsibility for his criminal conduct. I thus conclude that factors four and five do not support a finding that Respondent's registration would be inconsistent with the public interest. And having considered all of the factors, I further conclude that Respondent is entitled to be registered. Order Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 CFR 0.100(b) and 0.104, I order that the application of Samuel S. Jackson, D.D.S., for a DEA Certificate of Registration as a practitioner be, and it hereby is, granted. This order is effective immediately. Dated: April 24, 2007. Michele M. Leonhart, Deputy Administrator. [FR Doc. E7-8261 Filed 4-30-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF LABOR Office of the Secretary Submission for OMB Review: Comment Request April 12, 2007. The Department of Labor
(DOL)has submitted the following public information collection request
(ICR)to the Office of Management and Budget
(OMB)for review and approval in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35). A copy of this ICR, with applicable supporting documentation, may be obtained at *http://www.reginfo.gov/public/do/PRAMain* , or contact Ira Mills on 202-693-4122 (this is not a toll-free number) or E-Mail: *Mills.Ira@dol.gov.* Comments should be sent to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for U.S. Department of Labor/Employment and Training Administration (ETA), Office of Management and Budget, Room 10235, Washington, DC 20503, 202-395-7316 (this is not a toll free number), within 30 days from the date of this publication in the **Federal Register** . The OMB is particularly interested in comments which: • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; • Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; • Enhance the quality, utility and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , permitting electronic submission of responses. *Agency:* Employment and Training Administration. *Type of Review:* Extension without change of a currently approved collection. *Title:* Domestic Agricultural In-Season Wage Report. *OMB Number:* 1205-0017. *Frequency:* Annually. *Affected Public:* Individuals or Households, Farms, State, Local, or Tribal Government. *Type of Response:* Reporting. *Number of Respondents:* 38,855. *Annual Responses:* 38,805 for ETA Form 232-A; 600 for ETA Form 232. *Average Response Time:* 15 minutes for ETA Form 232-A and 11 hours for ETA Form 232. *Total Annual Burden Hours:* 16,301. *Total Annualized Capital/Startup Costs:* 0. *Total Annual Costs (operating/maintaining systems or purchasing services):* 0. *Description:* State Workforce Agencies must collect information on agricultural prevailing wage rates in order to implement Federal regulations governing the intrastate and interstate recruitment of farmworkers for agricultural (crop and livestock) and logging jobs. This information is collected by crop area and crop activity, wage rates paid, total number of domestic and foreign workers, productivity standards, and hourly earnings of piece rate workers. Ira L. Mills, Departmental Clearance Officer/Team Leader. [FR Doc. E7-8239 Filed 4-30-07; 8:45 am] BILLING CODE 4510-FP-P DEPARTMENT OF LABOR Employment and Training Administration Workforce Investment Act—Small Grassroots Organizations Connecting With the One-Stop Delivery System; Solicitation for Grant Applications (SGA), SGA/DFA-PY 06-11 AGENCY: Employment and Training Administration (ETA), Labor. ACTION: Notice; amendment. SUMMARY: The Employment and Training Administration published a document in the **Federal Register** of April 5, 2007, announcing the availability of funds and solicitation for grant applications for small grassroots organizations with the ability to connect to the local One-Stop Delivery System. The document is hereby amended. FOR FURTHER INFORMATION CONTACT: Linda Forman, Grants Management Specialist, Telephone
(202)693-3416. In the **Federal Register** of April 5, 2007, in FR Volume 72, Number 65: —On page 16825, starting in the middle column, Part II
(1)Award Information stated the following: The agency expects to award approximately 40 grants. The grant amount for each “grassroots” organization will range between $50,000-$75,000. Amendment The solicitation is amended to read: The agency expects to award approximately 50 grants. The grant amount for each “grassroots” organization will be up to $60,000. Signed at Washington, DC, this 24th day of April, 2007. Eric Luetkenhaus, Grant Officer, Employment & Training Administration. [FR Doc. E7-8258 Filed 4-30-07; 8:45 am] BILLING CODE 4510-FN-P NATIONAL SCIENCE FOUNDATION Information Collection Activities: Proposed Collection; Comment Request AGENCY: National Science Foundation. ACTION: Notice. SUMMARY: Under the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501 et seq.), and as part of its continuing effort to reduce paperwork and respondent burden, the National Science Foundation
(NSF)is inviting the general public and other Federal agencies to comment on this proposed information collection. DATES: Written comments on this notice must be received by June 29, 2007 to be assured of consideration. Comments received after that date will be considered to the extent practicable. ADDRESSES: Written comments regarding the information collection and requests for copies of the proposed information collection request should be addressed to Suzanne Plimpton, Reports Clearance Officer, National Science Foundation, 4201 Wilson Boulevard, Room 295, Arlington, VA 22230, or by e-mail to *splimpton@nsf.gov.* FOR FURTHER INFORMATION CONTACT: Suzanne Plimpton on
(703)292-7556 or send e-mail to *splimpton@nsf.gov.* Individuals who use a telecommunications device for the deaf
(TDD)may call the Federal Information Relay Service
(FIRS)at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through Friday. SUPPLEMENTARY INFORMATION: *Title of Collection:* Antarctic emergency response plan and environmental protection information. *OMB Approval Number:* 3145-0180. *Expiration Date of Approval:* November 30, 2007. *Abstract:* The NSF, pursuant to the Antarctic Conservation Act of 1978 (16 U.S.C. 2401 et seq.) (“ACA”) regulates certain non-governmental activities in Antarctica. The ACA was amended in 1996 by the Antarctic Science, Tourism, and Conservation Act. On September 7, 2001, NSF published a final rule in the **Federal Register** (66 FR 46739) implementing certain of these statutory amendments. The rule requires non-governmental Antarctic expeditions using non-U.S. flagged vessels to ensure that the vessel owner has an emergency response plan. The rule also requires persons organizing a non-governmental expedition to provide expedition members with information on their environmental protection obligations under the Antarctic Conservation Act. *Expected Respondents.* Respondents may include non-profit organizations and small and large businesses. The majority of respondents are anticipated to be U.S. tour operators, currently estimated to number twelve. *Burden on the Public.* The Foundation estimates that a one-time paperwork and recordkeeping burden of 40 hours or less, at a cost of $500 to $1400 per respondent, will result from the emergency response plan requirement contained in the rule. Presently, all respondents have been providing expedition members with a copy of the Guidance for Visitors to the Antarctic (prepared and adopted at the Eighteenth Antarctic Treaty Consultative Meeting as Recommendation XVIII-1). Because this Antarctic Treaty System document satisfies the environmental protection information requirements of the rule, no additional burden shall result from the environmental information requirements in the proposed rule. Dated: April 24, 2007. Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation. [FR Doc. E7-8208 Filed 4-30-07; 8:45 am] BILLING CODE 7555-01-P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. *Extension:* Form N-3, SEC File No. 270-281, OMB Control No. 3235-0316. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) the Securities and Exchange Commission (“Commission”) has submitted to the Office of Management and Budget (“OMB”) a request for extension of the previously approved collection of information discussed below. The title for the collection of information is “Form N-3 (17 CFR 239.17a and 274.11b) under the Securities Act of 1933 and under the Investment Company Act of 1940, Registration Statement of Separate Accounts Organized as Management Investment Companies.” Form N-3 is the form used by insurance company separate accounts organized as management investment companies that offer variable annuity contracts to register as investment companies under the Investment Company Act of 1940 (15 U.S.C. 80a-1 *et seq.* ) and/or to register their securities under the Securities Act of 1933 (15 U.S.C. 77a *et seq.* ). The primary purpose of the registration process is to provide disclosure of financial and other information to investors and potential investors for the purpose of evaluating an investment in a security. Form N-3 also permits separate accounts organized as management investment companies that offer annuity contracts to provide investors with a prospectus containing information required in a registration statement prior to the sale or at the time of confirmation of delivery of securities. The form also may be used by the Commission in its regulatory review, inspection, and policy-making roles. The Commission estimates that there are 2 initial registration statements and 30 post-effective amendments to initial registration statements filed on Form N-3 annually and that the average number of portfolios referenced in each initial filing and post-effective amendment is 2. The Commission further estimates that the hour burden for preparing and filing a post-effective amendment on Form N-3 is 154.7 hours per portfolio. The total annual hour burden for preparing and filing post-effective amendments is 9,282 hours (30 post-effective amendments × 2 portfolios × 154.7 hours per portfolio). The estimated annual hour burden for preparing and filing initial registration statements is 3,690.8 hours (2 initial registration statements × 2 portfolios × 922.7 hours per portfolio). The total annual hour burden for Form N-3, therefore, is estimated to be 12,972.8 hours (9,282 hours + 3,690.8 hours). The information collection requirements imposed by Form N-3 are mandatory. Responses to the collection of information will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid control number General comments regarding the above information should be directed to the following persons:
(i)Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or e-mail to: *David_Rostker@omb.eop.gov* ; and
(ii)R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312, or send an e-mail to: *PRA_Mailbox@sec.gov* . Comments must be submitted to OMB within 30 days of this notice. Dated: April 23, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-8196 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27783; File No. 812-13334] XTF Advisors Trust, et al.; Notice of Application April 25, 2007. AGENCY: Securities and Exchange Commission (“SEC” or the “Commission”). ACTION: Notice of Application for exemption pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), for an exemption from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder. Applicants: XTF Advisors Trust (the “Trust”) and XTF Advisors LLC, (the “Investment Advisor”), (collectively the “Applicants”). Summary of Application: Applicants request an order pursuant to Section 6(c) of the 1940 Act exempting certain life insurance companies and their separate accounts that currently invest or may hereafter invest in the Insurance Funds (defined below) from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust and shares of any future investment companies that are designed to fund insurance products and for which the Investment Advisor or any of its affiliates may serve as investment manager, investment adviser, subadviser, administrator, principal underwriter or sponsor (each, an “Insurance Fund” and collectively, the “Insurance Funds”) to be sold to and held by:
(a)Separate accounts funding variable annuity contracts and variable life insurance policies (collectively “Variable Contracts”) issued by both affiliated life insurance companies and unaffiliated life insurance companies;
(b)trustees of qualified group pension and group retirement plans outside of the separate account context (“Qualified Plans”);
(c)separate accounts that are not registered as investment companies under the 1940 Act pursuant to exemptions from registration under Section 3(c) of the 1940 Act;
(d)any Advisor to an Insurance Fund for the purpose of providing seed capital to an Insurance Fund; and
(e)any other account of a Participating Insurance Company permitted to hold shares of an Insurance Fund (“General Accounts”). Filing Date: The Application was filed on October 17, 2006, and amended on April 17, 2007. Hearing or Notification of Hearing: If no hearing is ordered, the requested exemption will be granted. Any interested person may request a hearing on this Application, or ask to be notified if a hearing is ordered. Any requests must be received by the Commission by 5:30 p.m. on May 21, 2007. Request a hearing in writing, giving the nature of your interest, the reason for the request, and the issues you contest. Serve the Applicants with the request, either personally or by mail, and also send it to the Secretary of the Commission, along with proof of service by affidavit, or in the case of any attorney-at-law by certificate. Request notification of the date of a hearing by writing to the Secretary of the Commission. ADDRESSES: The Commission: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090; Applicants: c/o JoAnn Strasser, Esq., Thompson Hine LLP, 312 Walnut St., Suite 1400, Cincinnati Ohio 45202. FOR FURTHER INFORMATION CONTACT: Robert S. Lamont, Jr., Senior Counsel, or Joyce M. Pickholz, Branch Chief, Office of Insurance Products, Division of Investment Management, at
(202)551-6795. SUPPLEMENTARY INFORMATION: The following is a summary of the Application; the complete Application is available for a fee from the Commission's Public Reference Branch, 100 F Street, NE., Room 1580, Washington, DC 20549-1090 (telephone
(202)551-8090). Applicants' Representations 1. Each Insurance Fund is registered under the 1940 Act as an open-end management investment company. The Trust was organized under Delaware law on October 10, 2006 and is registered under the 1940 Act as a management investment company (File Nos. 811-21971/333-138261). 2. The Investment Advisor was organized in 2002, under the laws of the State of Delaware, and registered with the Commission under the Investment Advisors Act of 1940, as amended, in 2005. The sole member of the Investment Advisor is XTF L.P., a Delaware limited partnership. 3. Applicants represent that the Trust intends to, and other Insurance Funds may in the future, offer Shares to separate accounts of affiliated and unaffiliated insurance companies in order to fund various types of insurance products. These separate accounts are, or will be, registered as investment companies under the 1940 Act or will be exempt from such registration under Section 3(c) of the 1940 Act (individually a “Separate Account” and collectively the “Separate Accounts”). Insurance companies whose Separate Account(s) may now or in the future own Shares are referred to herein as “Participating Insurance Companies.” 4. Applicants represent that the Participating Insurance Companies have established, or will establish, their own Separate Accounts and design their own Variable Contracts. Each Participating Insurance Company has, or will have, the legal obligation to satisfy all applicable requirements under both State and Federal law. Each Participating Insurance Company may rely on Rule 6e-2 or Rule 6e-3(T) under the 1940 Act, although in connection with the establishment and maintenance of Separate Accounts funding variable life insurance policies some Participating Insurance Companies may rely on individual exemptive orders as well. 5. Applicants state that each Participating Insurance Company on behalf of its Separate Accounts has entered, or will enter, into a participation agreement with each Insurance Fund in which it invests which will govern participation by the Participating Insurance Company in such Insurance Fund (a “Participation Agreement”). The role of the Insurance Fund under this arrangement, insofar as Federal securities laws are applicable, will consist of offering Shares to the Separate Accounts and fulfilling any conditions that the Commission may impose upon granting the order requested herein. 6. Applicants propose that the Insurance Funds also be permitted to offer and/or sell Shares to Qualified Plans administered by a Trustee. Section 817(h) of the Internal Revenue Code of 1986, as amended (the “Code”), imposes certain diversification standards on the underlying assets of Separate Accounts funding Variable Contracts. In particular, the Code provides that Variable Contracts shall not be treated as an annuity contract or life insurance policy for any period (and any subsequent period) for which the underlying assets are not, in accordance with regulations prescribed by the Treasury Department, adequately diversified. On March 2, 1989, the Treasury Department issued Treasury Regulations (Treas. Reg. Section 1.817- 5) that established diversification requirements for Variable Contracts, which require the Separate Accounts upon which these contracts or policies are based to be diversified as provided in the Treasury Regulations. In the case of Separate Accounts that invest in underlying investment companies, the Treasury Regulations provide a “look through” rule that permits the Separate Account to look to the underlying investment company for purposes of meeting the diversification requirements, provided that the beneficial interests in the investment company are held only by the segregated asset accounts of one or more insurance companies. However, the Treasury Regulations also contain certain exceptions to this requirement, one of which allows shares in an investment company to be held by the trustee of a qualified pension or retirement plan without adversely affecting the ability of shares in the same investment company to also be held by Separate Accounts funding Variable Contracts (Treas. Reg. Section 1.817-5(f)(3)(iii)). Another exception allows the investment adviser of the investment company and certain companies related to the investment adviser to hold shares of the investment company, an exception that is often used to provide the capital required by Section 14(a) of the 1940 Act. 7. Qualified Plans may choose the Shares offered as the sole investment under the Qualified Plan or as one of several investments. Qualified Plan participants may or may not be given an investment choice depending on the terms of the Qualified Plan itself. Exercise of voting rights by participants in any such Qualified Plans, as opposed to the trustees of such Qualified Plans, cannot be mandated by the Applicants. Each Qualified Plan must be administered in accordance with the terms of the Qualified Plan and as determined by its trustee or trustees. To the extent permitted under applicable law, an Advisor may act as investment adviser or trustee to Qualified Plans that purchase Shares. 8. Applicants propose that the Insurance Funds also be permitted to offer and/or sell Shares to an Advisor. The Treasury Regulations permit such sales as long as the return on Shares held by the Advisor or its affiliates is computed in the same manner as for Shares held by the Separate Accounts, and the Advisor does not intend to sell the Shares to the public. The Treasury Regulations impose an additional restriction on sales to an Advisor, who may hold Shares only in connection with the creation of an Insurance Fund. Applicants anticipate that sales will be made to an Advisor for the purpose of providing necessary capital required by Section 14(a) of the 1940 Act. Any Shares purchased by an Advisor will automatically be redeemed if and when the Advisor's investment advisory agreement terminates. 9. Applicants propose that the Insurance Funds also be permitted to offer and/or sell Shares to General Accounts. The Treasury Regulations permit sales to General Accounts as long as the return on Shares held by General Accounts is computed in the same manner as for Shares held by a Separate Account, and the General Accounts do not intend to sell the Shares to the Public. Applicants anticipate that sales may be made to General Accounts for purposes of creation of the Insurance Funds. Applicants' Legal Analysis 1. In connection with the funding of scheduled premium variable life insurance policies issued through a Separate Account registered as a unit investment trust (“UIT”) under the 1940 Act, Rule 6e-2(b)(15) provides partial exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act. Section 9(a)(2) of the 1940 Act makes it unlawful for any company to serve as an investment adviser or principal underwriter of any UIT, if an affiliated person of that company is subject to disqualification enumerated in Section 9(a)(1) or
(2)of the 1940 Act. Sections 13(a), 15(a) and 15(b) of the 1940 Act have been deemed by the Commission to require “pass-through” voting with respect to an underlying investment company's shares. Rule 6e-2(b)(15) provides these exemptions apply only where all of the assets of the UIT are shares of management investment companies “which offer their shares exclusively to variable life insurance separate accounts of the life insurer or of any affiliated life insurance company.” Therefore, the relief granted by Rule 6e-2(b)(15) is not available with respect to a scheduled premium life insurance Separate Account that owns shares of an underlying fund that also offers its shares to a variable annuity Separate Account or a flexible premium variable life insurance Separate Account of the same company or any other affiliated company. The use of a common management investment company as the underlying investment vehicle for both variable annuity and variable life insurance Separate Accounts of the same life insurance company or of any affiliated life insurance company is referred to herein as “mixed funding.” 2. The relief granted by Rule 6e-2(b)(15) also is not available with respect to a scheduled premium variable life insurance Separate Account that owns shares of an underlying fund that also offers its shares to Separate Accounts funding Variable Contracts issued by one or more unaffiliated life insurance companies. The use of a common management investment company as the underlying investment vehicle for Separate Accounts funding Variable Contracts issued by one or more unaffiliated life insurance companies is referred to herein as “shared funding.” 3. Moreover, because the relief under Rule 6e-2(b)(15) is available only where shares are offered exclusively to variable life insurance Separate Accounts of a life insurer or any affiliated life insurance company, additional exemptive relief is necessary if the Shares are also to be sold to Qualified Plans, an Advisor and General Accounts (collectively, “Eligible Purchasers”). Applicants note that if the Shares were sold only to Separate Accounts funding variable annuity contracts and/or Eligible Purchasers, exemptive relief under Rule 6e-2(b)(15) would not be necessary. The relief provided for under this section does not relate to Eligible Purchasers or to a registered investment company's ability to sell its shares to Eligible Purchasers. The use of a common management investment company as the underlying investment vehicle for Separate Accounts funding Variable Contracts issued by affiliated and unaffiliated insurance companies, and for Eligible Purchasers, is referred to herein as “extended mixed and shared funding.” 4. In connection with flexible premium variable life insurance contracts issued through a Separate Account registered under the 1940 Act as a UIT, Rule 6e-3(T)(b)(15) provides partial exemptions from Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act. The exemptions granted by Rule 6e-3(T)(b)(15) are available only where all the assets of the Separate Account consist of the shares of one or more registered management investment companies that offer to sell their shares “exclusively to separate accounts of the life insurer, or of any affiliated life insurance companies, offering either scheduled contracts or flexible contracts, or both; or which also offer their shares to variable annuity separate accounts of the life insurer or of an affiliated life insurance company or which offer their shares to any such life insurance company in consideration solely for advances made by the life insurer in connection with the operation of the separate account.” Therefore, Rule 6e-3(T)(b)(15) permits mixed funding but does not permit shared funding. 5. Moreover, because the relief under Rule 6e-3(T)(b)(15) is available only where Shares are offered exclusively to Separate Accounts funding Variable Contracts issued by a life insurer or any affiliated life insurance company, additional exemptive relief is necessary if the Shares are also to be sold to Eligible Purchasers. Applicants note that if the Shares were sold only to Separate Accounts funding variable annuity contracts and/or Eligible Purchasers, exemptive relief under Rule 6e-3(T)(b)(15) would not be necessary. The relief provided for under this section does not relate to Eligible Purchasers or to a registered investment company's ability to sell its shares to Eligible Purchasers. 6. Applicants maintain that there is no policy reason for the sale of the Shares to Eligible Purchasers to result in a prohibition against, or otherwise limit a Participating Insurance Company from relying on the relief provided by Rules 6e-2(b)(15) and 6e-3(T)(b)(15). However, because the relief under Rules 6e-2(b)(15) and 6e-3(T)(b)(15) is available only when shares are offered exclusively to certain Separate Accounts, additional exemptive relief may be necessary if the Shares are also to be sold to Eligible Purchasers. Applicants therefore request relief in order to have the Participating Insurance Companies enjoy the benefits of the relief granted in Rules 6e-2(b)(15) and 6e-3(T)(b)(15) even where Eligible Purchasers are investing in the relevant Insurance Fund. Applicants note that if the Shares were to be sold only to Eligible Purchasers, and/or Separate Accounts funding variable annuity contracts, exemptive relief under Rule 6e-2(b)(15) and Rule 6e-3(T)(b)(15) would be unnecessary. The relief provided for under Rules 6e-2(b)(15) and 6e-3(T)(b)(15) does not relate to Eligible Purchasers, or to a registered investment company's ability to sell its shares to Eligible Purchasers. 7. Consistent with the Commission's authority under Section 6(c) of the 1940 Act to grant exemptive orders to a class or classes of persons and transactions, this Application requests relief for the class consisting of Participating Insurance Companies and their Separate Accounts (and to the extent necessary, investment advisers, principal underwriters and depositors of such Separate Accounts). 8. In effect, the partial relief granted in Rules 6e-2(b)(15) and 6e-3(T)(b)(15) under the 1940 Act from the requirements of Section 9 of the 1940 Act limits the amount of monitoring necessary to ensure compliance with Section 9 to that which is appropriate in light of the policy and purposes of Section 9. Those rules recognize that it is not necessary for the protection of investors or the purposes fairly intended by the policy and provisions of the 1940 Act to apply the provisions of Section 9(a) to individuals in a large insurance complex, most of whom will have no involvement in matters pertaining to investment companies in that organization. Applicants assert that it is also unnecessary to apply Section 9(a) of the 1940 Act to the many individuals in various unaffiliated insurance companies (or affiliated companies of Participating Insurance Companies) that may utilize the Insurance Fund as investment vehicles for Variable Contracts. Applicants argue that there is no regulatory purpose in extending the monitoring requirements to embrace a full application of Section 9(a)'s eligibility restrictions because of mixed funding or shared funding and sales to Qualified Plans, an Advisor or General Accounts. Applicants represent that the Participating Insurance Companies and Qualified Plans are not expected to play any role in the management of the Insurance Funds. Applicants argue that those individuals who participate in the management of the Insurance Funds will remain the same regardless of which Separate Accounts or Qualified Plans invest in the Insurance Funds. Applying the monitoring requirements of Section 9(a) of the 1940 Act because of investment by Separate Accounts of Participating Insurance Companies or Qualified Plans would be unjustified and would not serve any regulatory purpose and could reduce the net rates of return realized by contract owners and Qualified Plan holders due to increased monitoring costs. 9. Rules 6e-2(b)(15)(iii) and 6e-3(T)(b)(15)(iii) under the 1940 Act provide exemptions from pass-through voting requirements with respect to several significant matters, assuming the limitations on mixed and shared funding are observed. Rules 6e-2(b)(15)(iii)(A) and 6e-3(T)(b)(15)(iii)(A) provide that the insurance company may disregard the voting instructions of its contract owners with respect to the investments of an underlying fund, or any contract between such a fund and its investment adviser, when required to do so by an insurance regulatory authority (subject to the provisions of Rules 6e-2(b)(5)(i), 6e-2(b)(7)(ii)(A), 6e-3(T)(b)(5)(i) and 6e-3(T)(b)(7)(ii)(A) under the 1940 Act). Rules 6e-2(b)(15)(iii)(B) and 6e-3(T)(b)(15)(iii)(A)(2) provide that an insurance company may disregard the voting instructions of its contract owners if the contract owners initiate any change in an underlying fund's investment policies, principal underwriter or any investment adviser (provided that disregarding such voting instructions is reasonable and subject to the other provisions of Rules 6e-2(b)(5)(ii), 6e-2(b)(7)(ii)(B), 6e-2(b)(7)(ii)(C), 6e-3(T)(b)(5)(ii), 6e-3(T)(b)(7)(ii)(B), and 6e-3(T)(b)(7)(ii)(C) under the 1940 Act). 10. Rule 6e-2 under the 1940 Act recognizes that a variable insurance contract, as an insurance contract, has important elements unique to insurance contracts and is subject to extensive State regulation. In adopting Rule 6e-2(b)(15)(iii), the Commission expressly recognized that State insurance regulators have authority, pursuant to State insurance laws or regulations, to disapprove or require changes in investment policies, investment advisers, or principal underwriters. The Commission also expressly recognized that State insurance regulators have authority to require an insurer to draw from its general account to cover costs imposed upon the insurer by a change approved by contract owners over the insurer's objection. The Commission, therefore, deemed such exemptions necessary “to assure the solvency of the life insurer and performance of its contractual obligations by enabling an insurance regulatory authority or the life insurer to act when certain proposals reasonably could be expected to increase the risks undertaken by the life insurer.” In this respect, flexible premium variable life insurance contracts are identical to scheduled premium variable life insurance contracts. Therefore, the corresponding provisions of Rule 6e-3(T) under the 1940 Act undoubtedly were adopted in recognition of the same factors. 11. Applicants also assert that the sale of Shares to Qualified Plans, an Advisor and General Accounts will not have any impact on the relief requested herein. With respect to Qualified Plans, which are not registered as investment companies under the 1940 Act, shares of a portfolio of an investment company sold to a Qualified Plan must be held by the trustee(s) of the Qualified Plan pursuant to Section 403(a) of the Employee Retirement Income Security Act (“ERISA”). Applicants note that
(1)Section 403(a) of ERISA endows Qualified Plan trustees with the exclusive authority and responsibility for voting proxies provided neither of two enumerated exceptions to that provision applies;
(2)some of the Qualified Plans may provide for the trustee(s), an investment adviser (or advisers), or another named fiduciary to exercise voting rights in accordance with instructions from participants; and
(3)there is no requirement to pass through voting rights to Qualified Plan participants. 12. Applicants argue that an Advisor and General Accounts are similar in that they are not subject to any pass-through voting requirements. Applicants therefore, conclude that unlike the case with insurance company Separate Accounts, the issue of resolution of material irreconcilable conflicts with respect to voting is not present with Eligible Purchasers. 13. Applicants represent that where a Qualified Plan does not provide participants with the right to give voting instructions, the trustee or named fiduciary has responsibility to vote the shares held by the Qualified Plan. Accordingly, Applicants argue that even if an Advisor or an affiliate of an Advisor were to serve in the capacity of trustee or named fiduciary with voting responsibilities, an Advisor or its affiliates would have a fiduciary duty to vote relevant Shares in the best interest of the Qualified Plan participants. 14. Further, Applicants assert that even if a Qualified Plan were to hold a controlling interest in an Insurance Fund, Applicants do not believe that such control would disadvantage other investors in such Insurance Fund to any greater extent than is the case when any institutional shareholder holds a majority of the voting securities of any open-end management investment company. In this regard, Applicants submit that investment in an Insurance Fund by a Qualified Plan will not create any of the voting complications occasioned by mixed funding or shared funding. Unlike mixed funding or shared funding, Qualified Plan investor voting rights cannot be frustrated by veto rights of insurers or State regulators. 15. Where a Qualified Plan provides participants with the right to give voting instructions, Applicants see no reason to believe that participants in Qualified Plans generally or those in a particular Qualified Plan, either as a single group or in combination with participants in other Qualified Plans, would vote in a manner that would disadvantage Variable Contract holders. Applicants assert that the purchase of Shares by Qualified Plans that provide voting rights does not present any complications not otherwise occasioned by mixed or shared funding. 16. Applicants do not believe that the sale of the Shares to Qualified Plans will increase the potential for material irreconcilable conflicts of interest between or among different types of investors. In particular, Applicants see very little potential for such conflicts beyond those that would otherwise exist between Variable Contract owners. 17. Applicants assert that permitting an Insurance Fund to sell its shares to an Advisor or to the General Account of a Participating Insurance Company will enhance management of each Insurance Fund without raising significant concerns regarding material irreconcilable conflicts. Unlike the circumstances of many investment companies that serve as underlying investment media for variable insurance products, an Insurance Fund may be deemed to lack an insurance company “promoter” for purposes of Rule 14a-2 under the 1940 Act. Accordingly, any Insurance Funds that are established as new registrants may be subject to the requirements of Section 14(a) of the 1940 Act, which generally requires that an investment company have a net worth of $100,000 upon making a public offering of its shares. Insurance Funds also will require more limited amounts of initial capital in connection with the creation of any new series of Shares and the voting of initial Shares of such series on matters requiring the approval of Shareholders. A potential source of the requisite initial capital is an Insurance Fund's investment adviser or a Participating Insurance Company. Either of these parties may have an interest in making the requisite capital investment and in participating with an Insurance Fund in its organization. However, provision of seed capital or the purchase of shares in connection with the management of an Insurance Fund by its investment adviser or by a Participating Insurance Company may be deemed to violate the exclusivity requirement of Rule 6e-2(b)(15) and/or Rule 6e-3(T)(b)(15). 18. Given the conditions of Treas. Reg. Section 1.817-5(f)(3) and the harmony of interest between an Insurance Fund, on the one hand, and an Advisor or a Participating Insurance Company, on the other, Applicants assert that little incentive for overreaching exists. Applicants further assert that such investment should not implicate the concerns discussed above regarding the creation of material irreconcilable conflicts. Instead, Applicants argue that permitting investments by an Advisor, or by General Accounts, will permit the orderly and efficient creation of an Insurance Fund, and reduce the expense and uncertainty of using outside parties at the early stages of the Insurance Fund's operations. Applicants' Conditions Applicants consent to the following conditions with respect to each Insurance Fund: 1. A majority of the Board of each Insurance Fund will consist of persons who are not “interested persons” of the Insurance Fund, as defined by Section 2(a)(19) of the 1940 Act, and the rules thereunder, and as modified by any applicable orders of the Commission, except that if this condition is not met by reason of death, disqualification or bona fide resignation of any trustee or trustees, then the operation of this condition will be suspended:
(a)For a period of 90 days if the vacancy or vacancies may be filled by the Board;
(b)for a period of 150 days if a vote of shareholders is required to fill the vacancy or vacancies; or
(c)for such longer period as the Commission may prescribe by order upon application. 2. The Board of each Insurance Fund will monitor the Insurance Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all Separate Accounts and participants of all Qualified Plans investing in the Insurance Fund, and determine what action, if any should be taken in response to such conflicts. A material irreconcilable conflict may arise for a variety of reasons, including:
(a)An action by any State insurance regulatory authority;
(b)a change in applicable Federal or State insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretive letter, or any similar action by insurance, tax or securities regulatory authorities;
(c)an administrative or judicial decision in any relevant proceeding;
(d)the manner in which the investments of the Insurance Fund are being managed;
(e)a difference in voting instructions given by variable annuity contract owners, variable life insurance contract owners, and trustees of the Qualified Plans;
(f)a decision by a Participating Insurance Company to disregard the voting instructions of contract owners; or
(g)if applicable, a decision by a Qualified Plan to disregard the voting instructions of Qualified Plan participants. 3. Participating Insurance Companies (on their own behalf, as well as by virtue of any investment of General Account assets in an Insurance Fund), an Advisor, and any Trustee on behalf of any Qualified Plan that executes a Participation Agreement upon becoming an owner of 10 percent or more of the assets of an Insurance Fund (collectively, “Participants”) will report any potential or existing conflicts to the Board of the relevant Insurance Fund. Participants will be responsible for assisting the Board in carrying out the Board's responsibilities under these conditions by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This responsibility includes, but is not limited to, an obligation by each Participating Insurance Company to inform the Board whenever contract owner voting instructions are disregarded, and, if pass-through voting is applicable, an obligation by each Trustee for a Qualified Plan to inform the Board whenever it has determined to disregard Qualified Plan participant voting instructions. The responsibility to report such information and conflicts, and to assist the Board, will be a contractual obligation of all Participating Insurance Companies under their Participation Agreement with the relevant Insurance Fund, and these responsibilities will be carried out with a view only to the interests of the contract owners. The responsibility to report such information and conflicts, and to assist the Board, also will be contractual obligations of all Qualified Plans under their Participation Agreement with the relevant Insurance Fund, and such agreements will provide that these responsibilities will be carried out with a view only to the interests of Qualified Plan participants. 4. If it is determined by a majority of the Board of an Insurance Fund, or a majority of the disinterested directors/trustees of such Board, that a material irreconcilable conflict exists, then the relevant Participant will, at its expense and to the extent reasonably practicable (as determined by a majority of the disinterested directors/trustees), take whatever steps are necessary to remedy or eliminate the material irreconcilable conflict, up to and including:
(a)Withdrawing the assets allocable to some or all of their Separate Accounts from the relevant Insurance Fund and reinvesting such assets in a different investment vehicle including another Insurance Fund, submitting the question as to whether such segregation should be implemented to a vote of all affected contract or policy owners and, as appropriate, segregating the assets of any appropriate group ( *i.e.* , variable annuity contract owners or variable life insurance policy owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract or policy owners the option of making such a change; and
(b)establishing a new registered management investment company or managed separate account. If a material irreconcilable conflict arises because of a decision by a Participating Insurance Company to disregard contract or policy owner voting instructions, and that decision represents a minority position or would preclude a majority vote, then the Participating Insurance Company may be required, at the election of the relevant Insurance Fund, to withdraw such Participating Insurance Company's Separate Account investments in the Insurance Fund, and no charge or penalty will be imposed as a result of such withdrawal. If a material irreconcilable conflict arises because of a Qualified Plan's decision to disregard Qualified Plan participant voting instructions, if applicable, and that decision represents a minority position or would preclude a majority vote, the Qualified Plan may be required, at the election of the Insurance Portfolio, to withdraw its investment in the Insurance Fund, and no charge or penalty will be imposed as a result of such withdrawal. The responsibility to take remedial action in the event of a Board determination of a material irreconcilable conflict and to bear the cost of such remedial action will be a contractual obligation of all Participants under their Participation Agreement with the relevant Insurance Fund, and these responsibilities will be carried out with a view only to the interests of contract or policy owners and Qualified Plan participants. For purposes of this Condition 4, a majority of the disinterested directors/trustees of the Board of each Insurance Fund will determine whether or not any proposed action adequately remedies any material irreconcilable conflict, but, in no event, will the Insurance Fund or an Advisor, as relevant, be required to establish a new funding vehicle for any Variable Contract. No Participating Insurance Company will be required by this Condition 4 to establish a new funding vehicle for any Variable Contract if any offer to do so has been declined by vote of a majority of the contract or policy owners materially and adversely affected by the material irreconcilable conflict. Further, no Qualified Plan will be required by this Condition 4 to establish a new funding vehicle for the Qualified Plan if:
(a)A majority of the Qualified Plan participants materially and adversely affected by the irreconcilable material conflict vote to decline such offer, or
(b)pursuant to documents governing the Qualified Plan, the Qualified Plan makes such decision without a Qualified Plan participant vote. 5. The determination by the Board of each Insurance Fund of the existence of a material irreconcilable conflict and its implications will be made known in writing promptly to all Participants. 6. As to Variable Contracts issued by Separate Accounts registered under the 1940 Act, Participating Insurance Companies will provide pass-through voting privileges to all Variable Contract owners as required by the 1940 Act as interpreted by the Commission. However, as to Variable Contracts issued by unregistered Separate Accounts, pass-through voting privileges will be extended to contract owners to the extent granted by the issuing insurance company. Accordingly, such Participants, where applicable, will vote the Shares held in their Separate Accounts in a manner consistent with voting instructions timely received from Variable Contract owners. Participating Insurance Companies will be responsible for assuring that each Separate Account investing in the relevant Insurance Fund calculates voting privileges in a manner consistent with other Participants. The obligation to calculate voting privileges as provided in this Application will be a contractual obligation of all Participating Insurance Companies under their Participation Agreement with the relevant Insurance Fund. Each Participating Insurance Company will vote Shares for which it has not received timely voting instructions, as well as Shares held in its General Account or otherwise attributed to it, in the same proportion as it votes those Shares for which it has received voting instructions. Each Qualified Plan will vote as required by applicable law and governing Qualified Plan documents. 7. As long as the 1940 Act requires pass-through voting privileges to be provided to Variable Contract owners, an Advisor, who has provided seed capital for the Insurance Fund, and any General Account will vote their respective Shares in the same proportion as all variable contract owners having voting rights with respect to that Insurance Fund; provided, however, that an Advisor or any General Account shall vote its Shares in such other manner as may be required by the Commission or its staff. 8. Each Insurance Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, which, for these purposes, shall be the persons having a voting interest in the Shares, and, in particular, the Insurance Fund will either provide for annual meetings (except to the extent that the Commission may interpret Section 16 of the 1940 Act not to require such meetings) or comply with Section 16(c) of the 1940 Act (although each Insurance Fund is not, or will not be, one of those trusts of the type described in Section 16(c) of the 1940 Act), as well as with Section 16(a) of the 1940 Act and, if and when applicable, Section 16(b) of the 1940 Act. Further, each Insurance Fund will act in accordance with the Commission's interpretations of the requirements of Section 16(a) with respect to periodic elections of directors/trustees and with whatever rules the Commission may promulgate thereto. 9. An Insurance Fund will make its Shares available to the Separate Accounts and Qualified Plans at or about the time it accepts any seed capital from an Advisor or General Account of a Participating Insurance Company. 10. Each Insurance Fund has notified, or will notify, all Participants that Separate Account prospectus disclosure or Qualified Plan prospectuses or other Qualified Plan disclosure documents regarding potential risks of mixed and shared funding may be appropriate. Each Insurance Fund will disclose in its prospectus that:
(a)Shares of the Insurance Fund may be offered to Separate Accounts funding both variable annuity contracts and variable life insurance policies and, if applicable, to Qualified Plans;
(b)due to differences in tax treatment and other considerations, the interests of various contract owners participating in the Insurance Fund and the interests of Qualified Plans investing in the Insurance Fund, if applicable, may conflict; and
(c)the Insurance Fund's Board will monitor events in order to identify the existence of any material irreconcilable conflicts and to determine what action, if any, should be taken in response to any such conflict. 11. If and to the extent that Rule 6e-2 and Rule 6e-3(T) under the 1940 Act are amended, or proposed Rule 6e-3 under the 1940 Act is adopted, to provide exemptive relief from any provision of the 1940 Act, or the rules promulgated thereunder, with respect to mixed or shared funding, on terms and conditions materially different from any exemptions granted in the order requested in this Application, then each Insurance Fund and/or Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 or 6e-3(T), or Rule 6e-3, as such rules are applicable. 12. Each Participant, at least annually, will submit to the Board of each Insurance Fund such reports, materials or data as the Board reasonably may request so that the directors/trustees of the Board may fully carry out the obligations imposed upon the Board by the conditions contained in this Application. Such reports, materials and data will be submitted more frequently if deemed appropriate by the Board of an Insurance Fund. The obligations of the Participants to provide these reports, materials and data to the Board, when it so reasonably requests, will be a contractual obligation of all Participants under their Participation Agreement with the relevant Insurance Fund. 13. All reports of potential or existing conflicts received by the Board of each Insurance Fund, and all Board action with regard to determining the existence of a conflict, notifying Participants of a conflict and determining whether any proposed action adequately remedies a conflict, will be properly recorded in the minutes of the Board or other appropriate records, and such minutes or other records shall be made available to the Commission upon request. 14. Each Insurance Fund will not accept a purchase order from a Qualified Plan if such purchase would make the Qualified Plan an owner of 10 percent or more of the assets of the Insurance Fund unless the Trustee for such Qualified Plan executes an agreement with the Insurance Fund governing participation in the Insurance Fund that includes the conditions set forth herein to the extent applicable. A Trustee for a Qualified Plan will execute an application containing an acknowledgement of this condition at the time of its initial purchase of Shares. Conclusions Applicants submit that, for the reasons summarized above and to the extent necessary or appropriate to provide for the transactions described herein, the requested exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, in accordance with the standards of Section 6(c) of the 1940 Act, are in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-8231 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94-409, that the Securities and Exchange Commission will hold the following meeting during the week of April 30, 2007: A Closed Meeting will be held on Thursday, May 3, 2007 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters may also be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (4), (5), (7), (8), (9)(B), and
(10)and 17 CFR 200.402(a)(3), (4), (5), (7), (8), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Commissioner Casey, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the Closed Meeting scheduled for Thursday, May 3, 2007 will be: Formal orders of investigations; Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings of an enforcement nature; Regulatory matters regarding financial institutions; an adjudicatory matter; and Other matters related to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at
(202)551-5400. Dated: April 26, 2007. Nancy M. Morris, Secretary. [FR Doc. E7-8309 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55661; File No. SR-Amex-2007-29] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to the Listing and Trading of Notes Linked to the Performance of the Dow Jones-AIG Commodity Index Total Return April 24, 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 American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared substantially by Amex. On April 5, 2007, Amex filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade notes linked to the performance of the Dow Jones-AIG Commodity Index Total Return (the “Index”). The text of the proposal is available at Amex, the Commission's Public Reference Room, and *http://www.amex.com.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Amex included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below, and the most significant aspects of such statements are set forth in sections A, B, and C below. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Under section 107(A) of the Amex *Company Guide* (the “Company Guide”), the Exchange may approve for listing and trading securities which cannot be readily categorized under the listing criteria for common and preferred stocks, bonds, debentures, or warrants, including index and currency warrants. Amex proposes to list for trading under section 107(A) of the Company Guide floating rate notes (the “Notes”) linked to the performance of the Index. 3 The Exchange submits that it recently received approval to list and trade notes linked to the performance of the Dow Jones-AIG ExEnergy Sub-Index, which is a subset of the Index. 4 The Notes will provide for participation in the positive performance of the Index during their term. 3 Lehman Brothers Holdings Inc. (“Lehman”), Dow Jones & Company, Inc. (“Dow Jones”) and AIG International, Inc. (“AIGI”) have entered into a non-exclusive license agreement providing for the use of the Index by Lehman and certain affiliates and subsidiaries thereof in connection with certain securities including the Notes. 4 *See* Securities Exchange Act Release No. 54790 (November 20, 2006), 71 FR 68645 (November 27, 2006) (SR-Amex-2006-01). The Exchange states that the Notes will conform to the initial listing guidelines under section 107(A) of the Company Guide and the continued listing guidelines under sections 1001-1003 of the Company Guide. The Notes are senior, non-convertible debt securities of Lehman and have a term of thirteen months. The Notes are cash-settled in U.S. dollars and do not give the holder any right or other ownership interest in the Index or commodities comprising the Index. The Notes are designed for investors who desire to participate in, or gain exposure to, an index composed of a basket of actively-traded commodities and receive monthly coupon interest payments, and who are willing to forego principal protection on the Notes during such term. Lehman will issue the Notes in denominations of whole units, with each unit representing a single Note. The original public offering price will be $1,000 per Note. Unless the Notes have been redeemed earlier, at maturity, a holder would receive per each $1,000 Note, a cash amount equal to the Daily Value (as defined herein) per $1,000 Note as of the Valuation Date, 5 *plus* accrued and unpaid coupon payments, to, but excluding, the stated maturity date. The “Daily Value” as of any Index Business Day 6 is calculated as follows: $1,000 + ($1,000 × 3 × (Index Return 7 − (Treasury Bill Return 8 + Adjustment Rate 9 ))). The sum of the Treasury Bill Return and the Adjustment Rate reflects a combination of
(1)The cost of Lehman providing investors with exposure to the Index through the Notes, and
(2)the fee to investors purchasing the Notes. 5 The “Valuation Date” will generally be the third business day before the stated maturity date. 6 An “Index Business Day” means a business day or, but for the occurrence of a Market Disruption Event (as defined herein), a day that would have been a business day, on which the Index is calculated by the Sponsors and published by Dow Jones, or if applicable, on which any successor Index is calculated. A “Market Disruption Event” means any of the following events, as determined in its sole discretion by Lehman Brothers Inc. (the “Calculation Agent”):
(1)The Index value is not calculated by the Sponsors and published by Dow Jones (or any successor Index is not calculated and published by the sponsors thereof);
(2)the termination or suspension of, or material limitation or disruption in, the trading on a relevant exchange of any futures contract included in the Index (or any successor Index);
(3)the settlement price on a relevant exchange of any futures contract included in the Index (or any successor Index) has increased or decreased by an amount equal to the maximum permitted price change from the previous day's settlement price; or
(4)the settlement price of any futures contract included in the Index (or any successor Index) is not published by the relevant exchange. 7 The “Index Return” is equal to the difference between the Closing Index Level (the closing level of the Index on any Index Business Day) and the Initial Index Level (the Closing Index Level on the date of the prospectus supplement), *divided by* the Initial Index Level. If the third business day before the stated maturity date is not an Index Business Day or the Calculation Agent determines that one or more Market Disruption Events has occurred on that day, the Calculation Agent will, subject to certain limitations, calculate the Index Return by determining the Closing Index Level on the next Index Business Day on which there is not a Market Disruption Event (the “Final Index Level”). If such postponement causes the Valuation Date to occur within three business days prior to the scheduled stated maturity date, the stated maturity date will be postponed until three business days after the date that the Final Index Level is determined. 8 The daily “Treasury Bill Return” on any calendar day is the one-day return calculated using the weekly auction high rate for the 91-day Treasury Bill. The Treasury Bill Return as of any Index Business Day means a rate determined by the Calculation Agent by compounding the daily Treasury Bill Return on each calendar day during the term of the Notes. 9 The “Adjustment Rate” means a rate, as determined by the Calculation Agent, which will equal the quotient of
(1)The product of 0.30% *times* the number of calendar days from and including the date of the prospectus supplement to and including the Index Business Day, and
(2)365. Lehman may redeem the Notes early if, on any Index Business Day prior to the Valuation Date, the Daily Value per $1,000 Note falls below a certain pre-determined amount. This day is known as the “Early Redemption Determination Date.” This pre-determined amount will be determined at the time of issuance of the Notes. In the event of redemption, Lehman will pay an amount per $1,000 Note equal to the Daily Value per $1,000 Note calculated as of the first Index Business Day following the Early Redemption Determination Date, *plus* accrued and unpaid coupon payments to, but excluding, the Early Redemption Determination Date. If an event of default occurs and the maturity of the Notes are accelerated, Lehman will pay holders an amount equal to the amount that would have been payable at maturity, calculated as though the date of acceleration was the stated maturity date, and the date three Index Business Days before the date of acceleration was the Valuation Date. If a bankruptcy proceeding is commenced, the claims of a holder of a Note may be limited. Index Description The Index, developed by AIGI, is a proprietary index that is calculated by Dow Jones, AIGI, and AIG Financial Products Corp. (“AIG-FP” and, together with AIGI and Dow Jones, the “Sponsors”) and published by Dow Jones. 10 The methodology for determining the composition and weighting of the Index and for calculating its level is subject to modification by the Sponsors at any time. Dow Jones disseminates the Index level at least every 15 seconds from 8 a.m. to 3 p.m. Eastern Time (“ET”), 11 and publishes a daily Index level at approximately 4 p.m. ET on each DJ-AIG Business Day 12 on its Web site at *http://www.djindexes.com* and on Bloomberg's Web site. 10 AIG-FP is not a broker-dealer or futures commission merchant; however, AIG-FP may have such affiliates. Therefore, AIG-FP
(1)Maintains and agrees to continue to maintain procedures reasonably designed to prevent the use and dissemination by relevant employees of AIG-FP, in violation of applicable laws, rules and regulations, of material non-public information relating to changes in the composition or method of computation or calculation of the Index or the Dow Jones-AIG Commodity Index and
(2)agrees to periodically check the application of such procedures as they relate to personnel of AIG-FP responsible for such changes. Dow Jones has informed the Exchange that it does not have any affiliates engaged in the securities or commodities trading businesses and, as such, do not believe that such firewall procedures are necessary in its case. In addition, the Supervisory and Advisory Committees (as defined herein) are subject to written policies that acknowledge their obligations with respect to material non-public information. 11 Any disseminated Index value after 3 p.m. ET is static due to the close of auction trading of various commodities futures contracts. 12 “DJ-AIG Business Day” is a day on which the weighting of the Index commodities that are open for trading, in the aggregate, is greater than 50% of the overall weight of the commodities comprising the Index. For example, based on the weighting of the Index commodities for 2007, if the Chicago Board of Trade (“CBOT”) and the New York Mercantile Exchange (“NYMEX”) are closed for trading on the same day, such day would not constitute a DJ-AIG Business Day. The Index is re-weighted and re-balanced each year in January on a price-percentage basis. The annual weightings for the Index are determined each year in June or July by AIG-FP under the supervision of the Index Supervisory Committee, 13 announced after approval by such Committee and implemented the following January. 13 On February 21, 2007, Dow Jones announced a change to the Dow Jones-AIG Commodity Index Oversight Committee structure providing for a two-tier committee structure consisting of a “Supervisory Committee” and an “Advisory Committee.” The Supervisory Committee makes all final decisions relating to the Index with the advice and recommendation from the Advisory Committee. The Index is designed to track rolling futures positions in a diversified basket of 19 exchange-traded futures contracts on physical commodities. The 19 physical commodities selected for 2007 are aluminum, coffee, copper, corn, cotton, crude oil, gold, heating oil, lean hogs, live cattle, natural gas, nickel, silver, soybeans, soybean oil, sugar, unleaded gasoline, wheat, and zinc. Unlike equities, which typically entitle the holder to a continuing stake in a corporation, commodity futures contracts normally specify a certain date for the delivery of the underlying physical commodity. The Index tracks what is known as a rolling futures position, which is a position where, on a periodic basis, futures contracts on physical commodities specifying delivery on a nearby date must be sold and futures contracts on physical commodities that have not yet reached the delivery period must be purchased. An investor with a rolling futures position is able to avoid delivering underlying physical commodities while maintaining exposure to those commodities. The rollover for each Index component occurs over a period of five DJ-AIG Business Days each month according to a pre-determined schedule. The 19 physical commodities selected for inclusion in the Index for 2007, and their respective weightings, are as follows: Commodity Weighting (percent) crude oil 12.723561 natural gas 12.546191 soybeans 7.747790 gold 6.825901 aluminum 6.803820 copper 6.187758 live cattle 6.141286 corn 5.627129 wheat 4.715495 unleaded gasoline 3.940958 heating oil 3.789289 cotton 3.146094 sugar 3.122271 coffee 3.021718 lean hogs 3.013524 soybean oil 2.845646 zinc 2.798069 nickel 2.715318 silver 2.288179 Total (rounded) 100.000000 Futures contracts on the Index are currently listed for trading on CBOT. The Index commodities currently trade on United States (“U.S.”) exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange (“LME”). Designated Contracts for Each Index Commodity The Sponsors have established a two-tier committee structure to assist them in connection with the operation of the Index. 14 The two committees are the “Supervisory Committee” and the “Advisory Committee.” 15 The Supervisory Committee provides final decisions regarding the composition and maintenance of the Index with the advice and recommendation of the Advisory Committee. The Supervisory Committee is comprised of three members appointed by Dow Jones and AIG-FP from their respective organizations. The Advisory Committee is comprised of nine prominent members of the financial and academic communities selected by AIG-FP. Both Committees meet annually to consider any changes to be made to the Index for the coming year. The Committees may also meet at such other times as may be necessary. A futures contract, known as a “Designated Contract,” is selected by the Supervisory Committee for each Index commodity. 16 With the exception of several LME contracts, the Supervisory Committee selects the futures contract that is traded in the U.S. and denominated in U.S. dollars. If more than one of those contracts exists, the Supervisory Committee will select the most actively traded contract. Data concerning this Designated Contract will be used to calculate the Index value. If a Designated Contract is terminated or replaced, a comparable futures contract would be selected, if available, to replace that Designated Contract. 14 *See id* . 15 Lehman has informed the Exchange that none of the members of the Supervisory or Advisory Committees is an officer, director, or employee of Lehman. 16 The Supervisory Committee may exclude any otherwise eligible contract from the Index if it determines that it has inadequate liquidity. The Index currently includes contracts traded on LME, which is located in London. During the hours when the LME is closed, Dow Jones uses the last price and the settlement price once they are available in order to publish the Index value through the end of the trading day. The Index value does not reflect any after-hours or overnight trading in contracts traded on LME. The Designated Contracts for the Index commodities included in the Index for 2007 are traded on LME, CBOT, the New York Board of Trade (“NYBOT”), 17 the Chicago Mercantile Exchange, Inc. (“CME”), and NYMEX. The particular commodities futures exchanges for each commodity futures contract are as follows:
(1)Aluminum, nickel, and zinc—LME at *http://www.lme.com* ;
(2)corn, soybeans, soybean oil, and wheat—CBOT at *http://www.cbot.com* ;
(3)live cattle and lean hogs—CME at *http://www.cme.com* ;
(4)coffee, cotton, and sugar—NYBOT at *http://www.nybot.com* ; and
(5)copper, crude oil, gold, heating oil, natural gas, silver, and unleaded gasoline—NYMEX at *http://www.nymex.com.* In addition, various market data vendors and financial news publications publish futures prices and data. The Exchange represents that futures quotes and last sale information for the commodities underlying the Index are widely disseminated through a variety of major market data vendors worldwide, including Bloomberg and Reuters. 17 NYBOT recently was purchased by the Intercontinental Exchange (“ICE”) and is now a regulated subsidiary of ICE. Determination of Relative Weightings The relative weightings of the component commodities included in the Index are determined annually according to both liquidity and dollar-adjusted production data in 2/3 and 1/3 shares, respectively. Each June, for each commodity designated for potential inclusion in the Index, liquidity is measured by the commodity liquidity percentage (“CLP”) and production by the commodity production percentage (“CPP”). The CLP for each commodity is determined by taking a five-year average of the product of the trading volume and the historic dollar value of the designated contract for that commodity, and dividing the result by the sum of such products for all commodities which were designated for potential inclusion in the Index. The CPP is determined for each commodity by taking a five-year average of annual world production figures, adjusted by the historic dollar value of the designated contract, and dividing the result by the sum of such production figures for all the commodities which were designated for potential inclusion in the Index. The CLP and the CPP are then combined (using a ratio of 2:1) to establish the commodity index percentage (“CIP”) for each commodity. This CIP is then adjusted in accordance with certain diversification rules in order to determine the commodities which will be included in the Index and their respective percentage weights. The Index is designed to provide diversified exposure to commodities as an asset class. To ensure that no single commodity or commodity sector dominates the Index, the following diversification rules are applied to the annual re-weighting and re-balancing of the Index as of January of the applicable year: • No related group of commodities designated as a commodity group ( *e.g.* , energy, precious metals, livestock, or grains) may constitute more than 33% of the Index. • No single commodity may constitute more than 15% of the Index. • No single commodity, together with its derivatives ( *e.g.* , crude oil, together with heating oil and unleaded gasoline), may constitute more than 25% of the Index. Following the annual re-weighting and re-balancing of the Index in January, the percentage of any single commodity or group of commodities at any time prior to the next re-weighting or re-balancing will fluctuate and may exceed or be less than the percentages set forth above. Following application of the diversification rules, CIPs are incorporated into the Index by calculating the new unit weights for each Index commodity. Near the beginning of each new calendar year, the CIPs, along with the settlement prices on that date for designated contracts included in the Index, are used to determine a commodity index multiplier (“CIM”) for each Index commodity. This CIM is used to achieve the percentage weightings of the Index commodities, in dollar terms, indicated by their respective CIPs. After the CIMs are calculated, they remain fixed throughout the year. As a result, the observed price percentage of each Index commodity will float throughout the year until the CIMs are reset the following year based on new CIPs. The Index is calculated by the Sponsors by applying the impact of the changes to the futures prices of commodities included in the Index (based on their relative weightings). Once the CIMs are determined, the calculation of the Index is a mathematical process whereby the CIMs for the Index commodities are multiplied by the prices in U.S. dollars for the applicable designated contracts. These products are then summed (during the rollover period, the sum includes both nearby and deferred contracts weighted according to the specified roll percentage). The percentage change in this sum from the sum of the prior day is then applied to the prior Index level to arrive at the current Index value. Finally, the returns on cash collateral invested in Treasury Bills, which are calculated using the most recent weekly auction high rate for 91-day Treasury Bills, are added to the current Index value to arrive at the Index level. Index Calculation Disruption Events From time to time, disruptions can occur in trading futures contracts on various commodity exchanges. The daily calculation of the Index may be adjusted in the event that the Sponsors determine that any of the following Index calculation disruption events exists: • The termination or suspension of, or material limitation or disruption in, the trading of any futures contract used in the calculation of the Index on that day; • The settlement price of any futures contract used in the calculation of the Index reflects the maximum permitted price change from the previous day's settlement price; • The failure of an exchange to publish settlement prices for any futures contract used in the calculation of the Index; or • With respect to any futures contract used in the calculation of the Index that trades on LME, a business day on which LME is not open for trading. The Exchange submits that for a temporary disruption in the trading of a futures contract, AIGI will typically use the prior day's price for an Index commodity or commodities. In exceptional cases, AIGI may employ a “fair value” price. However, the Exchange represents that if the use of a prior day's price or “fair value” pricing for an Index commodity or commodities continues for more than one day, the Exchange will commence delisting the Notes. Exchange Rules Applicable to the Notes Amex represents that the Notes will trade on the Exchange subject to existing Amex trading rules applicable to the Notes 18 including, among others, rules governing priority, parity, and precedence of orders, specialist responsibilities, account opening, and customer suitability requirements. In addition, the Notes will be subject to the equity margin rules of the Exchange. 19 18 E-mail from Jeffrey P. Burns, Associate General Counsel, Amex, to Edward Cho, Special Counsel, Division of Market Regulation (“Division”), Commission, dated April 24, 2007 (clarifying the scope of the trading rules governing the Notes traded on the Exchange). *See infra* note 23. 19 *See* Amex Rule 462. Criteria for Initial and Continued Listing The Exchange represents that it prohibits the initial and/or continued listing of any security that is not in compliance with Rule 10A-3 under the Act. 20 The Exchange further represents that the Notes will meet the listing requirements set forth in Section 107(A) of the Company Guide as well as the continued listing requirements set forth in Sections 1001 through 1003 of the Company Guide. The Exchange also has a general policy that prohibits the distribution of material, non-public information by its employees. 20 *See* 17 CFR 240.10A-3(c)(1). Trading Halts The Exchange states that it will halt trading in the Notes if the circuit breaker parameters of Amex Rule 117 have been reached. In exercising its discretion to halt or suspend trading in the Notes, the Exchange may consider factors such as those set forth in Amex Rule 918C(b), in addition to other factors that may be relevant. In particular, if the Index value is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the Index value occurs. If the interruption to the dissemination of the Index value persists past the trading day on which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. Surveillance The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Notes. Specifically, Amex will rely on its existing surveillance procedures governing index-linked securities which are similar to its surveillance procedures governing exchange-traded funds and trust-issued receipts. With regard to the Index components, the Exchange currently has in place a comprehensive surveillance sharing arrangement with ICE, LME, and NYMEX, for the purpose of providing information in connection with trading in or related to futures contracts comprising the Index and traded on their respective exchanges. The Exchange also notes that CBOT, CME, and NYBOT are members of the Intermarket Surveillance Group (“ISG”). As a result, the Exchange asserts that it can obtain all necessary market surveillance information, 21 including customer identity information, from CBOT, CME, ICE, LME, NYBOT, and NYMEX, if necessary, due to regulatory concerns that may arise in connection with the commodity futures contracts underlying the Index. 21 E-mail from Jeffrey P. Burns, Associate General Counsel, Amex, to Edward Cho, Special Counsel, Division, Commission, dated April 16, 2007 (confirming the scope of ISG market surveillance information). Information Circular The Exchange will, prior to trading the Notes, distribute an Information Circular to its membership providing guidance with regard to member firm compliance responsibilities (including suitability recommendations) 22 when handling transactions in the Notes and highlighting the special risks and characteristics of the Notes. In addition, the Circular will disclose the applicable trading rules governing the trading of the Notes on the Exchange 23 and that Lehman will deliver a prospectus in connection with the initial sales of the Notes and will reference that the Commission has no jurisdiction over the trading of the physical commodities or the futures contracts or on the commodities upon which the value of the Notes is based. 22 With respect to suitability recommendations and risks, the Exchange will require members, member organizations, and employees thereof recommending a transaction in the Notes:
(1)To determine that such transaction is suitable for the customer, and
(2)to have a reasonable basis for believing that the customer can evaluate the special characteristics of, and is able to bear the financial risks of, such transaction. 23 E-mail from Jeffrey P. Burns, Associate General Counsel, Amex, to Edward Cho, Special Counsel, Division, Commission, dated April 24, 2007 (specifying that information about the particular trading rules governing the Notes traded on the Exchange would also be identified in the Information Circular). 2. Statutory Basis The proposed rule change is consistent with Section 6 of the Act, 24 in general, and furthers the objectives of Section 6(b)(5), 25 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 24 15 U.S.C. 78f. 25 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would 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 did not receive any written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which Amex consents, the Commission will:
(A)By order approve such proposed rule change, or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. Amex has requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of the notice of the filing thereof. The Commission has determined that a 15-day comment period is appropriate in this case. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *(http://www.sec.gov/rules/sro.shtml)* ; or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-Amex-2007-29 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2007-29. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site *(http://www.sec.gov/rules/sro.shtml)* . Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2007-29 and should be submitted on or before May 16, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 26 26 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-8224 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55663; File No. SR-Amex-2007-39] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add Additional Exceptions to Rule 126A-AEMI Relating to the Generation of Intermarket Sweep Orders April 24, 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 April 20, 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. Amex has filed this proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(5) 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)(5). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Amex proposes to adopt changes to Rule 126A—AEMI in order to fully conform the list of circumstances described therein with additional exceptions
(a)Listed in Rule 611(b) of Regulation NMS 5 or
(b)separately granted by the Commission pursuant to exemptive orders issued pursuant to Rule 611(d) of Regulation NMS. 6 The following resultant changes to Rule 126A—AEMI are proposed:
(i)Addition of the “stopped order” exception specified under Rule 611(b)(9) of Regulation NMS; 7
(ii)addition of an exception for “qualified contingent trades”; 8 and
(iii)addition of an exception for certain “sub-penny trade-throughs.” 9 5 17 CFR 242.611(b). 6 17 CFR 242.611(d). 7 17 CFR 242.611(b). 8 *See* Securities Exchange Act Release No. 54389 (August 31, 2006), 71 FR 52829 (September 7, 2006). 9 *See* Securities Exchange Act Release No. 54678 (October 31, 2006), 71 FR 65018 (November 6, 2006). The text of the proposed rule change is available on Amex's Web site at *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, Amex included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Amex has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is currently operating, and has adopted rules in connection with the operation of, its new hybrid market trading platform for equity products and exchange traded funds, designated as AEMI SM (the Auction and Electronic Market Integration platform). Rule 126A—AEMI is the Exchange's effectuation of Rule 611 of Regulation NMS (“Order Protection Rule”), whereby trading centers are required to “establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent trade-throughs on that trading center of protected quotations in NMS stocks,” subject to certain exceptions. Rule 126A—AEMI, in relevant part, currently requires AEMI to generate an intermarket sweep order to any away market displaying a protected quotation simultaneously with the execution of a transaction on the Amex that would constitute a trade-through, except when one or more of eight circumstances—all contemplated in Rule 611 of Regulation NMS 10 —exist. 10 17 CFR 242.611(b). The current proposed changes are intended to expand the list of exceptional circumstances in Rule 126A—AEMI to include:
(i)An additional exception from Rule 611(b)(9) of Regulation NMS 11 pertaining to certain “stopped orders” for which the Amex had, at the time of receipt of the order, guaranteed an execution at no worse than a specified price; 12
(ii)an additional exception for “qualified contingent trades”; 13 and
(iii)an additional exception for certain “sub-penny trade-throughs.” 14 11 17 CFR 242.611(b)(9). 12 Although Rule 109—AEMI prohibits granting or accepting a stop with respect to a security traded in AEMI, this exemption may still be applicable in certain situations such as error corrections. 13 *See* Securities Exchange Act Release No. 54389 (August 31, 2006), 71 FR 52829 (September 7, 2006). 14 *See* Securities Exchange Act Release No. 54678 (October 31, 2006), 71 FR 65018 (November 6, 2006). The Exchange asserts that the proposal to effect the foregoing changes to the AEMI trading system does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and does not have the effect of limiting the access to or availability of the system. 2. Statutory Basis The proposed rule change is designed to be consistent with Regulation NMS, as well as consistent with Section 6(b) of the Act, 15 in general, and furthers the objectives of Section 6(b)(5) thereunder, 16 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and national market system and, in general, to protect investors and the public interest. 15 15 U.S.C. 78f(b). 16 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change will impose no burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not:
(1)Significantly affect the protection of investors or the public interest;
(2)impose any significant burden on competition; and
(3)have the effect of limiting the access to or availability of an existing order entry or trading system of the Exchange, the foregoing rule change has become effective immediately pursuant to Section 19(b)(3)(A)(iii) of the Act 17 and Rule 19b-4(f)(5) thereunder. 18 At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. 17 15 U.S.C. 78s(b)(3)(A)(iii). 18 17 CFR 240.19b-4(f)(5). 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 at *http://www.sec.gov/rules/sro.shtml;* or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-Amex-2007-39 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-Amex-2007-39. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-Amex-2007-39 and should be submitted on or before May 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 19 19 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-8225 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55664; File No. SR-CBOE-2007-36] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Increase the Class Quoting Limit in Ten Option Classes April 24, 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 April 14, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the CBOE. The Exchange has designated this proposal as one constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule under Section 19(b)(3)(A)(i) of the Act, 3 and Rule 19b-4(f)(1) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(i). 4 17 CFR 240.19b-4(f)(1). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to increase the class quoting limit in ten option classes. The text of the proposed rule change is available on CBOE's Web site *(http://www.cboe.com)* , at the CBOE's Office of the Secretary, and at the Commission's public reference room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CBOE Rule 8.3A, Maximum Number of Market Participants Quoting Electronically per Product, establishes class quoting limits (“CQLs”) for each class traded on the Hybrid Trading System. 5 A CQL is the maximum number of quoters that may quote electronically in a given product and the current levels are established from 25-40, depending on the trading activity of the particular product. 5 *See* Rule 8.3A.01. Rule 8.3A, Interpretation .01(c) provides a procedure by which the President of the Exchange may increase the CQL for a particular product. In this regard, the President of the Exchange may increase the CQL in exceptional circumstances, which are defined in the rule as “substantial trading volume, whether actual or expected.” 6 The effect of an increase in the CQL is procompetitive in that it increases the number of market participants that may quote electronically in a product. The purpose of this filing is to increase the CQL in the following option classes as described below: 6 “Any actions taken by the President of the Exchange pursuant to this paragraph will be submitted to the SEC in a rule filing pursuant to Section 19(b)(3)(A) of the Exchange Act.” Rule 8.3A.01(c). Option class Current CQL New CQL Apple Inc.
(AAPL)47 60 Dendreon Corporation
(DNDN)40 50 Crocs Inc.
(CROX)30 35 Goldman Sachs Group Inc.
(GS)40 45 Intercontinental Exchange, Inc.
(ICE)40 45 Mastercard Incorporated Class A 35 40 Nymex Holding
(NMX)30 40 NYSE Euronext
(NYX)45 55 Research in Motion
(RIMM)42 60 Sunpower Corporation Class A
(SPWR)25 30 The trading volume in these option classes recently has increased substantially. Increasing the CQL in these classes will enable the Exchange to enhance the liquidity offered, thereby offering deeper and more liquid markets. 2. Statutory Basis CBOE believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of section 6(b) of the Act. 7 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 8 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. 7 15 U.S.C. 78(f)(b). 8 15 U.S.C. 78(f)(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE 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 neither received nor solicited written comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change will take effect upon filing with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act 9 and Rule 19b-4(f)(1) thereunder, 10 because it constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. 9 15 U.S.C. 78s(b)(3)(A)(i). 10 17 CFR 240.19b-4(f)(1). 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-CBOE-2007-36 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2007-36. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2007-36 and should be submitted on or before May 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 Florence E. Harmon, Deputy Secretary. 11 17 CFR 200.30-3(a)(12). [FR Doc. E7-8223 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55667; File No. SR-NASDAQ-2007-004] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Establish Rules Governing the Trading of Options on the NASDAQ Options Market April 25, 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 January 30, 2007, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission” or “SEC”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by Nasdaq. On April 24, 2007, Nasdaq filed Amendment No. 1 to the proposal. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superseded the original filing in its entirety. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to adopt rules to govern participation in the NASDAQ Options Market, LLC (“NOM”), which will be an options exchange facility of Nasdaq. Nasdaq represents that NOM will operate a fully automated, price/time priority execution system built on the core functionality of Nasdaq's recently-approved Single Book equities platform, meaning that Nasdaq will operate its options market much as it operates its cash equities market today. 4 4 Nasdaq will file with the Commission pursuant to Rule 19b-4 under the Act a separate proposed rule change to establish NOM as a facility (as defined in Section 3(a)(2) of the Act) of Nasdaq. Nasdaq believes that NOM will benefit individual investors, options trading firms, and the options market generally. The entry of an innovative, low cost competitor such as Nasdaq will promote competition, spurring existing markets to improve their own execution systems and reduce trading costs. NOM will differentiate its market by offering executions in price/time priority, a feature that should increase order interaction and yield better executions. NOM's execution system will be designed to quote in penny increments where consistent with the Commission's penny pilot program for options, advancing the Commission's efforts to move the industry to penny quoting in an orderly fashion and helping to narrow spreads, reduce payment for order flow, and enhance price competition. 5 The text of the proposed rule change is available on Nasdaq's Web site at *http://www.nasdaq.com* , on the Commission's Web site at *http://www.sec.gov* , at Nasdaq, and at the Commission's Public Reference Room. 5 *See, e.g.* , Securities Exchange Act Release No. 55162 (January 24, 2007), 72 FR 4738 (February 1, 2007) (approving SR-Amex-2006-106). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it had received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq is proposing to adopt a series of rules in connection with NOM, which will be a facility of Nasdaq. NOM will operate an electronic trading system developed to trade options (“System”) that will provide for the electronic display and execution of orders in price/time priority without regard to the status of the entities that are entering orders. The System will provide a routing service for orders when trading interest is not present on NOM, and will link with and comply with the obligations of the Plan for the Purpose of Creating and Operating an Intermarket Linkage (“Linkage Plan”). NOM Options Participants All Nasdaq members will be eligible to participate in NOM provided that Nasdaq specifically authorizes them to trade in the System. New Nasdaq members will be required to fulfill the requirements of the Nasdaq Rule 1000 Series as well as the incremental requirements set forth in the proposed options rules; existing Nasdaq members will be required to comply with the incremental requirements of the proposed options rules. The proposed rules avoid to the greatest extent possible proposing requirements that overlap with the rules already set forth in the Rule 1000 Series of the Nasdaq Rule Manual. NOM will have only one category of members, known as “Options Participants.” Only Options Participants will be permitted to transact business on NOM via the System. Nasdaq will authorize any Options Participant who meets certain enumerated qualification requirements to obtain access to NOM. Among other things, Options Participants must be registered as broker-dealers pursuant to the Act and have as the principal purpose of being an Options Participant the conduct of a securities business. Every Options Participant shall at all times maintain membership in another registered options exchange that is not registered solely under Section 6(g) of the Act. 6 It is Nasdaq's intent not to serve as a Designated Options Examining Authority, and Nasdaq will work with the Commission and the other registered options exchanges to ensure that each Options Participant will have as its DOEA a registered options exchange other than Nasdaq. Options Participants that transact business with customers must at all times be members of the National Association of Securities Dealers (“NASD”). 6 15 U.S.C. 78f(g). There will be two types of Options Participants, Options Order Entry Firms (“OEFs”) and Options Market Makers. OEFs will be those Options Participants representing customer orders as agent on NOM and non-market maker participants conducting proprietary trading as principal. NOM will not list an options series for trading unless at least one Options Market Maker is registered in that options series. In addition, before NOM opens trading for any additional series of an options class, it would require at least one Options Market Maker to be registered for trading in that particular series. NOM may suspend or terminate any registration of an Options Market Maker when, in NOM's judgment, the interests of a fair and orderly market are best served by such action. Options Market Makers are Options Participants registered with Nasdaq as Options Market Makers and registered with NOM in one or more series of options listed on NOM. Nasdaq is proposing to permit Options Market Makers to register on a series-by-series basis. Nasdaq does not view NOM as a “one-stop-shop” for trading all options. Nasdaq believes that permitting Options Market Makers to limit their registration to series in which they are eager to provide liquidity is an efficient way to identify options that will be actively traded on NOM. This will also allow Nasdaq to mitigate its use of excessive quote message capacity of the national market system and of vendors. To encourage Options Market Makers to provide liquidity in the greatest number of options series, Nasdaq is proposing to require Options Market Makers to execute at least 75% of their total options contracts executed on NOM in options series in which they are registered as Options Market Makers. To become an Options Market Maker, an Options Participant is required to register by filing a written application. NOM will not place any limit on the number of entities that may become Options Market Makers. NOM Options Market Makers will be required to electronically engage in a course of dealing to enhance liquidity available on NOM and to assist in the maintenance of fair and orderly markets. Among other things, Options Market Makers would have to satisfy the following responsibilities and duties during trading:
(i)Maintain a two-sided market for at least 10 contracts in at least seventy-five percent (75%) of the options series to which the Options Market Maker is registered;
(ii)participate in the opening; and
(iii)maintain minimum net capital in accordance with Commission and Nasdaq Rules. Substantial or continued failure by an Options Market Maker to meet any of its obligations and duties will subject the Options Market Maker to disciplinary action, suspension, or revocation of the Options Market Maker's registration in one or more options series. Options Market Makers receive certain benefits for carrying out their duties. For example, a lender may extend credit to a broker-dealer without regard to the restrictions in Regulation T of the Board of Governors of the Federal Reserve System 7 if the credit is to be used to finance the broker-dealer's activities as a market maker on a national securities exchange. Thus, an Options Market Maker has a corresponding obligation to hold itself out as willing to buy and sell options for its own account on a regular or continuous basis to justify this favorable treatment. This goal will be supported by Nasdaq's proposal to require Options Market Makers to execute at least 75% of their total contracts in series in which they are registered Options Market Makers. 7 12 CFR part 220. Nasdaq is proposing an Order Exposure requirement comparable to that which currently applies on other registered options exchanges. Specifically, as set forth in Chapter VII, Section 14, with respect to orders routed to NOM, Options Participants may not execute as principal orders they represent as agent unless
(i)Agency orders are first exposed on NOM for at least three
(3)seconds, or
(ii)the Options Participant has been bidding or offering on NOM for at least three
(3)seconds prior to receiving an agency order that is executable against such bid or offer. Execution System Nasdaq's options trading system will leverage Nasdaq's current state of the art technology, including its customer connectivity, messaging protocols, quotation and execution engine, order router, data feeds, and network infrastructure. This approach minimizes the technical effort required for existing Nasdaq members to begin trading options on NOM. As a result, NOM will closely resemble Nasdaq's equities market, but will differ from most existing options exchanges by, most prominently, offering true price/time priority across all orders and participants rather than differentiating between Participant/trading interest classes. 8 8 Nasdaq has determined that its proposed execution system can execute accommodation trades and, therefore, Nasdaq does not propose to offer a Cabinet Trading System as other exchanges have chosen to do. Like the Nasdaq system for equities, all trading interest entered into the Options Trading System will be automatically executable. Orders entered into the system will be displayed anonymously or with attribution or non-displayed. For Participants seeking to trade anonymously, the NOM execution system will offer fully anonymous trading, however, options trades are not currently anonymous through settlement. NOM will become an exchange member of the Options Clearing Corporation (“OCC”). 9 The System will be linked to OCC for Nasdaq to transmit locked-in trades for clearance and settlement. 9 Nasdaq Execution Services will maintain its OCC membership as it will maintain the ability to route orders to the options exchanges as Nasdaq's broker-dealer subsidiary. *Hours of Operation.* The options trading system will operate between the hours of 8 a.m. ET and market close, with all orders being available for execution from 9:30 a.m. to market close. *Minimum Quotation and Trading Increments.* Nasdaq is proposing to apply the following quotation increments:
(1)If the options series is trading at less than $3.00, five
(5)cents;
(2)if the options series is trading at $3.00 or higher, ten
(10)cents; and
(3)if the options series is trading pursuant to the Penny Pilot program 10 one
(1)cent if the options series is trading at less than $3.00, five
(5)cents if the options series is trading at $3.00 or higher, except for the QQQQs, where the minimum quoting increment will be one cent for all series. In addition, Nasdaq is proposing that the minimum trading increment for options contracts traded on NOM will be one
(1)cent for all series. 10 *See supra* note 5. *NASDAQ Opening/Halt and Closing Crosses.* The NOM system will support a single price opening or re-opening via an electronic cross. The NOM crosses at the opening and at the resumption of trading following a halt are modeled on the highly-acclaimed crosses that Nasdaq developed for the trading of equities, as set forth in Nasdaq Rules 4753 (Halt Cross) and 4754 (Closing Cross). At the opening of trading and also at any resumption following a halt, NOM will execute a cross modeled on the Nasdaq Halt Cross. The Halt Cross will be used, rather than the Nasdaq Opening Cross, because the Opening Cross is designed to operate in the midst of a continuous market such as exists for equities prior to 9:30 a.m., whereas the Halt Cross is designed to operate in the absence of a continuous market such as exists for equities that are halted and also exists for options trading at 9:30 a.m. Registered Options Market Makers will be required to participate in the opening of the market by, at a minimum, opening their quotations. Orders may be submitted, modified, and cancelled throughout a brief pre-opening phase preceding the commencement of trading on the market. During this pre-opening phase, NOM will calculate and disseminate a theoretical opening price, order imbalance, and the size and direction of any imbalance. Thereafter, NOM will determine via algorithm a single price at which a particular options series will open and will match via algorithm the maximum number of available orders. At the close of trading, NOM will conduct a single price cross based upon the Nasdaq Closing Cross for equities. The NOM Closing Cross will utilize the same elements as the opening/halt crosses, including the dissemination of potential closing prices and imbalance information as well as algorithms to determine the closing cross price and to pair available orders. The closing cross differs from the opening/halt crosses in that NOM will offer special market-on-close and limit-on-close orders that only participate in the closing cross and not in the continuous market. *Order Types.* The proposed System will make available to Participants Limit Orders, Discretionary Orders, Reserve Orders, Minimum Quantity Orders, Market Orders, and Price Improving Orders with characteristics and functionality similar to what is currently approved for use in the Nasdaq's equities trading facility. Nasdaq does not propose to adopt “complex” orders at this time, but may propose them for separate consideration in the future. “Limit Orders” are orders to buy or sell options at a specified price or better. A limit order is marketable when, for a limit order to buy, at the time it is entered into the System, the order is priced at the current inside offer or higher, or for a limit order to sell, at the time it is entered into the System, the order is priced at the inside bid or lower. “Discretionary Orders” are orders that have a displayed price and size, as well as a non-displayed discretionary price range, at which the entering party, if necessary, is also willing to buy or sell. The non-displayed trading interest is not entered into the System book but is, along with the displayed size, converted to an Immediate or Cancel (“IOC”) buy
(sell)order priced at the highest (lowest) price in the discretionary price range when displayed contracts become available on the opposite side of the market or an execution takes place at any price within the discretionary price range. The generation of this IOC order is triggered by the automatic cancellation of the displayed contracts portion of the Discretionary Order. If more than one Discretionary Order is available for conversion to an IOC order, the system will convert and process all such orders in the same priority in which such Discretionary Orders were entered. If an IOC order is not executed in full, the unexecuted portion of the order is automatically re-posted and displayed in the System book with a new time stamp, at its original displayed price, and with its non-displayed discretionary price range. “Reserve Orders” are limit orders that have both a displayed size as well as an additional non-displayed amount. Both the displayed and non-displayed portions of the Reserve Order are available for potential execution against incoming orders. If the displayed portion of a Reserve Order is fully executed, the System will replenish the display portion from reserve. A new timestamp is created for the replenished portion of the order each time it is replenished from reserve, while the reserve portion retains the time-stamp of its original entry. “Minimum Quantity Orders” are orders that require that a specified minimum quantity of contracts be obtained, or the order is cancelled. Minimum Quantity Orders may only be entered with a time-in-force designation of IOC. Minimum Quantity Orders with an IOC time in force received prior to the opening cross will be rejected. “Market Orders” are orders to buy or sell at the best price available at the time of execution. “Price Improving Orders” are orders to buy or sell an option at a specified price at an increment smaller than the minimum price variation in the security. Price Improving Orders may be entered in increments as small as one cent. Price improving orders that are available for display will be displayed at the appropriate minimum quotation increment (rounding down to the proper increment for buys, up to the proper increment for sells). *Time in Force Designations.* Participants entering orders into the System may designate such orders to remain in force and available for display and/or potential execution for varying periods of time. Unless cancelled earlier, once these time periods expire, the order (or the unexecuted portion thereof) is returned to the entering party. “Expire Time” or “EXPR” are orders that, if after entry into the System, the order is not fully executed, the order (or the unexecuted portion thereof) shall remain available for potential display and/or execution for the amount of time specified by the entering Participant unless canceled by the entering party. EXPR Orders will be available for entry from 8 a.m. until market close and for execution from 9:30 a.m. until market close. “Immediate Or Cancel” or “IOC” orders are orders that if, after entry into the System, a marketable limit order (or unexecuted portion thereof) becomes non-marketable, the order (or unexecuted portion thereof) will be canceled and returned to the entering participant. IOC Orders will be available for entry from 8 a.m. until market close and for potential execution from 9:30 a.m. until market close. IOC Orders entered between 8 a.m. and 9:30 a.m. Eastern Time will be held within the System until 9:30 a.m. at which time the System shall determine whether such orders are marketable. “DAY” orders are orders that if, after entry into the System, the order is not fully executed, the order (or unexecuted portion thereof) will remain available for potential display and/or execution until market close, unless canceled by the entering party, after which it shall be returned to the entering party. DAY Orders will be available for entry from 8 a.m. until market close and for potential execution from 9:30 a.m. until market close. “Good Til Cancelled” or “GTC” orders are orders that if, after entry into System, the order is not fully executed, the order (or unexecuted portion thereof) will remain available for potential display and/or execution unless cancelled by the entering party, or until the option expires, whichever comes first. GTC Orders will be available for entry from 8 a.m. until market close and for potential execution from 9:30 a.m. until market close. *Order Display/Matching System.* The System will be based upon functionality currently approved for use in Nasdaq's equities trading system. Specifically, the System will allow participants to enter priced limit orders to buy and sell NOM-listed options as attributed, non-attributed, or non-displayed orders. Attributable Orders are designated for display (price and size) next to the Participant's MPID. Non-Attributable Orders are entered by a Participant and designated for display (price and size) on an anonymous basis in the order display service of the System. Non-Displayed Orders are not displayed in the System, but nevertheless remain available for potential execution against all incoming orders until executed in full or cancelled. Options Participants will be permitted to enter multiple orders at single or multiple price levels and will have the option to have a portion of their order held in reserve and not displayed to the marketplace. *Routing.* NOM will support orders that are designated to be routed to the National Best Bid and Offer (“NBBO”) as well as orders that will execute only within NOM. Orders that are designated to execute at the NBBO will be routed to other options markets to be executed when Nasdaq is not at the NBBO, consistent with the Options InterMarket Linkage. The system will ensure that orders designated to only execute within the system will not create a trade through or locked or crossed market violation. *Book Processing.* The System, like the equities facility, will have a single execution algorithm based on price/time priority. For each order, among equally-priced or better-priced trading interest, the System executes against available contra-side displayed contract amounts in full, in price/time priority, before then moving to any non-displayed contracts which are likewise executed in price/time priority. *Data Feed.* The System will create a proprietary data feed which will include all displayed orders, both attributable and non-attributable. Initially, in order to save capacity, the proprietary data will not include the market participant identifiers for attributable orders. Linkage Plan Rules NOM will participate in the Linkage Plan to receive orders from options exchanges that use the Options Intermarket Linkage (“Linkage”) to route orders. Nasdaq plans to use its proprietary order router to send orders to other options exchanges. Nonetheless, in order to participate and to receive orders, NOM is proposing to adopt rules relating to the Linkage that are substantially similar to the rules in place on all of the options exchanges that are Participants to the Linkage Plan. In general, the proposed rules contain relevant definitions, establish the conditions pursuant to which Market Makers may enter Linkage orders, impose obligations on NOM regarding how it must process incoming Linkage orders, and establish a general standard that Options Participants should avoid trade-throughs. The proposed NOM Rules establish potential regulatory liability for Options Participants who engage in a pattern or practice of trading through other exchanges, establish obligations with respect to locked and crossed markets, and restrict a market maker on NOM from sending principal orders (other than principal acting as agent [“P/A”] orders), which reflect unexecuted customer orders through the Linkage if the market maker affects less than 80% of specified order flow on NOM. For those limited instances where Nasdaq does use the Linkage to send orders, Nasdaq is proposing to designate one Market Maker per eligible class as the “InterMarket Linkage Market Maker” or “ILM” to be responsible for settling P/A and Satisfaction orders that would be sent to away markets through the Linkage for a given class of options trading on NOM. 11 The ILM responsible for such orders will be specifically designated in each Eligible Class traded on NOM and will be required to adhere to the responsibilities of an Eligible Market Maker, as set forth in the Linkage Plan. 11 The ILM will perform the same functions that the BOX InterMarket Linkage Market Maker performs on the Boston Options Exchange facility of the Boston Stock Exchange (“BOX”). *See* BOX Rules, Chapter VI, Section 5(a)(ix) and Chapter XII. The ILM also will be required to act with due diligence with regard to the interests of orders entrusted to it and fulfill other duties of an agent, including, but not limited to, ensuring that such orders, regardless of their size or source, receive proper representation and timely execution in accordance with the terms of the orders and the rules of NOM. NOM will immediately route all P/A orders on behalf of the ILM according to these instructions. The order would be generated automatically by NOM and routed to the away exchange with the required clearing information included. Each execution received from an away exchange would result in the automatic generation of a trade execution on NOM between the original order and the ILM. This designation of ILM will ensure that P/A and Satisfaction orders will be handled in accordance with the Linkage Plan. Securities Traded on NOM Nasdaq proposes to adopt listing standards for Options traded on NOM (Chapter IV of the proposed rules) as well as for Index Options (Chapter VIX) that are identical to the approved rules of other options exchanges. 12 Nasdaq will join the Options Listings Procedures Plan and will list and trade options already listed on other options exchanges. Nasdaq will gradually phase-in its trading of options, beginning with a selection of actively traded options. At least initially, Nasdaq does not plan to develop new options products or listing standards. Nasdaq is aware that, in the event Nasdaq determines to trade an options class not listed on another registered options exchange or within Nasdaq's existing listing standards, Nasdaq will be required to submit a proposed rule change to establish listing standards. 12 *See, e.g.* , BOX Rules, Chapters IV and XIV. Conduct and Operational Rules for Options Participants Nasdaq proposes to adopt rules that are substantially similar to the approved rules of other options exchanges. Thus, Nasdaq proposes to adopt rules that are substantially similar to the rules of BOX regarding: exercises and deliveries (NOM proposed rules, Chapter VIII); records, reports, and audits (Chapter IX); summaries and suspensions and minor rule violations (Chapter X); doing business with the public (Chapter XI); and margin (Chapter XIII). Nasdaq proposes to adopt Business Conduct Rules (Chapter III) that are consistent with the BOX Business Conduct Rules, with certain exceptions. 13 Specifically, with respect to Position Limits (Section 7), Exceptions from Position Limits (Section 8), Exercise Limits (Section 9), and Reports Related to Position Limits (Section 10), Nasdaq is proposing to apply the limits established pursuant to the rules of the Chicago Board Options Exchange (“CBOE”), although NOM will establish such limits for products not traded on the CBOE. By expressly incorporating an already-approved limit, Nasdaq will ensure that an appropriate limit is in place at all times without the need to continually adjust its rules or to disrupt the operations of its participants. With respect to financial and operational rules, Nasdaq proposes to adopt rules similar to those of existing options exchanges regarding exercises and deliveries, margin, net capital, and books and records. 13 *See* BOX Rules, Chapter III. National Market System NOM will operate as a full and equal participant in the national market system for options trading established under Section 11A of the Act, 14 just as its equities market participates today. NOM will become a member of the Options Price Reporting Authority, the Options Linkage Authority, the Options Regulatory Surveillance Authority, and the Options Listing Procedures Plan. 14 15 U.S.C. 78k-1. NOM expects to participate in those plans on the same terms currently applicable to current members of those plans, and it expects little or no plan impact due to the fact that NOM's market will operate on price/time priority. Nasdaq has contacted the leadership of each options-related national market system plan to begin the membership process. Regulation NOM will leverage many of the structures that Nasdaq established to operate a national securities exchange in compliance with Section 6 of the Act. 15 As described in more detail below, there will be three elements of that regulation:
(1)Nasdaq will join the existing options industry agreements pursuant to Section 17(d) of the Act, 16 as it did with respect to equities;
(2)Nasdaq's Regulatory Services Agreement with NASD will govern many aspects of the regulation and discipline of members that participate in options trading, just as it does for equities regulation; and
(3)Nasdaq will perform options listing regulation as well as real-time regulation of options trading as it does today for equities. The principle here, again, is that Nasdaq will regulate its options market much as it does the equities market today. 15 15 U.S.C. 78f. 16 15 U.S.C. 78q(d). Section 17(d) of the Act and the related Exchange Act rules permit self-regulatory organizations (“SROs”) to allocate certain regulatory responsibilities to avoid duplicative oversight and regulation. Under Exchange Act Rule 17d-1, 17 the Commission designates one SRO to be the Designated Examining Authority (“DEA”) for each broker-dealer that is a member of more than one SRO. The DEA is responsible for the financial aspects of that broker-dealer's regulatory oversight. Because Nasdaq members also must be members of at least one other SRO, Nasdaq would generally not be designated as the DEA for any of its members. 17 17 CFR 240.17d-1. Rule 17d-2 under the Act 18 permits SROs to file with the Commission plans under which the SROs allocate among each other the responsibility to receive regulatory reports from, and examine and enforce compliance with, specified provisions of the Act and rules thereunder and SRO rules by firms that are members of more than one SRO (“common members”). If such a plan is declared effective by the Commission, an SRO that is a party to the plan is relieved of regulatory responsibility as to any common member for whom responsibility is allocated under the plan to another SRO. 18 17 CFR 240.17d-2. All of the options exchanges, NASD, and the New York Stock Exchange have entered into the Options Sales Practices Agreement, a Rule 17d-2 agreement. Under this Agreement, the examining SROs will examine firms that are common members of Nasdaq and the particular examining SRO for compliance with certain provisions of the Act, certain of the rules and regulations adopted thereunder, certain examining SRO rules, and certain NOM Rules. In addition, NOM Rules contemplate participation in this Agreement by requiring that any Options Participant also be a member of at least one of the examining SROs. For those regulatory responsibilities that fall outside the scope of any Rule 17d-2 agreements, Nasdaq will retain full regulatory responsibility under the Exchange Act. However, Nasdaq has entered into a Regulatory Services Agreement with NASD, pursuant to which NASD personnel operate as agents for Nasdaq in performing certain of these functions. As is the case with Nasdaq's equities market, Nasdaq will supervise NASD Regulation and continue to bear ultimate regulatory responsibility. Finally, as it does with equities, Nasdaq Regulation will perform real-time surveillance of NOM for the purpose of maintaining a fair and orderly market at all times. As it does with Nasdaq's equities trading, Nasdaq Regulation will monitor Nasdaq's options trading market on a real-time basis to identify unusual trading patterns and determine whether particular trading activity requires further regulatory investigation by NASD. In addition, Nasdaq Regulation will oversee the process for determining and implementing trade halts, identifying and responding to unusual market conditions, and administering Nasdaq's process for identifying and remediating “obvious errors” by and among its Options Participants. 19 Nasdaq proposed rules (Chapter V) regarding halts, unusual market conditions, extraordinary market volatility, and audit trail are closely modeled on the approved rules of the BOX. 20 19 Nasdaq's proposed Obvious Error guidelines and procedures closely resemble the rules of the Philadelphia Stock Exchange, particularly with respect to the establishment of a Theoretical Price against which to measure for obvious errors. 20 *See* BOX Rules, Chapter V. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with Section 6 of the Act, 21 in general, and with Section 6(b)(5) of the Act, 22 in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and national market system, and in general, to protect investors and the public interest; and are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers, or to regulate by virtue of any authority conferred by this title matters not related to the purposes of this title or to the administration of the exchange. 21 15 U.S.C. 78f. 22 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Nasdaq operates in an intensely competitive global marketplace for listings, financial products, transaction services, and market data. Relying on its array of services and benefits, Nasdaq competes for the privilege of providing market and listing services to broker-dealers and issuers. Nasdaq's ability to compete in this environment is based in large part on the quality of its trading systems, the overall quality of its market and its attractiveness to the largest number of investors, as measured by speed, likelihood and cost of executions, as well as spreads, fairness, and transparency. With these aspects of competition as a guide, Nasdaq designed its current proposal to create the fastest, fairest, most transparent, most efficient, and least expensive trading venue available for the trading of options. The proposed system will incorporate the best functional elements from Nasdaq's equity trading system. The resulting system will reduce overall trading costs and increase price competition, both pro-competitive developments. Nasdaq believes that the resulting system will have the pro-competitive effect of spurring further initiative and innovation among market centers and market participants. Market participants that disagree and do not view these developments as pro-competitive, will have the flexibility to use only those functions that improve their trading or to not use the system at all; participation in the system in whole or in part is completely voluntary. 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or
(ii)as to which Nasdaq consents, the Commission will:
(A)By order approve such proposed rule change; or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *(http://www.sec.gov/rules/sro.shtml);* or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2007-004 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2007-004. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site *(http://www.sec.gov/rules/sro.shtml)* . Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR-NASDAQ-2007-004 and should be submitted on or before May 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 23 23 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-8244 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55669; File No. SR-NASDAQ-2006-065] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendments Nos. 1, 2, and 3 Thereto To Reestablish a Quotation and Trading System for Securities That Are Designated by The PORTAL® Market as PORTAL Securities April 25, 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 December 22, 2006, The NASDAQ Stock Market LLC (“Nasdaq”), filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by Nasdaq. On March 6, 2007, Nasdaq filed Amendment No. 1 to the proposed rule change. 3 On April 3, 2007, Nasdaq filed Amendment No. 3 to the proposed rule change. 4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superseded the original filing in its entirety. 4 Amendment No. 2 was filed and withdrawn on April 3, 2007. I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq proposes to reestablish a quotation and trading system for securities that are designated by The PORTAL® Market (“PORTAL” or the “PORTAL® Market”) as PORTAL securities. The text of the proposed rule change is available on Nasdaq's Web site at *http://www.nasdaq.com* , at Nasdaq'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, Nasdaq included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background Nasdaq currently operates the PORTAL Market for securities that were sold in private placements and are eligible for resale under SEC Rule 144A 5 adopted under the Securities Act of 1933 (“Securities Act”). The National Association of Securities Dealers, Inc. (“NASD”) created the PORTAL Market in 1990, 6 simultaneously with the SEC's adoption of Rule 144A, 7 for the purposes of quotation, trading, and trade reporting in securities deemed eligible by the NASD for resale under Rule 144A. Rule 144A provides an exemption from registration under Section 5 of the Securities Act 8 for resales of privately placed securities to investors that meet the eligibility requirements of being a qualified institutional buyer (“QIB”) under Rule 144A(a)(1), 9 *i.e.* , institutional investors that in the aggregate own or invest on a discretionary basis at least $100 million in securities and broker/dealers that in the aggregate own or invest on a discretionary basis at least $10 million in securities. The Depository Trust Company (“DTC”) can make Rule 144A securities eligible for deposit, book-entry delivery, and other depository services provided that such Rule 144A securities, except in the case of investment grade rated debt, 10 are designated for inclusion in a system of a self-regulatory organization (“SRO”) for the reporting, quoting and trading of Rule 144A securities. An issuer of an investment grade rated debt issue can apply directly to DTC for book-entry services under DTC rules (“Rule 144A investment grade rated debt issues”) and need not also qualify the security as a PORTAL-designated security. 11 5 17 CFR 230.144A. 6 *See* Securities Exchange Act Release No. 27956 (April 27, 1990), 55 FR 18781 (May 4, 1990) (SR-NASD-88-23). The PORTAL Rules were subsequently amended. *See* Securities Exchange Act Release Nos. 28678 (December 6, 1990), 55 FR 51194 (December 12, 1990) (SR-NASD-90-50); 33326 (December 13, 1993), 58 FR 66388 (December 20, 1993) (SR-NASD-91-5); 34562 (August 19, 1994), 59 FR 44210 (August 26, 1994) (SR-NASD-94-39); 35083 (December 12, 1994), 59 FR 65104 (December 16, 1994) (SR-NASD-94-65); 40424 (September 10, 1998), 63 FR 49623 (September 16, 1998) (SR-NASD-98-68); 43873 (January 23, 2001), 66 FR 8131 (January 29, 2001) (SR-NASD-99-65); 44042 (March 6, 2001), 66 FR 14969 (March 14, 2001) (SR-NASD-99-66); NASD Notice to Members 01-19 (March 2001) (the “2001 PORTAL rule filing”). 7 *See* Securities Exchange Act Release No. 27928 (April 23, 1990), 55 FR 17933 (April 30, 1990). 8 15 U.S.C. 77e. 9 17 CFR 230.144A(a)(1). 10 Investment grade rated debt includes nonconvertible debt securities and nonconvertible preferred stock that are rated in one of the top four generic rating categories by a nationally recognized statistical rating organization. 11 *See* Securities Exchange Act Release No. 33327 (December 13, 1993), 58 FR 67878 (December 22, 1993) (SR-DTC-90-06). The sole current function of Nasdaq related to the PORTAL Market is to review whether an issue of privately placed securities meets the eligibility requirements of Rule 144A, 12 thereby qualifying the securities for DTC book-entry services. The PORTAL Market, as originally approved by the SEC in 1990, was intended to function as a system that would allow NASD members and QIBs to trade PORTAL-designated securities in a closed system in compliance with SEC Rule 144A. Thus, the PORTAL rules included requirements to qualify NASD members and QIBs as “PORTAL Participants” for qualified NASD members to enter quotations in PORTAL securities and to submit trade reports for PORTAL trades to the PORTAL system for comparison, clearance, and settlement. 12 Nasdaq staff historically had responsibility for review of PORTAL Market applications to determine the eligibility of securities and, originally, PORTAL Participants (including broker/dealers and investors). Upon the separation of Nasdaq from the NASD and the approval of Nasdaq as a registered national securities exchange under Section 6 of the Act, the review functions for PORTAL Market eligibility were retained by Nasdaq, and the PORTAL Market rules in the NASD Rule 5300 Series became the Nasdaq Rule 6500 Series. *See* Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006). These market-related functions in PORTAL securities as originally approved by the SEC in 1990 did not, however, develop as anticipated. In particular, Nasdaq believes that the NASD's adoption of PORTAL rules that imposed trade reporting for all transactions in PORTAL securities, which occurred at a time when no trade reporting requirements applied to privately-placed securities in general, ultimately were not implemented because of:
(1)A cumbersome technology for access to the PORTAL Market computer system for reporting purposes, which was a stand-alone computer system; and
(2)resistance to the imposition of trade reporting in Rule 144A equity and in both Rule 144A and SEC-registered debt. In a continuing effort to encourage trade-reporting in PORTAL-designated securities, the NASD obtained SEC approval in 1998 of an interpretation of the definition of the term “ACT Eligible Security” in NASD Rule 6110(a) for the Automated Confirmation Transaction Service (“ACT”) 13 to include all securities designated as PORTAL securities pursuant to the PORTAL rules to the extent transactions in such PORTAL-designated securities were voluntarily submitted to ACT solely for reconciliation and comparison. 14 In addition, the NASD submitted a letter to the Divisions of Market Regulation and Corporation Finance of the SEC, dated November 16, 1998, advising that the NASD would eliminate the Stratus computer system that supported the PORTAL Market. On January 23, 2001, the SEC approved the establishment of a corporate bond trade reporting and transaction dissemination facility, known as the Trade Reporting and Compliance Engine or “TRACE,” 15 which required trade reporting in most PORTAL designated securities and investment grade debt Rule 144A securities that are DTC eligible. 16 13 ACT is a system owned and operated by Nasdaq that accommodates reporting and dissemination of last sale reports for secondary market transactions in equity securities and can provide automated comparison and confirmation services and can forward confirmed trades to DTC for settlement. The OTC Trade Reporting Facility provides the same functions for reporting trades in PORTAL equity securities as previously performed by ACT. 14 *See* Securities Exchange Act Release No. 40424 (September 10, 1998), 63 FR 49623 (September 16, 1998) (SR-NASD-98-68). 15 TRACE is a system operated by the NASD that facilitates the mandatory reporting of over-the-counter secondary market transactions in eligible fixed income securities. *See* NASD Rule 6200 Series. 16 *See* Securities Exchange Act Release No. 43873 (January 23, 2001), 66 FR 8131 (January 29, 2001) (and related NASD Notice to Members 01-18 (March 2001)). Other changes were subsequently made to the TRACE rules. *See* Securities Exchange Act Release Nos. 48056 (June 18, 2003), 68 FR 37886 (June 25, 2003) (SR-NASD-2003-78) (and related NASD Notice to Members 03-36 (June 2003)); 48305 (August 8, 2003), 68 FR 48656 (August 14, 2003) (SR-NASD-2003-99) (and related NASD Notice to Members 03-45 (August 2003)); 49854 (June 14, 2004), 69 FR 35088 (June 23, 2004) (SR-NASD-2004-57) (and related NASD Notice to Members 04-51 (July 2004)); 50317 (September 3, 2004), 69 FR 55202 (September 13, 2004) (SR-NASD-2004-94) (and related NASD Notice to Members 04-65 (September 2004)); 50977 (January 6, 2005), 70 FR 2202 (January 12, 2005) (SR-NASD-2004-189) (and related NASD Notice to Members 05-05 (January 2005)); 51611 (April 26, 2005), 70 FR 22735 (May 2, 2005) (SR-NASD-2005-026) (and related NASD Notice to Members 05-37 (May 2005)); 52183 (August 1, 2005), 70 FR 46239 (August 9, 2005) (SR-NASD-2005-63) (and related NASD Notice to Members 05-52 (August 2005)); 53031 (December 28, 2005), 71 FR 634 (January 5, 2006) (SR-NASD-2005-120) (and related NASD Notice to Members 06-01 (January 2006)). On March 6, 2001, 17 the SEC approved amendments to the PORTAL rules to require that NASD members submit trade reports of secondary market transactions in PORTAL-designated equity securities through ACT and of most PORTAL-designated debt securities through TRACE. 18 Only trade reporting obligations were imposed with respect to secondary market transactions in PORTAL equity and debt securities. 17 *See supra* , note 6, the 2001 PORTAL rule filing. 18 A limited number of PORTAL debt securities are not subject to trade reporting to TRACE, *e.g.* , mortgage or asset backed securities, collateralized mortgage obligations, money market instruments, and municipal and municipal-derivative securities. The use of TRACE and ACT for mandatory trade reporting of secondary market transactions in PORTAL securities was intended to address the technological and cost problems that were associated with the reporting of such trades through the stand-alone PORTAL computer system. The SEC also, as part of the same rule change, approved the elimination of a large number of obsolete provisions in the PORTAL rules, including the registration requirements for NASD members and QIBs to trade in a closed system, rules regulating the quotation and trading of PORTAL securities, and the unsuccessful PORTAL trade reporting requirements. 19 19 In another rule change, the NASD amended the Uniform Practice Code to apply to re-sales of restricted securities as defined in Rule 144(a)(3) under the Securities Act. *See* Securities Exchange Act Release No. 38491 (April 9, 1997), 62 FR 18665 (April 16, 1997) (SR-NASD-97-06); *see also* Section 11100(a) of the NASD Uniform Practice Code. The Current Trading Environment for PORTAL Securities The market, trading, and technological environments for PORTAL securities have evolved. As stated previously, mandatory trade reporting applies to almost all PORTAL securities. Today, pursuant to NASD Rule 6700 Series, trade reports in all PORTAL-designated equity securities are submitted to the NASD's OTC Reporting Facility (“OTC Reporting Facility”) 20 and trade reports in most PORTAL-designated debt securities continue to be submitted to TRACE. There is no public dissemination in any form of information in trade reports submitted with respect to PORTAL securities and depository-eligible Rule 144A investment grade rated debt issues. NASD provides ongoing surveillance of the trade reports in PORTAL securities that are submitted through the OTC Reporting Facility and TRACE, including trade reports with respect to PORTAL securities and depository-eligible Rule 144A investment grade rated debt issues. 20 *See* NASD Rule 6600 Series. The existence of mandatory trade reporting for most PORTAL securities has led to an increased interest on the part of the securities industry for greater market transparency in PORTAL securities in the form of centralized quotations and last sale trade information. In addition, technological advances now allow a quotation, trade negotiation, and reporting system to be more easily integrated into the existing PORTAL Market structure. Nasdaq's PORTAL Proposal Nasdaq is proposing to establish an updated version of the PORTAL Market that was originally envisioned when PORTAL was first approved in 1990. The proposed amendments to the PORTAL rules will:
(i)Establish qualification requirements for brokers and dealers that are Nasdaq members and QIBs that wish to access PORTAL; and
(ii)implement quotation, trade negotiation and trade reporting functions in the PORTAL Market with respect to PORTAL-designated securities. Most of the proposed amendments were previously approved by the Commission with respect to the earlier attempt by the NASD to establish PORTAL as a closed trading system for Rule 144A securities. Nasdaq's proposed PORTAL system is summarized below. *Security Designation:* Nasdaq will continue to qualify “restricted securities,” as that term is defined in SEC Rule 144(a)(3) 21 and securities that are restricted pursuant to contract or through the terms of the security for designation as PORTAL securities based on, among other things, the security and information requirements for the resale of a security under Rule 144A(d)(3) and (d)(4). 22 Thus, PORTAL securities must not be, or have been when issued, of the same class as securities listed on a national securities exchange or quoted in a U.S. automated inter-dealer quotation system, nor be securities of an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act of 1940. With respect to the information requirements under Rule 144A(d)(4), an issuer of a PORTAL-designated security must be subject to reporting under Section 13 of the Act 23 or Section 15(d) of the Act, 24 a foreign private issuer that is exempt from reporting pursuant to Rule12g3-2(b) under the Act, 25 a foreign government eligible to register securities under Schedule B of the Securities Act, or include disclosure in the private placement memorandum that the issuer agrees to provide to a holder of a Rule 144A security and a prospective purchaser designated by the holder reasonably current information about the issuer's business and financial statements. 21 17 CFR 230.144(a)(3). 22 17 CFR 230.144A(d)(3) and (d)(4). 23 15 U.S.C. 78m. 24 15 U.S.C. 78o(d). 25 17 CFR 240.12g3-2(b). As a matter of practice, PORTAL designation is limited to those Rule 144A securities that are initially sold to QIBs by a broker/dealer acting as initial placement agent or initial purchaser. 26 Moreover, Nasdaq will continue to have authority under PORTAL rules to suspend or terminate the designation of a PORTAL security if Nasdaq determines that the security is not in compliance with PORTAL rules, a holder or prospective purchaser that requested information pursuant to Rule 144A(d)(4) did not receive the information, any application or other document relative to such securities submitted to Nasdaq contained an untrue statement of material fact or omitted to state a material fact necessary to make the statements therein not misleading, or failure to withdraw designation of such securities would for any reason be detrimental to the interests and welfare of Nasdaq, Nasdaq members, or investors. 26 Current Rule 6522(a)(4) requires that a PORTAL security be assigned a CUSIP number that is different than the identification number assigned to any unrestricted securities of the same class. As a matter of practice by PORTAL and Standard & Poor's (“S&P”), the CUSIP number assigned to those securities that are initially sold to QIBs pursuant to Rule 144A is different than the CUSIP numbers assigned to those securities that are part of the same offering that are sold to accredited investors pursuant to SEC Regulation D and to non-U.S. investors under SEC Regulation S. Thus, PORTAL-designation is limited to those securities that have initially been sold to QIBs. Nasdaq is proposing to amend this rule, which will be renumbered Rule 6502(b)(1)(D), to reflect this policy. *Broker/Dealer Access:* Similar to NASD's original PORTAL system approved by the SEC, Nasdaq members that meet the PORTAL qualification requirements will be designated as “PORTAL Dealers” and “PORTAL Brokers.” The purpose of distinguishing between Nasdaq members thatualify as “PORTAL Dealers” and “PORTAL Brokers” is to identify in PORTAL those Nasdaq members that qualify as a QIB under Rule 144A to purchase Rule 144A securities on a principal basis. To qualify as a PORTAL Broker, a Nasdaq member will be required by PORTAL rules to execute a subscriber agreement with PORTAL, be a member of Nasdaq, be qualified to do business as a general securities firm, and agree to comply with the PORTAL rules. Pursuant to Rule 144A(a)(1)(iii), a dealer registered under Section 15 of the Act 27 is authorized to act as an agent for a QIB on a non-discretionary basis pursuant to Rule 144A or to act in a riskless principal capacity on behalf of a QIB. To qualify as a PORTAL Dealer, a Nasdaq member will be required by PORTAL rules to meet these same requirements and also to demonstrate to the satisfaction of Nasdaq that it is eligible to purchase securities under the financial criteria of SEC Rule 144A. Under Rule 144A(a)(1)(ii), a dealer so registered will qualify as a QIB if the dealer in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the dealer and may act for its own account or the accounts of other QIBs. Nasdaq proposes to qualify a Nasdaq member as a PORTAL Dealer based on the member's Audited Financial Statements filed with the SEC pursuant to Rule 17a-5(d) under the Act. 28 Nasdaq would annually update its qualification of PORTAL Dealers. 27 15 U.S.C. 78o. 28 17 CFR 240.17a-5(d). PORTAL Dealers and PORTAL Brokers would be permitted to post anonymous one- or two-sided indicative quotations in PORTAL securities that may be accessed by other PORTAL Dealers and Brokers and QIBs qualified as “PORTAL Qualified Investors.” 29 In addition, PORTAL Dealers and Brokers will be permitted to negotiate anonymously, execute trades in PORTAL securities, and submit trade reports in PORTAL-negotiated trades that will be forwarded to TRACE and the OTC Reporting Facility for comparison and confirmation. 29 The SEC noted that pursuant to Rule 144A, broker/dealers are permitted to enter quotations in an inter-dealer quotation system so long as the offer is made to QIBs or persons whom dealers reasonably believe to be QIBs. *See supra* , note 6, the 2001 PORTAL rule filing. *Investor Access:* Like the original PORTAL system approved by the SEC, an institution that executes a subscriber agreement, agrees to comply with the PORTAL rules and meets the $100 million standard of being a QIB under Rule 144A would be qualified by Nasdaq as a “PORTAL Qualified Investor” to access the PORTAL Market through a password protected linkage and view quotations by PORTAL Dealers and PORTAL Brokers, and confirm transactions where the investor uses a PORTAL Dealer or Broker to execute a trade in PORTAL. In addition, in order to comply with the requirement of Rule 144A(d)(2) that the seller of Rule 144A securities take reasonable steps to ensure that the purchaser is aware that the seller may rely on Rule 144A, the subscriber agreement will include an undertaking that the PORTAL Qualified Investor is aware that it may purchase a PORTAL security from another qualified investor who may rely on an exemption from the provisions of Section 5 of the Securities Act. 30 30 15 U.S.C. 77(e). *Trade Negotiation/Execution:* Unlike the original PORTAL system, the reestablished PORTAL system would use electronic negotiation features in order to allow PORTAL Dealers and PORTAL Brokers to negotiate both openly and anonymously and execute trades in PORTAL securities. All quotes in the PORTAL system will be indicative, not firm. Once an anonymous trade is negotiated in the PORTAL system, the identity of the counter-parties will be revealed to each other for purposes of comparison, confirmation, and settlement. *Trade Reporting:* Trade reports in reportable PORTAL debt and equity securities will continue to be submitted to the TRACE and the OTC Reporting Facility, respectively. In addition, PORTAL-negotiated trades will be submitted through the PORTAL System to TRACE and the OTC Reporting Facility. Nasdaq also intends to provide the ability to forward PORTAL trades to an appropriate subsidiary of Depositary Trust and Clearing Corporation for settlement. *Dissemination of PORTAL Trade Report Information:* All trade report information for trades that are negotiated via the PORTAL system will be disseminated in PORTAL to PORTAL Brokers, Dealers and Qualified Investors (“PORTAL Participants”), but would not include the identity of the parties and, in the case of PORTAL debt, would not aggregate or otherwise follow the dissemination protocols applicable to debt trades reported to TRACE. 31 PORTAL Participants would be prohibited from disclosing any PORTAL Market information, including quotations, transactions and other information displayed in the PORTAL Market (“PORTAL Market Information”), to any party other than another PORTAL Participant. Nasdaq will not disseminate PORTAL Market Information to the public. 31 Trade report information on Rule 144A investment grade debt that is not a PORTAL security would not be disseminated in PORTAL. To the extent that Nasdaq members desire to quote, execute, and view trade report information on any Rule 144A investment grade debt security in PORTAL, the security must be qualified as a PORTAL security. *Regulatory Surveillance:* NASD currently provides and would continue to provide surveillance of the trade reports in PORTAL securities that are submitted through TRACE and the OTC Reporting Facility. Real-Time Surveillance of quoting and trading activity in the PORTAL system will be conducted by Nasdaq's MarketWatch Department. SEC Exemptions As part of its original review and approval of a PORTAL trading system, the Commission and its staff granted several exemptions and no-action requests to the NASD as the then-operator of the PORTAL Market and made other related determinations. Nasdaq, through letter requests to be separately submitted to the Commission, will seek the issuance of similar and new exemptions so as to allow the operation of the PORTAL trading system as described in this filing. In summary, Nasdaq is seeking Commission exemptions in the following areas: *SEC Rule 15c2-11:* Through a separate letter request, Nasdaq is seeking an exemption from Rule 15c2-11 under the Act 32 with respect to the gathering and furnishing of the prescribed information by PORTAL Dealers and PORTAL Brokers that intend to publish, or submit for publication, quotations for PORTAL-designated securities through the PORTAL system. 32 17 CFR 240.15c2-11. *Registration Under Section 12(g) of the Act:* Through a separate letter request, Nasdaq is seeking an exemption from the provisions of Section 12(g) of the Act 33 to permit Nasdaq members and brokers and dealers to trade PORTAL-designated equity securities that are not registered under Section 12(g) of the Act. 34 33 15 U.S.C. 78l(g). 34 *Id.* *Registration Under Section 12(b) of the Act:* Through a separate letter request, Nasdaq is seeking an exemption from the provisions of Section 12(a) of the Act 35 to permit Nasdaq members and brokers and dealers to trade PORTAL securities that are not registered under Section 12(b) of the Act. 36 35 15 U.S.C. 78l(a). 36 15 U.S.C. 78l(b). R2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 37 in general and with Section 6(b)(5) of the Act, 38 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, remove impediments to a free and open market and a national market system, and, in general, to protect investors and the public interest. In particular, the proposal can be expected to enhance the efficiency and transparency of trading Rule 144A securities. 37 15 U.S.C. 78f. 38 15 U.S.C. 78f(b)(5). In addition, Nasdaq believes that the proposed rule change is consistent with Section 11A(a)(1) of the Act. 39 Section 11A(a)(1) articulates the Congressional findings and policy goals and objectives respecting the development of a national market system. Essentially, Congress found that new data processing and communication techniques should be applied to improve the efficiency of market operations, broaden the distribution of market information, enhance opportunities to achieve best execution and promote competition among market participants. That provision stresses the importance of implementing communication enhancements that will advance the efficiency and effectiveness of a securities market in servicing the needs of investors. Currently, the secondary placement market in unregistered securities is a traditional over-the-counter market, in which negotiations are conducted over the phone without the benefit of a quotation or last sale trade information dissemination system. Nasdaq believes that the proposed amendments to the PORTAL Market will provide these benefits and, thus, will enhance the efficiency of the market's operation in Rule 144A-eligible securities. 39 15 U.S.C. 78k-1(a)(1). *Rule 144A Under the Securities Act:* Because Nasdaq has designed the amendments to the PORTAL Market to facilitate compliance with Rule 144A, Section 6(b)(1) of the Act 40 also requires a determination as to whether it is reasonably designed to accomplish this purpose. 41 Nasdaq believes that the PORTAL system is designed to provide that participants who comply with its requirements will also be in compliance with the requirements of Rule 144A, except where information is not provided upon request in compliance with Rule 144A(d)(4). 40 15 U.S.C. 78f(b)(1). 41 Section 6(b)(1) of the Act requires that Nasdaq, as a national securities exchange, be so organized and have the capacity to enforce compliance with, among other things, the federal securities laws. *See* 15 U.S.C. 78f(b)(1). Rule 144A is available only to institutional investors meeting the definition of “qualified institutional buyer” under Rule 144A(a)(1). A seller is required to form a reasonable belief that a purchaser is a “qualified institutional buyer” as the term is defined in Rule 144A(a)(1). With the exception of broker-dealers, a qualified institutional buyer is required to in the aggregate own and invest on a discretionary basis at least $100 million in securities of non-affiliated issuers. The proposed amendments to the PORTAL rules require that any investor applying to qualify as a PORTAL Qualified Investor meet the Rule 144A standards for qualified institutional buyers. Rule 144A(d)(2) requires that the seller of 144A securities take reasonable steps to ensure that the purchaser is aware that the seller may rely on Rule 144A. To meet this requirement of Rule 144A, the proposed amendments to the PORTAL rules also provide in the designation requirements for PORTAL Qualified Investors that applicants sign an undertaking in a subscriber agreement that states that they are aware that they may purchase a PORTAL security from another qualified investor who may rely on an exemption from the provisions of Section 5 of the Securities Act 42 pursuant to Rule 144A. 42 15 U.S.C. 77(e). The PORTAL rules also have current eligibility requirements for admitting securities into the PORTAL system that parallel the Rule 144A eligibility requirements for securities. The PORTAL rules require, therefore, that the security be eligible to be sold pursuant to Rule 144A under the Securities Act. The application for designation of a PORTAL security requires the submission of specific information necessary to support the applicant's claim that the security meets the requirements of Rule 144A. In addition, the current PORTAL Rules provide Nasdaq with the authority to request any additional information that Nasdaq believes is necessary to make a determination of whether a security is eligible under Rule 144A. 43 43 *See* Nasdaq Rules 6521(a) and 6522(a)(5). Furthermore, Rule 144A conditions the eligibility of certain securities under Rule 144A on certain information being available to holders and prospective purchasers. Rule 144A(d)(4) provides that, with respect to securities of an issuer that is neither subject to Section 13 of the Act 44 nor Section 15(d) of the Act, 45 nor exempt from reporting pursuant to Rule 12g3-2(b) under the Act, 46 nor a foreign government eligible to register securities under Schedule B of the Securities Act, the holder and a prospective purchaser designated by the holder must have the right to obtain from the issuer, upon request of the holder, and the purchaser must have received at or prior to the time of sale, upon such purchaser's request to the holder, certain information about the issuer. Because the PORTAL rules currently require that a security meet the Rule 144A security eligibility requirements and that the issuer undertake to provide the information required by Rule 144A(d)(4), where applicable, Nasdaq must, as part of the PORTAL security designation process, assess whether the issuer is required to provide such information to holders and prospective purchasers. 44 15 U.S.C. 78m. 45 15 U.S.C. 78o(d). 46 17 CFR 240.12g3-2(b). In addition to structuring the PORTAL rules to provide that participants who comply with its requirements also are in compliance with the requirements of Rule 144A, the proposed rule change would structure PORTAL to limit the possibility that unregistered securities enter the U.S. retail market by requiring that PORTAL-designated securities be assigned a CUSIP or CINS security identification number that is different than the identification number assigned to any securities of the same class that do not satisfy the eligibility requirements for PORTAL securities. Since the original approval of the PORTAL Market, the security explanation protocol employed by S&P related to the CUSIP number assigned to PORTAL securities specifically distinguishes those securities from all other publicly-traded and restricted securities by using the words “Rule 144A” and “PORTAL.” For these reasons, Nasdaq believes that the PORTAL system, as proposed, is reasonably designed to facilitate compliance with Rule 144A, so long as there is compliance with the PORTAL rules and procedures, except where information is not provided on request pursuant to Rule 144A(d)(4). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or
(ii)as to which Nasdaq consents, the Commission will:
(A)By order approve such proposed rule change, or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *(http://www.sec.gov/rules/sro.shtml);* or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2006-065 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2006-065. 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 Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2006-065 and should be submitted on or before May 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 47 47 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-8252 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55666; File No. SR-Phlx-2007-29] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Extension of the $1 Strike Pilot Program April 25, 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 April 16, 2007, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by Phlx. The Exchange has filed the proposal 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 The Exchange proposes to amend Commentary .05 to Exchange Rule 1012 in order to extend for a period of one year a pilot program that allows the Exchange to list options classes overlying five individual stocks with strike price intervals of $1.00 where, among other things, the underlying stock closes below $20.00 on the primary market trading it on the day before selection by the Exchange to list pursuant to the pilot, and the Exchange can list $1.00 strike prices on any options classes specifically designated by other securities exchanges that employ a similar pilot program under their rules (“Pilot Program”). 5 The text of the proposed rule change is available at Phlx, the Commission's Public Reference Room, and *http://www.phlx.com.* 5 The Pilot Program was initially approved by the Commission on June 11, 2003, and extended until June 5, 2007. *See* Securities Exchange Act Release Nos. 48013 (June 11, 2003), 68 FR 35933 (June 17, 2003) (SR-Phlx-2002-55) (“Phlx Approval Order”); 49801 (June 3, 2004), 69 FR 32652 (June 10, 2004) (SR-Phlx-2004-38); 51768 (May 31, 2005), 70 FR 33250 (June 7, 2005) (SR-Phlx-2005-35); and 53938 (June 5, 2006), 71 FR 34178 (June 13, 2006) (SR-Phlx-2006-36) (collectively, “Phlx Pilot Extensions”). The other options exchanges have similar $1 strike price listing pilot programs that were likewise extended through June 5, 2007. *See* Securities Exchange Act Release Nos. 53843 (May 19, 2006), 71 FR 30455 (May 26, 2006) (SR-Amex-2006-49); 53885 (May 24, 2006), 71 FR 30973 (May 31, 2006) (SR-BSE-2006-19); 53805 (May 15, 2006), 71 FR 29690 (May 23, 2006) (SR-CBOE-2006-31); 53806 (May 15, 2006), 71 FR 29694 (May 23, 2006) (SR-ISE-2006-20); and 53807 (May 15, 2006), 71 FR 29373 (May 22, 2006) (SR-NYSEArca-2006-14). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Phlx has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to extend the Pilot Program for one year until June 5, 2008, so that the Exchange may continue to list options at $1.00 strike price intervals within the parameters specified in Commentary .05 to Phlx Rule 1012. The Commission approved the Pilot Program allowing the listing of strike prices for options at $1.00 intervals for securities trading under $20.00, and extended it through June 5, 2007. 6 The Exchange is proposing to extend the Pilot Program for a period of one year, through June 5, 2008. The Pilot Program will remain unchanged such that pursuant to it Phlx can establish $1 strike price intervals on options classes overlying no more than five individual stocks designated by the Exchange where the underlying stock closes below $20.00 on its primary market on the trading day before selection by the Exchange to list pursuant to the Pilot Program; the $1.00 strike price is from $3.00 to $20.00; the $1.00 strike price is no more than $5.00 from ($5.00 above or below) the closing price of the underlying stock on the preceding day; the $1.00 strike price will not be listed within $0.50 of an existing $2.50 strike price within the same series; and the $1.00 strike price will not be applied to Long-Term Equity AnticiPation Securities. And, pursuant to the Pilot Program, the Exchange can multiply list those option classes specifically designated to be listed at $1.00 strike prices by other options exchanges that have similar $1.00 pilot programs pursuant to their own rules. 6 *See* Phlx Approval Order and Phlx Pilot Extensions, *supra* note 5. In July 2003, Phlx chose and listed five options classes with $1 strike price intervals, thereafter listed on a multiple listing basis $1 strike prices options classes that were listed by other options exchanges pursuant to their $1 strike price pilot programs, and currently lists 22 options classes with $1 strike prices. 7 The Exchange continues to believe that the ability to list stocks at $1 strike price intervals pursuant to the Pilot Program has given investors flexibility and the opportunity to more closely and effectively tailor their options investments to the price of the underlying stock and has allowed the Exchange to take advantage of competitive opportunities to list options at $1.00 strike prices. Furthermore, the Exchange has not detected any material proliferation of illiquid options series resulting from the Pilot Program. 7 Phlx continues to list the $1 strike prices in the options classes that it initially chose for the Pilot Program: TYCO International, LTD (TYC), Micron Tech. (MU), Oracle Co. (ORQ), Brocade Comm. (UBF), and Juniper Networks (JUP). Because TYC is presently trading outside the strike price range permissible in the Pilot Program, however, it is not trading at $1 strike price intervals. In the Phlx Pilot Extensions, the Commission indicated that if Phlx sought to extend, expand, or request permanent approval of the Pilot Program, it would be required to include a Pilot Program Report with its filing. 8 Phlx's Pilot Program Report (“Report”), included as Exhibit 3 to the proposal, reviews the Exchange's experience with the Pilot Program. According to Phlx, the Report clearly supports the Exchange's belief that extension of the Pilot Program is proper. Among other things, Phlx believes that the Report shows the strength and efficacy of the Pilot Program on the Exchange, as reflected by the increase in the percentage of $1 strikes in comparison to total options volume traded on Phlx at $1 strike price intervals as compared to other options volume and the continuing robust open interest of options traded on Phlx at $1 strike price intervals. Phlx believes that the Report establishes that the Pilot Program has not created and in the future should not create capacity problems for the systems of the Exchange or the Options Price Reporting Authority (“OPRA”), and explains that most delistings of $1 strike price options series occurred to ensure that the chosen $1 strike price issues remained within the parameters of the Pilot Program. 8 *See* Phlx Pilot Extensions, *supra* note 5. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act, 9 in general, and furthers the objectives of Section 6(b)(5), 10 specifically, in that it is designed to perfect the mechanism of a free and open market and a national market system, to protect investors and the public interest, and to promote just an equitable principles of trade. Phlx believes the proposal would achieve this by allowing the continued listing of options at $1.00 strike price intervals within certain parameters, thereby stimulating customer interest in options overlying the lowest tier of stocks and creating greater trading opportunities and flexibility and providing customers with the ability to more closely tailor investment strategies to the precise movement of the underlying stocks. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition 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 either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change does not:
(1)Significantly affect the protection of investors or the public interest;
(2)impose any significant burden on competition; and
(3)become operative for 30 days from the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b-4(f)(6) thereunder. 12 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b-4(f)(6). 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 designated by the Commission. Phlx has satisfied the five-day pre-filing requirement. As set forth in the Commission's initial approval of the Pilot Program, if Phlx proposes to:
(1)Extend the Pilot Program;
(2)expand the number of options eligible for inclusion in the Pilot Program; or
(3)seek permanent approval of the Pilot Program, it must submit a Pilot Program Report to the Commission along with the filing of its proposal to extend, expand, or seek permanent approval of the Pilot Program. Phlx must file any proposal to expand or seek permanent approval of the Pilot Program and the Pilot Program Report with the Commission at least 60 days prior to the expiration of the Pilot Program. The Pilot Program Report must cover the entire time the Pilot Program was in effect and must include:
(1)Data and written analysis on the open interest and trading volume for options (at all strike price intervals) selected for the Pilot Program;
(2)delisted options series (for all strike price intervals) for all options selected for the Pilot Program;
(3)an assessment of the appropriateness of $1 strike price intervals for the options Phlx selected for the Pilot Program;
(4)an assessment of the impact of the Pilot Program on the capacity of Phlx's, OPRA's, and vendors' automated systems;
(5)any capacity problems or other problems that arose during the operation of the Pilot Program and how Phlx addressed them;
(6)any complaints that Phlx received during the operation of the Pilot Program and how Phlx addressed them; and
(7)any additional information that would help to assess the operation of the Pilot Program. *See* Phlx Approval Order, *supra* note 5. 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 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-Phlx-2007-29 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-Phlx-2007-29. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-Phlx-2007-29 and should be submitted on or before May 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-8257 Filed 4-30-07; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10851] Maine Disaster # ME-00006 AGENCY: U.S. Small Business Administration. ACTION: Notice. SUMMARY: This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of Maine (FEMA-1691-DR), dated 4/20/2007. *Incident:* Flooding. *Incident Period:* 3/16/2007 through 3/18/2007. DATES: *Effective Date:* 4/20/2007. *Physical Loan Application Deadline Date:* 6/19/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the President's major disaster declaration on 4/20/2007, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: *Primary Counties:* Hancock, Knox, Lincoln, Waldo. *The Interest Rates are:* Percent Other (Including Non-Profit Organizations) with Credit Available Elsewhere 5.250 Businesses And Non-Profit Organizations without Credit Available Elsewhere 4.000 The number assigned to this disaster for physical damage is 10851. Catalog of Federal Domestic Assistance Number 59008). Herbert L. Mitchell, Associate Administrator for Disaster Assistance. [FR Doc. E7-8247 Filed 4-30-07; 8:45 am] BILLING CODE 8025-01-P TRADE AND DEVELOPMENT AGENCY SES Performance Review Board AGENCY: Trade and Development Agency. ACTION: Notice. SUMMARY: Notice is hereby given of the appointment of members of the Trade and Development Agency's Performance Review Board. FOR FURTHER INFORMATION CONTACT: Carolyn Hum, Administrative Officer, Trade and Development Agency, 1000 Wilson Boulevard, Suite 1600, Arlington, VA 22209
(703)875-4357. SUPPLEMENTARY INFORMATION: Section 4314(c)(1) through (5), U.S.C., requires each agency to establish, in accordance with regulations prescribed by the Office of Personnel Management, one or more SES performance review boards. The board shall review and evaluate the initial appraisal of a senior executive's performance by the supervisor, along with any recommendations to the appointing authority relative to the performance of the senior executive. The following have been selected as acting members of the Performance Review Board of the Trade and Development Agency: Leocadia Zak, Deputy Director, U.S. Trade and Development Agency; Geoffrey Jackson, Director for Policy and Program, U.S. Trade and Development Agency; Thomas Hardy, Chief of Staff, U.S. Trade and Development Agency; and James Wilderotter, General Counsel, U.S. Trade and Development Agency. Dated: April 25, 2007. Carolyn Hum, Administrative Officer. [FR Doc. E7-8294 Filed 4-30-07; 8:45 am] BILLING CODE 8040-01-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Environmental Impact Statement: State Route 71, South Knoxville Boulevard, From Governor John Sevier Highway (State Route 168) to Moody Avenue, Knox County, TN AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of intent. SUMMARY: The Federal Highway Administration
(FHWA)is issuing this notice to advise the public that an Environmental Impact Statement
(EIS)will be prepared for a proposed highway project in Knox County, Tennessee. FOR FURTHER INFORMATION CONTACT: Ms. Karen M. Brunelle, Planning and Program Management Team Leader, Federal Highway Administration—Tennessee Division Office, 640 Grassmere Park Road, Suite 112, Nashville, TN 37211. 615-781-5772. SUPPLEMENTARY INFORMATION: A Final EIS
(FEIS)was approved for the South Knoxville Boulevard project on June 24, 1977. That FEIS covered a project that started at Chapman Highway (U.S. 441/SR-71) near Longvale Drive and extended northward to State Route 158 (the Central Business District
(CBD)Loop) in Knoxville. The segment of that project from the CBD Loop southward to Moody Avenue has been constructed as a four-lane, median divided freeway section, and opened to traffic. Construction plans were prepared for the approved alignment from Moody Avenue southward to Old Sevierville Pike, but this part of the project has not been constructed. The segment of the approved South Knoxville Boulevard alignment between Old Sevierville Pike and Chapman Highway was subsequently determined to have engineering constraints due to several sinkholes along the route. An Environmental Assessment
(EA)was prepared to address an alternate alignment between Old Sevierville Pike and Chapman Highway. The EA was approved by the FHWA on April 25, 2001. A Corridor and Design Public Hearing was conducted on July 31, 2001. A final environmental decision document was not issued. In the spring of 2003, the Tennessee Department of Transportation
(TDOT)commissioned the University of Tennessee Center for Transportation to review fifteen proposed TDOT projects across the state. The James White Parkway (also known as South Knoxville Boulevard) Extension was included in those projects. Based on the results of this review, TDOT, in November 2003, referred the project back to local officials for further review. The James White Parkway—Chapman Highway Corridor Study Task Force, with technical support from the Knoxville—Knox County Metropolitan Planning Commission and the Knoxville Regional Transportation Planning Organization, conducted an extensive review of the project. The task force was authorized by the Knoxville City Council in January 2002 and was expanded in the spring of 2004 to include a broad cross-section of stakeholders from both the City of Knoxville and Knox County. In January 2005, the task force recommended that additional alternatives be studied for extending James White Parkway, including extending the southern terminus to Governor John Sevier Highway (SR-168). During preparation of the EA for the segment of the project between Old Sevierville Pike and Chapman Highway, several environmental issues were identified that suggested other alternative alignments should be studied and evaluated. These identified issues could result in potential significant impacts. Therefore, due to potential environmental impacts in the study area, community concerns, and the desire to extend the project's south terminus, the FHWA in cooperation with TDOT will now prepare an EIS. The EIS will be for a proposal to complete State Route 71, South Knoxville Boulevard, from Governor John Sevier Highway (State Route 168) to Moody Avenue in Knox County, Tennessee, a distance of approximately four miles, depending upon the alternative alignment that could be selected. Alternatives to be considered include:
(1)No-build;
(2)a Transportation System Management alternative;
(3)one or more build alternatives that could include constructing a roadway on a new location, upgrading existing Chapman Highway (U.S. 441/State Route 33/71), or a combination of both; and
(4)other alternatives that may arise from public input. Public scoping meetings will be held for the project corridor. As part of the scoping process, Federal, State, and local agencies and officials; private organizations; citizens; and interest groups will have an opportunity to identify issues of concern and provide input on the purpose and need for the project, range of alternatives, methodology, and the development of the EIS. A Coordination Plan will be developed to include the public in the project development process. This plan will utilize the following outreach efforts to provide information and solicit input: newsletters; an internet website; e-mail and direct mail; informational meetings and briefings; public hearings; and other efforts as necessary and appropriate. A public hearing will be held upon completion of the Draft EIS and 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 hearings. To ensure that the full range of issues related to this proposed action are identified and taken into account, comments and suggestions are invited from all interested parties. Comments and questions concerning the proposed action should be directed to the FHWA contact person at the address provided above. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this proposed program.) Issued on: April 25, 2007. Karen M. Brunelle, Planning and Program Mgmt. Team Leader, Nashville, TN. [FR Doc. E7-8250 Filed 4-30-07; 8:45 am] BILLING CODE 4910-22-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Environmental Impact Statement: Port Huron township and City of Port Huron, MI AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of intent. SUMMARY: The FHWA is reissuing this Notice to advise the public of changes to the Environmental Assessment that was to be prepared for the proposed improvements to the I-94/I-69 corridor and the Black River Bridge in Port Huron Township, MI and changes to the Environmental Impact Statement that was to be prepared for the proposed improvements to the United States Port of entry Plaza for the Blue Water Bridge in St. Clair County, Michigan. This Notice revises the published Notices of Intent of January 27, 2005 and November 7, 2006. FOR FURTHER INFORMATION CONTACT: Mr. Ryan Rizzo, Major Projects Manager, Federal Highway Administration, 315 W. Allegan Street, Room 201, Lansing, Michigan 48933, Telephone
(517)702-1833. SUPPLEMENTARY INFORMATION: The FHWA in cooperation with the Michigan Department of Transportation
(MDOT)is preparing an Environmental Impact Statement
(EIS)to evaluate alternatives for potential improvements to the United States Border Plaza at the Blue Water Bridge. The Blue Water Bridge is a major passenger and commercial border crossing between the United States and Canada and is the termination point for I-94 in the United States and for Highway 402 in Canada. MDOT owns and operates the Blue Water Bridge in conjunction with the Canadian Blue Water Bridge Authority (BWBA), MDOT also owns and operates the Blue Water Bridge Border Plaza. Several inspection agencies operate on the United States Plaza. The agencies are responsible for inspecting vehicles, goods, and people entering the United States and include: The Bureau of Customs and border Protection (CBO), the United States Department of Agriculture (USDA), and the Food and Drug Administration (FDA). The inspection agencies lease facilities on the United States Plaza from MDOT through the General Services Administration (GSA), which serves as the Federal-leasing agent. MDOT collects tolls from vehicles departing the United States for Canada on the plaza. The study area is located within the City of Port Huron and Port Huron Township. The study area consists of approximately 30 blocks (195 acres) of urban land use surrounding the existing plaza and ramps and extends to the west along I-94/I-69 approximately 2.2 miles. The study area includes the Black River Bridge, Water Street interchange, Lapeer Connector interchange, and locations for possible off-site inspection facilities, located north of I-94/I-69 and west of the Water Street interchange. In September 2002, this project started as an Environmental Assessment
(EA)and proceeded through the scoping phase, Purpose and Need documentation, and three public information meetings. As a result of identified potentially significant impacts, FHWA and MDOT concluded in 2004 that an Environmental Impact Statement should be completed. In 2006 after further analysis, it was decided that the project could be split into two environmental documents: and Environmental Assessment for the I-94/I-69 corridor improvements and an Environmental Impact Statement for the plaza project. In early 2007, after additional consultation with stakeholders and interested parties, it was determined that the two separate studies should be merged into one and the I-94/I-69 improvements will be a part of the Environmental Impact Statement. Four plaza and transportation improvement alternatives have been identified within the recommended study area. Alternatives will include:
(1)No-Build Alternative,
(2)Township alternative with a secured I-94 corridor,
(3)City alternative with Pine Grove Avenue relocated to the east and an unsecured I-94 corridor. Agency and citizen involvement will continue to be solicited throughout this process. A public hearing will be held on the Draft Environmental Impact Statement (DEIS). Public notice will be given of the time and place of the hearing. The DEIS 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 are 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. Issued on: April 20, 2007. James J. Steele, Division Administrator, Lansing, Michigan. [FR Doc. 07-2112 Filed 4-30-07; 8:45 am]
Connectionstraces to 32
Traces to 32 documents
U.S. Code
23 references not yet in our index
  • 30 CFR 206.250
  • 19 CFR 201
  • 19 CFR 207
  • 5 CFR 1320.10
  • 306 U.S. 292
  • 412 F.3d 165
  • 340 U.S. 474
  • 419 F.3d 477
  • 508 U.S. 223
  • 485 U.S. 759
  • 231 F.2d 699
  • 519 U.S. 482
  • Pub. L. 104-13
  • 17 CFR 239.17
  • Pub. L. 94-409
  • 17 CFR 240.19
  • 17 CFR 240.10
  • 15 USC 78(f)(b)
  • 15 USC 78(f)(b)(5)
  • 12 CFR 220
  • 17 CFR 240.17
  • 17 CFR 240.12
  • 17 CFR 240.15
Citation graph
cites case law
Notices
Notice of competitive coal lease sale
U.S.C.§ 181
U.S.C.§ 1675
C.F.R.§ 201.15
U.S.C.§ 207
U.S.C.§ 1677
U.S.C.§ 1675a
U.S.C.§ 552a
U.S.C.§ 824
U.S.C.§ 371
SCOTUS306 U.S. 292
F. App'x412 F.3d 165
SCOTUS340 U.S. 474
Cites 55 · showing 12Cited by 0 across 0 sources
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