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Code · REGISTER · 2007-06-01 · National Archives and Records Administration (NARA) · Notices

Notices. Notice of availability of proposed records schedules; request for comments

17,427 words·~79 min read·/register/2007/06/01/07-2717

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

BILLING CODE 6735-01-M NATIONAL ARCHIVES AND RECORDS ADMINISTRATION Records Schedules; Availability and Request for Comments AGENCY: National Archives and Records Administration (NARA). ACTION: Notice of availability of proposed records schedules; request for comments. SUMMARY: The National Archives and Records Administration
(NARA)publishes notice at least once monthly of certain Federal agency requests for records disposition authority (records schedules). Once approved by NARA, records schedules provide mandatory instructions on what happens to records when no longer needed for current Government business. They authorize the preservation of records of continuing value in the National Archives of the United States and the destruction, after a specified period, of records lacking administrative, legal, research, or other value. Notice is published for records schedules in which agencies propose to destroy records not previously authorized for disposal or reduce the retention period of records already authorized for disposal. NARA invites public comments on such records schedules, as required by 44 U.S.C. 3303a(a). DATES: Requests for copies must be received in writing on or before July 2, 2007 (Note that the new time period for requesting copies has changed from 45 to 30 days after publication). Once the appraisal of the records is completed, NARA will send a copy of the schedule. NARA staff usually prepare appraisal memorandums that contain additional information concerning the records covered by a proposed schedule. These, too, may be requested and will be provided once the appraisal is completed. Requesters will be given 30 days to submit comments. ADDRESSES: You may request a copy of any records schedule identified in this notice by contacting the Life Cycle Management Division
(NWML)using one of the following means: Mail: NARA (NWML), 8601 Adelphi Road, College Park, MD 20740-6001. E-mail: *requestschedule@nara.gov.* FAX: 301-837-3698. Requesters must cite the control number, which appears in parentheses after the name of the agency which submitted the schedule, and must provide a mailing address. Those who desire appraisal reports should so indicate in their request. FOR FURTHER INFORMATION CONTACT: Laurence Brewer, Director, Life Cycle Management Division (NWML), National Archives and Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001. Telephone: 301-837-1539. E-mail: *records.mgt@nara.gov.* SUPPLEMENTARY INFORMATION: Each year Federal agencies create billions of records on paper, film, magnetic tape, and other media. To control this accumulation, agency records managers prepare schedules proposing retention periods for records and submit these schedules for NARA's approval, using the Standard Form
(SF)115, Request for Records Disposition Authority. These schedules provide for the timely transfer into the National Archives of historically valuable records and authorize the disposal of all other records after the agency no longer needs them to conduct its business. Some schedules are comprehensive and cover all the records of an agency or one of its major subdivisions. Most schedules, however, cover records of only one office or program or a few series of records. Many of these update previously approved schedules, and some include records proposed as permanent. No Federal records are authorized for destruction without the approval of the Archivist of the United States. This approval is granted only after a thorough consideration of their administrative use by the agency of origin, the rights of the Government and of private persons directly affected by the Government's activities, and whether or not they have historical or other value. Besides identifying the Federal agencies and any subdivisions requesting disposition authority, this public notice lists the organizational unit(s) accumulating the records or indicates agency-wide applicability in the case of schedules that cover records that may be accumulated throughout an agency. This notice provides the control number assigned to each schedule, the total number of schedule items, and the number of temporary items (the records proposed for destruction). It also includes a brief description of the temporary records. The records schedule itself contains a full description of the records at the file unit level as well as their disposition. If NARA staff has prepared an appraisal memorandum for the schedule, it too includes information about the records. Further information about the disposition process is available on request. Schedules Pending (Note that the new time period for requesting copies has changed from 45 to 30 days after publication) 1. Department of the Air Force, Agency-wide (N1-AFU-06-3, 2 items, 2 temporary items). Forms, correspondence, reports, and other records relating to inter-service transfer of officers and recall of officers to active duty. 2. Department of the Army, Agency-wide (N1-AU-07-5, 3 items, 1 temporary item). System outputs and reports associated with an electronic information system used to track basic human resources data on contractors deployed with U.S. forces. Data includes but is not limited to names, social security numbers, addresses, assignments, locations, and names of next of kin. Proposed for permanent retention are the master file and system documentation. 3. Department of Defense, Office of Inspector General (N1-509-07-1, 9 items, 6 temporary items). Records of the General Counsel including administrative hearings, legal proceedings, opinions on proposed directives, responses to requests for document searches, and working papers maintained by individual attorneys. Proposed for permanent retention are office functional files, historical legislative files, and policy files. 4. Department of Defense, National Geospatial-Intelligence Agency (N1-537-03-10, 8 items, 8 temporary items). Copies of gravity, geodesy, gravimetry, and isostasy files maintained outside the primary recordkeeping systems. Also included are bibliographic index files. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 5. Department of Homeland Security, Office of Public Affairs (N1-563-07-3, 6 items, 2 temporary items). Background research materials accumulated by the history office. Proposed for permanent retention are historical collection files documenting the decisions and policies of the Department's senior leadership; oral history recordings, transcripts, and finding aids; and program management files. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 6. Department of Homeland Security, Transportation Security Administration (N1-560-07-1, 3 items, 3 temporary items). Authorization forms granting overnight guests at airport hotels access to commercial establishments beyond airport screening checkpoints. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 7. Department of the Interior, Office of the Secretary (N1-48-07-4, 82 items, 58 temporary items). Records of the Office of Hearings and Appeals, including monthly and quarterly caseload reports, duplicative litigation files, docketing files, electronic docketing system, system input files, record return cards and other records. Proposed for permanent retention are recordkeeping copies of program case files, decision files, appeals reading files and hearings reading files. 8. Department of the Interior, Bureau of Reclamation (N1-115-07-1, 19 items, 18 temporary items). Records relating to administrative or mission-related functions, including administration, environmental monitoring, financial activities, law enforcement, personnel matters, public affairs, property management, research and development, and water reclamation. Proposed for permanent retention are case files relating to fish and wildlife management. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 9. Department of Justice, Civil Division (N1-60-07-1, 5 items, 2 temporary items). Miscellaneous general file reference copies of enclosures for Class 9, war matters. Proposed for permanent retention are case files relating to Executive Branch Emergency Powers and Presidential War Powers (1930-1949) and enclosures relating to World War I Alien Property matters. 10. Department of Justice, Federal Bureau of Investigation (N1-65-06-11, 3 items, 3 temporary items). Inputs, master file, and system documentation for a jewelry and gem database which tracks stolen jewelry. 11. Department of Justice, Federal Bureau of Investigation (N1-65-06-12, 4 items, 1 temporary item). Database used to track requests for records submitted by members of the Joint Intelligence Committee. Proposed for permanent retention are redacted and un-redacted paper and electronic versions of records and the indexes to the records used by the Joint Intelligence Committee Inquiry review to address questions related to the September 11, 2001, terrorist attacks. 12. Department of Transportation, Federal Railroad Administration (N1-399-07-7, 3 items, 2 temporary items). Records accumulated within the Office of Administrator and Deputy Administrator including copies of speeches and testimonies. Proposed for permanent retention are recordkeeping copies of speeches and testimonies of the Administrator and Deputy Administrator. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 13. Department of the Treasury, Bureau of the Public Debt (N1-53-06-8, 18 items, 16 temporary items). Records relating to procedures for federal investments, state and local government investments, and Treasury loans receivables. Proposed for permanent retention are historical records relating to interest rates and borrowing for government investments. 14. Department of Veterans Affairs, Veterans Health Administration (N1-15-07-1, 1 item, 1 temporary item). Echocardiogram images captured on video cassette tapes. A written report is filed in the patient folder. 15. Department of Veterans Affairs, Veterans Health Administration (N1-15-07-2, 1 item, 1 temporary item). Emergency room registers for agency medical care facilities. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 16. Environmental Protection Agency, Agency-wide (N1-412-07-03, 1 item, 1 temporary item). Records relating to the implementation of the post-award monitoring, evaluation, and oversight of grants and other assistance agreements. Included are correspondence, reports, policies and procedures, office-specific plans, and other documentation. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 17. Environmental Protection Agency, Headquarters (N1-412-07-10, 2 items, 2 temporary items). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. Records include communications and distribution strategy files, including plans, publications, and reports; and regional oversight and coordination files, including implementation reports, inspections, correspondence, reviews, and related records. Paper recordkeeping copies of these files were previously approved for disposal. Dated: May 25, 2007. Michael J. Kurtz, Assistant Archivist for Records Services—Washington, DC. [FR Doc. E7-10573 Filed 5-31-07; 8:45 am] BILLING CODE 7515-01-P NATIONAL SCIENCE FOUNDATION Advisory Committee for GPRA Performance Assessment (13853); Notice of Meeting In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended) the National Science Foundation announces the following meeting. *Name:* Advisory Committee for GPRA Performance Assessment—(13853). *Date and Time:* June 14, 2007, 8 a.m.-5 p.m.; June 15, 2007 8:30 a.m.-4 p.m. *Place:* National Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230, Room 375. If you are attending the meeting and need access to the NSF building, please contact Joyce Grainger ( *jgrainge@nsf.gov* ) for a visitor's badge. *Contact:* Ms. Joyce Grainger, BFA/BD, National Science Foundation, *jgrainge@nsf.gov.* Telephone: 703-292-4481. *Type of Meeting:* Open. *Purpose of Meeting:* To provide advice and recommendations to the National Science Foundation
(NSF)Director regarding the Foundation's performance as it relates to the Government Performance and Results Act of 1993 (GPRA). *Agenda:* Presentations and discussion of topics regarding the assessment of accomplishments of NSF awards as they relate to three strategic outcome goals stated in the National Science Foundation's 2006-2011 Strategic Plan: Discovery, Learning, and Research Infrastructure. Thursday, June 14, 2007 Welcome and Introductions; Charge to the Committee; and overview presentations on Foundation-wide issues in the context of performance assessment. The Committee, in subgroups, will analyze and assess accomplishments under the Discovery, Learning, and Research Infrastructure strategic outcome goals. Friday, June 15, 2007 The NSF Deputy Director will meet with the Committee. The Committee reconvenes as a Committee of the Whole to hear progress reports from the strategic goals' subgroups, discuss findings and conclusions, make recommendations, and complete preparation of the final report to NSF. Dated: May 25, 2007. Susanne Bolton, Committee Management Officer. [FR Doc. E7-10482 Filed 5-31-07; 8:45 am] BILLING CODE 7555-01-P NUCLEAR REGULATORY COMMISSION NUREG/CR-6931 Volume 1, “CAROLFIRE Test Report Volume 1: General Test Descriptions and the Analysis of Circuit Response Data, Draft for Public Comment,” and NUREG/CR-6931 Volume 2, “CAROLFIRE Test Report Volume 2: Cable Fire Response Data for Fire Model Improvement, Draft for Public Comment—Revision 1” AGENCY: Nuclear Regulatory Commission (NRC). ACTION: Notice of availability of “CAROLFIRE Test Report Volume 1: General Test Descriptions and the Analysis of Circuit Response Data, Draft for Public Comment,” and “CAROLFIRE Test Report Volume 2: Cable Fire Response Data for Fire Model Improvement, Draft for Public Comment—Revision 1,” and request for public comment. SUMMARY: The NRC is making NUREG/CR-6931 Volume 1, “CAROLFIRE Test Report Volume 1: General Test Descriptions and the Analysis of Circuit Response Data, Draft for Public Comment,” and NUREG/CR-6931 Volume 2, “CAROLFIRE Test Report Volume 2: Cable Fire Response Data for Fire Model Improvement, Draft for Public Comment—Revision 1” available for public comment for a period of 45 days. DATES: Comments on these documents should be submitted during the 45-day public comment period. Comments received after that date will be considered to the extent practicable. To ensure efficient and complete comment resolution, comments should include volume, section, page, and line numbers of the document to which the comment applies, if possible. ADDRESSES: Members of the public are invited and encouraged to submit written comments to Michael Lesar, Chief, Rulemaking, Directives and Editing Branch, Office of Administration, Mail Stop T6-D59, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Comments can also be hand delivered to Michael Lesar, 11545 Rockville Pike, Rockville, MD, between 7:30 a.m. and 4:15 p.m. on Federal workdays. Comments may also be sent electronically to *NRCREP@nrc.gov.* These documents are available at the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site at *http://www.nrc.gov/reading-rm/adams.html* under Accession No. ML071300299; on the NRC Web site at *http://www.nrc.gov/reading-rm/doc-collections/nuregs/docs4comment.html;* and at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD. The PDR's mailing address is USNRC PDR, Washington, DC 20555; telephone
(301)415-4737 or
(800)397-4205; fax
(301)415-3548; e-mail *PDR@NRC.GOV.* FOR FURTHER INFORMATION CONTACT: Mark H. Salley, Fire Research Branch, Materials Engineering Directorate, Office of Nuclear Regulatory Research, telephone
(301)415-2840, e-mail *mxs3@nrc.gov.* SUPPLEMENTARY INFORMATION: The purpose of NUREG/CR-6931 Volume 1 entitled “CAROLFIRE Test Report Volume 1: General Test Descriptions and the Analysis of Circuit Response Data, Draft for Public Comment,” is to document the fire test data taken during the *Ca* ble *R* esponse t *o* *L* ive *Fire* (CAROLFIRE) testing program to resolve “Bin 2 items” identified in Regulatory Issue Summary
(RIS)2004-03. RIS 2004-03 clarifies the scope of regulatory compliance inspections related to post-fire safe shutdown circuit analysis, and specifically, the cable failure modes effects analysis including spurious operation of plant equipment. The relevant Bin 2 items represent those cable failure mode configurations for which current data and understanding were lacking when the RIS was issued; CAROLFIRE provides that data. The purpose of NUREG/CR-6931 Volume 2 entitled “CAROLFIRE Test Report Volume 2: Cable Fire Response Data for Fire Model Improvement, Draft for Public Comment—Revision 1,” is to document the fire data taken during the CAROLFIRE program to foster the development of tailored cable thermal response and electrical failure fire modeling tools. This represents an extension of ongoing NRC fire model Verification and Validation efforts that address a recognized gap in current fire modeling capabilities. The NRC is seeking public comment in order to receive feedback from the widest range of interested parties and to ensure that all information relevant to developing this document is available to the NRC staff. These documents are issued for comment only and are not intended for interim use. The NRC will review public comments received on the documents, incorporate suggested changes as necessary, and issue the final NUREG/CR-6931 Volumes 1 and 2 for use. Dated at Rockville, MD, this 21st day of May 2007. For the Nuclear Regulatory Commission. Mark A. Cunningham, Director, Division of Fuel, Engineering and Radiological Research, Office of Nuclear Regulatory Research. [FR Doc. E7-10611 Filed 5-31-07; 8:45 am] BILLING CODE 7590-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27840] Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 May 25, 2007. The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of May, 2007. A copy of each application may be obtained for a fee at the SEC's Public Reference Branch (tel. 202-551-5850). An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC's Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on June 19, 2007, and should be accompanied by proof of service on the applicant, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE.,Washington, DC 20549-1090. FOR FURTHER INFORMATION CONTACT: Diane L. Titus at
(202)551-6810, SEC, Division of Investment Management, Office of Investment Company Regulation, 100 F Street, NE., Washington, DC 20549-4041. Prudential Unit Trusts Prudential Equity Trust Shares 1 [File No. 811-5046] *Summary:* Applicant, a unit investment trust, seeks an order declaring that it has ceased to be an investment company. By January 10, 2005, each series of applicant had made its final liquidating distribution to unitholders, based on net asset value. Applicant incurred no expenses in connection with the liquidation. *Filing Dates:* The application was filed on March 1, 2007, and amended on May 22, 2007. *Applicant's Address:* First Trust Portfolios, L.P., 1001 Warrenville Rd., Suite 300, Lisle, IL 60532. Seligman Quality Municipal Fund, Inc. [File No. 811-6100] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On March 23, 2007, applicant made a final liquidating distribution to its shareholders, based on net asset value. Expenses of $125,904 incurred in connection with the liquidation were paid by applicant. Applicant has retained $1,000 in cash to pay certain outstanding expenses related to the liquidation. *Filing Dates:* The application was filed on May 1, 2007, and amended on May 21, 2007. *Applicant's Address:* 100 Park Ave., New York, NY 10017. California Investment Trust II [File No. 811-4418] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On January 4, 2007, applicant transferred its assets to California Investment Trust, based on net asset value. Expenses of $74,000 incurred in connection with the reorganization were paid by the acquiring trust. *Filing Dates:* The application was filed on April 27, 2007, and amended on May 18, 2007. *Applicant's Address:* 44 Montgomery St., Suite 2100, San Francisco, CA 94104. Putnam Florida Tax Exempt Income Fund [File No. 811-6129] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On February 26, 2007, applicant transferred its assets to Putnam Tax Exempt Income Fund, based on net asset value. Expenses of $52,000 incurred in connection with the reorganization were paid by applicant and the acquiring fund. *Filing Date:* The application was filed on April 27, 2007. *Applicant's Address:* One Post Office Sq., Boston, MA 02109. First Fiduciary Trust [File No. 811-21445] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering or engage in business of any kind. *Filing Date:* The application was filed on April 25, 2007. *Applicant's Address:* 442 W 47th St., Kansas City, MO 64112. TT International U.S.A. Feeder Trust [File No. 811-9975] TT International U.S.A. Master Trust [File No. 811-10151] *Summary:* Applicants, a feeder fund and a master fund, respectively, in a master-feeder structure, each seek an order declaring that it has ceased to be an investment company. On September 26, 2005, TT International U.S.A. Master Trust (“Master Trust”) distributed substantially all of its assets to TT International U.S.A. Feeder Trust (“Feeder Trust”). On that same day, the Feeder Trust made a liquidating distribution to its shareholders other than TT International, its investment adviser, based on net asset value. The Master Trust has retained certain cash and tax reclamation assets, which are being held in custody by The Northern Trust Company. Once the Master Trust receives the outstanding tax reclamation amounts, it will make a final liquidating distribution to the Feeder Trust, which in turn will make a final distribution to TT International. Applicants' investment adviser, TT International, paid $65,000 in expenses incurred in connection with each liquidation. *Filing Dates:* The applications were filed on December 6, 2005, and amended on May 8, 2007. *Applicant's Address:* C/O SEI Investments Global Funds Services, One Freedom Valley Dr., Oaks, PA 19456. Antenor Fund, LLC [File No. 811-21089] Beaumont Fund, LLC [File No. 811-21090] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On December 31, 2006, each applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of approximately $3,333 incurred in connection with each liquidation were paid by Prospero Capital Management, LLC, investment adviser to each applicant. *Filing Dates:* The application for Antenor Fund, LLC was filed and amended on March 1, 2007, and amended on April 20, 2007. The application for Beaumont Fund, LLC was filed on April 20, 2007. *Applicant's Address:* C/O Prospero Capital Management, LLC, Wall Street Plaza, 88 Pine St., 31st Floor, New York, NY 10005. First Funds [File No. 811-6589] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. By June 2, 2006, applicant had transferred its assets to corresponding series of Goldman Sachs Trust, based on net asset value. Expenses of $966,321 incurred in connection with the reorganization were paid Goldman Sachs Asset Management, the surviving fund's investment adviser. *Filing Dates:* The application was filed on January 17, 2007, and two amended applications were filed on March 29, 2007, and May 21, 2007. *Applicant's Address:* First Tennessee Bank National Association, Attn: Karen Kruse, 530 Oak Court Dr., Suite 200, Memphis, TN 38117. Agile Funds, Inc. [File No. 811-21329] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. By February 15, 2007, all of applicant's shareholders had redeemed their shares at net asset value. Expenses of $5,000 incurred in connection with the liquidation were paid by Tactical Allocation Services, LLC, applicant's investment adviser. *Filing Dates:* The application was filed on February 28, 2007, and amended on April 18, 2007. *Applicant's Address:* C/O Tactical Allocation Services, LLC, 4909 East Pearl Circle, Suite 300, Boulder, CO 80301. Cohen & Steers Quality REIT Preferred Fund, Inc. [File No. 811-21086] Cohen & Steers Dividend Advantage Realty Fund, Inc. [File No. 811-21203] Cohen & Steers Total Return Realty Fund II, Inc. [File No. 811-21310] Cohen & Steers Dividend All Star Fund, Inc. [File No. 811-21573] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicants have never made a public offering of their securities and do not propose to make a public offering or engage in business of any kind. *Filing Dates:* The applications were filed on March 21, 2006, and amended on May 16, 2007. *Applicant's Address:* 280 Park Ave., 10th Floor, New York, NY 10017. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-10561 Filed 5-31-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55814; File No. SR-CBOE-2007-27] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change and Amendment No. 1 Thereto Relating to Class Quoting Limits May 25, 2007. I. Introduction On March 5, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to provide for termination of a Market-Maker or Remote Market-Maker (“RMM”) appointment in an option class traded on Hybrid if the Market-Maker or RMM has not submitted any electronic quotations in that option class during the preceding 30 days. The Exchange submitted Amendment No. 1 to the proposed rule change on April 18, 2007. The proposed rule change, as amended, was published for comment in the **Federal Register** on April 25, 2007. 3 The Commission received no comments on the proposal. This order approves the proposal, as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55644 (April 19, 2007), 72 FR 20570. II. Description of the Proposal CBOE Rule 8.3A establishes the upper limit, *i.e.* , Class Quoting Limit (“CQL”), on the number of members that may quote electronically in a particular product traded on CBOE's Hybrid Trading System and Hybrid 2.0 Platform (collectively “Hybrid”). 4 4 *See* Securities Exchange Act Release No. 51429 (March 24, 2005), 70 FR 16536 (March 31, 2005) (approving SR-CBOE-2005-58). The purpose of this rule change is to amend CBOE Rule 8.3A to adopt an interpretation which is applicable only in those option classes traded on Hybrid in which the CQL for the option class is full and there is a waiting list of member(s) requesting the ability to quote electronically in the option class. Specifically, in the event a Market-Maker or RMM who holds an appointment in an option class traded on Hybrid has not submitted any electronic quotations in that option class during the preceding 30 days (calculated on a rolling basis), then the Market-Maker or RMM's appointment in that option class will be terminated effective immediately. CBOE will notify the Market-Maker or RMM prior to terminating its appointment, and the rule provides that CBOE can make exceptions to this Interpretation and Policy in unusual circumstances. The Market-Maker or RMM can subsequently request an appointment in the option class. If there is a wait-list of members requesting the ability to quote electronically, then the Market-Maker or RMM will be placed on the wait-list for the option class. CBOE intends to implement the proposal upon approval by the Commission. III. Discussion After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 5 and, in particular, the requirements of Section 6 of the Act. 6 Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act, 7 in that the proposal has been designed to promote just and equitable principles of trade, and to protect investors and the public interest. The Commission believes that the proposal should enhance liquidity by helping to ensure that members who might be willing to provide competitive quotations and liquidity in an option class are given an opportunity to do so. 5 The Commission has considered the amended proposed rule change's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(5). IV. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 8 that the proposed rule change (SR-CBOE-2007-27), as modified by Amendment No. 1, is approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-10555 Filed 5-31-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55811; File No. SR-CHX-2007-08] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change To Expand Its Price Manipulation Rule To Address Additional Instances of Improper Behavior May 24, 2007. On March 21, 2007, the Chicago Stock Exchange, Inc. (“CHX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 to amend its rule relating to price manipulation. The proposed rule change was published for comment in the **Federal Register** on April 20, 2007. 3 The Commission received no comments on the proposal. This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55625 (April 12, 2007), 72 FR 19998. I. Description of the Proposal The Exchange seeks to amend its rule relating to price manipulation to address two separate instances of improper activity:
(1)Manipulative conduct consisting of a single event (in addition to a series of events, as the current rule contemplates) and
(2)manipulation based upon the entry of orders as opposed to that based solely upon the entry of trades. The proposal would also expand the rule to address conduct by persons associated with a participant firm, in addition to the firm's partners, directors, officers and registered employees. II. Discussion After careful review, the Commission finds that CHX's proposal to amend its rule relating to price manipulation is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 4 and, in particular, the requirements of Section 6 of the Act 5 and the rules and regulations thereunder. The Commission believes that these changes would appropriately establish that improper price manipulation could occur upon the entry of orders at successively higher or lower prices, not just upon the execution of trades at successively higher or lower prices. Additionally, the Commission believes that these changes would appropriately establish that improper price manipulation could occur with a single trade or order at a price higher or lower than the market. 4 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f. III. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 6 that the proposed rule change (SR-CHX-2007-08) be, and it hereby is, approved. 6 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-10554 Filed 5-31-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55816; File No. SR-DTC-2006-16] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change Amending FAST and DRS Limited Participant Requirements for Transfer Agents May 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on October 12, 2006, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) and on March 29, 2007, and May 3, 2007, amended the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by the DTC. 2 The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 1 15 U.S.C. 78s(b)(1). 2 The exact text of the DTC's proposed rule change is set forth in its filing, which can be found at *http://www.dtc.org/impNtc/mor/index.html#2006.* I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change DTC proposes to amend its rules to update, standardize, and restate the requirements for the Fast Automated Securities Transfer Program (“FAST”), to delineate the responsibilities of DTC and the transfer agents with respect to the securities held by transfer agents as part of the FAST program, and to restate the requirements for transfer agents participating in the Direct Registration System (“DRS”). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the DTC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. DTC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of these statements. 3 3 The Commission has modified portions of the text of the summaries prepared by the DTC.
(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Prior to the establishment of the FAST program, transfers of securities to or from DTC occurred by sending securities back and forth between DTC and transfer agents. In the case of securities being deposited with DTC, DTC sent the certificates to the transfer agent for registration into the name of DTC's nominee, Cede & Co., and the transfer agent returned the reregistered certificates to DTC. In the case of securities being withdrawn from DTC, DTC sent the certificates registered in the name of Cede & Co. to the transfer agent for reregistration into the name designated by the withdrawing DTC participant, and the transfer agent returned the reregistered security to DTC for delivery to the withdrawing participant. This process exposed securities to risk of loss during transit between DTC and transfer agents and resulted in the expense of making physical deliveries of securities. Under the FAST program, transfer agents hold FAST-eligible securities registered in the name of Cede & Co. in the form of balance certificates. As additional securities are deposited or withdrawn from DTC, transfer agents adjust the denomination of the balance certificates as appropriate and electronically confirm theses changes with DTC. Such “FAST agents” are holding in custody those securities that would otherwise be held at DTC for the benefit of DTC's participants. As such, the FAST program reduces the movement of certificates between DTC and the transfer agents and therefore reduces the costs and risks associated with the creation, movement, and storing of certificates to DTC, DTC participants, issuers, and transfer agents. 4 4 For a description of DTC's current rules relating to FAST, see Securities Exchange Act Release Nos. 34-13342 (March 8, 1977) [File No. SR-DTC-76-3]; 34-14997 (July 26, 1978) [File No. SR-DTC-78-11]; 34-21401 (October 16, 1984) [File No. SR-DTC-84-8]; 34-31941 (March 3, 1993) [SR-DTC-92-15]; and 34-46956 (December 6, 2002) [File No. SR-DTC-2002-15]. The FAST program has grown substantially since first being introduced in 1975. 5 Recent changes in the rules of the major securities exchanges are expected to further accelerate this growth. 6 Those exchange rules require, as a listing prerequisite, that issues be eligible for processing through DRS. Since becoming a FAST agent is a criterion for transfer agents' eligibility for participation in DRS, DTC anticipates significant growth in the FAST program as DRS becomes more widely used or eventually becomes mandatory. 5 DTC introduced the FAST program in 1975 with 400 issues and 10 agents. Currently, there are over 930,000 issues and approximately 90 agents in FAST. 6 Securities Exchange Act Release Nos. 54289 (August 8, 2006), 71 FR 47278 (August 16, 2006) [File No. SR-NYSE-2006-29]; 54290 (August 8, 2006), 71 FR 47262 (August 16, 2006) [File No. SR-Amex-2006-40]; 54288 (August 8, 2006), 71 FR 47276 (August 16, 2006) [File No. SR-NASDAQ-2006-08]; 54410 (September 7, 2006), 71 FR 54316 (September 14, 2006) [File No. SR-NYSE Arca-2006-31]; 55482 (March 15, 2007), 72 FR 13544 (March 22, 2007) [File No. SR-Phlx-2006-69]; 55481 (March 15, 2007), 72 FR 13544 (March 22, 2007) [File No. SR-CHX-2006-33]; and 55480 (March 15, 2007), 72 FR 13544 (March 22, 2007) [File No. SR-BSE-2006-46]. DRS allows investors to hold a security as the registered owner in electronic form on the books of the issuer rather than holding indirectly through a financial intermediary that holds the security in “street name” or holding through the use of a certificate. Through the use of FAST, DRS also allows for the transfer of a DRS position from the books of the issuer to a financial intermediary through the facilities of DTC. 7 7 For a description of DTC's rules relating to DRS, see Securities Exchange Act Release Nos. 34-37931 (November 7, 1996) [File No. SR-DTC-96-15]; 34-41862 (September 10, 1999) [File No. SR-DTC-99-16]; 34-42366 (January 28, 2000) [File No. SR-DTC-00-01]; 34-42704 (April 19, 2000) [File No. SR-DTC-00-04]; 34-43586 (November 17, 2000) [File No. SR-DTC-00-09]; 34-44969 (August 14, 2001) [File No. SR-DTC-2001-07]; 34-45232 (January 3, 2002) [SR-DTC-2001-18]; 34-45430 (February 11, 2002) [File No. SR-DTC-2002-01]; and 34-48885 (December 5, 2003) [File No. SR-DTC-2002-17]; 34-52422 (September 14, 2005) [File No. SR-DTC-2005-11].
(1)Proposed Amendments to DTC's FAST Requirements Despite the FAST program's robust past growth and expected future growth, the transfer agent eligibility requirements for FAST have not substantially changed since the implementation of FAST and do not:
(i)Take into account the increased volume and value of securities processed by the transfer agents,
(ii)reflect the current availability of improved technology and other safeguards which would enhance the safety and soundness of securities held at the transfer agents in the name of Cede & Co. on behalf of DTC participants, and
(iii)require the use of standardized audit reports to certify transfer agents' processes and controls. In light of the FAST program's growth, DTC has reexamined the requirements of the FAST program with a view toward ensuring that the assets in the custody of transfer agents, which ultimately belong to DTC's participants and their customers, are adequately protected. As more fully described below, DTC has identified aspects of the FAST program's requirements that need updating, including:
(i)Insurance requirements (to take into account transaction volumes and values conducted by transfer agents),
(ii)safekeeping requirements (to clarify and to enhance security and fire protection standards and to take into consideration technological advances that allow for economical security improvements),
(iii)regulatory and bookkeeping requirements (to ensure compliance with applicable laws and regulations and utilize standardized audit reports certifying as to transfer agents' processes and controls), and
(iv)fees (to clarify transfer agents' responsibilities). Taking these aspects into account, DTC proposes to amend and to restate the requirements for FAST transfer agents as set forth below in order to improve the soundness and safety of securities assets held for DTC on behalf of DTC participants and to provide better defined requirements as more issuers and transfer agents participate in the immobilization and dematerialization of securities. As a result, DTC proposes the following minimum requirements for transfer agents participating in the FAST program. 1. Transfer agent must be registered with the Commission, except where the transfer agent's participation in the FAST program is limited to acting solely for municipal issues (transfer agents must provide DTC with evidence of such), and follow all applicable rules under the Exchange Act, as well as all other applicable federal and state laws, rules, and regulations, applicable to transfer agents, including OFAC regulations. In addition, the transfer agent must provide DTC with a written notification as soon as practicable, if its regulator has taken any regulatory action against the transfer agent with respect to an alleged violation of such laws, rules, or regulations. Any regulatory reports or information furnished to DTC, including that required pursuant to this Item No. 1 and Item No. 14 below, shall be held as confidential by DTC and will not be used for any purpose other than to manage the risk of DTC and its Participants. All other information furnished to DTC pursuant to the requirements set forth herein shall be held in at least the same degree of confidence as may be required by law or the rules and regulations of the Commission. 8 8 The Commission notes that records relating to Commission examinations are highly confidential and are included herein only as one part of DTC's risk management system. Review of Commission examination records is a supplement to DTC's risk management program. 2. The transfer agent must execute and fulfill the requirements of the appropriate form of Balance Certificate Agreement with DTC (in the appropriate form). 9 9 DTC currently maintains three forms of the Balance Certificate Agreement: one for transfer agents, one for issuers acting as their own agent, and one for parties using a processing agent. DTC is consolidating these forms into a single form, as attached as Exhibit 2 to its filing. 3. When applying for FAST status, the transfer agent must include the name and CUSIP of a minimum of one issue it wishes to add to the FAST program. Issues eligible for the FAST program must be:
(i)Traded on an exchange registered under Section 6 of the Exchange Act,
(ii)municipal securities, or
(iii)transferred by a transfer agent that already acts as a FAST transfer agent for at least five
(5)other issues that are traded on an exchange. The above provisions notwithstanding, DTC reserves the complete discretion to include or exclude any particular issue in the FAST program. 4. The transfer agent must sign and fulfill requirements of the Operational Criteria for the FAST Transfer Agent Processing 10 and must comply with all applicable provisions of DTC's Operational Arrangements (“OA”) 11 as amended from time to time. 10 The Operational Criteria for the FAST Transfer Agent Processing is attached as Exhibit 2(b) to DTC's filing. 11 For more information relating to DTC's OA, see Securities Exchange Act Release Nos. 34-45994 (May 29, 2002), 67 FR 39452 [File No. SR-DTC-2002-02]; 34-24818 (August 19, 1987), 52 FR 31833 [File No. DTC-87-10]; 34-25948 (July 27, 1988), 53 FR 29294 [File No. DTC-88-13]; 34-30625 (April 23, 1992), 57 FR 18534 [File No. DTC-92-06]; 34-35649 (April 26, 1995), 60 FR 21576 [File No. DTC-94-19]; and 34-39894 (April 21, 1998), 63 FR 23310 [File No. DTC-97-23]. 5. In order to provide for the operational proficiency and efficiency of the program, on being accepted as a FAST transfer agent, the transfer agent must complete DTC's training on FAST functionality. 6. In order to protect against a risk of loss, the transfer agent must carry and provide evidence of a minimum of the following Bankers Blanket Bond Standard Form 24, or similar coverage, in proportion to transaction volume the agent processes, as follows: a. $10 million with a deductible of no more than $50,000 for a transfer agent with 25,000 or fewer transfer transactions per year as reported to the Commission. b. $25 million with a deductible of no more than $100,000 for a transfer agent with over 25,000 transfer transactions per year as reported to the Commission. In addition, the transfer agent must:
(i)Carry a minimum of $1 million in Errors and Omissions insurance with a deductible of no more than $25,000 and must show evidence of the policy on applying for FAST status and
(ii)have a “mail” insurance policy of $10 million or more and show evidence of the policy on applying for FAST status. The Errors and Omissions coverage shall identify DTC as an additional insured. The “mail” coverage shall identify DTC as a loss payee but shall not be invalidated by any act or neglect of the insured. In the event that a transfer agent can demonstrate that its existing coverage and/or capitalization would provide similar protections to DTC as the requirements set forth herein, it may apply to DTC for a waiver of the deductibles set out above. DTC shall have sole discretion as to whether or not to grant any such waiver. 7. In order to facilitate consistent protection against losses relating to securities in a transfer agent's control, the transfer agent must notify DTC as soon as practicable of notice of any actual lapse in insurance coverage or change in business practices, such as increasing volumes or other business changes that would result in the transfer agent requiring additional insurance coverage as outlined above. Such notice shall be delivered to: DTC, Inventory Management—1SL, 55 Water Street, New York, New York 10041. And with a copy to: DTC, General Counsel's Office, 55 Water Street—22nd Floor, New York, New York 10041. 8. The transfer agent must provide proof to DTC of the new or substitute policy for all required insurance at least 30 days prior to any expiration or change in insurance limits of a previous insurance policy. 9. To further facilitate Item No. 7 above, the terms of the insurance coverage noted above must state that the insurance provider must notify DTC within five
(5)days of notice of any threatened or actual lapse in the above coverage requirements. 10. The transfer agent must establish and maintain electronic communications with DTC to balance FAST positions on a daily schedule. 11. The transfer agent must provide on an annual basis to DTC within ten
(10)business days of filing with the SEC an accountant's report (pursuant to Exchange Act Rule 17Ad-13, Annual Study of Evaluation of Internal Accounting Controls) attesting to the soundness of controls to safeguard securities assets and reliability and integrity of computer systems, including confidentiality of customer account or other non-public information. To the extent that a transfer agent obtains a SAS-70 audit report, the transfer agent shall provide DTC with a copy of the report within ten
(10)business days of the transfer agent's receipt of the report. In addition, the transfer agent must provide, within the same time frame as required for such report, a report from an external certified public accountant: a. Certifying that the transfer agent is complying with all of DTC's requirements relating to FAST agents including and without limitation to
(a)those listed herein,
(b)the Operational Criteria for FAST Transfer Agent Processing,
(c)the Operational Agreement and
(d)the Balance Certificate Agreement; b. certifying that the agent meets any SEC requirements for business continuity planning; and c. containing an SSAE 10 report (or the equivalent) attesting to the soundness of the transfer agent's control in meeting the requirements set forth herein; however an SSAE-10 need not be provided if the transfer agent has provided a SAS-70 audit report in accordance with the provisions of this paragraph 11. 12. FAST agents must safeguard all the securities assets as stated under SEC Rule 17Ad-12 and with at least the following additional DTC requirements: a. Maintaining a theft and fireproof safe of no less than 350 pounds with a minimum anti-theft test rating of UL 687 and a minimum fire rating of UL 72; b. maintaining a theft and fire central monitoring alarm system protecting the entire premises; c. all certificates will be maintained in a secure location, accessible only by authorized personnel; and d. certificates shall not be left unattended unless stored in a secure location or a “locked” safe. 13. Personnel with access to the safe and the codes for the centralized monitoring system will be governed by the Commission's Rule 17f-2, which includes but is not limited to rules for fingerprinting staff that physically handle certificates. 14. The transfer agent upon application must provide DTC with a copy of the two most recent Commission examination reports as well as any follow-up correspondence. In addition, the transfer agent on an ongoing basis must provide DTC with notice of any alleged material deficiencies documented by the Commission within 5 business days of the transfer agent being notified of such material deficiencies. 15. During regular business hours upon advance notice, DTC reserves the right to visit and inspect to the extent pertaining to their position the transfer agent's facilities, books, and records but is not obligated to do so. 16. The transfer agent may only charge DTC fees ( *i.e.* , deposit, withdrawal, “rush,” cancellation, registration, or other transfer fees) that:
(a)Are contractually agreed to by the issuer,
(b)are the same for all other registered holders, and
(c)do not violate the regulations of the relevant securities exchange relating to transfer agent fees. 17. Existing FAST agents shall have a period of six
(6)months from the date of the Commission's approval of this rule filing within which they must comply with these requirements, including the submission to DTC of a signed Balance Certificate Agreement, signed Operational Criteria, and all supporting documentation referenced herein. If an agent is not compliant with these requirements upon the expiration of such period, DTC shall have the right, using sole discretion, to terminate or to continue the agent's FAST status. 18. An agent acting on behalf of a transfer agent or an issuer acting on its own behalf shall have the same rights and responsibilities under these requirements as if it were the transfer agent.
(2)Proposed Amended and Restated Eligibility Requirements for DRS Limited Participants DTC is proposing the following restatement of the eligibility requirements for DRS Limited Participants 12 and the DRS eligibility requirements for DRS issues to promote consistency with the FAST program requirements as well as to further ensure the soundness of the DRS system as follows. In order to be eligible to be a DRS Limited Participant, a transfer agent must: 12 DRS Limited Participants are transfer agents that participate in DRS through DTC. They are bound to certain provisions of the DTC rules. Securities Exchange Act Release No. 34-37931 (November 7, 1996) [File No. SR-DTC-96-15]. 1. Participate in the FAST program and abide by the rules outlined in the FAST requirements above. 2. Execute a DTC Limited Participant Account agreement. 3. Deliver transaction advices directly to investors relating to DRS Withdrawal-by-Transfer requests and provide DTC with a file (in a format and using functionality as specified by DTC from time to time) containing the transaction advice delivery date. 4. Complete DTC's program on training of DRS and Profile Modification System (“Profile”) functionality. 5. Participate in the Profile surety or insurance programs to initiate Profile transactions. 13 13 In DRS, instructions to transfer shares are sent by a broker-dealer that is a DTC participant or by a transfer agent that is a DRS Limited Participant through Profile. Profile provides screen based indemnification against false instructions from the party submitting the instructions through DRS. The indemnity is supported by either a surety bond or an insurance policy. 6. Implement program changes related to DTC systems modifications within a reasonable time upon receiving notification from DTC of such modifications. 7. Implement program changes to support and expand DRS processing capabilities as agreed to by the DRS Ad Hoc Committee. 8. Mail a transfer advice or statement to shareholders within three
(3)business days of each DRS account transaction that affects the shareholder's position or more often as required by the Commission's regulations. Existing DRS Limited Participants shall have a period of six
(6)months from the date of the Commission's approval of this rule filing within which they must comply with these requirements. If an agent is not compliant with these requirements upon the expiration of such period, DTC shall have the right using its sole discretion to terminate or to continue the agent's status as a DRS Limited Participant.
(3)Eligibility Requirements for DRS Issues In order for an issue to be eligible as a DRS issue, the following eligibility requirements must be met: 1. The issue must be transferred by a transfer agent accepted as a DTC DRS Limited Participant. 2. The issue must be included in the FAST program and may not be added to DRS if “out of balance” positions exist. 3. The issuer or transfer agent for the issue must mail a transaction advice or statement within three
(3)business days of each DRS account transaction that affects the shareholders position or more often as required by Commission regulations.
(4)DTC's Proposed Standard of Care Obligations With Respect to FAST DTC is proposing to establish a clearer demarcation of responsibility and liability with respect to the FAST program. Historically, DTC believes the Commission has left to user-governed clearing agencies the question of how to allocate losses associated with, among other things, clearing agency functions. 14 In conjunction with its approval of these standards, the Commission noted that while it had “called on registered clearing agencies to undertake, by rule, to deliver all fully-paid securities in their control to, or as directed by, the participant for whom the securities are held,” given that registered clearing agencies had demonstrated a high level of responsibility in safeguarding securities and funds, a standard of care based on a strict standard of liability was not required either with respect to failures of the clearing agency or a sub-custodian. DTC notes that securities in the FAST program are held by a transfer agent and are not within the immediate custody and control of DTC. As such, after a transfer agent is accepted to the FAST program, DTC is proposing the addition of a clarifying provision to Rule 6 to state that DTC will not be liable for the acts or omissions of FAST Agents or other third parties, unless caused directly by DTC's gross negligence, willful misconduct, or violation of federal securities laws for which there is a private right of action. In addition, DTC proposes that under no circumstance shall DTC be liable for selecting or accepting any third party as an agent of DTC, including a transfer agent participating in the FAST Program. 14 Securities Exchange Act Release Nos. 34-20221 (September 23, 1983) and 34-22940 (February 24, 1986). In this regard, DTC adopted a uniform standard with respect to certain of its procedures, or Service Guides, such that DTC is not liable for any loss incurred by a participant other than one caused directly by gross negligence or willful misconduct on the part of DTC. See Securities Exchange Act Release No. 34-44719 (August 17, 2001) [File No. SR-DTC-2001-01]. DTC believes the proposed rule change is consistent with the requirements of Section 17A of the Act, as amended, 15 and the rules and regulations thereunder because it improves standards relating to the eligibility of transfer agents and issues for its FAST and DRS programs. As such, it assures the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible. 15 15 U.S.C. 78q-s.
(B)Self-Regulatory Organization's Statement on Burden on Competition DTC 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. The Commission requests comments as to whether the rule change will effect competition.
(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others DTC has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the **Federal Register** or within such longer period:
(i)As the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will:
(A)By order approve such proposed rule change or
(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ) or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-DTC-2006-16 in the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-DTC-2006-16. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filings also will be available for inspection and copying at the principal office of the DTC and on the DTC's Web site, *http://www.dtcc.com.* All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-DTC-2006-16 and should be submitted on or before June 22, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-10553 Filed 5-31-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55815; File No. SR-NASDAQ-2007-027] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Amend the Generic Listing Standards for Portfolio Depositary Receipts and Index Fund Shares May 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 March 23, 2007, The NASDAQ Stock Market LLC (“Nasdaq” 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 Nasdaq. On May 8, 2007, Nasdaq filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons and is simultaneously approving the proposal on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaces and supersedes 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 amend its existing rules to eliminate the requirement that the calculation methodology for the index underlying an exchange traded fund (“ETF”) be a methodology specified by rule and to adopt generic listing standards for a series of ETFs based solely or in part on fixed income indexes or securities. The text of the proposed rule change is available at Nasdaq, the Commission's Public Reference Room, and *http://nasdaq.complinet.com.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change 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 Rule 19b-4(e) under the Act 4 provides that the listing and trading of a new derivative securities product by a self-regulatory organization shall not be deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4, 5 if the Commission has approved, pursuant to Section 19(b) of the Act, 6 the self-regulatory organization's trading rules, procedures and listing standards for the product class that would include the new derivatives securities product, and the self-regulatory organization has a surveillance program for the product class. 7 Nasdaq has adopted generic listing standards to satisfy this rule for the listing and trading of portfolio depositary receipts (“PDRs”) 8 and index fund shares (“IFSs”) 9 (collectively, exchange traded funds or “ETFs”), among others. The proposed rule change will eliminate from these generic listing standards the requirement that the calculation methodology for the index underlying an ETF be a methodology specified by rule. In addition, the proposed rule change will establish generic listing standards, trading rules, and procedures, including surveillance, to permit the listing and trading pursuant to Rule 19b-4(e) under the Act of ETFs based solely on fixed income indexes (“Fixed Income Indexes”) or on a combination of equity and fixed income indexes (“Combination Indexes”). 4 17 CFR 240.19b-4(e). 5 17 CFR 240.19b-4(c)(1). 6 15 U.S.C. 78s(b). 7 *See* Securities Exchange Act Release No. 40761 (December 8, 1998), 63 FR 70952 (December 22, 1998). 8 Nasdaq Rule 4420(i). 9 Nasdaq Rule 4420(j). Index Methodology Change Nasdaq rules currently permit Nasdaq to list an ETF without filing a proposed rule change if the ETF meets certain requirements. 10 Among those requirements is the requirement in Rules 4420(i)(3)(B) and 4420(j)(3)(B) that the index be calculated based on the market capitalization, modified market capitalization, price, equal-dollar or modified equal-dollar weighting or a methodology weighting components of the index based on any, some or all of the following: Sales, cash flow, book value and dividends. Nasdaq recently made a filing with the Commission to expand this list to accommodate new products and now proposes to remove this requirement to provide greater flexibility to index providers and ETF issuers to develop indexes that meet the investment objectives of investors. Further, removing these requirements will reduce the time required for products based on innovative index calculation methodologies to be brought to market. The indexes underlying ETFs would continue to be required to meet the other requirements of the generic listing standards. For example, domestic indexes require, without limitation, that the most heavily weighted component stock of an index not exceed 30% of the weight of the index, and the five most heavily weighted component stocks of an index not exceed 65% of the weight of the index, 11 and that an index include a minimum of 13 component stocks. 12 Similarly, the generic listing standards for international or global indexes require, without limitation, that the most heavily weighted component stock of an index not exceed 25% of the weight of the index, and the five most heavily weighted component stocks of an index not exceed 60% of the weight of the index, 13 and that an index include a minimum of 20 component stocks. 14 Nasdaq believes that such requirements will ensure that underlying indexes are sufficiently diversified, and that their components are sufficiently liquid to serve as the basis for an ETF. 15 10 Nasdaq Rules 4420(i) and 4420(j). 11 Nasdaq Rules 4420(i)(3)(A)(i)c. and 4420(j)(3)(A)(i)c. 12 Nasdaq Rules 4420(i)(3)(A)(i)d. and 4420(j)(3)(A)(i)d. 13 Nasdaq Rules 4420(i)(3)(A)(ii)c. and 4420(j)(3)(A)(ii)c. 14 Nasdaq Rules 4420(i)(3)(A)(ii)d. and 4420(j)(3)(A)(ii)d. 15 The Commission recently approved similar changes to the rules of other exchanges. *See* Securities Exchange Act Release Nos. 55544 (March 27, 2007), 72 FR 15923 (April 3, 2007) (approving an American Stock Exchange LLC (“Amex”) proposal (the “Amex Methodology Change”)); 55545 (March 27, 2007), 72 FR 15928 (April 3, 2007) and 55546 (March 27, 2007), 72 FR 15929 (April 3, 2007) (approving, on an accelerated basis, similar changes to the rules of the New York Stock Exchange (“NYSE”) and NYSE Arca, respectively). Use of Fixed Income and Combination Indexes The Commission has previously approved the trading on Nasdaq of a number of ETFs that are based on Fixed Income Indexes. 16 Nasdaq now proposes to establish generic listing standards, trading rules, and procedures, including surveillance, to permit the listing and trading pursuant to Rule 19b-4(e) of ETFs based solely on Fixed Income Indexes and Combination Indexes. The Commission recently approved similar standards for Amex. 17 The proposed rule is substantially similar to the Amex Rule. 18 Adopting generic listing standards for these securities and applying Rule 19b-4(e) should fulfill the intended objective of that Rule by allowing ETFs that satisfy the proposed generic listing standards to commence trading, without the need for a public comment period and Commission approval. This has the potential to reduce the time frame for bringing securities to market and thereby reduce the burdens on issuers and other market participants. If a particular index does not comply with the proposed generic listing standards under Rule 19b-4(e), Nasdaq may submit a separate filing pursuant to Section 19(b)(2) requesting Commission approval to list and trade the particular index-linked product. 16 Securities Exchange Act Release No. 55300 (February 15, 2007), 72 FR 8227 (February 23, 2007) (SR-Nasdaq-2007-002, relating to the trading, pursuant to unlisted trading privileges, of 14 ETFs). 17 Securities Exchange Act Release No. 55437 (March 9, 2007), 72 FR 12233 (March 15, 2007) (the “Amex Rule”). 18 The Amex Rule includes certain provisions that already appear elsewhere in Nasdaq's rules and are therefore not repeated. *See,* *e.g.* , Rules 4420(i)(4) and 4420(j)(4) (proposed to be renumbered as Rules 4420(i)(7) and 4420(j)(7)) relating to the trading hours for PDRs and IFSs, respectively. *See also* Rule 4613(a)(1)(B) relating to the minimum trading increment on Nasdaq. Proposed Rules 4420(i) and
(j)define the term “Fixed Income Securities” to include notes, bonds (including convertible bonds), debentures, or evidence of indebtedness that include, but are not limited to, U.S. Treasury securities (“Treasury Securities”), securities of government-sponsored entities (“GSE Securities”), municipal securities, trust-preferred securities, 19 supranational debt, 20 and debt of a foreign country or subdivision thereof. For purposes of the proposed definition, a convertible bond is deemed to be a Fixed Income Security until it is converted into its underlying common or preferred stock. 21 Once converted, the equity security may no longer continue as a component of a fixed income index under the proposed rules and, accordingly, would have to be removed from the index for the ETF to remain listed pursuant to the proposed rule. 19 Trust-preferred securities are undated cumulative securities issued from a special purpose trust in which a bank or bank holding company owns all of the common securities. The trust's sole asset is a subordinated note issued by the bank or bank holding company. Trust preferred securities are treated as debt for tax purposes so that the distributions or dividends paid are a tax-deductible interest expense. 20 Supranational debt represents the debt of international organizations such as the World Bank, the International Monetary Fund, regional multilateral development banks, and multilateral financial institutions. Examples of regional multilateral development banks include the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, and the Inter-American Development Bank. In addition, examples of multilateral financial institutions include the European Investment Bank and the International Fund for Agricultural Development. 21 Under the Section 3(a)(11) of the Act, 15 U.S.C. 78c(a)(11), a convertible security is an equity security. However, for the purposes of the proposed generic listing criteria, Nasdaq believes that defining a convertible security (prior to its conversion) as a Fixed Income Security is consistent with the objectives and intention of the generic listing standards for fixed-income-based ETFs as well as the Act. Fixed Income Index Criteria To list an ETF pursuant to the proposed generic listing standards for Fixed Income Indexes, the index underlying the ETF must satisfy all the conditions contained in proposed Rule 4420(i)(4) (for PDRs) or proposed Rule 4420(j)(4) (for IFSs). As with existing generic listing standards for ETFs based on domestic and international or global indexes, these listing criteria are designed to ensure that securities with substantial market distribution and liquidity account for a substantial portion of the weight of a Fixed Income Index. 22 22 The index criteria are loosely based on the standards contained in Commission and Commodity Futures Trading Commission (“CFTC”) rules regarding the application of the definition of narrow-based security index to debt security indexes. *See* Securities Exchange Act Release No. 54106 (July 6, 2006), 71 FR 39534 (July 13, 2006) (File No. S7-07-06) (the “Joint Rules”). To list an ETF based on a Fixed Income Index pursuant to the proposed generic listing standards, the index must meet the following criteria: • The index or portfolio must consist of Fixed Income Securities; • Components that in aggregate account for at least 75% of the weight of the index or portfolio must have a minimum original principal amount outstanding of $100 million or more; • No component Fixed Income Security (excluding a Treasury Security) represents more than 30% of the weight of the index, and the five highest weighted component fixed income securities in the index do not in the aggregate account for more than 65% of the weight of the index; 23 23 This is consistent with the standard for U.S. equity ETFs set forth in Rules 4420(i)(3)(A)c. and 4420(j)(3)(A)c. and the standard set forth by the Commission and the CFTC in the Joint Rules. • An underlying index or portfolio (excluding one consisting entirely of exempted securities) must include a minimum of 13 non-affiliated issuers; 24 and 24 The required number of unaffiliated issuers parallels the diversification requirement applicable to U.S. equity ETFs as set forth in Rules 4420(i)(3)(A)d. and 4420(j)(3)(A)d. • Component securities that in aggregate account for at least 90% of the weight of the index or portfolio must be either: 25 25 Nasdaq notes that this proposed standard is consistent with a similar standard in the Joint Rules and is designed to ensure that the component fixed income securities have sufficient publicly available information. ▪ From issuers that are required to file reports pursuant to Sections 13 and 15(d) of the Act; 26 26 15 U.S.C. 78m and 78o(d). ▪ From issuers that have a worldwide market value of outstanding common equity held by non-affiliates of $700 million or more; ▪ From issuers that have outstanding securities that are notes, bonds, debentures, or evidences of indebtedness having a total remaining principal amount of at least $1 billion; ▪ Exempted securities, as defined in Section 3(a)(12) of the Act; 27 or 27 15 U.S.C. 78c(a)(12). ▪ From issuers that are governments of foreign countries or political subdivisions of foreign countries. The proposed generic listing requirements for ETFs based on Fixed Income Indexes would not require that component securities in an underlying index have an investment-grade rating. 28 In addition, the proposed requirements do not include a minimum trading volume, due to the lower trading volume that generally occurs in the fixed income markets as compared to the equity markets. 29 28 *See* Joint Rules, 71 FR at 30537. 29 Nasdaq believes that the requirement to have a minimum principal amount outstanding of $100 million, coupled with the proposed concentration requirements, would reduce the likelihood that an ETF listed under the proposal would be readily susceptible to manipulation. Listing and Trading of ETFs Based on Combination Indexes To list an ETF pursuant to the proposed generic listing standards for Combination Indexes, an index underlying the ETF must satisfy all the conditions contained in proposed Rule 4420(i)(5) (for PDRs) or Rule 4420(j)(5) (for IFSs). As with ETFs based solely on Fixed Income Indexes, the generic listing standards are intended to ensure that securities with substantial market distribution and liquidity account for a substantial portion of the weight of both the equity and fixed income portions of a Combination Index. The proposed rules provide that Nasdaq may list and trade ETFs based on a combination of indexes or a series of component securities representing the U.S. or domestic equity market, the international equity market, and the fixed income market, pursuant to Rule 19b-4(e) under the Act, provided that:
(i)Such portfolio or combination of indexes has been described in an exchange rule approved by the Commission for the trading of options, PDRs, IFSs, Index-Linked Exchangeable Notes, or Index-Linked Securities, and all of the standards set forth in the approval order are satisfied by the exchange employing generic listing standards; or
(ii)the equity portion and fixed income portion of the component securities separately meet the criteria set forth in Rule 4420(i)(3) (equities) and proposed Rule 4420(i)(4) (fixed income) for PDRs and Rule 4420(j)(3) (equities) and proposed Rule 4420(j)(4) (fixed income) for IFSs. Index Maintenance and Information Nasdaq proposes to establish requirements regarding the maintenance and dissemination of index information in connection with ETFs based on Fixed Income Indexes and Combination Indexes. These rules would require that the underlying value of a Fixed Income Index be widely disseminated by one or more major market data vendors at least once a day during the time when the corresponding ETF trades on Nasdaq. 30 The rules also would require that the underlying value of a Combination Index be widely disseminated by one or more major market data vendors at least once every 15 seconds during the time when the corresponding ETF trades on Nasdaq, provided that, with respect to the fixed income components of the Combination Index, their impact on the index is required to be updated only once each day. 31 Nasdaq believes that these provisions reflect the nature of the fixed income markets as well as the frequency of intra-day trading information with respect to Fixed Income Securities. If the index value does not change during some or all of the period when trading is occurring on Nasdaq, the last official calculated index value must remain available throughout Nasdaq trading hours. 30 Nasdaq Rules 4420(i)(4)(B)(ii) and 4420(j)(4)(B)(ii). 31 Nasdaq Rules 4420(i)(5)(A)(ii) and 4420(j)(5)(A)(ii). Moreover, if a Fixed Income Index or Combination Index underlying an ETF is maintained by a broker-dealer or fund advisor, the broker-dealer or fund advisor shall erect a “firewall” around the personnel who have access to information concerning changes and adjustments to the index. 32 In addition, any advisory committee, supervisory board, or similar entity that advises a Reporting Authority or that makes decisions on index composition, methodology, and related matters, must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the index. 33 32 Rules 4420(i)(4)(B)(i), 4420(i)(5)(A)(i), 4420(j)(4)(B)(i), and 4420(j)(5)(A)(i). 33 Rules 4420(i)(4)(B)(iii), 4420(i)(5)(A)(iii), 4420(j)(4)(B)(iii), and 4420(j)(5)(A)(iii). Application of General Rules Proposed Rules 4420(i)(6) and 4420(j)(6) set forth requirements governing any ETF based on a Fixed Income Index or Combination Index. These include initial shares outstanding and the dissemination of the Intraday Indicative Value, which is an estimate of the value of a share of each ETF, updated at least every 15 seconds. ETF Listing Criteria, Trading Rules, and Procedures Under Nasdaq's proposal, an ETF based on a Fixed Income Index or Combination Index would be subject to the listing criteria set out in proposed Rules 4420(i)(9) and 4420(j)(9) 34 Accordingly, an ETF's NAV must be calculated at least once each day and disseminated to all market participants at the same time. 35 Also, where the value of the underlying index or portfolio of securities on which the ETF is based is no longer calculated or available, or if the ETF replaces the underlying index or portfolio with a new index or portfolio, Nasdaq would commence delisting proceedings unless the new index or portfolio meets the requirements of and listing standards set forth in Rules 4420(i) and 4420(j), as applicable. 36 Nasdaq proposes to clarify that if a sponsor of an ETF chose to replace an index or portfolio that did not meet any of Nasdaq's generic listing standards, approval by the Commission of a separate filing pursuant to Section 19(b)(2) of the Act to list and trade that ETF would be required. 37 An ETF based on a Fixed Income Index or Combination Index would be traded, in all respects, under Nasdaq's existing trading rules and procedures that apply to ETFs generally, including with respect to delisting and trading halts. In particular, Rule 4120(a)(9) provides that, if the Intraday Indicative Value or the index value applicable to that series of ETFs is not being disseminated as required, Nasdaq may halt trading during the day in which the interruption to the dissemination of the Intraday Indicative Value or the index value occurs. If the interruption to the dissemination of the Intraday Indicative Value or the index value persists past the trading day in which it occurred, Nasdaq would halt trading no later than the beginning of the trading day following the interruption. 38 34 These rules will be renumbered from Rules 4420(i)(6) and 4420(j)(6). 35 *See* proposed Rules 4420(i)(9)(A)(ii) and 4420(j)(9)(A)(ii) (requiring that, before approving an ETF for listing, Nasdaq will obtain a representation from the ETF issuer that the NAV per share will be calculated daily and made available to all market participants at the same time). 36 *See* proposed Rules 4420(i)(9)(B)(i)b and 4420(j)(9)(B)(i)b. 37 The Commission previously approved a similar clarification to the rules of the American Stock Exchange. *See* Securities Exchange Act Release No. 54739 (November 9, 2006), 71 FR 66993 (November 17, 2006) (approving SR-Amex-2006-78). 38 If an ETF is traded on Nasdaq pursuant to unlisted trading privileges, Nasdaq would halt trading if the primary listing market halts trading in such ETF because the Intraday Indicative Value and/or the index value is not being disseminated. *See* Rule 4120(b)(9). As noted above, if a broker-dealer is responsible for maintaining (or has a role in maintaining) the underlying index, the broker-dealer would be required to erect and maintain a “firewall,” in a form satisfactory to Nasdaq, to prevent the flow of non-public information regarding the underlying index from the personnel involved in the development and maintenance of such index to others such as sales and trading personnel. Surveillance Nasdaq represents that an ETF based on a Fixed Income Index or Combination Index would be covered under NASD Regulation's surveillance program for ETFs, which NASD Regulation administers for Nasdaq under a regulatory services agreement. NASD Regulation will implement written surveillance procedures for ETFs based on either a Fixed Income Index or a Combination Index. 39 Nasdaq represents that NASD Regulation's surveillance procedures are adequate to properly monitor the trading of ETFs listed pursuant to the proposed new listing standards. In addition, Nasdaq also has a general policy prohibiting the distribution of material, non-public information by its employees. 39 *See* proposed Rules 4420(i)(6)(C) and 4420(j)(6)(C). 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 40 in general and with Section 6(b)(5) of the Act, 41 in particular, in that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 40 15 U.S.C. 78f. 41 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. 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-2007-027 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2007-027. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to the File Number SR-NASDAQ-2007-027 and should be submitted on or before June 22, 2007. IV. Commission Findings After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. 42 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act 43 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, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 42 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 43 15 U.S.C. 78f(b)(5). Currently, the Exchange must file a proposed rule change with the Commission pursuant to Section 19(b)(1) of the Act 44 and Rule 19b-4 thereunder 45 to list or trade any ETF based on Fixed Income Securities. The Exchange also must file a proposed rule change to list or trade an ETF based on a Fixed Income or Combination Index described in an exchange rule previously approved by the Commission as an underlying benchmark for a derivative security. Rule 19b-4(e) under the Act, however, provides that the listing and trading of a new derivative securities product by an SRO will not be deemed a proposed rule change pursuant to Rule 19b-4(c)(1) if the Commission has approved, pursuant to Section 19(b) of the Act, the SRO's trading rules, procedures, and listing standards for the product class that would include the new derivative securities product, and the SRO has a surveillance program for the product class. The Exchange's proposed rules for the listing and trading of ETFs pursuant to Rule 19b-4(e) based on
(1)certain indexes with components that include Fixed Income Securities or
(2)indexes or portfolios described in exchange rules previously approved by the Commission as underlying benchmarks for derivative securities fulfill these requirements. Use of Rule 19b-4(e) by Nasdaq to list and trade such ETFs should promote competition, reduce burdens on issuers and other market participants, and make such ETFs available to investors more quickly. 46 44 15 U.S.C. 78s(b)(1). 45 17 CFR 240.19b-4. 46 The Commission notes that failure of a particular ETF to satisfy the Exchange's generic listing standards does not preclude the Exchange from submitting a separate proposal to list and trade such ETF. The Commission has approved for listing and trading ETFs based on certain fixed income indexes and structured notes linked to a basket or index of Fixed Income Securities. 47 Further, the Commission approved substantially similar generic listing standards for ETFs based on Fixed Income Indexes and Combination Indexes to be traded on Amex. 48 The Commission believes that adopting generic listing standards for ETFs based on Fixed Income and Combination Indexes should fulfill the intended objective of that rule by allowing those ETFs that satisfy the proposed generic listing standards to commence trading without a rule filing. Taken together, the Commission finds that the Nasdaq proposal meets the requirements of Rule 19b-4(e). All products listed under the proposed generic listing standards will be subject to existing Nasdaq rules governing the trading of ETFs. 47 *See* note 16 *supra.* 48 *See* note 17 *supra.* Proposed Rule 4420(i) (for PDRs) and proposed Rule 4420
(j)(for IFSs) establish the standards for the composition of a Fixed Income Index or Combination Index underlying an ETF. These requirements are designed, among other things, to ensure that components of an index or portfolio underlying the ETF are adequately capitalized and sufficiently liquid, and that no one security dominates the index. The Commission believes that these standards are reasonably designed to ensure that a substantial portion of any underlying index or portfolio consists of securities about which information is publicly available, and that when applied in conjunction with the other applicable listing requirements, will permit the listing and trading only of ETFs that are sufficiently broad-based in scope to minimize potential manipulation. The Commission further believes that the proposed listing standards are reasonably designed to preclude Nasdaq from listing and trading an ETF that might be used as a surrogate for trading in unregistered securities. The proposed generic listing standards also will permit Nasdaq to list and trade an ETF if the Commission previously has approved a rule of another exchange that contemplates listing and trading a derivative security based on the same underlying index. Nasdaq would be able to rely on the Commission's earlier approval order, provided that Nasdaq complies with the commitments undertaken by the other exchange set forth in the prior order, including any surveillance-sharing arrangements. The Commission believes that Nasdaq's proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act, 49 which sets forth Congress' finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Under the Exchange's proposed listing standards, the underlying value of a Fixed Income Index is required to be widely disseminated by one or more major market data vendors at least once a day during the time when the corresponding ETF trades on the Exchange. Likewise, the underlying value of a Combination Index is required to be widely disseminated by one or more major market data vendors at least once every 15 seconds during the time when the corresponding ETF trades on the Exchange, provided that, with respect to the fixed income components of the Combination Index, the impact on the index is required to be updated only once each day. 49 15 U.S.C. 78k-1(a)(1)(C)(iii). Furthermore, the Commission believes that the proposed rules are reasonably designed to promote fair disclosure of information that may be necessary to price an ETF appropriately. If a Fixed Income Index or Combination Index underlying such an ETF is maintained by a broker-dealer or fund advisor, that entity must erect a firewall around the personnel who have access to information concerning changes and adjustments to the index. Any advisory committee, supervisory board, or similar entity that advises a Reporting Authority or that makes decisions on index composition, methodology, or related matters must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the index. The Commission also notes that proposed Rules 4420(i)(9)(A)(ii) and 4420(j)(9)(A)(ii), which would apply to an ETF listed and traded pursuant to this proposal, require that, before approving an ETF for listing, the Exchange will obtain a representation from the ETF issuer that the NAV per share will be calculated daily and made available to all market participants at the same time. The Commission also believes that the Exchange's trading halt rules are reasonably designed to prevent trading in an ETF when transparency cannot be assured. Rule 4120(a)(9) provides that, if the Intraday Indicative Value or the index value applicable to an ETF is not disseminated as required, the Exchange may halt trading during the day in which the interruption occurs. If the interruption continues, the Exchange will halt trading no later than the beginning of the next trading day. 50 Also, the Exchange will commence delisting proceedings in the event that the value of the underlying index is no longer calculated and widely disseminated on at least a 15-second basis (for Combination Indexes) or at least once a day (for Fixed Income Indexes). 50 Nasdaq may also exercise discretion to halt trading in a series of Portfolio Depository Receipts or Index Fund Shares based on a consideration of the following factors:
(A)trading in underlying securities comprising the index applicable to that series has been halted in the primary market(s),
(B)the extent to which trading has ceased in securities underlying the index, or
(C)the presence of other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market. *See* Nasdaq Rule 4120(a)(9). The Commission notes that the Exchange represented that NASD Regulation will implement written surveillance procedures for ETFs based on either a Fixed Income Index or Combination Index. 51 In approving this proposal, the Commission has relied on the Exchange's representation that its surveillance procedures are adequate to properly monitor the trading of ETFs listed pursuant to this proposal. This approval order is conditioned on the continuing accuracy of that representation. 51 *See* proposed Nasdaq Rules 4420(i)(6)(C) and 4420(j)(6)(C). Acceleration The Commission finds good cause to approve the proposal, as amended, prior to the thirtieth day after the proposal was published for comment in the **Federal Register** . The Commission believes that accelerating approval of the proposed rule change will expedite the listing and trading of additional ETFs based on Fixed Income and Combination Indexes by the Exchange, subject to consistent and reasonable standards. The Commission also notes that Nasdaq's proposed generic listing standards are substantially similar to the Amex Rules that were approved by the Commission. Thus, the Commission finds good cause, consistent with Section 19(b)(2) of the Act, 52 to grant accelerated approval of the proposed rule change. 52 15 U.S.C. 78s(b)(2). V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR-NASDAQ- 2007-027), as amended, is hereby approved on an accelerated basis. 53 53 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 54 54 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-10556 Filed 5-31-07; 8:45 am] BILLING CODE 8010-01-P SELECTIVE SERVICE SYSTEM Computer Matching Between the Selective Service System and the Department of Education AGENCY: Selective Service System. ACTION: Notice. In accordance with the Privacy Act of 1974 (5 U.S.C. 552a), as amended by the Computer Matching and Privacy Protection Act of 1988 (Pub. L. 100-503), and the Office of Management and Budget
(OMB)Guidelines on the Conduct of Matching Programs (54 FR 25818 (June 19, 1989)), and OMB Bulletin 89-22, the following information is provided: 1. Name of Participating Agencies The Selective Service System
(SSS)and the Department of Education (ED). 2. Purpose of the Match The purpose of this matching program is to ensure that the requirements of Section 12(f) of the Military Selective Service System Act [50 U.S.C. App. 462 (f)] are met. This program has been in effect since December 6, 1985. 3. Authority for Conducting the Matching Computerized access to the Selective Service Registrant Registration Records (SSS 10) enables ED to confirm the registration status of applicants for assistance under Title IV of the Higher Education Act of 1965 (HEA), as amended (20 U.S.C. 1070 et. seg.). Section 12(f) of the Military Selective Service Act, as amended [50 U.S.C. App. 462(f)], denies eligibility for any form of assistance or benefit under Title IV of the HEA to any person required to present himself for and submit to registration under Section 3 of the Military Selective Service System Act [50 U.S.C. App. 453] who fails to do so in accordance with that section and any rules and regulations issued under that section. In addition, Section 12(f)(2) of the Military Selective Service System Act specifies that any person required to present himself for and submit to registration under Section 3 of the Military Selective Service System Act must file a statement with the institution of higher education where the person intends to attend or is attending that he is in compliance with the Military Selective Service System Act. Furthermore, Section 12(f)(3) of the Military Selective Service System Act authorizes the Secretary of Education, in agreement with the Director of the Selective Service, to prescribe methods for verifying the statements of compliance filed by students. Section 484(n) of the HEA [20 U.S.C. 1091(n)], requires the Secretary to conduct data base matches with SSS, using common demographic data elements, to enforce the Selective Service registration provisions of the Military Selective Service Act [50 U.S.C. App. 462(f)], and further states that appropriate confirmation of a person shall fulfill the requirement to file a separate statement of compliance. 4. Categories of Records and Individuals Covered 1. Federal Student Aid Application File (18-11-01). Individuals covered are men born after December 31, 1959, but at least 18 years old by June 30 of the applicable award year. 2. Selective Service Registration Records (SSS 10). 5. Inclusive Dates of the Matching Program Commence on July 1, 2007 or 40 days after copies of the matching agreement are transmitted simultaneously to the Committee on Government Affairs of the Senate, the Committee on Government Operations of the House of Representatives, and the Office of Management and Budget, whichever is later, and remain in effect for eighteen months unless earlier terminated or modified by agreement of the parties. 6. Address for Receipt of Public Comments or Inquires Mr. Gastón Naranjo, Selective Service System, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425. Dated: May 24, 2007. William A. Chatfield, Director. [FR Doc. E7-10528 Filed 5-31-07; 8:45 am] BILLING CODE 8015-01-P TENNESSEE VALLEY AUTHORITY Environmental Impact Statement—Mountain Reservoirs Land Management Plan, Tennessee, North Carolina, and Georgia AGENCY: Tennessee Valley Authority. ACTION: Notice of intent. SUMMARY: The Tennessee Valley Authority
(TVA)will prepare an environmental impact statement
(EIS)addressing the impacts of various alternatives for managing project lands on nine TVA reservoirs in southeastern Tennessee, southwest North Carolina, and northwest Georgia. Public comment is invited concerning both the scope of the EIS and environmental issues that should be addressed as a part of this EIS. DATES: Comments on the scope of the EIS should be received on or before June 30, 2007. ADDRESSES: Written comments should be sent to Kenneth P. Parr, Environmental Stewardship and Policy, Tennessee Valley Authority, 1101 Market Street, LP 5U-C, Chattanooga, Tennessee 37402-2801. Comments may be e-mailed to *kpparr@tva.gov* or submitted by fax at
(423)751-3230. FOR FURTHER INFORMATION CONTACT: Laura M. Duncan, Tennessee Valley Authority, 1101 Market St. PSC 1E-C, Chattanooga, Tennessee 37402-2801. Telephone
(423)876-6706. E-mail may be sent to *Mountain_Reservoirs@tva.gov* . SUPPLEMENTARY INFORMATION: Background This notice is provided in accordance with the Council on Environmental Quality's regulations (40 CFR parts 1500 to 1503), TVA's procedures for implementing the National Environmental Policy Act (NEPA), and Section 106 of the National Historic Preservation Act
(NHPA)and its implementing regulations (36 CFR part 800). The Mountain Reservoirs Land Management Plan
(Plan)will address lands on the following reservoirs: Ocoee 1 (Parksville), Ocoee 2, and Ocoee 3 in Polk County, Tennessee; Apalachia in Polk County, Tennessee and Cherokee County, North Carolina; Hiwassee in Cherokee County, North Carolina; Fontana in Swain and Graham Counties, North Carolina; Chatuge in Clay County, North Carolina and Towns County, Georgia; Blue Ridge in Fannin County, Georgia; and Nottely in Union County, Georgia. These reservoirs were completed between 1911 and 1944. All of these reservoirs are operated for power production and recreation, and several of them also provide flood control and other benefits. The length of the reservoir pools range from 0 miles for the run-of-river Ocoee 2 to 29 miles for Fontana. TVA originally acquired a total of 104,375 acres of land above normal summer pool for the nine reservoirs and their associated hydroelectric generating facilities. Over the years, TVA has transferred to other public agencies, primarily the National Park Service and the U.S. Forest Service, or sold to various public and private entities the majority of this land. TVA presently owns a total of 6,274 acres of land on these reservoirs that is the subject of this Plan. TVA manages its public lands for conservation, recreation, and economic development. The Plan will allocate lands to various categories of uses, which will then be used to guide the types of activities that will be considered on each parcel of land. This allocation will take into account past land use allocations, current land uses, public needs, the presence of sensitive environmental resources, and TVA policies. By providing a clear statement of how TVA intends to manage public lands and by identifying land for specific uses, TVA hopes to provide a blueprint for the management of its mountain reservoir lands. Plans are submitted to the TVA Board of Directors for approval and adopted as guidelines for management of TVA public land consistent with the agency's responsibilities under the 1933 TVA Act. Potential Alternatives The EIS will analyze a range of alternative approaches to land allocation. The No Action alternative would continue to rely on the Forecast System adopted by TVA in 1965 and subsequently updated for all of the subject reservoirs except Fontana, which has never been planned. Planned uses under the Forecast System are Dam Reservation, Powerhouse Reservation, Public Recreation, Agricultural Research, Industry, Construction and Maintenance, Reservoir Operations, and Commercial Recreation. One or more Action Alternatives are anticipated depending on the results of the public scoping. Under any Action Alternative, TVA contemplates allocating lands into the following zones: Non-TVA Shoreland/Flowage Easement, TVA Project Operations, Sensitive Resource Management, Natural Resource Conservation, Industrial, Recreation, and Shoreline Access. If there are multiple Action Alternatives, they would likely differ in the amount of land they allocate to these zones. Under all alternatives, TVA anticipates that lands currently committed to a specific use would be allocated to that current use; however, changes that support TVA goals and objectives can be considered. Committed lands include those with existing long term easements, leases, licenses, and contracts; lands with outstanding land rights; and lands that are necessary for TVA project operations. The committed lands total 5,194 acres or 83 percent of the 6,274 acres being planned. The TVA dam reservations and generating facilities make up about 47 percent of the committed lands. Uncommitted lands total 1,080 acres. The uncommitted lands are on Chatuge, Nottely, Hiwassee, and Blue Ridge Reservoirs. This EIS will tier from TVA's Final EIS, Shoreline Management Initiative: An Assessment of Residential Shoreline Development Impacts in the Tennessee Valley (November 1998). That EIS evaluated alternative policies for managing residential shoreline development on TVA reservoirs. Residential shoreline occurs on Chatuge, Hiwassee, Blue Ridge, Fontana and Nottely Reservoirs, and the Plan will not affect the policies for its management. Proposed Issues To Be Addressed The EIS will contain descriptions of the existing environmental and socioeconomic resources within the area that would be affected by the Plan. TVA's evaluation of potential impacts to these resources will include, but not necessarily be limited to, the potential impacts on water quality, water supply, aquatic and terrestrial ecology, endangered and threatened species, wetlands, floodplains, recreation, aesthetics and visual resources, land use, historic and archaeological resources, and socioeconomic resources. Scoping Process Scoping, which is integral to the process for implementing the NEPA, is a procedure that solicits public input to the EIS process to ensure that:
(1)Issues are identified early and properly studied;
(2)issues of little significance do not consume substantial time and effort;
(3)the draft EIS is thorough and balanced; and
(4)delays caused by an inadequate EIS are avoided. TVA's NEPA procedures require that the scoping process commence soon after a decision has been reached to prepare an EIS in order to provide an early and open process for determining the scope and for identifying the significant issues related to a proposed action. The range of alternatives and the issues to be addressed in the draft EIS will be determined, in part, from written comments submitted by mail or e-mail, and comments presented orally or in writing at any public meetings. The preliminary identification of reasonable alternatives and environmental issues in this notice is not meant to be exhaustive or final. Additional information on the planning process is available on the TVA Web site at *http://www.tva.com/environment/reports/mtnres/.* This material includes a questionnaire that scoping participants are requested to complete in order to assist TVA in the planning process. The participation of affected Federal, State, and local agencies and Indian tribes, as well as other interested persons, is invited. Pursuant to the regulations of the Advisory Council on Historic Preservation implementing Section 106 of the NHPA, TVA also solicits comments on the potential of the proposed Plan to affect historic properties. This notice also provides an opportunity under Executive Orders 11990 and 11988 for early public review of the potential for TVA's Plan to affect wetlands and floodplains, respectively. Comments on the scope of this EIS should be submitted no later than the date given under the DATES section of this notice. Any comments received, including names and addresses, will become part of the administrative record and will be available for public inspection. TVA will hold a public scoping meeting on June 21, 2007. The open-house style meeting will be held at the Blairsville Campus of the North Georgia Technical College, 434 Meeks Avenue, Blairsville, Georgia. Upon consideration of the scoping comments, TVA will develop alternatives and identify environmental issues to be addressed in the EIS. These will be described in a report that will be available to the public. Following analysis of the environmental consequences of each alternative, TVA will prepare a draft EIS for public review and comment. Notice of availability of the draft EIS will be published by the Environmental Protection Agency in the **Federal Register** . TVA will solicit comments on the draft EIS in writing and at public meetings to be held in the project area. TVA expects to release the draft EIS in the winter of 2008 and the final EIS in the summer of 2008. Dated: May 25, 2007. Bridgette K. Ellis, Senior Vice President, Office of Environment and Research. [FR Doc. E7-10637 Filed 5-31-07; 8:45 am] BILLING CODE 8120-08-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Agency Information Collection Activity Seeking OMB Approval AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice. SUMMARY: The FAA invites public comments about our intention to request the Office of Management and Budget's
(OMB)revision of a current information collection. The **Federal Register** Notice with a 60-day comment period soliciting comments on the following collection of information was published on March 23, 2007, vol. 72, no. 52, page 13855. Title 49 U.S.C. 44703(h) mandates that all U.S. air carriers operating under 14 CFR parts 121 or 135, and all U.S. air operators under 14 CFR part 125, and certain others, request and receive certain training, safety, and testing records before extending a firm offer of employment to an individual who is applying to their company as a pilot. DATES: Please submit comments by July 2, 2007. FOR FURTHER INFORMATION CONTACT: Carla Mauney at *Carla.Mauney@faa.gov.* SUPPLEMENTARY INFORMATION: Federal Aviation Administration
(FAA)*Title:* Pilot Records Improvement Act of 1966. *Type of Request:* Revision of a currently approved collection. *OMB Control Number:* 2120-0607. *Forms(s):* 8060-10, 8060-10A, 8060-11, 8060-11A, 8060-12, 8060-13. *Affected Public:* An estimated 18,263 respondents. *Frequency:* This information is collected on occasion. *Estimated Average Burden per Response:* Approximately 2.5 hours per response. *Estimated Annual Burden Hours:* An estimated 45,655 hours annually. *Abstract:* Title 49 U.S.C. 44703(h) mandates that all U.S. air carriers operating under 14 CFR parts 121 or 135, and all U.S. air operators under 14 CFR part 125, and certain others, request and receive certain training, safety, and testing records before extending a firm offer of employment to an individual who is applying to their company as a pilot. These records are to be requested from the FAA, from an employer(s) from the previous 5-year period that used the applicant as a pilot, and from the National Driver Registry. ADDRESSES: Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to Nathan Lesser, Desk Officer, Department of Transportation/FAA, and sent via electronic mail to *oira_submission@omb.eop.gov* or faxed to
(202)395-6974. *Comments are invited on:* Whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; the accuracy of the Department's estimates of the burden of the proposed information collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology. Issued in Washington, DC on May 25, 2007. Carla Mauney, FAA Information Collection Clearance Officer, Strategy and Investment Analysis Division, AIO-20. [FR Doc. 07-2717 Filed 5-31-07; 8:45 am]
Connectionstraces to 13
5 references not yet in our index
  • Pub. L. 92-463
  • 17 CFR 240.19
  • Pub. L. 100-503
  • 36 CFR 800
  • 14 CFR 125
Citation graph
cites case law
Notices
Notice of availability of proposed records schedules; request for comments
U.S.C.§ 3303a
U.S.C.§ 78s
U.S.C.§ 78c
U.S.C.§ 78f
C.F.R.§ 200.30-3
U.S.C.§ 78q
U.S.C.§ 552
U.S.C.§ 78m
U.S.C.§ 78k–1
Pub. L.Pub. L. 92-463
Cite17 CFR 240.19
Pub. L.Pub. L. 100-503
Cites 18 · showing 12Cited by 0 across 0 sources
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