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Code · REGISTER · 2007-06-27 · The Securities and Exchange Commission (“Commission”) · Notices

Notices. Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940, as amended (“1940 Act” or “Act”) approving certain substitutions of securities and for an order of exemption pursuant to Section 17(b) of the 1940 Act

36,733 words·~167 min read·/register/2007/06/27/07-3131

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

BILLING CODE 7710-12-M SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27869; File No. 812-13361] ING Life Insurance and Annuity Company, et al., Notice of Application June 20, 2007. AGENCY: The Securities and Exchange Commission (“Commission”). ACTION: Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940, as amended (“1940 Act” or “Act”) approving certain substitutions of securities and for an order of exemption pursuant to Section 17(b) of the 1940 Act.
Applicants: ING Life Insurance and Annuity Company, ING USA Annuity and Life Insurance Company and ReliaStar Life Insurance Company of New York (each a “Company” and together, the “Companies”), Variable Annuity Account B of ING Life Insurance and Annuity Company, Separate Account B of ING USA Annuity and Life Insurance Company, Separate Account EQ of ING USA Annuity and Life Insurance Company and ReliaStar Life Insurance Company of New York Separate Account NY-B (each, an “Account” and together, the “Accounts”), and ING Investors Trust are collectively referred to herein as the “Applicants.
” Summary of Application: The Applicants request an order, pursuant to Section 26(c) of the 1940 Act, permitting the substitution (“Substitution”) of shares of the ING Franklin Mutual Shares Portfolio—Service Class (the “Substitute Fund”) for shares of the Franklin Templeton VIP Mutual Shares Securities Fund—Class 2 (the “Replaced Fund”). The Applicants also hereby apply for an order of exemption pursuant to Section 17(b) of the 1940 Act to permit in-kind redemptions and purchases in connection with the Substitution.
Filing Date: The Application was filed on January 31, 2007 and amended and restated on June 18, 2007. Hearing or Notification of Hearing: An order granting the Application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Secretary of the Commission and serving Applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on July 13, 2007, and should be accompanied by proof of service on Applicants, 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 of the Commission. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, J. Neil McMurdie, Counsel, ING Americas U.S. Legal Services, 151 Farmington Avenue, TS31, Hartford, CT 06156-8975. FOR FURTHER INFORMATION CONTACT:
Alison White, Senior Counsel, or Joyce M. Pickholz, Branch Chief, Office of Insurance Products, Division of Investment Management, at
(202)551-6795. SUPPLEMENTARY INFORMATION: The following is a summary of the Application. The complete Application is available for a fee from the Public Reference Branch of the Commission, 100 F Street, NE., Room 1580, Washington, DC 20549. Applicants' Representations 1. Each of the Companies is an indirect wholly owned subsidiary of ING Groep, N.V. (“ING”). ING is a global financial services holding company based in The Netherlands which is active in the field of insurance, banking and asset management. As a result, each Company likely would be deemed to be an affiliate of the others. 2. ING Life Insurance and Annuity Company (“ING Life”) is a stock life insurance company organized under the laws of the State of Connecticut in 1976 as Forward Life Insurance Company. Through a December 31, 1976 merger, ING Life's operations include the business of Aetna Variable Annuity Life Insurance Company (formerly known as Participating Annuity Life Insurance Company). Through a December 31, 2005 merger, ING Life's operations include the business of ING Insurance Company of America (“ING America”). Prior to May 1, 2002, ING Life was known as Aetna Life Insurance and Annuity Company. ING Life is principally engaged in the business of issuing life insurance and annuities. 3. ING USA Annuity and Life Insurance Company (“ING USA”) is an Iowa stock life insurance company which was originally organized in 1973 under the insurance laws of Minnesota. Through January 1, 2004 mergers, ING USA's operations include the business of Equitable Life Insurance Company of Iowa, United Life and Annuity Insurance Company, and USG Annuity and Life Company. Prior to January 1, 2004, ING USA was known as Golden American Life Insurance Company. ING USA is principally engaged in the business of issuing life insurance and annuities. 4. ReliaStar Life Insurance Company of New York (“ReliaStar NY”) is a stock life insurance company which was incorporated under the laws of the State of New York in 1917. Through an April 1, 2002 merger, ReliaStar NY's operations include the business of First Golden American Life Insurance Company of New York. ReliaStar NY is principally engaged in the business of issuing life insurance and annuities. 5. Each of the Accounts is a segregated asset account of the Company that is the depositor of such Account, and is registered under the 1940 Act as a unit investment trust. Each of the respective Accounts is used by the Company of which it is a part to support the Contracts that it issues. 6. Variable Annuity Account B of ING Life Insurance and Annuity Company (“ING Life B”) (File No. 811-2512) was established by Aetna in 1976 as a continuation of the separate account established in 1974 under the laws of the State of Arkansas by Aetna Variable Annuity Life Insurance Company to support certain Contracts. 7. Separate Account B of ING USA Annuity and Life Insurance Company (File No. 811-5626) was established by Golden in 1988 under the laws of the State of Minnesota. 8. Separate Account EQ of ING USA Annuity and Life Insurance Company, (formerly Equitable Life Insurance Company of Iowa Separate Account A) (File No. 811-8524), was established by Equitable Life in 1988 under the laws of the State of Iowa. 9. ReliaStar Life Insurance Company of New York Separate Account NY-B, formerly Separate Account NY-B of First Golden American Life Insurance Company of New York (File No. 811-7935), was established by First Golden in 1996 under the laws of the State of New York. 10. The ING Franklin Mutual Shares Portfolio, a series of ING Investors Trust, will be used as the Substitute Fund. 11. ING Investors Trust, formerly known as the GCG Trust, was organized as a Massachusetts business trust on August 3, 1988. ING Investors Trust is registered under the 1940 Act as an open-end management investment company (File No. 811-5629). 12. For the series included in this substitution Application, overall management services will be provided by Directed Services LLC (“DSL”). DSL is an investment adviser registered under the Advisers Act, and a broker-dealer registered under the Exchange Act. Under the terms of an investment advisory agreement between ING Investors Trust and DSL (the “Trust Management Agreement”), which agreement first became effective on October 24, 1997, DSL manages the business and affairs of each of the respective series of the ING Investors Trust, subject to the control and oversight of the ING Investors Trust Board of Trustees (the “Board”). Under the Trust Management Agreement, DSL is authorized to exercise full investment discretion and make all determinations with respect to the investment of the assets of the respective series, but may, at its own cost and expense, retain portfolio managers for the purpose of making investment decisions and research information available to ING Investors Trust. 13. DSL delegates to subadvisers the responsibility for day-to-day management of the investments of each respective portfolio, subject to DSL's oversight. DSL also recommends the appointment of additional or replacement subadvisers to the Board. ING Investors Trust and DSL have received exemptive relief from the Commission that permits ING Investors Trust and DSL to add or terminate a subadviser without shareholder approval. 14. The Franklin Templeton VIP Mutual Shares Securities Fund, a series of the Franklin Templeton Variable Insurance Products Trust (File No. 811-05583), will be replaced pursuant to any order issued pursuant to this Application. 15. The Contracts are flexible premium variable annuity contracts. The Contracts provide for the accumulation of values on a variable basis, fixed basis, or both, during the accumulation period, and provide settlement or annuity payment options on a variable or fixed basis. Under each of the prospectuses for the Contracts, each Company reserves the right to substitute shares of one fund or portfolio for shares of another. A Contract owner may transfer all or any part of the Contract value from one subaccount to any other subaccount or a fixed account, if available, as long as the Contract remains in effect and at any time up to 30 days before the due date of the first annuity payment for variable annuity Contracts. For many of the Contracts, the Company issuing the Contract reserves the right to limit the number of transfers during a specified period. 16. The comparative fees and expenses for each fund in this proposed substitution are as follows: Management fees (%) Distribution (12b-1) fees (%) Other expenses (%) Total annual expenses (%) Expense waivers (%) Net annual expenses (%) Substitute Fund: ING Franklin Mutual Shares Portfolio—Service Class 1 0.78 2 0.25 1.03 1.03 Replaced Fund: Franklin Templeton VIP Mutual Shares Securities Fund—Class 2 0.60 0.25 0.21 1.06 1.06 1 This portfolio is subject to a Unified Fee arrangement. 2 The “Other Expenses” of this portfolio includes a Shareholder Services Fee of 0.25%. This Shareholder Services Fee is permanently capped at 0.25%. 17. The ING Franklin Mutual Shares Portfolio is patterned after the Franklin Templeton VIP Mutual Shares Securities Fund, and these two portfolios have the same investment objectives and policies. The investment objective of both portfolios is to seek capital appreciation. Additionally, the investment adviser for Franklin Templeton VIP Mutual Shares Securities Fund will be the sub-adviser to the ING Franklin Mutual Shares Portfolio and will manage the two funds in the same way. 18. The expense ratios and total return figures for each fund in this proposed substitution as of March 31, 2007, are as follows: Expense ratio (%) 1 Year (%) 3 Years (%) 5 Years (%) 10 Years (%) Since inception Substitute Fund: ING Franklin Mutual Shares Portfolio—Service Class 3 1.03 Replaced Fund: Franklin Templeton VIP Mutual Shares Securities Fund—Class 2 1.06 14.58 13.72 10.38 10.46 3 This portfolio commenced operations on April 27, 2007. Therefore, annual performance information is not yet available. Implementation of the Substitutions 19. Applicants will effect the Substitution as soon as practicable following the issuance of the requested order. As of the Effective Date of the Substitution, shares of the Replaced Fund will be redeemed for cash or in-kind. The Companies, on behalf of the Replaced Fund subaccount of each relevant Account, will simultaneously place a redemption request with the Replaced Fund and a purchase order with the Substitute Fund so that the purchase of Substitute Fund shares will be for the exact amount of the redemption proceeds. Thus, Contract values will remain fully invested at all times. The proceeds of such redemptions will then be used to purchase the appropriate number of shares of the Substitute Fund. 20. The Substitution will take place at relative net asset value (in accordance with Rule 22c-1 under the 1940 Act) with no change in the amount of any affected Contract owner's contract value, cash value, accumulation value, account value or death benefit, or in the dollar value of his or her investment in the applicable Account. Any in-kind redemption of shares of the Replaced Fund or in-kind purchase of shares of the Substitute Fund will, except as noted below, take place in substantial compliance with the conditions of Rule 17a-7 under the 1940 Act. No brokerage commissions, fees or other remuneration will be paid by either the Replaced Fund or the Substitute Fund or by affected Contract owners in connection with the Substitution. The transactions comprising the Substitution will be consistent with the policies of each investment company involved and with the general purposes of the 1940 Act. 21. Affected Contract owners will not incur any fees or charges as a result of the Substitution nor will their rights or the Companies' obligations under the Contracts be altered in any way. The Companies or their affiliates will pay all expenses and transaction costs of the Substitution, including legal and accounting expenses, any applicable brokerage expenses, and other fees and expenses. In addition, the Substitution will not impose any tax liability on affected Contract owners. The Substitution will not cause the Contract fees and charges currently being paid by affected Contract owners to be greater after the Substitution than before the Substitution. Also, as described more fully below, after notification of the Substitution and for 30 days after the Substitution, affected Contract owners may reallocate to any other investment options available under their Contract the subaccount value of the Replaced Fund without incurring any administrative costs or allocation (transfer) charges. 22. Shortly after the date of the Application, all affected Contract owners were notified of the Substitution by means of supplements to the Contract prospectuses. Among other information regarding the Substitution, the supplements informed affected Contract owners that beginning on the date of the first supplement the Companies would not exercise any rights reserved by them under the Contracts to impose restrictions or fees on transfers from the Replaced Fund (other than restrictions related to frequent or disruptive transfers) until at least 30 days after the Effective Date of the Substitution. Following the date the order requested by the Application is issued, but before the Effective Date, affected Contract owners will receive a second supplement to the Contract prospectus setting forth the Effective Date and advising affected Contract owners of their right, if they so choose, at any time prior to the Effective Date, to reallocate or withdraw accumulated value in the Replaced Fund subaccounts under their Contracts or otherwise terminate their interest therein in accordance with the terms and conditions of their Contracts. If affected Contract Owners reallocate account value prior to the Effective Date or within 30 days after the Effective Date, there will be no charge for the reallocation of accumulated value from the Replaced Fund subaccount and the reallocation will not count as a transfer when imposing any applicable restriction or limit under the Contract on transfers. The Companies will not exercise any right they may have under the Contracts to impose additional restrictions or fees on transfers from the Replaced Fund under the Contracts (other than restrictions related to frequent or disruptive transfers) for a period of at least 30 days following the Effective Date of the Substitution. Additionally, all current Contract Owners will be sent prospectuses of the Substitute Fund before the Effective Date. 23. Within five
(5)business days after the Effective Date, affected Contract Owners will be sent a written confirmation (“Post-Substitution Confirmation”) indicating that shares of the Replaced Fund have been redeemed and that the shares of Substitute Fund have been substituted. The Post-Substitution Confirmation will show how the allocation of the Contract Owner's account value before and immediately following the Substitution has changed as a result of the Substitution and detail the transactions effected on behalf of the respective affected Contract Owner because of the Substitution. Applicant's Legal Analysis 1. Applicants represent that each of the prospectuses for the Contracts expressly discloses the reservation of the Companies' right, subject to compliance with applicable law, to substitute shares of another open-end management investment company for shares of an open-end management investment company held by a subaccount of an Account. 2. Applicants state that the Companies reserved this right of substitution both to protect themselves and their Contract owners in situations where either might be harmed or disadvantaged by circumstances surrounding the issuer of the shares held by one or more of its separate accounts, and to afford the opportunity to replace such shares where to do so could benefit the Contract owners and Companies. 3. Applicants maintain that Contract Owners will be better served by the proposed Substitution. Applicants anticipate that the replacement of the Replaced Fund will result in a Contract that is administered and managed more efficiently, and one that is more competitive with other variable products in both wholesale and retail markets. As noted above, the Substitute Fund will be patterned after the Replaced Fund. The Substitute Fund will be managed according to the same investment objective and policies as the Replaced Fund and the investment adviser for the Replaced Fund will serve as the sub-adviser to the Substitute Fund. 4. In addition to the foregoing, Applicants generally submit that the proposed Substitution meets the standards that the Commission and its staff have applied to similar substitutions that have been approved in the past. 5. Applicants anticipate that Contract owners will be at least as well off with the proposed array of subaccounts to be offered after the proposed substitutions as they have been with the array of subaccounts offered before the substitutions. The proposed Substitution retains for Contract owners the investment flexibility which is a central feature of the Contracts. If the proposed Substitution is carried out, all Contract owners will be permitted to allocate purchase payments and transfer accumulated values and contract values between and among the remaining subaccounts as they could before the proposed Substitution. 6. Applicants maintain that the terms of the Substitution, including the consideration to be paid and received by the Replaced Fund or the Substitute Fund, are reasonable, fair and do not involve overreaching principally because the transactions do not cause owners' interests under a Contract to be diluted and because the transactions will conform with the principal conditions enumerated in Rule 17a-7 of the 1940 Act. The proposed transactions will take place at relative net asset value with no change in the amount of any Contract owner's Contract or cash value, accumulation value or death benefit or in the dollar value of his or her investment in any of the Accounts. 7. Applicants submit that the Substitution by the Companies is consistent with the policies of the Substitute Fund and the Replaced Fund, as recited in the current registration statements and reports filed by each under the 1940 Act. Applicants also submit that the Substitution is consistent with the general purposes of the 1940 Act. 8. Applicants submit that, to the extent that the Substitution is deemed to involve principal transactions between affiliates, the procedures and terms and descriptions described in the Application demonstrate that neither the Replaced Fund, the Substitute Fund, the Accounts nor any other Applicant will be participating in the Substitution on a basis less advantageous than that of any other participant. Even though the Applicants may not rely on Rule 17a-7, Applicants believe that the Rule's conditions outline the type of safeguards that result in transactions that are fair and reasonable to registered investment company participants and preclude overreaching in connection with an investment company by its affiliated persons. 9. The boards of trustees or directors, as applicable, of the Replaced Fund and the Substitute Fund have adopted procedures, as required by paragraph (e)(1) of Rule 17a-7, pursuant to which the portfolios or funds of each may purchase and sell securities to and from their affiliates. The Companies and the investment advisers will carry out the Substitution in conformity with the principal conditions of Rule 17a-7 and the Replaced Fund's and the Substitute Fund's procedures thereunder. Also, no brokerage commission, fee, or other remuneration will be paid to any party in connection with the proposed transaction. In addition, the applicable ING Investors Trust board will subsequently review the Substitution and make the determinations required by paragraph (e)(3) of Rule 17a-7. 10. Except as noted below, applicants state that the Substitution will take place in accordance with the requirements enumerated in Rule 17a-7 under the 1940 Act and with the approval of the boards of ING Investors Trust, except that the Substitution may be effected in cash or in-kind. Applicants further submit that the Substitution is consistent with the investment policy of the Replaced Fund and the Substitute Fund, as recited in the current prospectuses relating to each. 11. With regard to the in-kind transfer, the investment adviser of the Substitute Fund and the investment adviser to the Replaced Fund intend to value securities selected for transfer between the two funds in a manner that is consistent with the current methodology used to calculate the daily net asset value of the Replaced Fund. Where the Replaced Fund's investment adviser employs certain third party, independent pricing services to value securities held by the Replaced Fund (“Vendor Pricing”), the investment adviser of the Substitute Fund and Replaced Fund's investment adviser will employ Vendor Pricing to value securities held by the Replaced Fund that are selected for transfer to the Substitute Fund. Generally, the redemption of securities from the Replaced Fund and subsequent transfer to the Substitute Fund will be done on a pro-rata basis. In the event that the Replaced Fund holds illiquid or restricted securities or assets that are not otherwise readily distributable or if a pro-rata transfer of securities would result in the parties holding odd lots, the investment advisers may agree to have the Replaced Fund transfer to the Substitute Fund an equivalent amount of cash instead of securities. 12. After the assets have been contributed to the Substitute Fund, responsibility for valuation of the securities held by the Substitute Fund will shift to the valuation committee of the Substitute Fund's board of trustees. At the end of the first trading following the transfer, the applicable valuation agent and custodian for the Substitute Fund will value the securities held by the Substitute Fund. The foregoing notwithstanding, the Substitute Fund's board of trustees will retain ultimate responsibility for valuation decisions. Applicant's Conditions 1. The Substitute Fund has an investment objective and investment policies that are the same as the investment objective and policies of the Replaced Fund, so that the objective of the affected Contract Owners can continue to be met. 2. For two years following the implementation of the Substitutions described herein, the net annual expenses of the Substitute Fund will not exceed the net annual expenses of the Replaced Fund immediately preceding the Substitutions. To achieve this limitation, Directed Services LLC will waive fees or reimburse the Substitute Fund in certain amounts to maintain expenses at or below the limit. Any adjustments or reimbursements will be made at least on a quarterly basis. In addition, the Companies will not increase the Contract fees and charges, including asset based charges such as mortality and expense risk charges deducted from the Subaccounts, that would otherwise be assessed under the terms of the Contracts for a period of at least two years following the Substitutions. 3. The Shareholder Services Fee of the Class S shares of the ING Franklin Mutual Shares Portfolio will be permanently capped at 0.25%. 4. Affected Contract Owners may reallocate amounts from the Replaced Fund without incurring a reallocation charge or limiting their number of future reallocations, or withdraw amounts under any affected Contract or otherwise terminate their interest therein at any time prior to the Effective Date and for a period of at least 30 days following the Effective Date in accordance with the terms and conditions of such Contract. Any such reallocation will not count as a transfer when imposing any applicable restriction or limit under the Contract on transfers. 5. The Substitutions will be effected at the net asset value of the respective shares in conformity with Section 22(c) of the 1940 Act and Rule 22c-1 thereunder, without the imposition of any transfer or similar charge by Applicants. 6. The Substitution will take place at relative net asset value without change in the amount or value of any Contract held by affected Contract Owners. Affected Contract Owners will not incur any fees or charges as a result of the Substitution, nor will their rights or the obligations of the Companies under such Contracts be altered in any way. 7. The Companies or their affiliates will pay all expenses and transaction costs of the Substitutions, including legal and accounting expenses, any applicable brokerage expenses, and other fees and expenses. In addition, the Substitutions will not impose any tax liability on affected Contract owners. 8. The Substitution will be effected so that investment of securities will be consistent with the investment objectives, policies and diversification requirements of the Substitute Fund. No brokerage commissions, fees or other remuneration will be paid by the Replaced Fund or the Substitute Fund or affected Contract Owners in connection with the Substitution. 9. The Substitution will not alter in any way the annuity, life or tax benefits afforded under the Contracts held by any affected Contract Owner. 10. The Companies will send to their affected Contract Owners within five
(5)business days of the Substitution a written Post-Substitution Confirmation which will include the before and after account values (which will not have changed as a result of the Substitution) and detail the transactions effected on behalf of the respective affected Contract Owner with regard to the Substitution. With the Post-Substitution Confirmations the Companies will remind affected Contract Owners that they may reallocate amounts from any of the Replaced Funds without incurring a reallocation charge or limiting their number of future reallocations for a period of at least 30 days following the Effective Date in accordance with the terms and conditions of their Contract. 11. The Commission shall have issued an order:
(a)Approving the Substitutions under Section 26(c) of the 1940 Act; and
(b)exempting the in-kind redemptions from the provisions of Section 17(a) of the 1940 Act as necessary to carry out the transactions described in this Application. 12. A registration statement for the Substitute Fund is effective, and the investment objectives and policies and fees and expenses for the Substitute Fund as described herein have been implemented. 13. Each affected Contract Owner will have been sent a copy of:
(a)A supplement to the Contract prospectus informing shareholders of this Application;
(b)a prospectus for the appropriate Substitute Fund; and
(c)a second supplement to the Contract prospectus setting forth the Effective Date and advising affected Contract Owners of their right to reconsider the Substitutions and, if they so choose, any time prior to the Effective Date and for 30 days thereafter, to reallocate or withdraw amounts under their affected Contract or otherwise terminate their interest therein in accordance with the terms and conditions of their Contract. 14. The Companies shall have satisfied themselves, that:
(a)The Contracts allow the substitution of investment company shares in the manner contemplated by the Substitutions and related transactions described herein;
(b)the transactions can be consummated as described in this Application under applicable insurance laws; and
(c)any regulatory requirements in each jurisdiction where the Contracts are qualified for sales have been complied with to the extent necessary to complete the transaction. 15. Under the manager-of-managers relief granted to the ING Investors Trust, a vote of the shareholders is not necessary to change a sub-adviser, except for changes involving an affiliated sub-adviser. Notwithstanding, the parties agree that before the Substitute Fund relies on any Commission order or rule that would permit the Substitute Fund to enter into contracts with subadvisers without obtaining shareholder approval, the Substitute Fund's reliance on the order or rule will be approved, following the substitution proposed herein, by a majority of the Substitute Fund's outstanding voting securities. Conclusion For the reasons and upon the facts set forth above, Applicants submit that the requested order meets the standards set forth in Section 26(c). Applicants request an order of the Commission, pursuant to Section 26(c) of the Act, approving the Substitutions. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12405 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold the following meeting during the week of June 25, 2007: A Closed Meeting will be held on Thursday, June 28, 2007 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters may also be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), (9)(B), and
(10)and 17 CFR 200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Commissioner Atkins, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the Closed Meeting scheduled for Thursday, June 28, 2007 will be: Formal orders of investigations; Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings of an enforcement nature; Resolution of litigation claims; Adjudicatory matters; and Other matters related to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at
(202)551-5400. Dated: June 21, 2007. Nancy M. Morris, Secretary. [FR Doc. E7-12341 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release 34-55920; File No. 600-23] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Order Approving an Extension of Temporary Registration as a Clearing Agency June 18, 2007. The Securities and Exchange Commission (“Commission”) is publishing this notice and order to solicit comments from interested persons and to extend the Fixed Income Clearing Corporation's (“FICC”) temporary registration as a clearing agency through June 30, 2008. 1 1 FICC is the successor to MBS Clearing Corporation and Government Securities Clearing Corporation. On February 2, 1987, pursuant to Sections 17A(b) and 19(a) of the Act 2 and Rule 17Ab2-1 promulgated thereunder, 3 the Commission granted the MBS Clearing Corporation (“MBSCC”) registration as a clearing agency on a temporary basis for a period of eighteen months. 4 The Commission subsequently extended MBSCC's registration through June 30, 2003. 5 2 15 U.S.C. 78q-1(b) and 78s(a). 3 17 CFR 240.17Ab2-1. 4 Securities Exchange Act Release No. 24046 (February 2, 1987), 52 FR 4218. 5 Securities Exchange Act Release Nos. 25957 (August 2, 1988), 53 FR 29537; 27079 (July 31, 1989), 54 FR 34212; 28492 (September 28, 1990), 55 FR 41148; 29751 (September 27, 1991), 56 FR 50602; 31750 (January 21, 1993), 58 FR 6424; 33348 (December 15, 1993), 58 FR 68183; 35132 (December 21, 1994), 59 FR 67743; 37372 (June 26, 1996), 61 FR 35281; 38784 (June 27, 1997), 62 FR 36587; 39776 (March 20, 1998), 63 FR 14740; 41211 (March 24, 1999), 64 FR 15854; 42568 (March 23, 2000), 65 FR 16980; 44089 (March 21, 2001), 66 FR 16961; 44831 (September 21, 2001), 66 FR 49728; 45607 (March 20, 2002), 67 FR 14755; 46136 (June 27, 2002), 67 FR 44655. On May 24, 1988, pursuant to Sections 17A(b) and 19(a) of the Act 6 and Rule 17Ab2-1 promulgated thereunder, 7 the Commission granted the Government Securities Clearing Corporation (“GSCC”) registration as a clearing agency on a temporary basis for a period of three years. 8 The Commission subsequently extended GSCC's registration through June 30, 2003. 9 6 *Supra* note 2. 7 *Supra* note 3. 8 Securities Exchange Act Release No. 25740 (May 24, 1988), 53 FR 19639. 9 Securities Exchange Act Release Nos. 25740 (May 24, 1988), 53 FR 19639; 29236 (May 24, 1991), 56 FR 24852; 32385 (June 3, 1993), 58 FR 32405; 35787 (May 31, 1995), 60 FR 30324; 36508 (November 27, 1995), 60 FR 61719; 37983 (November 25, 1996), 61 FR 64183; 38698 (May 30, 1997), 62 FR 30911; 39696 (February 24, 1998), 63 FR 10253; 41104 (February 24, 1999), 64 FR 10510; 41805 (August 27, 1999), 64 FR 48682; 42335 (January 12, 2000), 65 FR 3509; 43089 (July 28, 2000), 65 FR 48032; 43900 (January 29, 2001), 66 FR 8988; 44553 (July 13, 2001), 66 FR 37714; 45164 (December 18, 2001), 66 FR 66957; 46135 (June 27, 2002), 67 FR 44655. On January 1, 2003, MBSCC was merged into GSCC, and GSCC was renamed FICC. 10 The Commission subsequently extended FICC's temporary rgistration through June 30, 2007. 11 10 Securities Exchange Act Release No. 47015 (December 17, 2002), 67 FR 78531 (December 24, 2002) [File Nos. SR-GSCC-2002-07 and SR-MBSCC-2002-01]. 11 Securities Exchange Act Release Nos. 48116 (July 1, 2003), 68 FR 41031; 49940 (June 29, 2004), 69 FR 40695; 51911 (June 23, 2005), 70 FR 37878; and 54056 (June 28, 2006), 71 FR 38193. On May 17, 2007, FICC requested that the Commission grant FICC permanent registration as a clearing agency or in the alternative extend FICC's temporary registration until such time as the Commission is prepared to grant FICC permanent registration. 12 12 Letter from Nikki Poulos, Managing Director, General Counsel, and Chief Privacy Officer, FICC (May 16, 2007). Recently FICC announced its intention to have its Mortgage-Backed Services Division (“MBS Division”) act as a central counterparty (“CCP”). Pursuant to this service, FICC would act as the CCP for MBS Division members and would become the new legal counterparty to all original parties for eligible mortgage-backed securities transactions. Currently, FICC through its Government Securities Division acts as the CCP for its members' U.S. Government securities transactions. Therefore, the Commission is extending FICC's temporary registration as a clearing agency in order that FICC may continue to operate as a registered clearing agency and to provide its users clearing and settlement services. The Commission will consider permanent registration of FICC at a future date after the Commission has further evaluated FICC's plans to have its MBS Division act as a CCP and after the Commission and FICC have had time to evaluate how FICC is functioning with its MBS Division acting as a CCP, assuming the MBS Division CCP service is implemented. 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 600-23 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 600-23. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of FICC and on FICC's Web site at *http://www.ficc.com.* 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 600-23 and should be submitted on or before July 18, 2007. *It is therefore ordered* that FICC's temporary registration as a clearing agency (File No. 600-23) be and hereby is extended through June 30, 2008. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 13 Florence E. Harmon, Deputy Secretary. 13 17 CFR 200.30-3(a)(16). [FR Doc. E7-12331 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55923; File No. SR-Amex-2007-42] Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval of Proposed Rule Change as Modified by Amendment No. 1 To Lower the Required Number of Letters of Reference an Applicant Must Provide June 19, 2007. I. Introduction On April 26, 2007, the American Stock Exchange LLC (“Amex” 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 amend the required number of letters of reference an applicant must provide. On May 3, 2007, Amex submitted Amendment No. 1 to the proposed rule change. The proposed rule change was published for comment in the **Federal Register** on May 18, 2007. 3 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55756 (May 14, 2007), 72 FR 28089. II. Description of the Proposal Amex Rule 353 currently requires a member applicant to provide five letters of reference from any person seeking status as a regular, options principal member or LTP holder. 4 The Exchange proposes to amend Rule 353 to require member applicants to provide two, as opposed to five, letters of reference from responsible persons. 5 According to the Exchange, requiring five letters of reference has proven burdensome and time-consuming for member applicants and often delays the application process. Furthermore, Amex states that the content of such references is of little consequence in an applicant's ultimate approval. Finally, with the availability of more objective background information provided through other resources, such as WEBCRD, FBI fingerprints, and credit reports, Amex believes that the need for these letters of reference has largely been diminished. 4 Article IV, Section 1(d) of the Amex Constitution provides that applications for associate membership shall be in a form and manner prescribed by the Exchange. Pursuant to this section, the Exchange currently requires associate member applicants to provide five letters of reference. 5 The Exchange represented that it intends to reduce the requirement for associate membership applicants from five to two letters of reference to correspond with the proposed change affecting regular, options principal members and LTP holders. III. Discussion and Commission Findings The Commission has carefully reviewed the proposed rule change and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 6 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 7 which, among other things, requires that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 6 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(5). The Commission believes that amending Amex's rules to require two, instead of five, letters of reference is reasonable and consistent with the Act. This amendment should help expedite the application process without significantly diminishing Amex's standards of review with respect to the applicants. Applicants will still need to provide two references, and as Amex noted, there is now more objective background information available through other sources. IV. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 8 that the proposed rule change (SR-Amex-2007-42), be, and hereby 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. E7-12340 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55925; File No. SR-Amex-2007-44] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment Nos. 1 and 2 Thereto, to Amend Section 107D of the Company Guide June 20, 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 May 1, 2007, the American Stock Exchange LLC (“Exchange” or “Amex”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. On May 21, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. On June 14, 2007, the Exchange filed Amendment No. 2 to the proposed rule change. This order provides notice of the proposed rule change and approves the proposed rule change, as amended, on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Section 107D(g) of the Amex *Company Guide* to expand the eligibility of foreign securities and American Depository Receipts (“ADRs”) that may be components of an underlying index in connection with index-linked securities (“Index-Linked Securities”). 3 The text of the proposed rule change is available at Amex, the Commission's Public Reference Room, and *http://www.amex.com.* 3 *See* Section 107D of the Amex *Company Guide* (defining Index-Linked Securities as securities that provide for the payment at maturity of a cash amount based on the performance of an underlying index or indexes (“Underlying Index”)). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposal is to expand the number of permissible securities indexes comprised of foreign securities and/or ADRs that may qualify under Section 107D(g) of the Amex *Company Guide.* Pursuant to Section 107D, which sets forth generic listing standards to permit the listing and trading of Index-Linked Securities pursuant to Rule 19b-4(e) under the Act, 4 the Exchange may list Index-Linked Securities based on an Underlying Index that meet the criteria set forth in paragraph
(g)of Section 107D of the Amex *Company Guide.* Specifically, an Underlying Index is required to either be
(i)an index meeting the specific criteria set forth in Section 107D(g), or
(ii)an index previously approved for the trading of options or other derivative securities by the Commission under Section 19(b)(2) of the Act 5 and rules thereunder. 4 Rule 19b-4(e) provides that the listing and trading of a new derivative securities product by a self-regulatory organization (“SRO”) shall not be deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4, 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 derivatives securities product, and the SRO has a surveillance program for the product class. *See* 17 CFR 240.19b-4(e)(1). *See also* Securities Exchange Act Release No. 51563 (April 15, 2005), 70 FR 21257 (April 25, 2005) (SR-Amex-2005-001) (approving the adoption of generic listing standards for Index-Linked Securities). 5 15 U.S.C. 78s(b)(2). Section 107D(g) of the Amex *Company Guide* provides the following requirements for the Underlying Index:
(i)Each component security must have a minimum market value of at least $75 million, except that for each of the lowest weighted component securities in the Underlying Index that in the aggregate account for no more than 10% of the weight of the Underlying Index, the market value can be at least $50 million;
(ii)Each component security must have a trading volume in each of the last six months of not less than 1,000,000 shares, except that for each of the lowest weighted securities in the Underlying Index that in the aggregate account for no more than 10% of the weight of the Underlying Index, the trading volume must be at least 500,000 shares in each of the last six months;
(iii)In the case of a capitalization-weighted Underlying Index, the lesser of the five highest weighted component securities in the Underlying Index or the highest weighted component securities in the Underlying Index that in the aggregate represent at least 30% of the total number of component securities in the Underlying Index, each of such securities must have an average monthly trading volume of at least 2,000,000 shares over the previous six months;
(iv)No component security may represent more than 25% of the weight of the Underlying Index, and the five highest weighted component securities in the Underlying Index must not in the aggregate account for more than 50% of the weight of the Underlying Index (60% for an Underlying Index consisting of fewer than 25 component securities);
(v)90% of the Underlying Index's numerical index value and at least 80% of the total number of component securities must meet the then current criteria for standardized options trading set forth in Amex Rule 915;
(vi)Each component security must be an Act reporting company which is listed on a national securities exchange or is traded through the facilities of a national securities system and is subject to last sale reporting; and
(vii)Foreign country securities or ADRs that are not subject to comprehensive surveillance agreements must not in the aggregate represent more than 20% of the weight of the Underlying Index. The Exchange's experience to date has revealed that it is difficult to list and trade Index-Linked Securities based on an Underlying Index comprised of foreign securities and/or ADRs with respect to which the primary market for such securities is outside of the United States. In particular, subparagraph (g)(vi) of Section 107D of the *Company Guide* prohibits the inclusion of component securities unless each component security is an Act reporting company listed on a national securities exchange or traded through the facilities of a national securities system and is subject to last sale reporting. The Exchange believes that this requirement essentially eliminates the usefulness of the generic listing standard for Index-Linked Securities because it prohibits the use of foreign indexes (not already approved by the Commission) in connection with Index-Linked Securities, unless the underlying components are listed and traded on a United States national securities exchange. Accordingly, the Exchange believes that the requirements set forth in subparagraph
(vi)of Section 107D(g) of the Amex *Company Guide* are unduly restrictive to the detriment of the marketplace, as well as the application of the generic listing standard. The proposal would revise subparagraph
(vi)of Section 107D(g) and combine current subparagraphs
(vi)and
(vii)of this Section. The revision would permit the Exchange to list and trade Index-Linked Securities so long as all component securities are either
(A)securities (other than foreign country securities and ADRs) that are
(1)issued by a reporting company under the 1934 Act that is listed on a national securities exchange, and
(2)“NMS stock,” as defined in Rule 600 of Regulation NMS, 6 or
(B)foreign country securities or ADRs, provided that the foreign country securities or foreign country securities underlying ADRs having their primary trading market outside the United States on foreign trading markets that are not members of the Intermarket Surveillance Group or are not parties to comprehensive surveillance sharing agreements with the Exchange will not, in the aggregate, represent more than 20% of the dollar weight of the Underlying Index. 6 17 CFR 242.600(b)(47). The Exchange submits that the expansion of the potential foreign country securities and ADRs that may be components of an eligible Underlying Index underlying Index-Linked Securities should benefit the marketplace and investors. The Exchange believes that the proposal will also enhance the market for potential foreign-based index products listed and traded on the Exchange. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 7 in general, and furthers the objectives of Section 6(b)(5) of the Act, 8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, foster cooperation and coordination with persons engaged in facilitating transactions in securities, and remove impediments to and perfect the mechanism of a free and open market and a national market system. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-Amex-2007-44 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2007-44. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2007-44 and should be submitted on or before July 18, 2007. IV. Commission's Findings and Order Granting Accelerated Approval of the Proposed Rule Change After careful consideration, 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. 9 In particular, the Commission finds that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act, 10 which requires, among other things, that the Exchange's rules be designed to promote just and equitable principles of trade, to 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. The Commission believes that the proposal should expand the use of Underlying Indexes comprised of foreign securities and/or ADRs to the benefit of the marketplace and investors, so long as such component securities, having their respective primary foreign trading markets that are not members of ISG or parties to a comprehensive surveillance sharing agreement, do not represent in the aggregate more than 20% of the overall weight of the Underlying Index. 9 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). The Commission finds good cause for approving the proposed rule change, as modified by Amendment Nos. 1 and 2 thereto, before the 30th day after the date of publication of notice of filing thereof in the **Federal Register** . 11 The Commission notes that it has previously approved substantially similar provisions with respect to the expanded eligibility of component securities included in indexes underlying index-linked securities 12 and presently is not aware of any regulatory issue that should cause it to revisit that finding or would preclude the trading of such securities on the Exchange. Therefore, the Commission finds good cause, consistent with Section 19(b)(2) of the Act, 13 to approve the proposed rule change on an accelerated basis. 11 In Amendment No. 2, the Exchange requested for accelerated approval of the proposal. 12 *See* Securities Exchange Act Release No. 55687 (May 1, 2007), 72 FR 25824 (May 7, 2007) (SR-NYSE-2007-27) (approving, among other things, the eligibility requirements of component securities underlying Equity Index-Linked Securities). 13 15 U.S.C. 78s(b)(2). V. Conclusion *It is therefore Ordered,* pursuant to Section 19(b)(2) of the Act, 14 that the proposed rule change (SR-Amex-2007-44), as modified by Amendment Nos. 1 and 2 thereto, be, and it hereby is, approved on an accelerated basis. 14 *Id.* For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12393 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55927; File No. SR-CBOE-2007-55] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Transaction Fees for Electronically Executed Broker-Dealer Orders in IWM and QQQQ Options June 20, 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 May 29, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the CBOE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the CBOE Fees Schedule (“Fees Schedule”) to reduce transaction fees for electronically executed broker-dealer orders in options on the iShares Russell 2000 Index Fund (“IWM”) and the Nasdaq-100 Index Tracking Stock (“QQQQ”). The text of the proposed rule change is available at the CBOE, on the Exchange's Web site at *http://www.cboe.org/legal* , and in the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Currently, the Exchange assesses a transaction fee of $.45 per contract on broker-dealer orders that are electronically executed on the CBOE Hybrid Trading System (“Hybrid”). 3 Manually executed broker-dealer orders are assessed a transaction fee of $.25 per contract. 4 The broker-dealer electronic transaction fee helps allocate to broker-dealer orders a fair share of the costs of running the automatic execution feature of Hybrid and related Exchange systems. 3 “Broker-dealer” orders are defined in Footnote 16 of the Fees Schedule as broker-dealer orders (orders with “B” origin code), non-member market-maker orders (orders with “N” origin code), and orders from specialists in the underlying security (orders with “Y” origin code). 4 However, electronically and manually executed broker-dealer orders in options on the S&P 100 Index (“OEX” and “XEO”), S&P 500 (“SPX”), and Morgan Stanley Retail Index (“MVR”) are charged $.30 per contract, $.40 per contract, and $.25 per contract, respectively. Telephone conversation between Jaime Galvan, Assistant Secretary, CBOE, and Sara Gillis, Attorney, Division of Market Regulation, Commission, on June 18, 2007. The Exchange proposes to reduce the broker-dealer electronic transaction fee from $.45 per contract to $.25 per contract in IWM and QQQQ options, so that both electronic and manual broker-dealer executions in these products would be assessed $.25 per contract. The Exchange believes it is reasonable and appropriate not to assess a higher fee for electronic broker-dealer executions in IWM and QQQQ options because these options are among the largest options contracts on the Exchange in terms of trading volume and generate significant revenues for the Exchange. The Exchange implemented the proposed fee changes on June 1, 2007. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act, 5 in general, and furthers the objectives of Section 6(b)(4) 6 of the Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members and other persons using its facilities. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 7 and subparagraph (f)(2) of Rule 19b-4 8 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 9 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b-4(f)(2). 9 *Id* . IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-CBOE-2007-55 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2007-55. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2007-55 and should be submitted on or before July 18, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12388 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55926; File No. SR-CBOE-2007-61] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Extension of the iShares Russell 2000 Index Fund
(IWM)Option Pilot Program Until January 18, 2008 June 20, 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 June 12, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Exchange filed the proposed rule change as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A) 3 of the Act and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to extend an existing pilot program that increases the position and exercise limits for options on the iShares Russell 2000 Index Fund (“IWM options”) traded on the Exchange (“IWM Option Pilot Program”). The text of the rule proposal is available on the Exchange's Web site ( *http://www.cboe.org/legal* ), at the Exchange's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change, and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to extend the IWM Option Pilot Program for an additional six-month period, through January 18, 2008, 5 and to make non-substantive changes to simplify the rule text describing the IWM Option Pilot Program. The IWM Option Pilot Program increases the position and exercise limits for IWM options traded on the Exchange. 6 The Exchange is not proposing any other changes to the IWM Option Pilot Program. The Exchange represents that it has not encountered any problems or difficulties relating to the IWM Option Pilot Program since its inception. 5 January 18, 2008 is the third Friday of the month (or expiration Friday), which is the day on which January 2008 IWM options will expire. 6 Exercise limits for IWM options are equivalent to the position limits prescribed for IWM options in Rule 4.11.07 and the increased exercise limits are only in effect during the IWM Option Pilot Period. *See* Rule 4.12.02. The proposal that established the IWM Option Pilot Program was designated by the Commission to be effective and operative upon filing and provided that it would run from January 22, 2007 through July 22, 2007. 7 In that filing, the Exchange explained that in June 2005, as a result of a 2-for-1 stock split, the position limit for IWM options was temporarily increased from 250,000 contracts (covering 25,000,000 IWM shares) to 500,000 contracts (covering 50,000,000 IWM shares). At the time of the split, the furthest IWM option expiration date was January 2007. Therefore, the temporary position limit increase was scheduled to automatically revert to the pre-split level (as provided for in connection with the Rule 4.11 Pilot Program) of 25,000 contracts after expiration in January 2007. 7 *See* Securities Exchange Act Release No. 55176 (January 25, 2007), 72 FR 4741 (February 1, 2007). As the Exchange described in the proposal that established the IWM Option Pilot Program, the Exchange believes that a position limit of 250,000 option contracts would prevent traders from adequately hedging their options positions, thereby impairing their ability to provide liquidity. Specifically, the Exchange stated that IWM options are 1/10 the size of options on the Russell 2000 Index (“RUT”), which have a position limit of 50,000 contracts. 8 Therefore, traders who trade IWM options to hedge positions in RUT options are likely to find a position limit of 250,000 contracts in IWM options too restrictive and insufficient to properly hedge. For example, if a trader held 50,000 RUT options and wanted to hedge that position with IWM options, the trader would need, at a minimum, 500,000 IWM options to properly hedge the position. The Exchange additionally notes that index options on 1/10 the RUT have a position limit of 500,000 contracts, which is consistent with and corresponds to the increased position limits permitted under the IWM Option Position Limit Pilot. 9 Therefore, the Exchange continues to believe that a position limit of 250,000 contracts is too low and may adversely affect market participants' ability to provide liquidity in this product. 8 *See* Rule 24.4(a). 9 *See id.* As the Exchange also described in the proposal that established the IWM Option Pilot Program, IWM options have grown to become one of the largest options contracts in terms of trading volume. For example, through May 29, 2007, year-to-date industry volume in IWM options has averaged over 460,000 contracts per day, for a total of over 61 million contracts. CBOE alone has averaged almost 250,000 IWM option contracts per day during that time, for a total of almost 33 million contracts. In contrast, QQQQ options, which have a position limit of 900,000 contracts, have averaged almost 575,000 contracts per day in 2007. The Exchange believes that maintaining the increased position and exercise limits for IWM options will lead to a more liquid and more competitive market environment for IWM options that will benefit customers interested in this product. In fact, the Exchange has received positive feedback from market participants, who have expressed a desire that the IWM Option Pilot Program be renewed. For these reasons, the Exchange believes that the above stated reasons justify the IWM Option Pilot Program and requests that the Commission extend the IWM Option Pilot Program for an additional six-month time period, through January 18, 2008. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 10 in general, and furthers the objectives of Section 6(b)(5) of the Act, 11 in particular, because it is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and practices, and, in general, to protect investors and the public interest. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received written comments with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not:
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition; and
(iii)become operative for 30 days after the date of filing (or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest), the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and subparagraph (f)(6) of Rule 19b-4 thereunder. 13 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b-4(f)(6). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2007-61 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2007-61. 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 CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2007-61 and should be submitted on or before July 18, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12394 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55936; File No. SR-ISE-2007-32] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating To Removing Certain Rules From Its Rulebook June 21, 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 May 9, 2007, the International Securities Exchange, LLC (the “Exchange” or the “ISE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On June 8, 2007, ISE filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 is incorporated in this notice. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to remove certain inconsequential ISE rules for which there is no corresponding National Association of Securities Dealers (“NASD”) rule. The text of the proposed rule change is below. Proposed new language is *in italics;* proposed deletions are enclosed in brackets. Rule 403. *Reserved.* [Nominal Employment No Member may employ any person in a nominal position on account of business obtained by such person.] Rule 605. *Reserved.* [Other Affiliations of Registered Persons Except with the express written permission of the Exchange, every registered person shall devote his entire time during business hours to the business of the Member employing him, or to the business of its affiliates that are engaged in the transaction of business as a broker or dealer in securities or commodities or in such other businesses as have been approved by the Member's designated examining authority.] Rule 615. *Reserved.* [Addressing of Communications to Customers No Member shall address any communications to a customer in care of any other person unless either
(i)the customer, within the preceding twelve
(12)months, has instructed the Member in writing to send communications in care of such other persons, or
(ii)duplicate copies are sent to the customer at some other address designated in writing by him.] II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to rescind certain inconsequential ISE rules. The Exchange has recently entered into an amended and restated 17d-2 Agreement with the National Association of Securities Dealers (“NASD”), whereby the NASD has assumed regulatory and enforcement responsibilities for dual members with respect to common rules delineated in the Agreement. 4 During the course of amending this Agreement, the Exchange came across some common rules that the ISE needed to amend in order to conform the language to the corresponding NASD rule 5 and a few rules which are not common to the NASD rules and are not specific to or necessary for the Exchange's marketplace or membership. Accordingly, the Exchange proposes to remove the following rules from its rulebook: Rule 403 (Nominal Employment), Rule 605 (Other Affiliations of Registered Persons), and 615 (Addressing of Communications to Customers). 4 *See* Securities Exchange Act Release No. 55367 (February 27, 2007), 72 FR 9983 (March 6, 2007) (Order approving and declaring effective a plan for the allocation of regulatory responsibilities between ISE and NASD). 5 *See* Securities Exchange Act Release No. 55751 (May 11, 2007), 72 FR 27884 (May 17, 2007) (Proposal to amend ISE rules to conform such rules to their corresponding NASD rules). The Exchange seeks to rescind Rule 403 (Nominal Employment) because the rule is narrowly drafted to prohibit members from obtaining business by employing a person in a nominal position. The Exchange believes that Rule 406 (Gratuities) better addresses this issue by prohibiting a member from giving any compensation or gratuities in any one year in excess of $100 to any employee of any other member or of any non-member broker, dealer, bank or institution, without the prior consent of the employer and of the Exchange. Additionally, the Exchange seeks to rescind Rule 605 (Other Affiliations of Registered Persons) because the Exchange believes it is an antiquated rule and due to significant changes in market structure, the Exchange no longer believes it necessary to limit registered persons activities during business hours. Further, the NASD has no comparable rule and, as discussed above, the Exchange has entered into a 17d-2 Agreement with the NASD to monitor and enforce common rules, including, but not limited to, rules governing Registered Persons. Lastly, the Exchange seeks to rescind Rule 615 (Addressing of Communications to Customers) because the Exchange believes that broker-dealers that do a public business are better equipped to set their own policies and procedures governing communications with customers that are applicable to their business. Pursuant to ISE Rule 2114 (Doing Business with the Public) ISE members that do business with the public are required to also be a member of the NASD. The NASD requires broker-dealers to have written supervisory procedures covering areas such as, communications with the public and customer account statements. Additionally, those members must also comply with NASD rules, which the Exchange believes sufficiently address this topic. 2. Statutory Basis The basis under the Exchange Act for this proposed rule change is found in Section 6(b)(5). 6 Specifically, the Exchange believes the proposed rule change is consistent with Section 6(b)(5) requirements that the rules of an exchange be designed to promote just and equitable principles of trade, serve to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. 6 15 U.S.C. § 78f(b). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the Exchange consents, the Commission will:
(A)By order approve such proposed rule change, as amended, or
(B)Institute proceedings to determine whether the proposed rule change, as amended, should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-ISE-2007-32 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-ISE-2007-32. This file number should be included in 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, 100 F Street, NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to the File Number SR-ISE-2007-32 and should be submitted on or before July 18, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12390 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55924; File No. SR-NASDAQ-2007-050] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 To Modify the Minimum Shareholder Requirement for Initial Listing on the Nasdaq Global Select Market June 19, 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 May 10, 2007, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by Nasdaq. On June 19, 2007, Nasdaq filed Amendment No. 1 to the proposed rule change. 3 Nasdaq has filed this proposal pursuant to Section 19(b)(3)(A) of the Act 4 and Rule 19b-4(f)(6) thereunder, 5 which renders it effective upon filing with the Commission. The Commission is publishing this notice, as amended, to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Partial Amendment No. 1 replaced a footnote in the original filing. *See infra* note 8. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq proposes to modify the minimum shareholder requirement for initial listing on the Nasdaq Global Select Market. The text of the proposed rule change is below. Proposed new language is in italics; proposed deletions are in brackets. 6 6 Changes are marked to the rule text that appears in the electronic manual of Nasdaq found at *http://www.complinet.com/nasdaq.* 4426. Nasdaq Global Select Market Listing Requirements
(a)No change.
(b)Liquidity Requirements
(1)The security must demonstrate either: (A)-(B) No change.
(C)A minimum of 450 beneficial *round lot* shareholders[, in the case of:
(i)An issuer listing in connection with a court-approved reorganization under the federal bankruptcy laws or comparable foreign laws; or
(ii)An issuer that is affiliated with another company listed on the Global Select Market]. (2)-(3) No change. (c)-(f) No change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Rule 4426(b) sets forth the liquidity requirements for the Nasdaq Global Select Market. Among the requirements set out in that rule is the requirement that for initial listing on the Global Select Market, a security must have either
(i)2,200 beneficial shareholders or
(ii)550 beneficial shareholders and a minimum trading volume of at least 1.1 million shares per month over the prior year. In addition, companies listing in connection with a court-approved reorganization and companies affiliated with other Global Select Market companies can list on the Global Select Market if their security has a minimum of 450 beneficial shareholders. These requirements for the Global Select Market were adopted to be similar to, but higher than, the requirements for initial listing on the New York Stock Exchange (“NYSE”). In August 2006, the NYSE revised its listing standards to reduce the required number of round lot holders for initial listing from 2,000 to 400. 7 The NYSE stated that it made this change based on changes in the composition of the investor population in the time since it adopted the 2,000 holder requirement, such that fewer shareholders are necessary to provide liquidity in a security. 7 *See* Securities Exchange Act Release No. 54350 (August 22, 2006), 71 FR 51259 (August 29, 2006) (SR-NYSE-2006-64). Given the change to the NYSE requirements, Nasdaq now proposes to modify the liquidity requirement for the Global Select Market to permit a security to list if the security has a minimum of 450 beneficial round lot shareholders and satisfies the other requirements for initial listing. 8 Nasdaq notes that this requirement remains higher than the revised NYSE requirement and the requirement for listing on the Nasdaq Global Market. Given Nasdaq's experience with the 400 round lot holder requirement for initial and continued listing on the Nasdaq Global Market, Nasdaq does not believe that this change would result in any adverse impact on liquidity or on investors. Further, Nasdaq notes that the revised requirements exceed the requirements set forth in Rule 3a51-1(a)(2) under the Act. 9 8 In addition to the proposed criteria described above, Nasdaq would maintain the existing alternative criteria to permit listing a security that has either:
(i)2,200 beneficial shareholders; or
(ii)550 beneficial shareholders and a minimum trading volume of at least 1.1 million shares per month over the prior year. Nasdaq proposes to eliminate the alternative requirement for companies emerging from bankruptcy or affiliated with another listed company. Thus, as proposed, all companies, including companies emerging from bankruptcy and companies affiliated with another listed company, would be required to meet one of the three alternative standards. 9 17 CFR 240.3a51-1(a)(2) (excluding from the term “penny stock” certain securities). 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 10 in general, and with Section 6(b)(5) of the Act, 11 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. Nasdaq believes the proposed change would continue to maintain appropriate minimum liquidity requirements for companies seeking to list on the Nasdaq Global Select Market, while also recognizing changes in the market that allow such liquidity with fewer shareholders. 10 15 U.S.C. 78f. 11 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, as amended. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition; and
(iii)by its terms, become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b-4(f)(6) thereunder. 13 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b-4(f)(6). A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) 14 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. Nasdaq has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Specifically, the Commission believes that the proposal would allow Nasdaq to have similar holder requirements as other exchanges and the Nasdaq Global Market. 15 Accordingly, the Commission designates the proposal to be effective and operative upon filing with the Commission. 16 14 17 CFR 240.19b-4(f)(6)(iii). 15 *See* note 7 *supra* and accompanying text. 16 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of the amended proposed rule change, the Commission may summarily abrogate such proposed rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 17 17 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposal, the Commission considers the period to commence on June 19, 2007, the date on which Nasdaq submitted Amendment No. 1. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NASDAQ-2007-050 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-2007-050. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2007-050 and should be submitted on or before July 18, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 18 Florence E. Harmon, Deputy Secretary. 18 17 CFR 200.30-3(a)(12). [FR Doc. E7-12392 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55937; File No. SR-ASDAQ-2007-001] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change as Modified by Amendment No. 2 to Amend Nasdaq's “Clearly Erroneous” Rule June 21, 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 January 22, 2007, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by Nasdaq. On June 1, 2007, Nasdaq filed Amendment No. 1 to the proposed rule change. 3 On June 12, 2007, Nasdaq filed Amendment No. 2 to the proposed rule change. 4 The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 2, from interested persons. 1 5 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced the proposed rule change in its entirety. Nasdaq withdrew Amendment No. 1 on June 14, 2007. 4 Amendment No. 2 replaced the proposed rule change in its entirety. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to clarify the applicability of Nasdaq Rule 11890 to transactions resulting from unauthorized or manipulative trading activity. Nasdaq will implement the proposed rule change immediately upon approval by the Commission. The text of the proposed rule change is below. Proposed new language is *italicized* ; proposed deletions are in brackets. 11890. Clearly Erroneous Transactions
(a)Authority to Review Transactions Pursuant to Complaint of Market Participant
(1)Scope of Authority
(A)Subject to the limitations described in paragraph (a)(2)[(C)] *(D)* below, [officers] *officials* of Nasdaq designated by its President shall, pursuant to the procedures set forth in paragraph (a)(2) below, have the authority to review any transaction arising out of the use or operation of any execution or communication system owned or operated by Nasdaq and approved by the Commission[, including transactions entered into by a member of a national securities exchange with unlisted trading privileges in Nasdaq-listed securities (a “UTP Exchange”) through such a system]; provided, however, that the parties to the transaction must be readily identifiable by Nasdaq through its systems. A Nasdaq [officer] *official* shall review transactions with a view toward maintaining a fair and orderly market and the protection of investors and the public interest. Based upon this review, the [officer] *official* shall decline to act upon a disputed transaction if [the officer] *he or she* believes that the transaction under dispute is not clearly erroneous. If the [officer] *official* determines the transaction in dispute is clearly erroneous, however, he or she shall declare that the transaction is null and void or modify one or more terms of the transaction. When adjusting the terms of a transaction, the Nasdaq [officer] *official* shall seek to adjust the price and/or size of the transaction to achieve an equitable rectification of the error that would place the parties to a transaction in the same position, or as close as possible to the same position, as they would have been in had the error not occurred. For the purposes of this Rule, the terms of a transaction are clearly erroneous if: *(i)* the transaction is eligible for review under the Rule *,* and [if] *(ii) either* *a.* there is an obvious error in any term, such as price, number of shares or other unit of trading, or identification of the security *, or* *b. the person seeking review of the transaction has represented that it resulted from an order submitted by a person that was not authorized to submit that order into Nasdaq or from an account used for the purpose of effecting a manipulation of the market for the security.*
(2)Procedures for Reviewing Transactions
(A)*Except as provided in paragraph (a)(2)(B),* [A] *a* ny member[, member of a UTP Exchange,] or person associated with a[ny such] member that seeks to have a transaction reviewed pursuant to paragraph (a)(1) hereof shall submit a written complaint to Nasdaq MarketWatch in accordance with the following time parameters:
(i)for transactions occurring at or after 9:30 a.m.[, Eastern Time], but prior to 10:00 a.m.[, Eastern Time], complaints must be received by Nasdaq by 10:30 a.m.[, Eastern Time]; and
(ii)for transactions occurring *at any other time* [prior to 9:30 a.m., Eastern Time and at or after 10:00 a.m., Eastern Time], complaints must be received by Nasdaq within thirty minutes of execution time.
(B)*In the case of an Outlier Transaction, a member or person associated with a member that seeks to have a transaction reviewed pursuant to paragraph (a)(1) hereof shall submit a written complaint to Nasdaq MarketWatch in accordance with the following time parameters:* ( *i) for transactions occurring at or after 9:30 a.m. but prior to 10:00 a.m., complaints must be received by Nasdaq by 11:30 a.m.; *
(ii)*for transactions occurring prior to 9:30 a.m. or between 10:00 a.m. and the close of the Regular Session, complaints must be received by Nasdaq within ninety minutes of execution time; and *
(iii)*for transactions occurring after the close of the Regular Session, complaints must be received by Nasdaq prior to 9:30 a.m. the next trading day.* [(B)](C) Once a complaint has been received in accord with paragraph (a)(2)(A) *or (B)* above, the complainant shall have up to thirty
(30)minutes, or such longer period as specified by Nasdaq staff, to submit any supporting written information concerning the complaint necessary for a determination under paragraph (a)(1). Such supporting information must include the approximate time of transaction(s), security symbol, number of shares, price(s), contra broker(s) if the transactions are not anonymous, Nasdaq system used to execute the transactions, and *the factual basis for believing that the trade is clearly erroneous* [the reason the review is being sought]. If Nasdaq receives a complaint that does not contain all of the required supporting information, Nasdaq shall immediately notify the filer that the complaint is deficient. [(C)] *(D)* Following the expiration of the period for submission of supporting material, a Nasdaq [officer] *official* shall determine whether the complaint is eligible for review. A complaint shall not be eligible for review under paragraph
(a)unless:
(i)the complainant has provided all of the supporting information required under paragraph (a)(2)[(B)] *(C),* and
(ii)For trades in Nasdaq securities executed *during the Regular Session* [between 9:30 a.m. and 4:00 p.m. Eastern Time], or trades in non-Nasdaq securities executed *during the Regular Session after* [between the time when] the [p] *P* rimary [m] *M* arket for the security first posts an executable two-side quote [for its regular market trading session and 4:00 p.m. Eastern Time], the price of *a* transaction to buy
(sell)that is the subject of the complaint is greater than (less than) the [best offer (best bid)] *Inside Price* by an amount that equals or exceeds the minimum threshold set forth below: Inside price Minimum threshold $0-$0.99 $0.02 + (0.10 × Inside Price) $1.00-$4.99 $0.12 + (0.07 × (Inside Price−$1.00)) $5.00-$14.99 $0.40 + (0.06 × (Inside Price−$5.00)) $15 or more $1.00 [For a transaction to buy
(sell)a Nasdaq security, the inside price shall be the best offer (best bid) in Nasdaq at the time that the first share of the order that resulted in the disputed transaction was executed, and for a transaction to buy
(sell)a non-Nasdaq security, the inside price shall be the national best offer (best bid) at the time that the first share of the order that resulted in the disputed transaction was executed. A “Nasdaq security” means a security for which transaction reports are disseminated under the Nasdaq UTP Plan, and a “non-Nasdaq security” means a security for which transaction reports are disseminated under the Consolidated Tape Association Plan. The “primary market” for a non-Nasdaq Security is the market designated as the primary market under the Consolidated Tape Association Plan.] [(D)] *(E)* If a complaint is determined to be eligible for review, the counterparty to the trade shall be notified of the complaint via telephone *or other method permitted by paragraph* *(d)* by Nasdaq staff and shall have up to thirty
(30)minutes, or such longer period as specified by Nasdaq staff, to submit any supporting written information concerning the complaint necessary for a determination under paragraph (a)(1). Either party to a disputed trade may request the written information provided by the other party pursuant to paragraph (a)(2). [(E)] *(F)* Notwithstanding paragraphs (a)(2)[(B)] *(C)* and [(D)] *(E)* above, once a party to a disputed trade communicates that it does not intend to submit any further information concerning a complaint, the party may not thereafter provide additional information unless requested to do so by Nasdaq staff. If both parties to a disputed trade indicate that they have no further information to provide concerning the complaint before their respective thirty-minute information submission period has elapsed, then the matter may be immediately presented to a Nasdaq [officer] *official* for a determination pursuant to paragraph (a)(1) above. [(F)] *(G)* Each member[, member of a UTP Exchange,] or person associated with a[ny such] member involved in the transaction shall provide Nasdaq with any information that it requests in order to resolve the matter on a timely basis notwithstanding the time parameters set forth in paragraphs (a)(2)[(B)] *(C)* and [(D)] *(E)* above. [(G)] *(H)* Once a party has applied to Nasdaq for review and the transaction has been determined to be eligible for review, the transaction shall be reviewed and a determination rendered, unless
(i)both parties to the transaction agree to withdraw the application for review prior to the time a decision is rendered pursuant to paragraph (a)(1), or
(ii)the complainant withdraws its application for review prior to the notification of counterparties pursuant to paragraph (a)(2)[(D)] *(E)* .
(b)Procedures for Reviewing Transactions on Nasdaq's Own Motion. In the event of
(i)a disruption or malfunction in the use or operation of any quotation, execution, communication, or trade reporting system owned or operated by Nasdaq and approved by the Commission, or
(ii)extraordinary market conditions or other circumstances in which the nullification or modification of transactions may be necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest, the President of Nasdaq or any Executive Vice President designated by the President may, on his or her own motion, review any transaction arising out of or reported through any such quotation, execution, communication, or trade reporting system[, including transactions entered into by a member of a UTP Exchange through the use or operation of such a system, but excluding transactions that are entered into through, or reported to, a UTP Exchange]. A Nasdaq officer acting pursuant to this subsection may declare any such transaction null and void or modify the terms of any such transaction if the officer determines that
(i)the transaction is clearly erroneous, or
(ii)such actions are necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest; provided, however, that the officer [must] *shall* take action pursuant to this subsection [within thirty
(30)minutes of] *as soon as possible after* detection of the transaction except in the event of extraordinary circumstances, in which event the officer must take action by [3:00 p.m.,] *9:30 a.m.* [Eastern Time,] on the next trading day following the date of the transaction at issue.
(c)Review by the Market Operations Review Committee (“MORC”)
(1)Subject to the limitations described in paragraph (c)(2), a member[, member of a UTP Exchange,] or person associated with a[ny such] member may appeal a determination made under paragraph
(a)to the MORC. A member[, member of a UTP Exchange,] or person associated with a[ny such] member may appeal a determination made under paragraph
(b)to the MORC unless the officer making the determination also determines that the number of the affected transactions is such that immediate finality is necessary to maintain a fair and orderly market and to protect investors and the public interest. An appeal must be made in writing, and must be received by Nasdaq within thirty
(30)minutes after the person making the appeal is given the notification of the determination being appealed, except that if Nasdaq notifies the parties of action taken pursuant to paragraph
(b)after 4:00 p.m., the appeal must be received by Nasdaq by 9:30 a.m. the next trading day. Once a written appeal has been received, the counterparty to the trade that is the subject of the appeal will be notified of the appeal and both parties shall be able to submit any additional supporting written information up until the time the appeal is considered by the MORC. Either party to a disputed trade may request the written information provided by the other party during the appeal process. An appeal to the MORC shall not operate as a stay of the determination being appealed, and the scope of the appeal shall be limited to trades which the person making the appeal is a party. Subject to the limitations described in paragraph (c)(2), once a party has appealed a determination to the MORC, the determination shall be reviewed and a decision rendered, unless
(i)both parties to the transaction agree to withdraw the appeal prior to the time a decision is rendered by the MORC, or
(ii)the party filing the appeal withdraws its appeal prior to the notification of counterparties under this paragraph (c)(1). Upon consideration of the record, and after such hearings as it may in its discretion order, the MORC, pursuant to the standards set forth in this rule, shall affirm, modify, reverse, or remand the determination.
(2)If a Nasdaq [officer] *official* determines under paragraph (a)(2)[(C)] *(D)* that a transaction is not eligible for review, a party appealing such determination must allege in its appeal a mistake of material fact upon which it believes the [officer's] *official's* determination was based. If the MORC concludes that an appeal of such a determination does not allege a mistake of material fact, the determination shall become final and binding. If the MORC concludes that an appeal of such a determination alleges a mistake of material fact, Nasdaq shall notify the counterparty to the transaction and the determination shall be reviewed by the MORC as provided under paragraph (c)(1). If the MORC then finds that the determination was based on a mistake of material fact, the MORC shall remand the matter for adjudication under paragraph (a); otherwise, the determination shall become final and binding.
(3)The decision of the MORC pursuant to an appeal, or a determination by a Nasdaq [officer] *official* that is not appealed, shall be final and binding upon all parties and shall constitute final Nasdaq action on the matter in issue. Any determination by a Nasdaq [officer] *official* pursuant to paragraph
(a)or
(b)or any decision by the MORC pursuant to paragraph
(c)shall be rendered without prejudice as to the rights of the parties to the transaction to submit their dispute to arbitration.
(4)The party initiating the appeal shall be assessed a $500.00 fee if the MORC upholds the decision of the Nasdaq [officer] *official* . In addition, in instances where Nasdaq, on behalf of a member, requests a determination by another market center that a transaction is clearly erroneous, Nasdaq will pass any resulting charges through to the relevant member.
(d)Communications
(1)All materials submitted to Nasdaq or the MORC pursuant to this Rule shall be submitted within the time parameters specified herein via such telecommunications procedures as Nasdaq may announce from time to time in a[n] Notice to Members or Head Trader Alert. Materials shall be deemed received at the time indicated by the telecommunications equipment (e.g., facsimile machine or computer) receiving the materials. Nasdaq, in its sole and absolute discretion, reserves the right to reject or accept any material that is not received within the time parameters specified herein. *All times stated in this rule and related Interpretive Material are Eastern Time.*
(2)Nasdaq shall provide affected parties with prompt notice of determinations under this Rule via facsimile machine, electronic mail, or telephone (including voicemail); provided, however, that if an officer nullifies or modifies a large number of transactions pursuant to paragraph (b), Nasdaq may instead provide notice to parties via Nasdaq telecommunications protocols, a press release, or any other method reasonably expected to provide rapid notice to many market participants. *(e) Definitions* *For purposes of this Rule and related Interpretive Material:* *(1) “Inside Price” means:* *(A) for a transaction to buy
(sell)a Nasdaq security, the best offer (best bid) in Nasdaq at the time that the first share of an order or the first share of a series of orders that resulted in disputed transactions was executed, and* *(B) for a transaction to buy
(sell)a non-Nasdaq security, the national best offer (best bid) at the time that the first share of an order or the first share of a series of orders that resulted in the disputed transactions was executed.* *(2) “Nasdaq security” means a security for which transaction reports are disseminated under the Nasdaq UTP Plan.* *(3) “Non-Nasdaq security” means a security for which transaction reports are disseminated under the Consolidated Tape Association Plan.* *(4) “Outlier Transaction” means a transaction that:* *(A) is executed at a price that meets the following parameters:* *(i) in the case of a transaction for a Nasdaq security executed during the Regular Session, the price is 50% or more away from the Inside Price;* *(ii) in the case of a transaction for a non-Nasdaq security executed during the Regular Session after the Primary Market has posted its first two-sided quote, the price is 50% or more away from the Inside Price;* *(iii) in the case of a transaction for a Nasdaq security or non-Nasdaq security executed outside of the Regular Session, or a non-Nasdaq security executed during the Regular Session before the Primary Market has posted its first two-sided quote, the price is 50% or more away from the closing price of the security in the most recent Regular Session; and* *(B) the loss value of all transactions at issue in the complaint exceeds $10,000. The loss value is measured by multiplying the number of shares by the difference between the execution price and price with which the execution price is compared under paragraph (e)(4)(A).* *(5) “Primary Market” means:* *(A) for a Nasdaq security, the Nasdaq Market Center, and* *(B) for a non-Nasdaq Security, the market designated as the primary market under the Consolidated Tape Association Plan.* *(6) “Regular Session” means the primary trading session for a particular security on its Primary Market, which is generally 9:30 a.m. through 4:00 or 4:15 p.m.* IM-11890-1. Refusal to Abide by Rulings of a Nasdaq [Officer] Official or the MORC It shall be considered conduct inconsistent with just and equitable principles of trade for any member to refuse to take any action that is necessary to effectuate a final decision of a Nasdaq [officer] *official* or the MORC under Rule 11890. IM-11890-2. Review by Panels of the MORC For purposes of Rule 11890 and other Nasdaq Rules that permit review of Nasdaq decisions by the MORC, a decision of the MORC may be rendered by a panel of the MORC. In the case of a review of a determination by a Nasdaq [officer] *official* under Rule 11890(a)(2)[(C)] *(D)* that a transaction is not eligible for review (including a review of the sufficiency of allegations contained in an appeal regarding such a determination), the panel may consist of one or more members of the MORC, provided that no more than 50 percent of the members of any panel are directly engaged in market making activity or employed by a member whose revenues from market making activity exceed ten percent of its total revenues. In all other cases, the panel shall consist of three or more members of the MORC, provided that no more than 50 percent of the members of any panel are directly engaged in market making activity or employed by a member firm whose revenues from market making activity exceed ten percent of its total revenues. IM-11890-3. Application of Rule 11890(a)(2)[(C)]
(D)The following example is intended to assist market participants in understanding the minimum price deviation thresholds in paragraph (a)(2)[(C)] *(D)* and their effect on the eligibility of transactions for review under Rule 11890. ABCD, a Nasdaq [listed] security, has an [i] *Inside* [market] *Price* of
(bid)$12.00-$12.05 (ask). Market Maker A
(MMA)enters a market order to buy 10,000 shares, although it had intended a market order for 1,000 shares. The size of the order is such that the order `sweeps' the Nasdaq Market Center order file, which reflects 1,000 shares of liquidity offered at each of ten prices ranging from $12.05 to $12.95. Executions occur, moving through the depth of file, as follows: Trade #1—1000 shares @ $12.05 (9000 remaining). Trade #2—1000 shares @ $12.10 (8000 remaining). Trade #3—1000 shares @ $12.15 (7000 remaining). Trade #4—1000 shares @ $12.25 (6000 remaining). Trade #5—1000 shares @ $12.35 (5000 remaining). Trade #6—1000 shares @ $12.45 (4000 remaining). Trade #7—1000 shares @ $12.55 (3000 remaining). Trade #8—1000 shares @ $12.65 (2000 remaining). Trade #9—1000 shares @ $12.90 (1000 remaining). Trade #10—1000 shares @ $12.95 (complete). The inside offer at the time the first share of the order was executed is $12.05, so the minimum price deviation threshold is determined using the following formula: $0.40 + (0.06 × (Inside Price−$5.00)) = $0.40 + (0.06 × ($12.05−$5.00)) = $0.82. Thus, to be eligible for review, a transaction must be at a price that is at least $0.82 higher than the original best offer price (i.e., $12.05 + $0.82 = $12.87). MMA could petition for review of trades #9 and #10, priced at $12.90 and $12.95 respectively, but trades #1 through #8 would not be eligible for review. The sole basis for an appeal to the MORC of the determination that trades #1 through #8 are not eligible for review would be an assertion of a mistake of material fact. For example, an appeal could be based upon an assertion that the Nasdaq [officer] *official* had made an arithmetical error in determining the minimum price deviation threshold, or had erred in determining the applicable [inside price] *Inside Price.* IM-11890-4. Clearly Erroneous Transaction Guidance for Filings under Rule 11890(a) and Single Stock Events under Rule 11890(b) Nasdaq is providing the following guidance on how it [generally] considers: • all complaints filed by market participants under Rule 11890(a); and • [many] *most* events involving a single security considered on Nasdaq's own motion pursuant to Rule 11890(b). Nasdaq generally considers a transaction to be clearly erroneous when the print is substantially inconsistent with the market price *that existed* at the time of execution *of the first share of one or a series of orders that resulted in disputed transactions. Nasdaq would not consider a trade clearly erroneous, and therefore would not break or modify it, if it was priced within a range of the preceding market price, as described in detail below.* In making such a determination, Nasdaq takes into account the circumstances at the time of the transaction, the maintenance of a fair and orderly market, and the protection of investors and the public interest. Participants in Nasdaq are responsible for ensuring that the appropriate price and type of order are entered into Nasdaq's systems. Simple assertion by a firm that it made a mistake in entering an order or a quote, or that it failed to pay attention or to update a quote, may not be sufficient to establish that a transaction was clearly erroneous. Numerical Factors for Review Nasdaq primarily considers the execution price of a trade in determining whether it is clearly erroneous, * and breaks trades that are more than a specified percentage away from a Reference Price that is indicative of prior market conditions. The range away from a Reference Price beyond which trades may be broken is referred to as the Numerical Threshold. As a corollary to this policy, Nasdaq does not break trades that are at the Numerical Threshold or between the Reference Price and the Numerical Threshold, as set forth in the chart below.* Execution Price [Range Away from Reference Price] *Numerical Threshold—Regular Session* *Numerical Threshold—Outside Regular Session* *$0.20 and under* *The minimum threshold required for adjudication under Rule 11890(a)(2)(D)(ii)* *The minimum threshold that would be required for adjudication under Rule 11890(a)(2)(D)(ii) if it were applicable outside of the Regular Session* *Over $0.20 and up to* $1.75 [and under] [Equal to or greater than t] *T* he minimum threshold required for adjudication under Rule 11890(a)(2)[(C)]( *D* )(ii) *20%* Over $1.75 and up to $25 10% *20%* Over $25 and up to $50 5% *10%* Over $50 3% *6%* Nasdaq uses [different] Reference Prices based on the time of the trade and the listing venue of the security in order to establish an appropriate comparison point. These Reference Prices are detailed below. [In unusual circumstances, however, Nasdaq may use a different Reference Price.] Time of Trade and Listing Venue Reference Price Nasdaq[-listed] securities *during* [for trades executed between 9:30 am and 4:00 pm Eastern Time (“]Regular Session[”)] *Inside Price* [The best bid (best offer) (“BBO”) in Nasdaq at the time of execution of first share of the disputed order] Non-Nasdaq[-listed] securities for trades executed during Regular Session and after [p] *P* rimary [m] *M* arket has posted first two-sided quote *Inside Price* [The national BBO at the time of execution of first share of the disputed order] Non-Nasdaq[-listed] securities for trades executed during Regular Session and before [p] *P* rimary [m] *M* arket has posted first two-sided quote *Inside Price* [The national BBO at the time of execution of first share of the disputed order]. If [national BBO] *the Inside Price* does not appear substantially related to *the* market, Nasdaq may consider other Reference Prices including the opening trade, indication of interest and first two-sided quote in the [p] *P* rimary [m] *M* arket (which may occur after the execution) and the closing price for the prior Regular Session [for the security's primary market]. Nasdaq[-listed] *securities* and non-Nasdaq[-listed] securities *outside of Regular Session* [for trades executed after 4:00 pm and before 9:30 am Eastern Time] Closing price of security for the last Regular Session on the security's [p] *P* rimary [m] *M* arket. *If the closing price does not appear substantially related to the market, Nasdaq may consider other References Prices, including the prices of other trades in the trading session or the Inside Price.* *In unusual circumstances, Nasdaq may use a different Reference Price in determining which trades to break. For example, in the case of several large orders that execute at multiple prices, a Reference Price based on a weighted average of the best bid (best offer) (“BBO”) at relevant times may be used rather than a Reference Price based solely on the Inside Price.* *It may also be necessary to use a higher Numerical Threshold if, after market participants have been alerted to the existence of erroneous activity, the price of the security returns toward its prior trading range but continues to trade beyond the price at which trades would normally be broken. Nasdaq also may use different Numerical Thresholds in events that involve other markets in an effort to coordinate a Numerical Threshold that is consistent across markets.* *Finally, Nasdaq could break or adjust all trades in a security if a pervasive mistake resulted in trading that should not have occurred. For example, trades in a security that was incorrectly authorized for trading prior to the date of its actual initial public offering would all be broken. Similarly, if Nasdaq systems executed orders in the Nasdaq opening cross or closing cross at a price that was inconsistent with the rules governing the operation of the crosses, either due to a Nasdaq system error or because an underlying erroneous order resulted in an erroneous opening or closing price, Nasdaq may break or adjust all of the affected trades.* Additional Factors In occasional circumstances, Nasdaq may consider additional factors in determining whether a transaction is clearly erroneous ( *provided the applicable Numerical Threshold is exceeded* ). These include: • Material news released for the security • Suspicious trading activity • System malfunctions or disruptions • Locked or crossed markets • Trading in the security was recently halted/resumed • The security is an initial public offering • Volume and volatility for the security • Stock-split, reorganization or other corporate action • Validity of consolidated tape trades and quotes and Nasdaq BBO comparison to national BBO • General volatility of market conditions • Reason for the error Suspicious Trading Activity *As reflected in Rule 11890(a)(1)(A), Nasdaq may determine that a transaction is clearly erroneous if the person seeking review has represented that it resulted from an order submitted by a person that was not authorized to submit that order into Nasdaq or from an account used for the purpose of effecting a manipulation of the market for the security. Nasdaq may adjudicate such transactions under Rule 11890(a), or may address them under Rule 11890(b) if their effect on the market is such that nullification or modification of a large number of transactions may be necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest.* *While an assertion of suspicious trading activity may provide the basis for reviewing transactions, it does not provide a basis for altering the application of the factors used in determining whether to nullify or modify trades. Thus, the minimum price threshold required for adjudication under Rule 11890(a)(2)(D)(ii) would be applicable in the case of unauthorized or manipulative transactions being adjudicated under Rule 11890(a). Moreover, Nasdaq would apply the Numerical Thresholds described above in determining which trades to break. For example, if the best offer in a security during the Regular Session was $20 prior to the execution of the first share of a series of unauthorized buy orders that executed at prices ranging from $20 to $30, the usual Numerical Threshold would be 10%, or $22.00, and trades above that price could be broken.* Additional Information Concerning Rule 11890(b) Nasdaq may on its own motion review transactions in any security in the event of: • A disruption or malfunction in the use or operation of any quotation, execution, communication, or trade reporting system owned or operated by Nasdaq and approved by the SEC; • Extraordinary market conditions or other circumstances in which the nullification or modification of transactions may be necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest. Consequently, Rule 11890(b) is focused on systemic problems that involve large numbers of parties or trades, or market conditions where it would not be in the best interests of the market to proceed under the processes set forth in Rule 11890(a). Sometimes events involving a single security will meet the standards of Rule 11890(b). However, market participants should not assume that Rule 11890(b) will be available where, for example, they failed to file a complaint within the time periods specified in Rule 11890(a). The rule could be available, however, in cases where a trade not eligible for adjudication under Rule 11890(a) nevertheless could present systemic risks if permitted to stand. The guidance set forth in IM-11890-4 applies to many events involving a single security adjudicated pursuant to Rule 11890(b). However, Nasdaq may apply the guidance set forth in IM-11890-5 to some events involving a single security, such as some situations where trading activity occurs in multiple market centers and Nasdaq is acting in consultation with other markets. IM-11890-5. Clearly Erroneous Transaction Guidance for Multi-Stock Events Nasdaq is providing the following guidance on how it [generally] considers multi-stock events adjudicated on Nasdaq's own motion pursuant to Rule 11890(b). Nasdaq generally considers a transaction to be clearly erroneous when the print is substantially inconsistent with the market price *that existed* at the time of execution *of the first share of one or a series of orders that resulted in disputed transactions. Nasdaq would not consider a trade clearly erroneous, and therefore would not break or modify it, if it was priced within a range of the preceding market price, as described in detail below.* In making such a determination, Nasdaq takes into account the circumstances at the time of the transaction, the maintenance of a fair and orderly market, and the protection of investors and the public interest. Participants in Nasdaq are responsible for ensuring that the appropriate price and type of order are entered into Nasdaq's systems. Simple assertion by a firm that it made a mistake in entering an order or a quote, or that it failed to pay attention or to update a quote, may not be sufficient to establish that a transaction was clearly erroneous. Nasdaq may on its own motion review transactions in any security in the event of: • A disruption or malfunction in the use or operation of any quotation, execution, communication, or trade reporting system owned or operated by Nasdaq and approved by the SEC; or • Extraordinary market conditions or other circumstances in which the nullification or modification of transactions may be necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest. Consequently, Rule 11890(b) is focused on systemic problems that involve large numbers of parties or trades, or market conditions where it would not be in the best interests of the market to proceed under the processes set forth in Rule 11890(a). Even in cases involving multiple securities, however, market participants should not assume that Rule 11890(b) will be available where, for example, they failed to file a complaint within the time periods specified in Rule 11890(a). The rule could be available, however, in cases where a trade not eligible for adjudication under Rule 11890(a) nevertheless could present systemic risks if permitted to stand. The determination of whether to adjudicate an event under Rule 11890(b) is made by Nasdaq in its sole discretion pursuant to the terms of the rule. Numerical Factors for Review Nasdaq primarily considers the execution prices of the trades in question in determining whether trades should be nullified in a multi-stock event pursuant to Rule 11890(b). [Generally all trades more than 10% away from the Reference Price would be clearly erroneous.] *The range away from a Reference Price beyond which trades may be broken is referred to as the Numerical Threshold, and is 10% (except in the circumstances described below). As a corollary to this policy, Nasdaq does not break trades that are at the Numerical Threshold or between the Reference Price and the Numerical Threshold.* NASDAQ uses [different] Reference Prices based on time of the trade in order to establish an appropriate comparison point. These Reference Prices are detailed below. [In unusual circumstances, however, Nasdaq may use a different Reference Price.] Time of Trade Reference Price All trades executed *during the Regular Session* after the *market* opening *process* [of trading during regular market hours and until the end of regular market hours] *Inside Price* [For Nasdaq-listed securities, the best bid (best offer) (“BBO”) in Nasdaq at the time of execution of first share of the disputed order] [For Non-Nasdaq-listed securities, the national BBO at the time of execution of first share of the disputed order] All securities for trades executed: ▪ *outside of the Regular Session* ▪ after 4:00 p.m., Eastern Time
(ET)▪ before 9:30 a.m., ET] ▪ during the market opening process [for regular market hours] The closing price of the security for *the Regular Session* [regular market hours] on the security's [primary market] *Primary Market. If the closing price does not appear substantially related to the market, Nasdaq may consider other References Prices, including the prices of other trades in the trading session or the Inside Price.* *In unusual circumstances, however, Nasdaq may use a different Reference Price in determining which trades to break. For example, in the case of several large orders that execute at multiple prices, a Reference Price based on a weighted average of the best bid (best offer) (“BBO”) at relevant times may be used rather than a Reference Price based solely on the Inside Price.* *It may also be necessary to use a higher Numerical Threshold if, after market participants have been alerted to the existence of erroneous activity, the price of the security returns toward its prior trading range but continues to trade beyond the price at which trades would normally be broken. Nasdaq also may use different Numerical Thresholds in events that involve other markets in order to coordinate a Numerical Threshold that is consistent across markets.* *Finally, Nasdaq could break or adjust all trades in a security if a pervasive mistake resulted in trading that should not have occurred. For example, trades in a security that was incorrectly authorized for trading prior to the date of its actual initial public offering would all be broken. Similarly, if Nasdaq systems executed orders in the Nasdaq opening cross or closing cross at a price that was inconsistent with the rules governing the operation of the crosses, either due to a Nasdaq system error or because an underlying erroneous order resulted in an erroneous opening or closing price, Nasdaq may break or adjust all of the affected trades.* In occasional circumstances, Nasdaq may consider additional factors in determining whether the transactions are clearly erroneous *(provided the applicable Numerical Threshold is exceeded)* . These include: ▪ Material news released for individual securities ▪ Suspicious trading activity Nasdaq may also apply the guidance set forth in IM 11890-5 to some events involving a single security, such as some situations where trading activity occurs in multiple market centers and Nasdaq is acting in consultation with other markets. Suspicious Trading Activity *As reflected in Rule 11890(a)(1)(A), Nasdaq may determine that a transaction is clearly erroneous if the person seeking review has represented that it resulted from an order submitted by a person that was not authorized to submit that order into Nasdaq or from an account used for the purpose of effecting a manipulation of the market for the security. Nasdaq may adjudicate such transactions under Rule 11890(b) if their effect on the market is such that nullification or modification of a large number of transactions may be necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest.* *While an assertion of suspicious trading activity may provide the basis for reviewing transactions, it does not provide a basis for altering the application of the factors used in determining whether to nullify or modify trades. Thus, Nasdaq would apply the Numerical Thresholds described above in determining which trades to break. For example, if the best offer in a security during the Regular Session was $20 prior to the execution of the first share of a series of unauthorized buy orders that executed at prices ranging from $20 to $30, the usual Numerical Threshold would be 10%, or $22.00, and trades above that price could be broken.* 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 Application of Rule 11890 to Suspicious Trading Activity Nasdaq is amending Rule 11890, which covers the breaking or adjusting of trades determined to be clearly erroneous, to clarify the scope of its application to unauthorized and/or manipulative trading activity that could disrupt fair and orderly markets. In recent months, financial regulators have become aware of market manipulation schemes in which criminals manipulate stock prices by illegally gaining access to legitimate accounts. 5 Accordingly, Nasdaq is proposing to amend the definition of “clearly erroneous,” which currently refers to an obvious error in any term of a transaction, to make it clear that unauthorized trading activity fits within the definition. However, Nasdaq believes that the rule should not be drafted in a manner that makes an artificial distinction between manipulative activity undertaken through “hijacked” accounts and similar manipulations effected through accounts where an individual is technically authorized to enter orders but may take other measures to conceal identity. In short, Nasdaq believes that the scope of Rule 11890 should be broad enough to allow an appropriate response to any form of unauthorized or manipulative trading activity, including “cyber attacks” on the infrastructure of the financial system by terrorist organizations or attempts to manipulate stock prices by illegally gaining access to legitimate accounts or opening new accounts using false information. 6 5 *See, e.g.* , SEC Litigation Release No. 20037 (March 12, 2007). 6 Clay Wilson, Congressional Research Service, *Computer Attack and Cyber Terrorism: Vulnerabilities and Policy Issues for Congress* (April 1, 2005); Jeffrey Garten, *Markets' resilience to terror is no reason to relax,* Financial Times (September 11, 2006); Financial Services Sector Coordinating Council, *Protecting the U.S. Critical Financial Infrastructure: An Agenda for 2005* (2005). The rule change further provides that although suspicious trading activity may provide a basis for determining a trade to be clearly erroneous, it would not provide a basis for altering the application of price-based numerical factors in determining whether to break particular trades. As described in SR-NASDAQ-2006-046, 7 Nasdaq primarily considers the execution price of a trade in determining whether it is clearly erroneous, and breaks trades that are more than a specified percentage away from a Reference Price that is indicative of prior market conditions. The range away from a Reference Price beyond which trades may be broken, expressed as a percentage or minimum deviation, is referred to as the Numerical Threshold. 8 Thus, Nasdaq would apply the numerical factors described in IM-11890-4 and IM-11890-5 in determining which trades to break. 9 For example, if the best offer in a security during a market's Regular Session 10 was $20 prior to the execution of the first share of a series of unauthorized buy orders that executed at prices ranging from $20 to $30, the usual Numerical Threshold would be 10%, or $22.00, and higher-priced trades could be broken. Similarly, the minimum price threshold required for adjudication under Rule 11890(a)(2)(D)(ii) would be applicable in the case of unauthorized or manipulative transactions being adjudicated under Rule 11890(a). 7 Securities Exchange Act Release No. 54854 (December 1, 2006), 71 FR 71208, 71211 (December 8, 2006) (SR-NASDAQ-2006-046). 8 As a corollary to its policy, Nasdaq does not break trades that are at the Numerical Threshold or between the Reference Price and the Numerical Threshold. 9 IM-11890-4 provides guidance on how Nasdaq considers:
(1)all complaints filed by market participants under Rule 11890(a) and
(2)most events involving a single security considered on Nasdaq's own motion pursuant to Rule 11890(b). IM-11890-5 provides guidance on the remaining events involving a single security considered on Nasdaq's own motion pursuant to Rule 11890(b), such as some situations where trading activity occurs in multiple market centers and Nasdaq is acting in consultation with other markets. IM-11890-5 also provides guidance on how Nasdaq considers multi-stock events adjudicated on Nasdaq's own motion pursuant to Rule 11890(b). Telephone conversation by and between John Yetter, Senior Associate General Counsel, Nasdaq, and David Hsu, Special Counsel, Division of Market Regulation, Commission, on June 20, 2007. 10 The proposed rule change adds the defined term “Regular Session” to the rule, and defines it as “the primary trading session for a particular security on its Primary Market, which is generally 9:30 a.m. through 4:00 or 4:15 p.m. Nasdaq believes that it is important to allow transactions priced close to the inside market or other reference price to stand, even if the transactions directly resulted from a mistake, system error or account intrusion. This ensures that market participants have economic incentives to develop and maintain internal controls with a goal of preventing erroneous trading activity. It should also be noted that Nasdaq refers market participants for investigation by the NASD in its capacity as Nasdaq's regulatory services provider in all circumstances where a firm's erroneous trades raise questions as to the adequacy of its computer systems and internal controls. Nasdaq believes that enhanced controls by brokerage firms may play an important role in reducing the incidence of account intrusions, as well as system and human errors. 11 11 Nasdaq maintains records of each clearly erroneous complaint that it receives. This file includes: the filer's written complaint as required by Rule 11890(a)(2), any further written correspondence or notes of oral communications made by the Nasdaq MarketWatch analyst, any relevant screen shots or other market information retained by the analysts, and a record of the decisions by the Nasdaq official and the Market Operations Review Committee, if the official's decision is appealed. In the event of an account intrusion, Nasdaq requires written confirmation from the filer that the erroneous trade resulted from an account intrusion unless provided in the filer's original written complaint. Nasdaq refers all clearly erroneous complaints that raise regulatory concerns, including all cases alleging account intrusion, to NASD on a timely basis and also provides NASD with information on all complaints on a monthly basis. Numerical Thresholds The proposed rule change also amends IM-11890-4 and -5 to provide some additional guidance regarding the application of price-based factors under Rule 11890. The Reference Price generally used under Rule 11890 is the best bid/best offer (“BBO”) in Nasdaq, or the national BBO, for trading during the Regular Session, and the closing price on a stock's primary market for late and early trading. As described in SR-NASDAQ-2006-046, 12 however, Nasdaq may use a different Reference Price in unusual circumstances. Thus, in a case where material news about a security was released after market close for the security and a trade occurring after 4 p.m. and before 9:30 a.m. is at issue, Nasdaq may use a Reference Price derived from after-hours trading activity rather than the closing price of the security. Similarly, in the case of several large orders that execute at multiple prices, a Reference Price based on a weighted average of the BBO at relevant times may be used rather than a Reference Price based solely on the BBO immediately prior to the execution of the first share of the order. Nasdaq believes that it would enhance the clarity of the Interpretive Material to add these examples from the prior filing directly to the text. Nasdaq also proposes to amend the Interpretive Material to add examples of cases where Nasdaq may apply alternative Numerical Thresholds in determining which trades to break. For example, it may be necessary to use a higher Numerical Threshold if, after market participants have been alerted to the existence of erroneous activity, the price of a security returns toward its prior trading range but continues to trade beyond the price at which trades would normally be broken. Nasdaq also may use different Numerical Thresholds in events that involve other markets in order to coordinate a break point that is consistent across markets. For example, if the bulk of trades in a stock not listed on Nasdaq occurred in the stock's primary market, Nasdaq would generally seek to reach a result consistent with the primary market. 12 *See supra* note 7. Finally, the amended Interpretive Material provides that Nasdaq could break or modify all trades in a security if a pervasive mistake resulted in trading that should not have occurred. For example, trades in a security that was incorrectly authorized for trading prior to the date of its actual initial public offering would all be broken. Similarly, if Nasdaq systems executed orders in the Nasdaq opening cross or closing cross at a price that was inconsistent with the rules governing the operation of the crosses, either due to a Nasdaq system error or because an underlying erroneous order resulted in an erroneous opening or closing price, Nasdaq may break or adjust all of the affected trades. Nasdaq is also amending the Numerical Thresholds under IM-11890-4 for trading outside the Regular Session, to establish wider ranges within which trades are permitted to stand. The change reflects the diminished depth of the market during after hours and pre-market trading sessions; market participants trading during these sessions must accept the fact that orders are more likely to exhaust liquidity available at the inside price than is the case during the Regular Session. Accordingly, Nasdaq believes that the Numerical Thresholds should be doubled during these times. For example, a trade at $40 per share could be broken if more than 10% away from the Reference Price during the Regular Session, but could not be broken during the pre-market or after hours sessions unless it was more than 20% away from the Reference Price. Nasdaq is also amending the language of Rule 11890(a)(2)(B) to make it clear that persons seeking review of transactions must present a factual basis for believing that the trade is clearly erroneous. Nasdaq cannot, within the context of an adjudication that must be conducted within a short period of time, determine all of the factual circumstances associated with a particular trade or set of trades. Thus, for example, if a trader files for adjudication and states that he mistakenly entered an order for 400,000 shares rather than the intended order size of 4,000, Nasdaq cannot, on a real-time basis, determine whether this is accurate. Nevertheless, Nasdaq believes that it is generally incumbent on persons seeking review actually to allege a human or system error, rather than merely stating that the order was “filled away” or at “a bad price.” 13 Requiring the statement of a factual basis also allows NASD to evaluate, after the fact, whether a particular market participant is abusing the clearly erroneous process or employing poor internal controls. Individuals and firms found to have misled Nasdaq about the cause of the alleged error would be subject to disciplinary action for misleading a self-regulatory organization. 13 Nasdaq notes, however, that several circumstances exist in which price itself may provide a conclusive basis for determining that an error occurred. For example, if a market participant entered an order in a non-Nasdaq security for execution after 9:30 a.m., but the primary market delayed its opening in the security until a later time, an execution may occur at a price substantially unrelated to the primary market's opening price of the security. Similarly, an execution of an order for an exchange-traded fund at a price that is substantially out-of-line with the intraday indicative value for the fund may provide *prima facie* evidence of an error. There have also been circumstances in which an employee of a member firm notices an execution at a price a substantial percentage ( *i.e.* , well in excess of 10%) away from the best bid/best offer, is unable to contact the responsible trader to obtain an explanation, and files for a nullification of the trade based solely on its price. Other Changes Nasdaq is amending the time limits for market participants to file for an adjudication under Rule 11890(a) in cases where the price of the transaction at issue is more than 50% away from the applicable inside price (or the closing price, for trading outside the Regular Session or before the primary market has posted its first two-sided quote), provided that the value of the transactions at issue is more than $10,000. 14 If these criteria are met, the transaction is defined as an “Outlier Transaction,” and the parties to the trade are given an extra hour to petition for review if the trade occurred during the Regular Session or during pre-market hours, or until 9:30 a.m. the next trading day if the trade occurred after hours. The reason for the change is to provide greater assurance that trades that are egregiously out of line with prevailing market prices are not permitted to stand, provided that the dollar value of the trades is significant. 14 Measured by multiplying the number of shares at issue in the trades by the difference between the execution price and price with which the execution price is compared under the rule. Nasdaq is also making several minor procedural modifications to the rule. First, Nasdaq is amending the language of Rule 11890(a)(2)(E) to allow Nasdaq to notify the counterparty to a trade about an erroneous event by telephone or other means consistent with the communications provisions of Rule 11890(d). While Nasdaq currently intends to continue notifying counterparties by telephone, the proposed change would give Nasdaq the flexibility to incorporate more electronic communications in the future. Pursuant to Rule 11890(d), any change to the method of communication must be announced by Nasdaq in a Notice to Members or Head Trader Alert. Second, Nasdaq is amending Rule 11890(b) to replace a statement that Nasdaq should, except in extraordinary circumstances, take action under the subsection within thirty
(30)minutes of detection of an erroneous transaction, with a statement that Nasdaq should act as soon as possible. Time is always of the essence when determinations must be made under the rule, but as a practical matter, many events adjudicated under Rule 11890(b) involve coordination between multiple market centers, and the time required to gather and evaluate information needed to make a determination is often in excess of 30 minutes. Accordingly, Nasdaq is amending the rule to provide that a determination must be made as soon as possible, except in extraordinary circumstances, in which case the outside time limit for a determination under the paragraph
(b)will be 9:30 a.m. the next trading day (rather than 3 p.m., as currently provided). Third, Nasdaq is amending Rule 11890 and the Interpretative Material in several places to replace the word “officer” with the word “official.” The intent of this change is to allow adjudications under Rule 11890(a) to be made by any duly designated Nasdaq employee, rather than limiting that authority to persons that are officers of Nasdaq within the meaning of its limited liability company agreement ( *e.g.* , persons with the title of Vice President or President). The change will broaden the scope of persons permitted to adjudicate claims under the Rule, thereby allowing more efficient adjudications. All persons designated under the Rule will have appropriate background in market structure and the requirements of the Rule; designated persons are likely to be employees of Nasdaq's MarketWatch regulatory unit. Nasdaq is not, however, modifying Rule 11890(b), which requires decisions to break or modify trades on Nasdaq's own motion to be made by senior officers only. Consistent with current practice, all adjudications under 11890(a) and
(b)will continue to be made on a “no-names basis” ( *i.e.* , the adjudicator does not know the identities of the market participants that will be affected by the decision). Finally, Nasdaq is amending the rule to add a consolidated paragraph of definitions of terms used in the rule and to delete obsolete references to transactions entered into by a member of a national securities exchange with unlisted trading privileges in Nasdaq securities. Although Nasdaq's former SuperMontage system allowed other exchanges to enter orders directly, the current Nasdaq Market Center does not retain this functionality. Rather, other exchanges and their members can access Nasdaq through broker-dealers that are members of Nasdaq, including broker-dealers owned by exchanges. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 15 in general, and with Section 6(b)(5) of the Act, 16 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. 15 15 U.S.C. 78f. 16 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or
(ii)as to which Nasdaq consents, the Commission will:
(A)By order approve the proposed rule change or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2007-001 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-2007-001. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2007-001 and should be submitted on or before July 18, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12426 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55932; File No. SR-NYSEArca-2007-54] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Position and Exercise Limits for Options on the KBW Bank Index June 20, 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 June 13, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated the proposed rule change as “non-controversial” under Section 19(b)(3)(A)(iii) 3 of the Act and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend NYSE Arca Rule 5.16 in order to increase the position and exercise limits for options on the KBW Bank Index. The text of the proposed rule change is available at NYSE Arca, at the Commission's Public Reference Room, and on the Exchange's Web site ( *http://www.nyse.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, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NYSE Arca has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange recently listed for trading options on the KBW Bank Index (“BKX”) pursuant to the generic listing standards of NYSE Arca Rule 5.13. Under NYSE Arca Rule 5.16(a), a narrow-based index option such as BKX cannot have position and exercise limits that exceed 31,500 contracts. The Exchange notes that the Philadelphia Stock Exchange, Inc. (“Phlx”) and the International Securities Exchange, LLC (“ISE”) currently list options on BKX and expanded their position and exercise limits for options on BKX to 44,000 contracts. 5 Accordingly, the Exchange proposes to amend NYSE Arca Rule 5.16 to increase the position and exercise limits for options on BKX to 44,000 contracts also. The Exchange believes it is important for a product traded at multiple exchanges to have uniform position and exercise limits in order to eliminate any confusion among investors and other market participants. 5 *See* Securities Exchange Act Release Nos. 49312 (February 24, 2004), 69 FR 9672 (March 1, 2004) (SR-Phlx-2004-13) and 55279 (February 12, 2007), 72 FR 7784 (February 20, 2007) (SR-ISE-2007-02). 2. Statutory Basis The Exchange believes the basis under the Act for this proposed rule change is found in Section 6(b)(5), 6 in that the adoption of uniform position and exercise limits for BKX will serve 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. 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not:
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition; and
(iii)become operative for 30 days after the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 7 and subparagraph (f)(6) of Rule 19b-4 thereunder. 8 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b-4(f)(6). A proposed rule change filed under 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 9 However, Rule 19b-4(f)(6)(iii) 10 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. 9 17 CFR 240.19b-4(f)(6)(iii). 10 *Id.* The Commission believes that waiving the five-day prefiling requirement and the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow the Exchange to immediately implement this proposal and make NYSE Arca's position and exercise limits for options on BKX consistent with the Phlx's and ISE's position and exercise limits for such options. 11 Further, the Commission further notes that the increased position and exercise limits for Phlx were previously noticed for comment and no comments were received. The Commission designates the proposal to become effective and operative upon filing. 12 11 *See supra* note 5. 12 For purposes only of waiving the 30-day operative delay, the Commission has considered the impact of the proposed rule on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSEArca-2007-54 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2007-54. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of NYSE Arca. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2007-54 and should be submitted on or before July 18, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12389 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55906; File No. SR-NYSEArca-2007-46] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Firm Facilitation, Royalty, and Booth Fees June 13, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on May 31, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. NYSE Arca has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend its Schedule of Fees and Charges for Exchange Services (“Schedule”) by making a technical change to the Firm Facilitation fee, eliminating one Royalty Fee, adding another, and capping the fees it charges to OTP Firms for booths on the options trading floor. The text of the proposed rule change is available at the Exchange, its Web Site ( *http://www.nyse.com/regulation* ), and the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change, and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend the existing Schedule by:
(1)Making a technical change to the Firm Facilitation Fee;
(2)eliminating one Royalty Fee;
(3)adding one new Royalty Fee; and
(4)establishing a monthly cap on Booth Fees. A brief description of each proposed changes is provided below. *Firm Facilitation Fees.* The Firm Facilitation rate applies to transactions involving a proprietary trading account of an OTP Firm 5 that has a customer of that OTP Firm on the contra side of the transaction. This practice is generally referred to as “facilitating” an order. Facilitation Orders on NYSE Arca are manually traded via open outcry and are not presently eligible for electronic execution. Open outcry trades are not subject to the Post/Take pricing model that NYSE Arca utilizes for issues that trade as part of the Penny Pilot. Accordingly, the Schedule now reads “N/A” for Firm Facilitation fees under both “Post” and “Take” Liquidity. Once the Facilitation Orders are fully automated, the Exchange will file with the Commission, a proposal for a new Post/Take rate for this order type. 5 *See* NYSE Arca Options Rule 1.1(r) (defining “OTP Firm”). *Royalty Fees.* The Exchange proposes to eliminate Royalty Fees for options traded on the NASDAQ Fidelity Composite Index ETF (ONEQ). The Exchange will no longer collect the $0.12 per contract fee on any trades in ONEQ. By eliminating these fees, the Exchange hopes to attract additional order flow and encourage more trading by market participants. The Exchange plans to commence trading of options on the KBW Bank Index (BKX). The Exchange has entered into a licensing agreement with Keefe, Bruyette & Woods Inc., the firm that created and maintains the fund. As a part of this agreement, NYSE Arca will pay a fee to Keefe, Bruyette & Woods on every contract traded on the Exchange. Effective with this filing, the Exchange will assess a $0.10 Royalty Fee, on a per contract basis, for Firm, Broker/Dealer, and Market Maker transactions in options on the KBW Bank Index. For electronic executions in issues included in the Penny Pilot, Royalty Fees will be passed through to the trading participant on the “Take” side of the transaction. 6 6 *See* telephone conversation between Andrew Stevens, Assistant General Counsel, Amex, and Christopher Chow, Special Counsel, Commission, on June 13, 2007. *Booth Fees.* OTP Firms apply for, and receive permission to use, booths on the options trading floor. The Exchange currently charges a $350 per month fee for each booth that an OTP Firm uses, without any monthly cap. The Exchange now proposes capping this fee at $3500 per month. Going forward, firms will pay a maximum monthly booth fee of $3500 regardless of how many booths they are authorized to use. 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act, 7 in general, and Section 6(b)(4), 8 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 9 and Rule 19b-4(f)(2) 10 thereunder, because it establishes or changes a due, fee, or other charge imposed by the Exchange. Accordingly, the proposal is effective upon filing with the Commission. At any time within 60 days of the filing of such proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 9 15 U.S.C. 78s(b)(3)(A)(ii). 10 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSEArca-2007-46 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2007-46. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2007-46 and should be submitted on or before July 18, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12391 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55939; File No. SR-OCC-2007-06] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Credit Default Basket Options June 21, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on April 20, 2007, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) and on June 16, 2007, amended the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by OCC. The Commission is publishing this notice to solicit comments from interested persons. 1 15 U.S.C. 78s(b)(1). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purposed rule change would permit OCC to clear and settle credit default basket options (“CDBOs”). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of these statements. 2 2 The Commission has modified the text of the summaries prepared by OCC. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule change is to permit OCC to clear and settle CDBOs, which are options related to the creditworthiness of an issuer or guarantor (“reference entity”) of one or more specified debt securities (“reference obligations”). CDBOs are proposed to be traded by the Chicago Board Options Exchange (“CBOE”). 3 CDBOs are binary options that pay a fixed amount to the holder of the option upon the occurrence of a “credit event” affecting the reference obligations. 4 Characteristics of CDBOs are described below, followed by an explanation of the specific rule changes being proposed in order that OCC may clear and settle them. 3 Securities Exchange Act Release No. 55938 (June 21, 2007) (notice of filing of proposed rule change) [File No. SR-CBOE-2007-26]. 4 “Binary” options (also sometimes referred to as “digital” options) are “all-or-nothing” options that pay a fixed amount if automatically exercised and otherwise pay nothing. Description of Credit Default Basket Options CDBOs are structured as binary options with an automatic exercise feature. They are very similar to Credit Default Options (“CDOs”) that were recently approved for trading by CBOE and clearing by OCC except that CDBOs are based upon multiple reference entities instead of a single reference entity. 5 A CDBO will be automatically exercised and an exercise settlement amount will be payable if a “credit event” occurs with respect to any one of the reference entities at any time prior to the last day of trading. As in the case of a CDO, a “credit event” is generally defined as any failure to pay on any of the reference obligations or any other occurrence that would constitute an “event of default” or “restructuring” under the terms of any of the reference obligations of a particular reference entity and that the listing exchange has determined would be a credit event for purposes of the CDBO. 5 Securities Exchange Act Release No. 55871 (June 6, 2007), 72 FR 32372 (June 12, 2007) [File No. SR-CBOE-2006-84]. See also Securities Exchange Act Release No. 55872 (June 6, 2007), 72 FR 32693 (June 13, 2007) [File No. SR-OCC-2007-01]. CDBOs may be thought of as a bundle of CDOs in that there is a fixed exercise settlement amount that is determined for each of the reference entities included in the basket of reference entities underlying the CDBO. The exercise settlement amount may be the same for all of the reference entities or it may be different for each one. CDBOs come in two types: Multiple payout CDBOs and single payout CDBOs. A multiple payout CDBO is automatically exercised each time there is a credit event affecting any one of the reference entities. Once the CDBO has been exercised with respect to that reference entity such reference entity is removed from the basket. In the unlikely event that a CDBO is exercised with respect to all of the reference entities in the basket, the expiration of the option would be accelerated. A single payout CDBO, on the other hand, is automatically exercised only the first time that a credit event is confirmed with respect to any one of the reference entities. A single payout CDBO cannot be exercised again with respect to any other reference entity and its expiration date will be accelerated. With either a multiple payout CDBO or a single payout CDBO, the exercise settlement amount is the exercise settlement amount that was assigned by the listing exchange to the reference entity affected by the credit event. By-Law and Rule Amendments Applicable to CDOs In order to accommodate the clearing and settlement of CDBOs, OCC proposes to amend the By-Law Article and Rule Chapter that were adopted for CDOs. 1. Terminology—Article I, Section 1 and Article XIV, Section 1 of the By-Laws The definition of “option contract” in Article I of the By-Laws is amended to include CDBOs. “Adjustment event” and “credit event” are defined in Article XIV by reference to the rules of the listing exchange. The terms “credit event confirmation” and “credit event confirmation deadline” are used, respectively, to refer to the notice that must be provided by the listing exchange or other reporting authority to OCC that a credit event has occurred (and that a CDBO will therefore automatically be exercised) and to the deadline for receipt of such notice if it is to be treated as having been received on the business day on which it is submitted. Credit event confirmations received after the deadline on the expiration date but before the expiration time will be given effect but may result in delayed exercise settlement. OCC is also amending the definition of the term “exercise settlement amount” in Article XIV for purposes of CDBOs. The exercise settlement amount of a CDBO is the amount specified by the exchange on which the option is traded that will be paid in settlement when a CDBO is automatically exercised as a result of a credit event affecting a particular reference entity. The exercise settlement amount for each reference entity will be determined by the exchange at the time of listing when the exchange fixes the other variable terms for the options of a particular class or series. OCC is replacing the definitions of “variable terms,” “premium,” and “multiplier” in Article I of the By-Laws with revised definitions in Article XIV, Section 1, that are applicable to CDBOs. The term “class” is also redefined in Article XIV, Section 1. To be within the same class, CDBOs must have the same reporting authority, which OCC anticipates will ordinarily be the listing exchange. This is necessary because of the degree of discretion that the reporting authority will have in determining whether a credit event has occurred. Other terms that were created or amended for CDOs will be modified to apply to CDBOs as well. 2. Terms of Cleared Contracts—Article VI, Section 10(e) A new paragraph
(e)is added to Article VI, Section 10 so that an exchange is required to designate the exercise settlement amount and expiration date for a series of CDBOs at the time the series is opened for trading. Section 10(e) also reminds the reader that CDBOs are subject to adjustment under Article XIV. 3. Rights and Obligations—Article XIV, Section 2 Article XIV, Section 2A defines the general rights and obligations of holders and writers of CDBOs. As noted above, the holder of a CDBO that is automatically exercised has the right to receive the fixed exercise settlement amount for the particular reference entity affected by a credit event, and the assigned writer has the obligation to pay that amount. 4. Adjustments of Credit Default Basket Options—Article XIV, Section 3; Determination of Occurrence of Credit Event—Article XIV, Section 4 Article XIV, Section 3 provides for adjustment of CDBOs in accordance with the rules of the listing exchange. For example, CBOE's proposed rules provide for adjustment of CDBOs in the case of certain corporate events affecting the reference obligations, and OCC proposes simply to defer to those rules and to the determinations of CBOE pursuant to those rules. Accordingly, as in the case of CDOs, OCC will have no responsibility for adjustment determinations with respect to CDBOs. Similarly, Section 4 provides that the listing exchange for a class of CDBOs will have responsibility for determining the occurrence of a credit event that will result in automatic exercise of the options of that class with respect to a particular reference entity. The listing exchange has the obligation to provide a credit event confirmation to OCC in order to trigger the automatic exercise. 5. Exercise and Settlement—Chapter XV of the Rules and Rule 801 CDBOs would not be subject to the exercise-by-exception procedures applicable to most other options under OCC's Rules but would instead be automatically exercised prior to or at expiration if the specified criterion for exercise is met. The procedures for the automatic exercise of CDBOs, as well as their assignment and settlement (including during periods when a clearing member is suspended), are set forth in Rules 1501 through 1505 of new Chapter XV and in revised Rule 801(b). 6. Special Margin Requirements—Rule 601; Deposits in Lieu of Margin—Rule 1506 As in the case of CDOs, OCC will not initially margin CDBOs through its “STANS” system in the same way that other options are margined. Because of the fixed payout feature of CDOs and CDBOs, further systems development is needed to accommodate these options in STANS on a portfolio basis. Until such development is completed, elements of STANS will be used to determine the expected liquidating value of each class of CDBOs and CDOs by extracting certain information regarding the default probability from the listed equity options on the common stock of the reference entity and the market price of the CDBOs and CDOs. Expected liquidating values can then be derived from simulated price movements in the stock over a range of values. Thus, general principles of STANS will be applied, but each class of CDBOs and CDOs will be treated as a separate portfolio and will not be included within the entire portfolio of a particular account. An exception to this will be in the case where a firm has a net long position in CDBO or CDO contracts that are not required to be segregated and the risk computed under this methodology is less than 100% of the premium value of the net long position, the excess long value will be used to cover requirements associated with other cleared contracts. This margin methodology will result in a more conservative risk estimate than if the contracts were fully integrated in STANS since offsets in the risk calculation between these products and others will not be recognized except to the extent of any excess long value. Ultimately, CDBOs will be incorporated into the STANS system and will be valued and margined on a risk basis. OCC does not propose to accept escrow deposits in lieu of clearing margin for CDBOs. Therefore, Rule 1506 states that Rule 610, which otherwise would permit such deposits, does not apply to CDBOs. 7. Acceleration of Expiration Date—Rule 1507 This provision would accelerate the expiration date of a single payout CDBO when the option is deemed to have been automatically exercised on any day prior to the expiration date and to accelerate the expiration date of a multiple payout CDBO when the option is deemed to have been automatically exercised with respect to every reference entity underlying such option prior to the expiration date. The proposed changes to OCC's By-Laws and Rules are consistent with the purposes and requirements of Section 17A of the Act, as amended, because they are designed to promote the prompt and accurate clearance and settlement of transactions in, including exercises of, credit default basket options, to foster cooperation and coordination with persons engaged in the clearance and settlement of such transactions, to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of such transactions, and in general to protect investors and the public interest. They accomplish these purposes by applying substantially the same rules and procedures to these transactions as OCC applies to similar transactions in other cash-settled options except to the extent that special rules and procedures are required in order to accommodate unique features of CDBOs. Other than as described in this Item II, the proposed rule change is not inconsistent with the existing rules of OCC, including rules proposed to be amended. B. Self-Regulatory Organization's Statement on Burden on Competition OCC does not believe that the proposed rule change would impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were not and are not intended to be solicited with respect to the proposed rule change, and none have been received. 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-OCC-2007-06 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-OCC-2007-06. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of OCC and on OCC's Web site at *http://www.theocc.com/publications/rules/proposed_changes/sr_occ_07_06.pdf* . 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-OCC-2007-06 and should be submitted on or before July 12, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-12425 Filed 6-26-07; 8:45 am] BILLING CODE 8010-01-P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities: Proposed Request and Comment Request The Social Security Administration
(SSA)publishes a list of information collection packages that will require clearance by the Office of Management and Budget
(OMB)in compliance with Pub. L. 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. The information collection packages that may be included in this notice are for new information collections, approval of existing information collections, revisions to OMB-approved information collections, and extensions (no change) of OMB-approved information collections. SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and on ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Written comments and recommendations regarding the information collection(s) should be submitted to the OMB Desk Officer and the SSA Reports Clearance Officer. The information can be mailed, faxed or e-mailed to the individuals at the addresses and fax numbers listed below:
(OMB)Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202-395-6974, E-mail address: *OIRA_Submission@omb.eop.gov* .
(SSA)Social Security Administration, DCBFM, Attn: Reports Clearance Officer, 1333 Annex Building, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410-965-6400, E-mail address: *OPLM.RCO@ssa.gov.* I. The information collections listed below are pending at SSA and will be submitted to OMB within 60 days from the date of this notice. Therefore, your comments should be submitted to SSA within 60 days from the date of this publication. You can obtain copies of the collection instruments by calling the SSA Reports Clearance Officer at 410-965-0454 or by writing to the address listed above. *Missing and Discrepant Wage Reports Letter and Questionnaire—26 CFR 31.6051-2-0960-0432.* Each year employers report the wage amounts they paid their employees to the IRS for tax purposes, and separately to SSA for retirement and disability coverage purposes. These reported amounts should equal each other; however, each year some of the employer wage reports that SSA receives are less than the wage amounts reported to the IRS. SSA attempts to ensure that employees receive full credit for the wages that they have earned through the use of the forms SSA-L93-SM; SSA-L94-SM; SSA-95-SM and SSA-97-SM. Respondents are employers who reported less wage amounts to SSA than they reported to the IRS. *Type of Request:* Revision of an OMB-approved information collection. *Number of Respondents:* 360,000. *Frequency of Response:* 1. *Average Burden per Response:* 30 minutes. *Estimated Annual Burden:* 180,000 hours. II. The information collections listed below have been submitted to OMB for clearance. Your comments on the information collections would be most useful if received by OMB and SSA within 30 days from the date of this publication. You can obtain a copy of the OMB clearance packages by calling the SSA Reports Clearance Officer at 410-965-0454, or by writing to the address listed above. 1. *Certificate of Responsibility for Welfare and Care of Child Not in Applicant's Custody—20 CFR 404.330, 404.339-341 and 404.348-404.349-0960-0019.* SSA uses the information to determine if a non-custodial parent who is filing for Spouse's or Mother's and Father's benefits based on having a child in care meets the in-care requirements. Respondents are applicants for Spouse and/or Mother's and Father's benefits. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 14,000. *Frequency of Response:* 1. *Average Burden per Response:* 10 minutes. *Estimated Annual Burden:* 2,333 hours. 2. *Request for Waiver of Overpayment Recovery or Change in Repayment Notice—20 CFR 404.502-.513, 404.515 and 20 CFR 416.550-.570, 416.572—0960-0037.* The SSA-632-BK is used by a beneficiary/claimant to request a waiver of recovery of an overpayment by explaining why they feel they are without fault in causing the overpayment and to provide financial circumstances so that SSA can determine whether recovery would cause financial hardship. It is also used to request a different rate of recovery. In those cases the financial information must be provided for SSA to determine how much the overpaid person can afford to repay each month. Respondents are overpaid beneficiaries or claimants who are requesting a waiver of recovery for overpayment or a lesser rate of withholding. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 500,000. *Estimated Annual Burden:* 875,000 hours. Reason for completing form Number of respondents Frequency of response Average burden per response Total annual burden Request Waiver 400,000 1 2 hours 800,000 Request Change 100,000 1 45 minutes 75,000 Totals 500,000 875,000 3. *Supplemental Statement Regarding Farming Activities of Person Living Outside the U.S.A.—0960-0103.* Form SSA-7163A is used whenever a beneficiary or claimant reports work on a farm outside the United States (U.S.). It is designed to obtain sufficient information to determine whether or not foreign work deductions are applicable to the claimant's benefits. Respondents are beneficiaries or claimants for Social Security benefits who are engaged in farming activity outside the U.S. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 1,000. *Frequency of Response:* 1. *Average Burden per Response:* 1 hour. *Estimated Annual Burden:* 1,000 hours. 4. *Disability Report-Appeal—20 CFR 404.1512, 416.912, 404.916(c), 416.1416(c), 405 Subpart C, 422.140—0960-0144.* The SSA-3441-BK is used to secure updated medical and other information since the claimant's last disability determination from claimants who are appealing an unfavorable disability determination. This information may be used for reconsideration or request for federal reviewing official review of initial disability determinations and continuing disability reviews as well as a request for a hearing. This information assists the State Disability Determination Services, federal reviewing officials, and administrative law judges in preparing for appeals and hearings and in issuing a decision. Respondents are individuals who appeal denial of Social Security disability income and Supplemental Security Income
(SSI)benefits, cessation of benefits, or who are requesting a hearing. *Type of Request:* Revision of an OMB-approved information collection. *Estimated Annual Burden:* 1,296,190 hours. Collection method Number of respondents Frequency of response Average burden per response
(min)Estimated annual burden hours SSA-3441 (Paper Form) 21,282 1 45 15,962 Electronic Disability Collect System
(EDCS)1,284,019 1 45 963,014 I3441 (Internet Form) 158,607 1 120 317,214 Totals 1,463,908 1,296,190 5. *Request for Hearing by Administrative Law Judge—20 CFR 404.929, 404.933, 416.1429, 404.1433, 405.722, 418.1350—0960-0269.* The information collected on Form HA-501-U5 is used by SSA to document and initiate the Administrative Law Judge
(ALJ)hearing process for determining eligibility or entitlement to Social Security benefits (Title II), Supplemental Security Income payments (Title XVI), Special Veterans Benefits (Title VIII), Medicare (Title XVIII), and of initial determinations regarding Medicare Part B income-related premium subsidy reductions. The methods for filing a request for an ALJ hearing are being expanded to include the internet. If an individual receives a notice of denial of his/her disability claim and the notice provides rights to an ALJ hearing, he/she will have the option of filing for the ALJ hearing over the internet. The individual will complete the appropriate appeal screens and submit the appeal to SSA for processing. The respondents are individuals filing for an ALJ hearing. *Type of Request:* Revision of an OMB-approved information collection. *Number of Respondents:* 669,469. *Estimated Annual Burden:* 178,525 hours. Collection method Number of respondents Frequency of response Estimated completion time
(min)Total burden hours Paper & Modernized Claims System 334,735 1 10 55,789 i501 334,734 1 22 122,736 Totals 669,469 178,525 6. *Request for Earnings and Benefit Estimate Statement—20 CFR 404.810-0960-0466.* SSA uses the information the requestor provides on Form SSA-7004 to identify his or her Social Security earnings record, extract posted earnings information, calculate potential benefit estimates, produce the resulting Social Security Statement and mail it to the requestor. Respondents are Social Security number holders requesting information about their Social Security earnings records and estimates of their potential benefits. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 545,000. *Frequency of Response:* 1. *Average Burden per Response:* 5 minutes. *Estimated Average Burden:* 45,417 hours. 7. *Employer Verification of Earnings After Death—20 CFR 404.821 and 404.822-0960-0472.* The information collected on Form SSA L4112 is used by SSA to determine whether wages reported by an employer are correct and should be credited to the employee's Social Security number when SSA records indicate that the wage earner is deceased. The respondents are employers who report wages for a deceased employee. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 50,000. *Frequency of Response:* 1. *Average Burden per Response:* 10 minutes. *Estimated Annual Burden:* 8,333 hours. 8. *Appointment of Representative—20 CFR 404.1707, 404.1720, 404.1725, 410.684 and 416.1507-0960-0527.* A person claiming a right or benefit under the Social Security Act must notify SSA in writing if he or she appoints an individual to represent him or her in dealing with SSA. The information collected by SSA on form SSA-1696-U4 is used to verify the applicant's appointment of a representative. It allows SSA to inform the representative of items which affect the applicant's claim, and it also allows the claimant to give permission to their appointed representative to designate a person to copy claims files. Respondents are applicants who notify SSA that they have appointed a person to represent them in their dealings with SSA when claiming a right to benefits and representatives of claimants for Social Security benefits. *Type of Request:* Revision of an OMB-approved information collection. *Number of Respondents:* 551,520. *Frequency of Response:* 1. *Average Burden per Response:* 10 minutes. *Estimated Annual Burden:* 91,920 hours. 9. *Request for Reconsideration—20 CFR 404.907-404.921, 416.1407-416.1421, 408.1009-0960-0622.* The information collected on Form SSA-561-U2 is used by SSA to document and initiate the reconsideration process for determining eligibility or entitlement to Social Security benefits (Title II), Supplemental Security Income payments (Title XVI), Special Veterans Benefits (Title VIII), Medicare (Title XVIII), and of initial determinations regarding Medicare Part B income-related premium subsidy reductions. The methods for filing a request for reconsideration are being expanded to include the internet. If an individual receives a notice of denial of his/her disability claim and the notice provides the right to reconsideration, he/she will have the option of filing for the reconsideration over the internet. The individual will complete the appropriate appeal screens and submit the appeal to SSA for processing. The respondents are individuals filing for reconsideration. *Type of Request:* Revision of an OMB-approved information collection. *Number of Respondents:* 1,461,700. *Estimated Annual Burden:* 341,064 hours. Collection method Number of respondents Frequency of response Estimated completion time
(min)Total burden hours Paper & Modernized Claims System 730,850 1 8 97,447 i561 730,850 1 20 243,617 Totals 1,461,700 341,064 10. *Statement for Determining Continuing Eligibility for Supplemental Security Income Payments—Adult, Form SSA-3988; Statement for Determining Continuing Eligibility for Supplemental Security Income Payments—Child, Form SSA-3989—20 CFR Subpart B—416.204-0960-NEW.* Forms SSA-3988 and SSA-3989 will be used to determine whether SSI recipients have met and continue to meet all statutory and regulatory nonmedical requirements for SSI eligibility, and whether they have been and are still receiving the correct payment amount. The SSA-3988 and SSA-3989 are designed as self-help forms that will be mailed to recipients or to their representative payees for completion and return to SSA. The respondents are recipients of SSI payments or their representatives. *Type of Request:* Revision of an OMB-approved information collection. *Number of Respondents:* 60,000. *Estimated Annual Burden:* 26,000 hours. Collection instrument Respondents Frequency of response Average burden per response
(min)Estimated annual burden (hours) SSA-3988 30,000 1 26 13,000 SSA-3989 30,000 1 26 13,000 Totals 60,000 26,000 11. *Request for Program Consultation—20 CFR 404.1601-1661-0960 New.* The Disability Determination Services
(DDS)offices are staffed by State employees who perform disability determinations for applicants for Social Security disability benefits under Title II and Title XVI of the Social Security Act. SSA's federal regional quality assurance office has the authority to review DDS determinations, to assess errors, and to return cases for corrective action by the DDS. The information collected on the Request for Program Consultation
(RPC)will be used by the DDS's that request a review of the regional quality assurance evaluations. The DDS's use the RPC to present their rationale that supports their determinations. The information collected includes a short rationale and policy citations supporting their rebuttal. The RPC team will use the information to reassess their initial determination. The respondents are DDS's who request a review of the regional quality assurance determination. *Type of Request:* Request for a new information collection. *Number of Respondents:* 4,500. *Frequency of Response:* 1. *Average Burden per Response:* 30 minutes. *Estimated Annual Burden:* 2,250 hours.* *SSA inadvertently cited an incorrect burden hour in the first FRN dated April 23, 2007 and the second FRN dated June 13, 2007. This notice serves as a correction. Dated: June 21, 2007. Elizabeth A. Davidson, Reports Clearance Officer, Social Security Administration. [FR Doc. E7-12357 Filed 6-26-07; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF STATE [Public Notice: 5851] 30-Day Notice of Proposed Information Collection: DS-2031, Shrimp Exporter's/Importer's Declaration, OMB Control Number 1405-0095 ACTION: Notice of request for public comment and submission to OMB of proposed collection of information. SUMMARY: The Department of State has submitted the following information collection request to the Office of Management and Budget
(OMB)for approval in accordance with the Paperwork Reduction Act of 1995. • *Title of Information Collection:* Shrimp Exporter's/Importer's Declaration. • *OMB Control Number:* 1405-0095. • *Type of Request:* Extension of a Currently Approved Collection. • *Originating Office:* Bureau of Oceans and International Environmental and Scientific Affairs, Office of Marine Conservation (OES/OMC). • *Form Number:* DS-2031. • *Respondents:* Business or other for-profit. • *Estimated Number of Respondents:* 3,000. • *Estimated Number of Responses:* 10,000. • *Average Hours per Response:* 10 min. • *Total Estimated Burden:* 1,666. • *Frequency:* On Occasion. • *Obligation to Respond:* Mandatory. DATES: Submit comments to the Office of Management and Budget
(OMB)up to July 27, 2007. ADDRESSES: Direct comments and questions to Katherine Astrich, the Department of State Desk Officer in the Office of Information and Regulatory Affairs at the Office of Management and Budget (OMB), who may be reached at 202-395-4718. You may submit comments by any of the following methods: • *E-mail: kastrich@omb.eop.gov.* You must include the DS form number, information collection title, and OMB control number in the subject line of your message. • *Mail (paper, disk, or CD-ROM submissions):* Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503. • *Fax:* 202-395-6974. FOR FURTHER INFORMATION CONTACT: You may obtain copies of the proposed information collection and supporting documents from Clayton Stanger, Office of Marine Conservation, 2201 C Street, NW., Room 2758, Washington, DC who may be reached on 202-647-2335 or *StangerCM@state.gov.* SUPPLEMENTARY INFORMATION: We are soliciting public comments to permit the Department to: • Evaluate whether the proposed information collection is necessary to properly perform our functions. • Evaluate the accuracy of our estimate of the burden of the proposed collection, including the validity of the methodology and assumptions used. • Enhance the quality, utility, and clarity of the information to be collected. • Minimize the reporting burden on those who are to respond. Abstract of proposed collection: The Form DS-203 is necessary to document imports of shrimp pursuant to the State Department's implementation of Section 609 of Public Law 101-162, which prohibits the entry into the United States of shrimp harvested in ways which are harmful to sea turtles. Respondents are shrimp exporters and government officials in countries which export shrimp to the United States. The DS 2031 Form is to be retained by the importer for a period of three years subsequent to entry, and during that time is to be made available to U.S. Customs and Border Protection or the Department of State upon request. Methodology: The DS-2031 form is completed by the exporter, the importer, and under certain conditions a government official of the exporting country. The DS-2031 Form accompanies shipment of shrimp and shrimp products to the United States and is to be made available to U.S. Customs and Border Protection at the time of entry. Dated: May 10, 2007. David A. Balton, Deputy Assistant Secretary for Oceans and Fisheries, Department of State. [FR Doc. E7-12434 Filed 6-26-07; 8:45 am] BILLING CODE 4710-09-P DEPARTMENT OF STATE [Public Notice 5850] Culturally Significant Objects Imported for Exhibition; Determinations: “Lucy's Legacy: The Hidden Treasures of Ethiopia” Summary: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999 (64 FR 56014), Delegation of Authority No. 236 of October 19, 1999 (64 FR 57920), as amended, and Delegation of Authority No. 257 of April 15, 2003 (68 FR 19875), I hereby determine that the objects to be included in the exhibition, “Lucy's Legacy: The Hidden Treasures of Ethiopia,” imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign lenders. I also determine that the exhibition or display of the exhibit objects at the Houston Museum of Natural Science, Houston, Texas, from on or about August 31, 2007, to on or about April 20, 2008, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, such as a list of exhibit objects, contact Paul W. Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone:
(202)453-8050). The address is U. S. Department of State, SA-44, Room 700, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: June 20, 2007. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-12436 Filed 6-26-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5849] Culturally Significant Objects Imported for Exhibition; Determinations: “Yuungnaqpiallerput (The Way We Genuinely Live): Masterworks of Yup'ik Science and Survival” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Yuungnaqpiallerput (The Way We Genuinely Live): Masterworks of Yup'ik Science and Survival”, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to a loan agreement with the foreign owner or custodian. I also determine that the exhibition or display of the exhibit objects at the Yupiit Piciryarait Museum and Cultural Center, Bethel, Alaska, from on or about September 8, 2007, until on or about November 25, 2007, the Anchorage Museum at Rasmuson Center, Anchorage, Alaska, from on or about February 3, 2008, until on or about October 31, 2008, and the Alaska State Museum, Juneau, Alaska, from on or about May 1, 2009, until on or about October 1, 2009, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Wolodymyr Sulzynsky, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone:
(202)453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: June 15, 2007. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-12438 Filed 6-26-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Opportunity for Public Comment on Release of property acquired as Federal Government Surplus at Waycross—Ware County Airport; Waycross, GA AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice. SUMMARY: Under the provisions of Title 49, U.S.C. Section 47107(h)(2), notice is being given that the FAA is considering a request from the County of Ware to waive the requirement that approximately 0.102—acres of airport property, located at the Waycross—Ware County Airport, be used for aeronautical purposes. DATES: Comments must be received on or before July 27, 2007. ADDRESSES: Comments on this notice may be mailed or delivered in triplicate to the FAA at the following address: Atlanta Airports District Office, Attn: John Marshall, Program Manager, 1701 Columbia Ave., Suite 2-260, Atlanta, GA 30337-2747. In addition, one copy of any comments submitted to the FAA must be mailed or delivered to Mr. Jimmy Brown, Airport Manager for Waycross—Ware County Airport at the following address: 3395 Harris Rd, Suite 300, Waycross GA, 31503
(912)287-4394. FOR FURTHER INFORMATION CONTACT: John Marshall, Program Manager, Atlanta Airports District Office, 1701 Columbia Ave., Suite 2-260, Atlanta, GA 30337-2747
(404)305-7153. The application may be reviewed in person at this same location. SUPPLEMENTARY INFORMATION: The FAA is reviewing an application by the County of Ware to release approximately 0.102 acres of airport property at the Waycross—Ware County Airport. The property consists of one parcel located on the East side of the airport adjoining the West side of the Ware State Prison property. The exact location of the property is described by the metes and bounds which follow at the end of this section. The proposed use of the property is for parking at the Ware State Prison training facility. The property was acquired from the Federal Government as surplus property. This property is currently shown on the approved Airport Layout Plan as aeronautical use land; however the property is currently not being used for aeronautical purposes and the proposed use of this property is compatible with airport operations. Any person may inspect the application in person at the FAA office listed above under FOR FURTHER INFORMATION CONTACT. In addition, any person may, upon request, inspect the application, notice and other documents germane to the request in person at the Ware County government officers. *Metes and Bounds:* Beginning at the intersection of the centerlines of Highway US 1—Business (aka Alma Highway) and of Airport Road; run thence, South 41 degrees-31 minutes-32 seconds West, for a distance of 2339.50 feet to the point of BEGINNING; run thence, South 03 degrees-15 minutes-27 seconds East, for a distance of 133.67 feet; run thence, North 47 degrees-03 minutes-36 seconds West, for a distance of 96.45 feet; run thence North 42 degrees-55 minutes-46 seconds East, for a distance of 92.52 feet to the point of BEGINNING, having an area of 4,461.25 square feet, 0.102 acres. Issued in Atlanta, Georgia on June 7, 2006. Scott L. Seritt, Manager, Atlanta Airports District Office, Southern Region. [FR Doc. 07-3131 6-26-07; 8:45 am] BILLING CODE 4910-13-M DEPARTMENT OF TRANSPORTATION Federal Highway Administration [Docket No. FHWA-2007-28537] Agency Information Collection Activities: Notice of Request for Extension of Currently Approved Information Collection AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of request for extension of currently approved information collection. SUMMARY: The FHWA invites public comments about our intention to request the Office of Management and Budget's
(OMB)approval for renewal of an existing information collection that is summarized below under SUPPLEMENTARY INFORMATION . We are required to publish this notice in the **Federal Register** by the Paperwork Reduction Act of 1995. DATES: Please submit comments by August 27, 2007. ADDRESSES: You may submit comments identified by DOT DMS Docket Number FHWA-2007-28537 by any of the following methods: • *Web Site:* *http://dms.dot.gov.* Follow the instructions for submitting comments on the DOT electronic docket site. • *Fax:* 1-202-493-2251. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC, 20590. • *Hand Delivery:* U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. *Docket:* For access to the docket to read background documents or comments received, go to *http://dms.dot.gov* at any time or to U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC, 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Mr. Ralph Gillmann, 202-366-0160, Office of Highway Policy Information, Office of Policy, Federal Highway Administration, Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC, 20590. Office hours are from 8 a.m. to 4:30 p.m., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: *Title:* Heavy Vehicle Travel Information System (HVTIS). *OMB Control Number:* 2125-0587 (Expiration Date: November 30, 2007). *Background:* Title 49, United States Code, Section 301, authorizes the DOT to collect statistical information relevant to domestic transportation. The FHWA is developing the HVTIS to house data that will enable analysis of the amount and nature of truck travel at the national and regional levels. The information will be used by the FHWA and other DOT agencies to evaluate changes in truck travel in order to assess impacts on highway safety; the role of travel in economic productivity; impacts of changes in truck travel on infrastructure condition; and maintenance of our Nation's mobility while protecting the human and natural environment. The increasing dependence on truck transport requires that data be available to better assess its overall contribution to the Nation's well-being. In conducting the data collection, the FHWA will be requesting that State Departments of Transportation
(SDOT)continue to provide periodic reporting of traffic volume, vehicle classification, and vehicle weight data which they collect as part of their existing traffic monitoring programs, including other sources such as local governments and traffic operations. States and local governments collect traffic volume and vehicle classification data continuously and vehicle weight data periodically throughout the year using weigh-in-motion devices. The data should be representative of all public roads within State boundaries. The data will allow transportation professionals at the Federal, State, and metropolitan levels to make informed decisions about policies and plans. *Respondents:* 52 SDOTs, including the District of Columbia and Puerto Rico. *Frequency:* It is proposed that total volume and continuous vehicle classification data be reported on a monthly basis to assure timely information that can be compared to monthly reports of economic activity. Based on data collection practices commonly used by the SDOTs, it is proposed that truck weight data collected using weigh-in-motion devices and site description data be submitted to FHWA annually. *Estimated Average Burden per Response:* The SDOTs already collect traffic data for various purposes. In accordance with 23 U.S.C. 303, each State has a Traffic Monitoring System in place so the data collection burden relevant for this notice is the additional burden for each State to provide a copy of their traffic data using the record formats specified in the *Traffic Monitoring Guide.* Automation and online tools continue to be developed in support of the HVTIS and the capability now exists for online submission and validation of total volume data. The estimated average monthly burden is 3.5 hours for an annual burden of 42 hours. The annual reporting requirement is estimated to be 6 hours for the States and the District of Columbia and Puerto Rico. The combined burden from the monthly and annual reports is 48 hours per respondent. *Estimated Total Annual Burden Hours:* Total burden will be 2,496 hours. *Public Comments Invited:* You are asked to comment on any aspect of this information collection, including:
(1)Whether the proposed collection is necessary for the FHWA's performance;
(2)the accuracy of the estimated burdens;
(3)ways for the FHWA to enhance the quality, usefulness, and clarity of the collected information; and
(4)ways that the burdens could be minimized, including use of electronic technology, without reducing the quality of the collected information. The agency will summarize and/or include your comments in the request for OMB's clearance of this information collection. Authority: The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended, and 49 CFR 1.48. Issued on: June 20, 2007. James R. Kabel, Chief, Management Programs and Analysis Division. [FR Doc. E7-12362 Filed 6-26-07; 8:45 am] BILLING CODE 4910-22-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration [Docket No. FHWA-2007-28562] Agency Information Collection Activities: Notice of Request for Extension of Currently Approved Information Collection AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of request for extension of currently approved information collection. SUMMARY: The FHWA invites public comments about our intention to request the Office of Management and Budget's
(OMB)approval for renewal of an existing information collection that is summarized below under SUPPLEMENTARY INFORMATION . We are required to publish this notice in the **Federal Register** by the Paperwork Reduction Act of 1995. DATES: Please submit comments by August 27, 2007. ADDRESSES: You may submit comments identified by DOT DMS Docket Number FHWA-2007-28562 by any of the following methods: • *Web Site:* *http://dms.dot.gov* . Follow the instructions for submitting comments on the DOT electronic docket site. • *Fax:* 1-202-493-2251. • *Mail:* Docket Management Facility; U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. *Docket:* For access to the docket to read background documents or comments received, go to *http://dms.dot.gov* at any time or to U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Gloria Williams, 202-366-5032, Department of Transportation, Federal Highway Administration, Office of Policy and Governmental Affairs, 1200 New Jersey Avenue, SE., Washington, DC, 20590. Office hours are from 7:30 a.m. to 4:30 p.m., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: *Title:* Certification of Enforcement of the Heavy Vehicle Use Tax. *OMB Control #:* 2125-0541. *Background:* Title 23 United States Code, Section 141(c), provides that a State's apportionment of funds under 23 U.S.C. 104(b)(5) shall be reduced in an amount up to 25 percent of the amount to be apportioned during any fiscal year beginning after September 30, 1984, if vehicles subject to the Federal heavy vehicle use tax are lawfully registered in the State without having presented proof of payment of the tax. The annual certification by the State Governor or designated official regarding the collection of the heavy vehicle use tax serves as the FHWA's primary means of determining State compliance. The FHWA has determined that an annual certification of compliance by each State is the least obtrusive means of administering the provisions of the legislative mandate. In addition, States are required to retain for one year Schedule 1, IRS Form 2290, Heavy Vehicle Use Tax Return (or other suitable alternative provided by regulation). The FHWA conducts compliance reviews at least once every 3 years to determine if the annual certification is adequate to ensure effective administration of 23 U.S.C. 141(c). *Respondents:* 50 State Transportation Departments, and the District of Columbia for a total of 51 respondents. *Frequency:* Annually. *Estimated Average Annual Burden per Response:* The average burden to submit the certification and to retain required records is 12 hours per respondent. *Estimated Total Annual Burden Hours:* Total estimated average annual burden is 612 hours. *Public Comments Invited:* You are asked to comment on any aspect of this information collection, including:
(1)Whether the proposed collection is necessary for the FHWA's performance;
(2)the accuracy of the estimated burdens;
(3)ways for the FHWA to enhance the quality, usefulness, and clarity of the collected information; and
(4)ways that the burden could be minimized, including the use of electronic technology, without reducing the quality of the collected information. The agency will summarize and/or include your comments in the request for OMB's clearance of this information collection. Authority: The Paperwork Reduction Act of 1995; 44 U.S.C., Chapter 35, as amended; and 49 CFR 1.48. Issued on: June 20, 2007. James R. Kabel, Chief, Management Programs and Analysis Division. [FR Doc. E7-12455 Filed 6-26-07; 8:45 am] BILLING CODE 4910-22-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Environmental Impact Statement: Rock and Walworth Counties, Wisconsin AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of intent to prepare an Environmental Impact Statement. SUMMARY: The FHWA is issuing this notice to advise the public that an Environmental Impact Statement
(EIS)will be prepared for the proposed improvement of USH 14/STH 11 between Janesville, in Rock County, and IH 43 near Darien, in Walworth County, Wisconsin. FOR FURTHER INFORMATION CONTACT: Mr. Mark Chandler, Field Operations Engineer, Federal Highway Administration 567 D'Onofrio Drive, Suite 100, Madison, Wisconsin, 53719-2814; telephone:
(608)829-7514. You may also contact Mr. Eugene Johnson, Director, Bureau of Equity and Environmental Services, Wisconsin Department of Transportation, P.O. Box 7965, Madison, Wisconsin, 53707-7965; telephone:
(608)267-9527. SUPPLEMENTARY INFORMATION: Electronic Access An electronic copy of this document may be downloaded from the Government Printing Offices' Electronic Bulletin Board Service at
(202)512-1661, by using a computer, modem, and suitable communications software. Internet users may reach the Office of Federal Register's home page at: *http://www.archives.gov/* and the Government Printing Offices' database at: *http://www.gpoaccess.gov/nara/index.html.* Background The FHWA, in cooperation with the Wisconsin Department of Transportation, will prepare an Environmental Impact Statement to evaluate improvement alternatives for USH 14/STH 11. The project begins at USH 14 on the northwest side of Janesville, in Rock County, and extends approximately 25 miles to IH 43 near Darien, in Walworth County, Wisconsin. The EIS will be prepared in accordance with 40 CFR Part 1500 and FHWA regulations. Improvements to the highway are considered necessary to lessen congestion, improve safety, and provide efficient regional connections. Planning, environmental, and engineering studies are underway to develop transportation alternatives. The EIS will assess the need, location, and environmental impacts of alternatives within the study area. Possible improvement alternatives include a no build alternative, which assumes the continued use of the existing facility with the improvements necessary to ensure its continued use; an improved 2-lane highway with intersection improvements, passing lanes, and wider shoulders; the addition of lanes to create a 4-lane highway, and evaluation of one or more alternatives that follow new alignments. In addition, alternatives for a potential by-pass connecting USH 14 and STH 11 on the west side of Janesville will be evaluated. These alternatives include 2 and 4-lane connections along various alignments, as well as consideration of a freeway type highway. Information describing the proposed action and soliciting comments will be sent to appropriate Federal, State, and local agencies, and to private organizations and citizens who have previously expressed, or are known to have interest in this proposal. Local officials and the public will be given many opportunities to provide comments during the course of the study. There will be public information meetings throughout the data gathering and development and evaluation of alternatives. Two public hearings will be held. Public notice will be given of the time and place of the meetings and hearings. The Draft EIS will be available for public and agency review prior to the hearings. Several newsletters will be sent to keep local residents informed of the study's progress. A project Web site has been established to help provide information on the project. The Web site address is *http://www.dot.wisconsin.gov/projects/dl/wis11study/index.htm.* In addition, two committees have been formed, a Technical Committee and an Advisory Committee, that will meet throughout the life of the study. These committees are made up of local government officials and agency personnel and they will be responsible for helping define the project purpose and need, as well as providing input and comments on alternatives. The anticipated format for the EIS will be Screening Worksheets rather than the typical narrative form. The Wisconsin Department of Transportation has developed a series of Environmental Screening Worksheets, which are divided into Basic Sheets and Factor Sheets. The Screening Worksheets provide a flexible means of addressing the requirements for an Environmental Document. To ensure that the full range of issues related to this proposed action is addressed, and all substantive issues are identified, comments and suggestions are invited from all interested parties. Comments or questions concerning this proposed action and the EIS should be directed to FHWA or the Wisconsin Department of Transportation at the addresses provided in the caption FOR FURTHER INFORMATION CONTACT. Federal law prohibits discrimination on the basis of race, color, age, sex, or country of national origin in the implementation of this action. It is also Federal and State policy that no group of people bears the negative consequences of this action in a disproportionately high and adverse manner without adequate mitigation. Authority: 23 U.S.C. 315; 49 CFR 1.48. Issued on: May 24, 2007. Mark R. Chandler, Field Operations Engineer, Federal Highway Administration, Madison, Wisconsin. [FR Doc. 07-3141 Filed 6-26-07; 8:45 am]
Connectionstraces to 25
Traces to 25 documents
13 references not yet in our index
  • Pub. L. 94-409
  • 17 CFR 240.17
  • 17 CFR 240.19
  • 17 CFR 240.3
  • 5 USC 78s(b)(1)
  • Pub. L. 104-13
  • 20 CFR 404.810-0960
  • 20 CFR 404.907-404
  • 20 CFR 404.1601-1661
  • Pub. L. 101-162
  • 79 Stat. 985
  • 49 CFR 1.48
  • 40 CFR 1500
Citation graph
cites case law
Notices
Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940, as amended (“1940 Act” or “Act”) approving certain substitutions of securities and for an order of exemption pursuant to Section 17(b) of the 1940 Act
U.S.C.§ 552b
C.F.R.§ 200.402
U.S.C.§ 78q–1
U.S.C.§ 552
C.F.R.§ 200.30-3
U.S.C.§ 78s
U.S.C.§ 78c
U.S.C.§ 78f
C.F.R.§ 242.600
Pub. L.Pub. L. 94-409
Cite17 CFR 240.17
Cite17 CFR 240.19
Cites 38 · showing 12Cited by 0 across 0 sources
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