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Code · REGISTER · 2007-07-09 · SECURITIES AND EXCHANGE COMMISSION · Notices

Notices. Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 15(a) of the Act and rule 18f-2 under the Act, as well as from certain disclosure requirements

31,445 words·~143 min read·/register/2007/07/09/07-3314

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BILLING CODE 7710-FW-M SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. *Extension:* Form 10-D; OMB Control No. 3235-0604; SEC File No. 270-544. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) the Securities and Exchange Commission (“Commission”) has submitted to the Office of Management and Budget this request for extension of the previously approved collection of information discussed below.
Form 10-D (17 CFR 249.312) is used by asset-backed issuers to file periodic distribution reports pursuant to Section 13 and 15(d) under the Securities Exchange Act 1934 (“Exchange Act”) (15 U.S.C. 78a *et seq.* ) within 15 days after each required distribution date. The information provided by Form 10-D is mandatory and all information is made available to the public upon request. Form 10-D takes approximately 30 hours per response to prepare and is filed by 9,500 respondents.
We estimate that 75% of the 30 hours per response (22.5 hours) is prepared by the company for a total annual reporting burden of 213,750 hours (22.5 hours per response × 9,500 responses). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. Written comments regarding the above information should be directed to the following persons:
(i)Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or send an e-mail to *David_Rostker@omb.eop.gov* ; and
(ii)R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-mail to: *PRA_Mailbox@sec.gov* . Comments must be submitted to OMB within 30 days of this notice. Dated: June 28, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13164 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. *Extension:* Rule 6h-1; SEC File No. 270-497; OMB Control No. 3235-0555. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the Securities and Exchange Commission (“Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. The Securities Exchange Act of 1934 (“Act”) requires national securities exchanges and national securities associations that trade security futures products to establish listing standards that, among other things, require:
(1)Trading in such products not be readily susceptible to price manipulation; and
(2)the market trading a security futures product to have in place procedures to coordinate trading halts with the listing market for the security or securities underlying the security futures product. Rule 6h-1 under the Act 1 implements these statutory requirements and requires national securities exchanges and national securities associations that trade security futures products:
(1)To use final settlement prices for cash-settled security futures that fairly reflect the opening price of the underlying security or securities, and
(2)to have rules providing that the trading of a security futures product based on a single security shall be halted at all times that a regulatory halt has been instituted for the underlying security, and that the trading of a security futures product based on a narrow-based security index shall be halted at all times that a regulatory halt has been instituted for one or more of the underlying securities that constitute 50 percent or more of the market capitalization of the narrow-based security index. 1 17 CFR 240.6h-1. It is estimated that approximately seventeen respondents will incur an average burden of ten hours per year to comply with this rule, for a total burden of 170 hours. At an average cost per hour of approximately $197, the resultant total cost of compliance for the respondents is $33,490 per year (seventeen entities × ten hours/entity × $197/hour = $33,490). Written comments are invited on
(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b)the accuracy of the agency's estimate of the burden of the proposed collection of information;
(c)ways to enhance the quality, utility, and clarity of the information collected; and
(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Comments should be directed to: R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an email to: *PRA_Mailbox@sec.gov* . Comments must be submitted within 60 days of this notice. Dated: July 2, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13176 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. *Extension:* Rule 19d-3; SEC File No. 270-245; OMB Control No. 3235-0204. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) the Securities and Exchange Commission (“Commission”) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. • Rule 19d-3 (17 CFR 240.19d-3)—Applications for Review of Final Disciplinary Sanctions, Denials of Membership, Participation or Association, or Prohibitions or Limitations of Access to Services Imposed by Self-Regulatory Organizations. Rule 19d-3 under the Securities Exchange Act of 1934 (17 U.S.C. 78a *et seq.* ) prescribes the form and content of applications to the Commission by persons desiring stays of final disciplinary sanctions and summary action of self-regulatory organizations (“SROs”) for which the Commission is the appropriate regulatory agency. The Commission uses the information provided in the application filed pursuant to Rule 19d-3 to review final actions taken by SROs including:
(1)Disciplinary sanctions;
(2)denials of membership, participation or association; and
(3)prohibitions on or limitations of access to SRO services. It is estimated that approximately 15 respondents will utilize this application procedure annually, with a total burden of 270 hours, for all respondents to complete all submissions. This figure is based upon past submissions. The staff estimates that the average number of hours necessary to comply with the requirements of Rule 19d-3 is 18 hours. The average cost per hour, to complete each submission, is approximately $101. Therefore, the total cost of compliance for all respondents is $27,270. (15 submissions × 18 hours × $101 per hour). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. General comments regarding the estimated burden hours should be directed to the following persons:
(i)Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or send an email to: *David_Rostker@omb.eop.gov* and
(ii)R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria VA 22312 or send an email to: *PRA_Mailbox@sec.gov* . Comments must be submitted to OMB within 30 days of this notice. Dated: July 2, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13177 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549. *Extension:* Rule 19d-1; SEC File No. 270-242; OMB Control No. 3235-0206. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) the Securities and Exchange Commission (“Commission”) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. • Rule 19d-1—Notices by Self-Regulatory Organizations of Final Disciplinary Actions, Denials Bars, or Limitations Respecting Membership, Association, or Access to Services, and Summary Suspensions Rule 19d-1(17 CFR 240.19d-1) (“Rule”) under the Securities Exchange Act of 1934 (17 U.S.C. 78a *et seq.* ) prescribes the form and content of notices to be filed with the Commission by self-regulatory organizations (“SROs”) for which the Commission is the appropriate regulatory agency concerning the following final SRO actions:
(1)Disciplinary sanctions (including summary suspensions);
(2)denials of membership, participation or association with a member; and
(3)prohibitions or limitations on access to SRO services. The Rule enables the Commission to obtain reports from the SROs containing information regarding SRO determinations to discipline members or associated persons of members, deny membership or participation or association with a member, and similar adjudicated findings. The Rule requires that such actions be promptly reported to the Commission. The Rule also requires that the reports and notices supply sufficient information regarding the background, factual basis and issues involved in the proceeding to enable the Commission:
(1)To determine whether the matter should be called up for review on the Commission's own motion; and
(2)to ascertain generally whether the SRO has adequately carried out its responsibilities under the Exchange Act. It is estimated that 10 respondents will utilize this application procedure annually, with a total burden of 1175 hours, based upon past submissions. This figure is based on 10 respondents, spending approximately 117.5 hours each. Each respondent submitted approximately 235 responses. The staff estimates that the average number of hours necessary to comply with the requirements of Rule 19d-1 for each submission is 0.5 hours. The average cost per hour, per each submission is approximately $101. Therefore, the total cost of compliance for all the respondents is $118,675. (10 respondents × 235 responses per respondent × .5 hrs per response × $101 per hour). The filing of notices pursuant to the Rule is mandatory for the SROs, but does not involve the collection of confidential information. Rule 19d-1 does not have a retention of records requirement. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. General comments regarding the estimated burden hours should be directed to the following persons:
(i)Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or send an e-mail to: *David_Rostker@omb.eop.gov* and
(ii)R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an email to: *PRA_Mailbox@sec.gov* . Comments must be submitted to OMB within 30 days of this notice. Dated: July 2, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13178 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27879; 812-13375] Aston Funds and Aston Asset Management LLC; Notice of Application June 29, 2007. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 15(a) of the Act and rule 18f-2 under the Act, as well as from certain disclosure requirements. *Summary of the Application:* Applicants request an order that would permit them to enter into and materially amend subadvisory agreements without shareholder approval and would grant relief from certain disclosure requirements. *Applicants:* Aston Funds (the “Trust”) and Aston Asset Management LLC (“Aston”). *Filing Dates:* The application was filed on April 9, 2007, and amended on June 29, 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 Commission's Secretary 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 24, 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 by writing to the Commission's Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, c/o Aston, 222 North LaSalle Street, Suite 2600, Chicago, Illinois 60601, Attention: Cathy G. O'Kelly, Esquire. FOR FURTHER INFORMATION CONTACT: Lewis B. Reich, Senior Counsel, at
(202)551-6919, or, Nadya B. Roytblat, Assistant Director, at
(202)551-6821 (Office of Investment Company Regulation, Division of Investment Management). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the Commission's Public Reference Branch, 100 F Street, NE., Washington, DC 20549-0102 (telephone
(202)551-5850). Applicants' Representations 1. The Trust, a Delaware statutory trust, is registered under the Act as an open-end management investment company. Aston, a Delaware corporation, serves as the investment adviser to twenty-one series of the Trust (such series, the “Funds”) and is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). 1 1 The applicants also request that any relief granted pursuant to the application apply to future series of the Trust and any other existing or future registered open-end management investment company and its series that:
(a)Are advised by Aston or any entity controlling, controlled by, or under common control with Aston;
(b)use the manager of managers structure described in the application; and
(c)comply with the terms and conditions in the application (included in the term “Funds”). The Trust is the only existing registered open-end management investment company that currently intends to rely on the requested order. If the name of any Fund contains the name of a Sub-Adviser, as defined below, the name of Aston or the name of any entity controlling, controlled by, or under common control with Aston, that serves as the primary investment adviser to the Fund, will precede the name of the Sub-Adviser. 2. Aston serves as investment adviser pursuant to an investment advisory agreement between the Trust, on behalf of the Funds, and Aston (the “Management Agreement”) that was approved by the Trust's Board of Trustees (“Board”), including a majority of the trustees who are not “interested persons,” as defined in Section 2(a)(19) of the Act (“Independent Trustees”), and each Fund's shareholder(s). The Management Agreement permits Aston to enter into separate investment advisory agreements (“Sub-Advisory Agreements”) with sub-advisers (“Sub-Advisers”). Each Sub-Adviser is, and any future Sub-Adviser will be, registered under the Advisers Act. Each Sub-Advisory Agreement provides that each Sub-Adviser will provide an investment program for the Fund with respect to the portion of the assets allocated to it by Aston, including investment research and management with respect to securities and investments, and determine what securities and other investments will be purchased, retained or sold. Aston monitors and evaluates the Sub-Advisers and recommends to the Board their hiring, termination, and replacement. Aston recommends Sub-Advisers based on a number of factors discussed in the application used to evaluate their skills in managing assets pursuant to particular investment objectives. Aston compensates the Sub-Adviser of each Fund out of the fee paid to Aston by that Fund under the Management Agreement. 3. Applicants request an order to permit Aston, subject to Board approval, to enter into and materially amend Sub-Advisory Agreements without obtaining shareholder approval. The requested relief will not extend to any Sub-Adviser that is an “affiliated person” (as defined in Section 2(a)(3) of the Act) of a Fund or Aston other than by reason of serving as a Sub-Adviser to one or more of the Funds (“Affiliated Sub-Adviser”). None of the current Sub-Advisers to the Funds are Affiliated Sub-Advisers. 4. Applicants also request an exemption from the various disclosure provisions described below that may require each Fund to disclose fees paid by Aston to the Sub-Advisers. An exemption is requested to permit each Fund to disclose (both as a dollar amount and as a percentage of the Fund's net assets):
(a)Aggregate fees paid to Aston and Affiliated Sub-Advisers; and
(b)aggregate fees paid Sub-Advisers other than Affiliated Sub-Advisers (“Aggregate Fee Disclosure”). If a Fund employs an Affiliated Sub-Adviser, the Fund will provide separate disclosure of any fees paid to the Affiliated Sub-Adviser. Applicants' Legal Analysis 1. Section 15(a) of the Act provides, in relevant part, that it is unlawful for any person to act as an investment adviser to a registered investment company except pursuant to a written contract that has been approved by a vote of a majority of the company's outstanding voting securities. Rule 18f-2 under the Act provides that each series or class of stock in a series company affected by a matter must approve the matter if the Act requires shareholder approval. 2. Form N-1A is the registration statement used by open-end investment companies. Item 14(a)(3) of Form N-1A requires disclosure of the method and amount of the investment adviser's compensation. 3. Rule 20a-1 under the Act requires proxies solicited with respect to an investment company to comply with Schedule 14A under the Securities Exchange Act of 1934 (“Exchange Act”). Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together, require a proxy statement for a shareholder meeting at which the advisory contract will be voted upon to include the “rate of compensation of the investment adviser,” the “aggregate amount of the investment adviser's fees,” a description of the “terms of the contract to be acted upon,” and, if a change in the advisory fee is proposed, the existing and proposed fees and the difference between the two fees. 4. Form N-SAR is the semi-annual report filed with the Commission by registered investment companies. Item 48 of Form N-SAR requires investment companies to disclose the rate schedule for fees paid to their investment advisers, including the Sub-Advisers. 5. Regulation S-X sets forth the requirements for financial statements required to be included as part of investment company registration statements and shareholders reports filed with the Commission. Sections 6-07(2)(a),
(b)and
(c)of Regulation S-X require that investment companies include in their financial statements information about investment advisory fees. 6. Section 6(c) of the Act provides that the Commission may exempt any persons, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or from any rule thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policies and provisions of the Act. Applicants state that the requested relief meets this standard for the reasons discussed below. 7. Applicants assert that the Funds' shareholders rely on Aston to select the Sub-Advisers best suited to achieve a Fund's investment objectives. Applicants assert that, from the perspective of the investor, the role of the Sub-Advisers is comparable to that of individual portfolio managers employed by traditional investment advisory firms. Applicants state that requiring shareholder approval of each Sub-Advisory Agreement would impose costs and unnecessary delays on the Funds, and may preclude Aston from acting promptly in a manner considered advisable by the Board. Applicants also note that the Management Agreement will remain fully subject to section 15(a) of the Act and rule 18f-2 under the Act. 8. Applicants assert that many investment advisers use a “posted” rate schedule to set their fees. Applicants state that while investment advisers are willing to negotiate fees lower than those posted in the schedule, they are reluctant to do so where the fees are disclosed to other prospective and existing customers. Applicants submit that the requested relief will encourage potential Sub-Advisers to negotiate lower sub-advisory fees with Aston, the benefits of which may be passed on to Fund shareholders. Applicants' Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Before a Fund may rely on the requested order, the operation of the Fund in the manner described in the Application will be approved by a majority of the Fund's outstanding voting securities, as defined in the Act, or, in the case of a Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder(s) before offering shares of that Fund to the public. 2. The prospectus for each Fund will disclose the existence, substance and effect of any order granted pursuant to this Application. In addition, each Fund will hold itself out to the public as employing the manager of managers structure described in the Application. The prospectus will prominently disclose that Aston has ultimate responsibility, subject to oversight by the Board, to oversee the Sub-Advisers and recommend their hire, termination, and replacement. 3. At all times, at least a majority of the Board will be Independent Trustees, and the nomination of new or additional Independent Trustees will be at the discretion of the then-existing Independent Trustees. 4. Aston will not enter into a Sub-Advisory Agreement with any Affiliated Sub-Adviser, without such agreement, including compensation to be paid thereunder, being approved by the shareholders of the applicable Fund. 5. When a Sub-Adviser change is proposed for a Fund with an Affiliated Sub-Adviser, the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that such change is in the best interests of the Fund and its shareholders and does not involve a conflict of interest from which Aston or the Affiliated Sub-Adviser derives an inappropriate advantage. 6. Within 90 days of the hiring of any new Sub-Adviser, Aston will furnish the shareholders of the affected Fund all information about the new Sub-Adviser that would be contained in a proxy statement, except as modified by the order to permit Aggregate Fee Disclosure. This information will include Aggregate Fee Disclosure and any change in such disclosure caused by the addition of the new Sub-Adviser. To meet this condition, Aston will provide shareholders of the affected Fund with an information statement meeting the requirements of Regulation 14C, Schedule 14C, and Item 22 of Schedule 14A under the Exchange Act, except as modified by the order to permit Aggregate Fee Disclosure. 7. Aston will provide general management services to each Fund, including overall supervisory responsibility for the general management and investment of the Fund's assets, and, subject Board oversight, will:
(a)Set a Fund's overall investment strategies;
(b)evaluate, select, and recommend Sub-Advisers to manage all or part of the Fund's assets;
(c)when appropriate, allocate and reallocate the Fund's assets among multiple Sub-Advisers;
(d)monitor and evaluate the performance of the Sub-Advisers; and
(e)implement procedures reasonably designed to ensure that the Sub-Advisers comply with the Fund's investment objective, policies and restrictions. 8. No trustee or officer of the Trust or director or officer of Aston will own directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person) any interest in a Sub-Adviser, except for:
(a)Ownership of interests in Aston or any entity that controls, is controlled by, or is under common control with Aston; or
(b)ownership of less than 1% of the outstanding securities of any class of equity or debt of a publicly traded company that is either a Sub-Adviser or an entity that controls, is controlled by, or is under common control with a Sub-Adviser. 9. Independent legal counsel, as defined in Rule 0-1(a)(6) under the Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees. 10. Aston will provide the Board, no less frequently than quarterly, with information about the profitability of Aston on a per-Fund basis. The information will reflect the impact on profitability of the hiring or termination of any Sub-Adviser during the applicable quarter. 11. Whenever a Sub-Adviser is hired or terminated, Aston will provide the Board with information showing the expected impact on Aston's profitability. 12. Each Fund will disclose in its registration statement the Aggregate Fee Disclosure. 13. The requested order will expire on the effective date of Rule 15a-5 under the Act, if adopted. For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13191 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meetings Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94-409, that the Securities and Exchange Commission will hold the following meetings during the week of July 9, 2007: An Open Meeting will be held on Wednesday, July 11, 2007 at 10 a.m., in the Auditorium, Room L-002. A Closed Meeting will be held on Thursday, July 12, 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 Nazareth, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the Open Meeting scheduled for Wednesday, July 11, 2007 at 10 a.m. will be: The Commission will consider whether to adopt a new antifraud rule under Section 206 of the Investment Advisers Act of 1940. The new rule would prohibit advisers to certain pooled investment vehicles from making false or misleading statements to, or otherwise defrauding, investors or prospective investors in those pooled vehicles. The subject matter of the Closed Meeting scheduled for Thursday, July 12, 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; 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: July 3, 2007. Nancy M. Morris, Secretary. [FR Doc. E7-13272 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55997; File No. PCAOB-2007-01] Public Company Accounting Oversight Board; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adjusting Implementation Schedule of Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles July 2, 2007. Pursuant to section 107(b) of the Sarbanes-Oxley Act of 2002 (the “Act”), notice is hereby given that on April 3, 2007, the Public Company Accounting Oversight Board (the “Board” or the “PCAOB”) filed with the Securities and Exchange Commission (the “SEC” or “Commission”) the proposed rule change described in Items I and II below, which items have been prepared by the Board. The PCAOB has designated the proposed rule change as “constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule” under Section 19(b)(3)(A)(i) of the Securities Exchange Act of 1934 (as incorporated, by reference, into Section 107(b)(4) of the Act), which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons. I. Board's Statement of the Terms of Substance of the Proposed Rule The PCAOB is filing with the SEC an adjustment of the implementation schedule for Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles. Specifically the Board will not apply Rule 3523 to tax services provided on or before July 31, 2007, when those services are provided during the audit period and are completed before the professional engagement period begins. The PCAOB is not proposing any textual changes to the Rules of the PCAOB. II. Board's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule In its filing with the Commission, the Board included statements concerning the purpose of, and basis for, the proposed rule and discussed any comments it received on the proposed rule. The text of these statements may be examined at the places specified in Item IV below. The Board has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Board's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule
(a)Purpose On July 26, 2005, the Board adopted certain rules related to registered public accounting firms' provision of tax services to public company audit clients. The rules were designed to address certain concerns related to auditor independence when auditors sell personal tax services to individuals who play a direct role in preparing the financial statements of public company audit clients or market or otherwise opine in favor of aggressive tax shelter schemes. As part of this rulemaking, the Board adopted Rule 3523, which provides that a registered firm, subject to certain exceptions, is not independent of an audit client if the firm, or an affiliate of the firm, provides tax services during the audit and professional engagement period 1 to a person in, or an immediate family member of a person in, a financial reporting oversight role at an audit client. Rule 3523 was approved by the Securities and Exchange Commission (“SEC”) on April 19, 2006. 1 Consistent with the SEC's independence rules, 17 CFR 210.2-01(f)(5), the phrase “audit and professional engagement period” is defined to include two discrete periods of time. The “audit period” is the period covered by any financial statements being audited or reviewed. Rule 3501(a)(iii)(1). The “professional engagement period” is the period beginning when the accounting firm either signs the initial engagement letter or begins audit procedures and ends when the audit client or the accounting firm notifies the SEC that the client is no longer that firm's audit client. Rule 3501(a)(iii)(2). On October 31, 2006, the Board adjusted the implementation schedule for Rule 3523, as it applies to tax services provided during the period subject to audit but before the professional engagement period, so that the Board could revisit this aspect of the rule. 2 On April 3, 2007, the Board issued a concept release to solicit comment on the possible effects on a firm's independence of providing tax services to a person covered by Rule 3523 during the portion of the audit period that precedes the beginning of the professional engagement period, and other practical consequences of applying the restrictions imposed by Rule 3523 to that portion of the audit period. The Board has determined to further adjust the implementation schedule for Rule 3523 in order to allow sufficient time for consideration of commenters' views. Specifically, the Board will not apply Rule 3523 to tax services provided on or before July 31, 2007, when those services are provided during the audit period and are completed before the professional engagement period begins. 2 See PCAOB Release No. 2006-006 (October 31, 2006), at 2. Specifically, the Board stated that Rule 3523 will not apply to tax services provided on or before April 30, 2007, when those services are provided during the audit period and are completed before the professional engagement period begins. No other aspect of the Board's rules on independence and tax services is affected by this extension. As of November 1, 2006, registered firms have been required to comply with Rule 3523 as it relates to tax services provided while they serve as auditor of record for an audit client—that is, during the “professional engagement period.” In addition, with one exception, all other PCAOB rules concerning independence, tax services, and contingent fees that were adopted by the Board on July 26, 2005 and approved by the SEC on April 19, 2006 are now in effect. 3 3 With respect to tax services provided to audit clients whose audit committees pre-approve tax services pursuant to policies and procedures, Rule 3524 will not apply to any such tax service that is begun by April 20, 2007. See PCAOB Release No. 2006-001 (March 28, 2006), at 2-3, PCAOB Release No. 2005-020 (November 22, 2005) at 2-3, and PCAOB Release No. 2005-14 (July 26, 2005) at 47-48.
(b)Statutory Basis The statutory basis for the proposed rule change is Title I of the Act. B. Board's Statement on Burden on Competition The Board 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. Board's Statement on Comments on the Proposed Rule Received From Members, Participants or Others The Board did not solicit or receive written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934 (as incorporated, by reference, into Section 107(b)(4) of the Act) and paragraph
(f)of Rule 19b-4 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule is consistent with the requirements of Title I of 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/pcaob.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number PCAOB-2007-01 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 PCAOB-2007-01. 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/pcaob.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 PCAOB. All comments received will be posted without change; we do 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 PCAOB-2007-01 and should be submitted on or before July 30, 2007. By the Commission. Nancy M. Morris, Secretary. [FR Doc. E7-13136 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55984; File No. SR-CBOE-2007-53] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to an Administrative CBOE Billing Rule June 29, 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. On June 28, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to make a change to an administrative CBOE billing rule. 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 CBOE Rule 3.23 requires all CBOE members, other than lessor members, to designate a CBOE Clearing Member for the payment of CBOE invoices by means of the Exchange's Integrated Billing System (“IBS”). From time to time, vendors have requested the Exchange to act as their billing agent for vendor invoices for Exchange-related services provided to members. The Exchange would like to enter into arrangements with vendors under which the Exchange would collect payment from members for vendor invoices for Exchange-related services. 3 Some of these arrangements may involve payment by the vendor to the Exchange for performing this billing service, and some may involve no payment to the Exchange as mutually agreed by the vendor and the Exchange. 3 The Exchange represents that, in the Exchange's written agreement with each vendor for which the Exchange will collect payments via IBS, the Exchange will require the vendor to include a provision in the vendor's written agreement with each member from which payments via IBS will be collected in which the member authorizes CBOE to assess and collect from the member through CBOE's billing procedures and automated systems, on behalf of the vendor, the fees assessed by the vendor to the member for the vendor's service. *See* Amendment No. 1 to the proposed rule change. The Exchange proposes to amend Rule 3.23 to make explicit that the Exchange may collect such vendor fees that are designated by the Exchange from members via the IBS. The proposed rule change would benefit Exchange members in that it would allow members to pay vendor invoices for Exchange-related services along with all of their Exchange invoices via the IBS instead of having to receive and pay multiple invoices. The proposed rule change would also benefit vendors in that it would relieve vendors of the responsibility for individually billing and collecting from each of their CBOE member customers. 2. Statutory Basis The proposed rule change is an administrative rule change that is designed to facilitate the efficiency of Exchange operations and to ease administrative burdens on Exchange members by improving CBOE billing procedures. Therefore, the Exchange believes that the proposed rule change is consistent with the requirements provided under Section 6(b)(5) 4 of the Act that the rules of an exchange be designed 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. 4 15 U.S.C. 78(f)(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others 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 is concerned solely with the administration of the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 5 and subparagraph (f)(3) of Rule 19b-4 6 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. 7 5 15 U.S.C. 78s(b)(3)(A). 6 17 CFR 240.19b-4(f)(3). 7 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on June 28, 2007, the date on which CBOE submitted Amendment No. 1. *See* 15 U.S.C. 78s(b)(3)(C). 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-2007-53 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-2007-53. 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 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 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-2007-53 and should be submitted on or before July 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 Florence E. Harmon, Deputy Secretary. 8 17 CFR 200.30-3(a)(12). [FR Doc. E7-13165 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55994; File No. SR-ISE-2007-37] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to Cancellation Fees June 29, 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 1, 2007, the International Securities Exchange, LLC (the “ISE” or the “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 ISE. On June 20, 2007, the ISE filed Amendment No. 1 to the proposed rule change. The ISE has filed the proposed rule change 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, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to amend its Schedule of Fees regarding its cancellation fee. The text of the proposed rule change is available at ISE, the Commission's Public Reference Room, and *http://www.iseoptions.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 ISE 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 ISE 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 proposed rule change is to amend the ISE's cancellation fee. The Exchange currently has a cancellation fee of $1.50 that applies to Electronic Access Members (“EAMs”) that cancelled at least 500 orders in a month, for each order cancellation in excess of the total number of orders such member or an introducing broker executed that month. Further, all orders from the same clearing EAM for itself or an introducing broker, executed in the same series on the same side of the market at the same price within a 30 second period, are aggregated and counted as one executed order for purposes of this fee. The Exchange adopted this fee to recover the costs associated with processing multiple cancellations. The Exchange now proposes to exclude broker-dealer orders, including non-member market maker (FARMM) orders, from this fee by charging this fee for public customer orders only. Non-customers already pay transaction fees, which helps address cancellation costs, while the ISE currently excludes most public customer orders from transaction fees. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(4) that an exchange have an equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. 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 Because the foregoing proposed rule change establishes or changes a due, fee, or other charged imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 5 and Rule 19b-4(f)(2) 6 thereunder. At any time within 60 days of the filing of the 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. 7 5 15 U.S.C. 78s(b)(3)(A). 6 17 CFR 19b-4(f)(2). 7 For purposes of calculating the 60-day abrogation period, the Commission considers the period to commence on June 20, 2007, the date on which the Exchange filed 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-ISE-2007-37 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-2007-37. 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 ISE. 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-ISE-2007-37 and should be submitted on or before July 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13158 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56004; File No. SR-NASD-2004-130] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Amendment No. 3 and Order Granting Accelerated Approval of a Proposed Rule Change as Modified by Amendment Nos. 2 and 3 Relating to Amendments to Rule 2320(g) (Three Quote Rule) and Corresponding Recordkeeping Requirements under Rule 3110(b) July 2, 2007. I. Introduction On August 27, 2004, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“Commission” or “SEC”), 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 NASD Rule 2320(g) (“Three Quote Rule”) to exempt from the Three Quote Rule certain transactions in foreign securities of a foreign issuer that are part of an index calculated by the FTSE Group. On May 8, 2006, NASD filed Amendment No. 1 to the proposed rule change. 3 On October 19, 2006, NASD filed Amendment No. 2 to the proposed rule change. 4 The proposed rule change, as modified by Amendment No. 2, was published for comment in the **Federal Register** on October 31, 2006. 5 The Commission received ten comment letters on the proposal. 6 On April 3, 2007, NASD filed Amendment No. 3 to the proposed rule change 7 and a response to the comment letters. 8 This order provides notice of Amendment No. 3 and approves the proposed rule change as modified by Amendment Nos. 2 and 3 on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superseded in its entirety the text of the original filing. 4 Amendment No. 2 replaced and superseded in its entirety the text of the original filing, as amended. 5 *See* Securities Exchange Act Release No. 54650 (October 25, 2006), 71 FR 63812 (“Notice”). 6 *See* letters from James Duncan, Senior Vice President & Director, International Trading, and Andrew Jappy, Chief Information Officer & EVP, Canaccord Capital Corporation, dated November 21, 2006 (“Canaccord Letter”); Achilles M. Perry, Associate General Counsel, CIBC World Markets Corp., dated November 21, 2006 (“CIBC Letter”); Grant Vingoe, Esq., Partner, Arnold Porter LLP, dated November 21, 2006 (“Arnold Porter Letter”); Bill Yancey, Chairman of the Board, and John C. Giesea, President and CEO, Security Traders Association, dated November 21, 2006 (“STA Letter”); Rik Parkhill, Executive Vice President, TSX Group, Inc., President, TSX Markets, dated November 29, 2006 (“TSX Letter”); George W. Lennon, President, Canadian Security Traders Association, Inc., dated December 1, 2006 (“CSTA Letter”); Christopher Climo, Managing Director, Compliance and Chief Compliance Officer, TD Securities, Inc., dated December 7, 2006 (“TD Securities Letter”); James E. Twiss, Chief Policy Counsel, Market Regulation Services Inc., dated December 8, 2006 (“RS Letter”); Debra V. Moore, Manager—NASDAQ/OTC Equity Trading, and Glenn A. Hoback, Implementation Consultant—Internal Controls, Wachovia Securities, LLC, dated December 14, 2006 (“Wachovia Letter”); and Bryce Engel, Chief Brokerage Operations Officer, TD AMERITRADE, Inc., dated December 21, 2006 (“TD Ameritrade Letter”). 7 In Amendment No. 3, NASD proposes, among other things, to codify the existing exemptions relating to transactions in a non-exchange-listed security (as defined below) that are securities listed on a Canadian exchange. 8 *See* letter from Andrea D. Orr, Assistant General Counsel, NASD, to Nancy M. Morris, Secretary, Commission, dated April 3, 2007 (“NASD Response Letter”). II. Description of the Proposal Currently, the Three Quote Rule requires NASD members who execute a transaction in a non-exchange-listed security 9 for or with a customer to contact and obtain the quotations from three dealers (or all dealers if less than three) to determine the best inter-dealer market for that security. The Three Quote Rule, however, does not apply if two or more priced quotations for a non-exchange-listed security are displayed in an inter-dealer quotation system that permits quotation updates on a real-time basis. NASD proposes to expand the categories of transactions that would be exempted from the Three Quote Rule. First, NASD proposes to exempt a transaction for or with a customer in a non-exchange-listed security of a foreign issuer that is part of the FTSE All-World Index, if such transaction is executed during the regular business hours of the foreign market for the foreign security and no trading halt or other similar trading or quoting restriction is in effect in any foreign market on which such security is listed. Second, in response to comments following publication of its proposal, NASD proposes to codify certain exemptions previously issued by NASD staff under the Three Quote Rule's exemptive process. 10 Specifically, NASD proposes to exempt a transaction for or with a customer pertaining to the execution of an order in a non-exchange-listed security that is listed on a Canadian exchange as long as the customer order is executed by the NASD member or a person associated with the member on a Canadian exchange in an agency or riskless principal capacity and the member or a person associated with the member conducts regular and rigorous reviews of the equality of the execution of such orders in such securities, pursuant to the member's duty of best execution. NASD has also proposed to amend its recordkeeping requirement to provide a corresponding exclusion with respect to these proposed exemptions. 9 NASD Rule 6610(c) defines the term “non-exchange-listed security” as “any equity security that is not traded on any national securities exchange” and “shall not include ‘restricted securities,' as defined by SEC Rule 144(a)(3) under the Securities Act of 1933, nor any securities designated in the PORTAL Market, the Rule 6700 Series.” 10 *See, e.g.* , Letter to Kenneth W. Perlman, General Counsel, Mayer & Schweitzer, Inc., from Alden S. Adkins, Senior Vice President and General Counsel, NASD Regulation, Inc., on May 29, 1998. Under the proposed rule change, NASD members would continue to be required to comply with their best execution obligations under NASD Rule 2320 and, to the extent applicable, the suitability obligations under NASD Rule 2310. III. Summary of Comments and NASD's Response The Commission received ten comment letters on the proposal. 11 NASD submitted the NASD Response Letter, 12 and corresponding Amendment No. 3 to address the issue regarding application of the proposed rule change to Canadian-listed securities that was raised by the commenters. While some commenters expressed general support for NASD's proposal to exempt from the Three Quote Rule foreign securities that are part of the FTSE All-World Index, 13 all of the commenters objected to NASD's proposed withdrawal of the exemptions from the Three Quote Rule for Canadian issuers' securities. Specifically, NASD proposed to withdraw all existing exemptions granted under the Three Quote Rule with respect to Canadian securities executed on a Canadian exchange in an agency or riskless principal basis. 14 Were these exemptions withdrawn, NASD members would be required to comply with the Three Quote Rule in connection with transactions in Canadian securities that are not part of the FTSE All-World Index. The commenters argued that this result would be contrary to the duty of best execution, 15 would cause significant delays in execution, 16 and would increase the cost of transactions in Canadian securities that are not part of the FTSE All-World Index. 17 11 *See supra* note 6. 12 *See supra* note 8. 13 *See, e.g.* , Canaccord Letter, CIBC Letter, STA Letter, TSX Letter, CSTA Letter, and TD Ameritrade Letter. 14 *See* Notice, *supra* note 5, 71 FR at 63813 n.13. 15 *See,* *e.g.* , Canaccord Letter, STA Letter, TXS Letter, CSTA Letter, RS Letter, and Wachovia Letter. 16 *See,* *e.g.* , Canaccord Letter, CIBC Letter, Arnold Porter Letter, STA Letter, TD Securities Letter, Wachovia Letter, and TD Ameritrade Letter. 17 *See,* *e.g.* , STA Letter and TD Securities Letter. In light of the comments, NASD revised its previous position and clarified that the proposal would not supersede any exemptions previously granted. Contemporaneously with the NASD Response Letter, NASD filed Amendment No. 3 to codify the relief previously granted in the existing exemptions. IV. Discussion After careful review, the Commission believes that the proposed rule change is consistent with the requirements of the Act and the regulations thereunder applicable to NASD. 18 In particular, the Commission believes that the proposal is consistent with section 15A(b)(6) of the Act 19 and section 15A(b)(9) of the Act. 20 Section 15A(b)(6) of the Act requires that the rules of a national securities association be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and 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. Section 15A(b)(9) of the Act requires that rules of an association not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. 18 In approving the proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 19 15 U.S.C. 78o-3(b)(6). 20 15 U.S.C. 78o-3(b)(9). The Commission approved NASD's proposal to institute the Three Quote Rule in 1988. 21 The Three Quote Rule was an amendment to NASD's interpretation relating to best execution of retail transactions in non-Nasdaq securities. The Three Quote Rule's purpose is to assure that NASD members fulfill their duty to provide customers with best execution for transactions in non-exchange-listed securities, especially illiquid securities with non-transparent prices. The Commission subsequently approved NASD's proposal providing NASD staff authority to grant exemptions from the Three Quote Rule in 1997. 22 Subsequently, NASD granted exemptions from the Three Quote Rule for customer transactions in Canadian securities executed on a Canadian exchange. 23 In 2000, the Commission approved NASD's proposal to limit the Three Quote Rule's applicability to those situations when fewer than two priced quotes for a non-Nasdaq security are posted in an inter-dealer quotation medium. 24 21 *See* Securities Exchange Act Release No. 25637 (May 2, 1988), 53 FR 16488 (May 9, 1988). 22 *See* Securities Exchange Act Release No. 39266 (October 22, 1997), 62 FR 56217 (October 29, 1997). 23 *See supra* note 10. 24 *See* Securities Exchange Act Release No. 43319 (September 21, 2000), 65 FR 58589 (September 29, 2000). Pursuant to this exception, if two or more priced quotations for a non-exchange-listed security are displayed in an inter-dealer quotation system that permits quotation updates on a real-time basis, then NASD members are not required to obtain quotes from three dealers. The Commission finds that NASD's proposal to add the two new exceptions to the Three Quote Rule is consistent with the Act. In its order granting NASD staff exemptive authority with respect to the Three Quote Rule, the Commission noted that “one situation where exemptive relief might be applied would be trading in certain foreign securities. In some circumstances the foreign exchange market may constitute the best market for the securities that are listed on that market, and the time delay involved in contacting three dealers in advance of a customer transaction could hinder obtaining the best execution for the customer.” 25 25 Securities Exchange Act Release No. 39266 (October 22, 1997), 62 FR 56217 (October 29, 1997). Thus, the Commission believes that it is reasonable for NASD to exempt from the Three Quote Rule transactions in a foreign security that are included in the FTSE All-World Index and transactions in a security listed on a Canadian exchange, subject to the conditions specified in the amended Three Quote Rule. The Commission notes that, whether or not a transaction in a non-exchange-listed security is subject to the Three Quote Rule, the NASD member executing the transaction must satisfy its duty of best execution. V. Accelerated Approval The Commission finds good cause to approve NASD's proposal, as amended, prior to the thirtieth day after the amendment is published for comment in the **Federal Register** pursuant to section 19(b)(2) of the Act. NASD submitted Amendment No. 3 in response to comments received on its proposal. The amendment codifies exemptions NASD staff previously issued under the Three Quote Rule's exemptive process, 26 and as described above, proposes a corresponding exclusion to the recordkeeping requirements if a member establishes and documents the exemption. Accordingly, Amendment No. 3 does not raise any new issues. 26 *See supra* note 22. The Commission therefore finds good cause to approval NASD's proposal on an accelerated basis. VI. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning Amendment No. 3, including whether Amendment No. 3 is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASD-2004-130 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASD-2004-130. 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-NASD-2004-130 and should be submitted on or before July 30, 2007. VII. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 27 that the proposed rule change (SR-NASD-2004-130), as modified by Amendment Nos. 2 and 3, be, and hereby is, approved on an accelerated basis. 27 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 28 28 17 CFR 200.30(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13200 Filed 7-6-07;8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56003; File No. SR-NASD-2007-028] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to the Order Audit Trail System July 2, 2007. On April 17, 2007, the National Association of Securities Dealers, Inc. (“NASD”) 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 Rules 6951 and 6954 to require members that transmit an intermarket sweep order (“ISO”) to another member, electronic communications network, nonmember, or exchange to record and report the fact that the order was an ISO. On May 18, 2007, NASD filed Amendment No. 1 to the proposed rule change. The proposed rule change, as amended, was published for comment in the **Federal Register** on May 31, 2007. 3 The Commission received no comment letters on the proposal. This order approves the proposed rule change, as modified by Amendment No. 1. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55806 (May 23, 2007), 72 FR 30406 (the “Notice”). The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to NASD, 4 and, in particular, section 15A(b)(6) of the Act 5 which requires, among other things, that NASD rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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. 4 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78 *o* -3(b)(6). On June 9, 2005, the Commission adopted Regulation NMS, 6 which among other things, adopted an Order Protection Rule 7 that requires trading centers to establish, maintain, and enforce policies and procedures designed to prevent the execution of trades at prices inferior to protected quotations displayed by automated trading centers, subject to applicable exceptions. One of the exceptions from the Order Protection Rule is when the transaction that constitutes a trade-through 8 is “effected by a trading center that simultaneously routed an intermarket sweep order to execute against the full displayed size of any protected quotation in the NMS stock that was traded through.” 9 6 *See* Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005). 7 17 CFR 242.611. 8 A “trade-through” is “the purchase or sale of an NMS stock during regular trading hours, either as principal or agent, at a price that is lower than a protected bid or higher than a protected offer.” *See* 17 CFR 242.600(b)(77). 9 *See* 17 CFR 242.611(b)(6). The phrase “intermarket sweep order” is defined as “a limit order for an NMS stock that meets the following requirements:
(i)When routed to a trading center, the limit order is identified as an intermarket sweep order; and
(ii)Simultaneously with the routing of the limit order identified as an intermarket sweep order, one or more additional limit orders, as necessary, are routed to execute against the full displayed size of any protected bid, in the case of a limit order to sell, or the full displayed size of any protected offer, in the case of a limit order to buy, for the NMS stock with a price that is superior to the limit price of the limit order identified as an intermarket sweep order. These additional routed orders must also be marked as intermarket sweep orders.” The proposed rule change adopts this same definition of intermarket sweep order for purposes of the OATS Rules. *See* 17 CFR 242.600(b)(30). The purpose of the proposed rule change is to require member firms to record the fact that an order in an OATS-eligible security is an ISO when the member routes an ISO to another member or non-member. The member would be required to include this information in the Route Report it submits to NASD pursuant to the OATS Rules. 10 This requirement should ensure that NASD knows that the order was an ISO and can utilize that information when reviewing audit trails. 11 10 When a member transmits an order in an OATS-eligible security to another member, electronic communications network, non-member, or exchange for handling or execution, the routing member is required to submit a Route Report to NASD. The categories of information that a member must include in a Route Report are set forth in NASD Rule 6954(c) and in the *OATS Reporting Technical Specifications* published by NASD. 11 As discussed in the Notice, firms will not be required to begin using the ISO routing method code on Route Reports until February 4, 2008, but the code will be available for use by firms immediately on approval. Firms are encouraged to use the ISO code as soon as possible to facilitate NASD's ability to determine whether the trade was made in reliance on an ISO exception from the Order Protection Rule. The Commission believes that the proposed rule change is consistent with the Act and should enhance OATS data and help ensure that the NASD is able to more effectively monitor compliance with Regulation NMS. *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 12 that the proposed rule change (File No. SR-NASD-2007-028), as amended, be, and hereby is, approved . 12 15 U.S.C. 78s(b)(2). 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. E7-13201 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55995; File No. SR-NYSE-2007-58] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to NYSE Rule 104.10(6) June 29, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on June 28, 2007, the New York Stock Exchange LLC, Inc. (“NYSE” 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 NYSE. The NYSE has designated the proposed rule change as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The NYSE is proposing to extend for three
(3)months the current pilot related to specialist stabilization requirements operating pursuant to Exchange Rule 104.10(6) (Specialist Transactions in Active Securities that Establish or Increase the Specialist's Position) (“Stabilization Pilot”), 5 that is scheduled to terminate on June 30, 2007. Additionally, the Exchange seeks to make technical changes to Rule 104.10 to correct the numbering of certain subparagraphs of the Rule. The text of the proposed rule change is available on NYSE's Web site at *http://www.nyse.com,* at NYSE's principal office, and at the Commission's Public Reference Room. 5 *See* Securities Exchange Act Release No. 54860 (December 1, 2006), 71 FR 71221 (December 8, 2006) (SR-NYSE 2006-76). 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 NYSE 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 NYSE 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 extend the operation of the Stabilization Pilot pursuant to Exchange Rule 104.10(6) from June 30, 2007 to September 30, 2007. The Exchange is further requesting through this filing to make technical amendments to the Rule in order to correct the numbering of certain subparagraphs. a. Stabilization Pilot On December 1, 2006, the Commission approved changes to NYSE Rules 104.10(5) and 104.10(6) governing specialist stabilization requirements. 6 The amendments to the Rule moved away from defining stabilization in terms of the last sale to focus on market conditions, the type of trade in question and the specialist's existing position. The amendments to Exchange Rule 104.10(6) govern Conditional Transactions (as defined below) in active securities. 7 6 *See* Securities Exchange Act Release No. 54860, *supra* note 5. 7 “Active” securities are:
(a)Securities comprising the S&P 500(r) Stock Index;
(b)securities trading on the Exchange during the first five trading days following their initial public offering of such securities; and
(c)securities that have been designated as “active” by a Floor Official subject to the provisions of the Rule. Pursuant to the Stabilization Pilot, specialists can trade in active securities that establish or increase a position by reaching across the market to trade in the Exchange published bid (in the case of a specialist's sale) or offer (in the case of a specialist's purchase) when such bid (offer) is priced below (above) the last differently priced published bid (offer) (“Conditional Transaction”). A specialist is allowed to execute Conditional Transactions without restriction as to price provided the specialist follows said transaction with an appropriate transaction on the opposite side of the market commensurate with the size of the specialist's transaction, which is referred to as “appropriate re-entry.” 8 8 “Appropriate re-entry” for Conditional Transactions shall mean the specialist's stabilization obligation to re-enter a transaction on the opposite side of the market at or before the price participation point (“PPP”). The PPP is an Exchange-issued minimum guideline that identifies the price at or before which a specialist is expected to re-enter the market after effecting a Conditional Transaction. PPPs are only minimum guidelines and compliance with them does not guarantee a specialist is meeting his or her obligations. The Exchange states that the Stabilization Pilot provides the specialist with the ability to effect transactions for its dealer account to provide support to the Hybrid Market. The Exchange believes that the specialists have a greater ability to position themselves to provide more liquidity against market trend and thus moderate volatility. The Exchange, therefore, requests that the Stabilization Pilot be extended for three
(3)months to continue to afford specialists this needed flexibility to continue their adaptation to the new challenges of the Hybrid Market. The Exchange believes that extension of the Stabilization Pilot will continue to allow specialists to effectively manage their inventory in order to provide liquidity during times of market volatility. As such, the Exchange requests that the Commission extend the Stabilization Pilot to September 30, 2007. b. Technical Amendments to the Rule The Exchange is also seeking to make technical amendments to Rule 104.10, including to correct the numbering of certain subparagraphs. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirement under Section 6(b)(5) 9 of the Act that an Exchange have rules that are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange also believes that the proposed rule change also is designed to support the principles of Section 11A(a)(1) 10 in that it seeks to assure economically efficient execution of securities transactions. 9 15 U.S.C. 78f(b)(5). 10 15 U.S.C. 78k-1(a)(1). 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 Because the foregoing proposed rule change:
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) 11 of the Act and Rule 19b-4(f)(6) thereunder. 12 As required under Rule 19b-4(f)(6)(iii), 13 the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of the filing of the proposed rule change. 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b-4(f)(6). 13 17 CFR 240.19b-4(f)(6)(iii). A proposed rule change filed under Rule 19b-4(f)(6) 14 normally may not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) 15 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The NYSE requests that the Commission waive the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii), 16 which would make the rule change effective and operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would allow the Stabilization Pilot to continue without interruption through September 30, 2007 and provide the Exchange and the Commission additional time to evaluate the pilot. 17 Accordingly, the Commission designates that the proposed rule change effective and operative upon filing with the Commission. 14 17 CFR 240.19b-4(f)(6). 15 17 CFR 240.19b-4(f)(6)(iii). 16 *Id.* 17 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 such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSE-2007-58 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-NYSE-2007-58. 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 NYSE. 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-NYSE-2007-58 and should be submitted on or July 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 18 18 17 CFR 200.30-3(a)(12). Florence E. Harmon Deputy Secretary. [FR Doc. E7-13154 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55992; File No. SR-NYSE-2007-57] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Moratorium on the Qualification and Registration of New Registered Competitive Market Makers and New Competitive Traders, Governed by Rules 107A and 110, Respectively, for an Additional Three Months June 29, 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 28, 2007, the New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The NYSE proposes to extend for three months the moratorium related to the qualification and registration of Registered Competitive Market Makers (“RCMMs”) pursuant to Exchange Rule 107A and Competitive Traders (“CTs”) pursuant to Exchange Rule 110. The text of the proposed rule change is available on the NYSE's Web site ( *http://www.nyse.com* ), at the NYSE, 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. 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 proposes to extend for three months the current moratorium related to the qualification and registration of RCMMs pursuant to Exchange Rule 107A and CTs pursuant to Exchange Rule 110. On September 22, 2005, the Exchange filed SR-NYSE-2005-63 3 with the Commission proposing to implement a moratorium on the qualification and registration of new RCMMS and CTs (“Moratorium”). The purpose of the Moratorium was to allow the Exchange an opportunity to review the viability of RCMMs and CTs in the NYSE HYBRID MARKET SM (“Hybrid Market”). 4 3 *See* Securities Exchange Act Release No. 52648 (October 21, 2005), 70 FR 62155 (October 28, 2005) (SR-NYSE-2005-63). 4 *See* Securities Exchange Act Release No. 53539 (March 22, 2006), 71 FR 16353 (March 31, 2006) (SR-NYSE-2004-05) (establishing the Hybrid Market). The phased-in implementation of the Hybrid Market has required the Exchange to extend the Moratorium. 5 During each phase of the Hybrid Market, new system functionality is included in the operation of Exchange systems and new data has been generated. As a result, the Exchange was unable to make an informed decision as to the viability of RCMMs and CTs in the Hybrid Market. 5 *See* Securities Exchange Act Release Nos. 54140 (July 13, 2006), 71 FR 41491 (July 21, 2006) (SR-NYSE-2006-48); and 54985 (December 21, 2006), 72 FR 171 (January 3, 2007) (SR-NYSE-2006-113). The Exchange now proposes to extend the Moratorium, as amended, 6 for an additional three months in order to allow the Exchange to continue its analysis of the viability of RCMMs and CTs in the Hybrid Market. On January 25, 2007, the Exchange began programming its systems to implement Phase IV of the Hybrid Market. Phase IV modifications to all systems on the Floor were completed on or about February 27, 2007. The Exchange has continued to review data related to RCMMs and CTs during this time; however, more time is needed to provide the Exchange with an adequate sample period to make a more informed decision as to the viability of RCMMs and CTs in the Hybrid Market. As such, the Exchange requests to extend the Moratorium for an additional three months to complete its analysis. 6 *See* Securities Exchange Act Release No. 53549 (March 24, 2006), 71 FR 16388 (March 31, 2006) (SR-NYSE-2006-11) (making certain amendments to the Moratorium). The Exchange will issue an Information Memo announcing the extension of the Moratorium. The review is currently estimated to be completed on or about September 28, 2007. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) 7 that an exchange have rules that are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 7 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 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 Because the proposed rule change:
(i)Does not significantly affect the protection of investors or the public interest;
(ii)does not impose any significant burden on competition; and
(iii)does not become operative for 30 days after the date of the 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 8 and Rule 19b-4(f)(6) thereunder. 9 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) under the Act, the Exchange is required to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the five-day pre-filing requirement. A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act 10 normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) 11 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The NYSE has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow the moratorium to continue without interruption so that the Exchange may have additional time to fully analyze the future viability of RCMMs and CTs in the Hybrid Market. For these reasons, the Commission designates that the proposed rule change become operative immediately. 12 10 17 CFR 240.19b-4(f)(6). 11 17 CFR 240.19b-4(f)(6)(iii). 12 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 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 the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSE-2007-57 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-NYSE-2007-57. 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, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2007-57 and should be submitted on or before July 30, 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. E7-13156 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55985; File No. SR-NYSEArca-2007-47] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change to List and Trade Shares of the iShares FTSE EPRA/NAREIT Asia Index Fund June 29, 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 16, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”), through its wholly owned subsidiary NYSE Arca Equities, Inc. (“NYSE Arca Equities”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice and order to solicit comments on the proposed rule change from interested persons and to approve the proposed rule change 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 list and trade shares (“Shares”) of the iShares® 3 FTSE EPRA/NAREIT Asia Index Fund (“Fund”) of the iShares Trust (“Trust”) pursuant to NYSE Arca Equities Rule 5.2(j)(3). The text of the proposed rule change is available on the Exchange's Web site at *http://www.nyse.com,* at the Exchange's principal office, and at the Commission's Public Reference Room. 3 “iShares” is a registered trademark of Barclays Global Investors, N.A. 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 Exchange proposes to list Shares of the Fund. The Trust is an open-end management company with over 100 separate investment portfolios and is registered under the Investment Company Act of 1940 (“1940 Act”). 4 The Fund would seek investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE EPRA/NAREIT Asia Index (“Underlying Index” or “Index”). The Underlying Index measures the stock performance of companies engaged in the ownership and development of the Asian real estate market. Because all of the securities included in the Underlying Index are issued by companies engaged in the ownership and development of the Asian real estate market, the Fund would always be concentrated in the Asian real estate industry. The Fund would only concentrate its investments in a particular industry or group of industries to approximately the same extent as the Index is so concentrated. 4 *See* Post-Effective Amendment No. 78 to the Trust's Registration Statement on Form N-1A, as filed with the Commission on April 23, 2007 and accompanying Statement of Additional Information (“SAI”) (File Nos. 333-92935 and 811-09729) (“Registration Statement”). The Trust was established as a Delaware statutory trust on December 16, 1999. Under NYSE Arca Equities Rule 5.2(j)(3), the Exchange may list and/or trade “Investment Company Units” (“ICUs”) 5 pursuant to unlisted trading privileges (“UTP”). The Fund does not meet the “generic” listing requirements of NYSE Arca Equities Rule 5.2(j)(3) applicable to the listing of ICUs based on international or global indexes adopted pursuant to Rule 19b-4(e) under the Act, 6 and thus cannot be listed without a filing made pursuant to Rule 19b-4 under the Act. Specifically, the Underlying Index does not meet the requirement of Commentary .01(a)(B)(2) to NYSE Arca Equities Rule 5.2(j)(3) that, for component stocks that in the aggregate account for at least 90% of the weight of the Underlying Index, each of such stocks must have a minimum worldwide monthly trading volume during each of the last six months of at least 250,000 shares. 7 5 *See* Securities Exchange Act Release Nos. 41983 (October 6, 1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (approving, among other things, the listing and trading of ICUs); 44551 (July 12, 2001), 66 FR 37716 (July 19, 2001) (SR-PCX-2001-14) (approving generic listing standards for ICUs); and 55621 (April 12, 2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-86) (approving generic listing standards for ICUs based on international or global indexes). 6 17 CFR 240.19b-4(e). 7 Component stocks in the aggregate accounting for 89.3% of the weight of the Underlying Index had a minimum worldwide monthly trading volume during each of the last six months of at least 250,000 shares, as of May 2, 2007. Source: Bloomberg. The Exchange notes that the Commission has previously approved an exchange rule for the trading of funds based upon indexes that did not meet the six month volume requirement. 8 8 *See* Securities and Exchange Act Release No. 46306 (August 2, 2002), 67 FR 51916 (August 9, 2002) (SR-NYSE-2002-28) (approving the following funds for trading under unlisted trading privileges on the New York Stock Exchange (“NYSE”):
(1)Vanguard Total Stock Market VIPERs;
(2)iShares Russell 2000 Index Funds;
(3)iShares Russell 2000 Value Index Funds; and
(4)iShares Russell 2000 Growth Index Fund.) Operation of the Fund Barclays Global Fund Advisors (“BGFA”), a subsidiary of Barclays Global Investors, N.A. (“BGI”), would be the investment adviser (“Advisor”) to the Fund. The Advisor is registered as an investment adviser under section 203 of the Investment Advisers Act of 1940 (“Advisers Act”). 9 As the Advisor, BGFA would have overall responsibility for the general management and administration of the Trust. BGFA would provide an investment program for the Fund and would manage the investment of the Fund's assets. In seeking to achieve a Fund's investment objective, BGFA would use teams of portfolio managers, investment strategists, and other investment specialists. BGFA would also arrange for transfer agency, custody, fund administration, and all other non-distribution-related services necessary for the Fund to operate. While the Fund would be managed by the Advisor or portfolio manager, the Trust's Board of Trustees would have responsibility for the overall management and operations of the Fund. 9 15 U.S.C. 80b. The Index Provider FTSE International Limited (“FTSE”) (“Index Provider”) is the provider of the Index. FTSE is an independent company whose sole business is the creation and management of indices and associated data services. FTSE is a joint venture between The Financial Times and the London Stock Exchange and “FTSE TM ” is a trademark owned jointly by the London Stock Exchange plc and The Financial Times Limited. FTSE calculates over 60,000 indices daily, including more than 600 real-time indices. “NAREIT®” is a trademark of National Association of Real Estate Investment Trusts (“NAREIT”). Both the FTSE and NAREIT trademarks are used by FTSE under license. “EPRA®” is the trademark of the European Public Real Estate Association (“EPRA”). FTSE is neither a registered broker dealer nor is it affiliated with the Trust, BGFA, or its affiliates, or SEI Investments Distribution Co. (“SEI”), the distributor of the Fund (as discussed below). 10 BGI has entered into a license agreement with FTSE to use the Underlying Index and is sub-licensing rights in the Underlying Index to the Trust at no charge. 10 *See* e-mail on June 28, 2007 from Tim Malinowski, Director, NYSE Group, Inc. to Mitra Mehr, Special Counsel, Division of Market Regulation (“Division”), Commission (“June 28th E-mail”). Administrator, Custodian, and Transfer Agent Investors Bank & Trust Company (“Investors Bank”) would serve as administrator, custodian, and transfer agent for the Fund (“Administrator”). Under the Administration Agreement with the Trust, the Administrator would provide necessary administrative, legal, tax, accounting, and financial reporting services for the maintenance and operations of the Trust and the Fund. Under the Custodian Agreement with the Trust, the Administrator would maintain cash, securities, and other assets of the Trust and the Fund and would keep all necessary accounts and records. The Administrator would be required to deliver securities held by the Administrator and make payments for securities purchased by the Trust for the Fund. Also, under a Delegation Agreement, the Administrator may appoint certain foreign custodians or foreign custody managers for Fund investments outside the United States. Pursuant to a Transfer Agency and Service Agreement with the Trust, the Administrator would act as a transfer agent for the Fund's authorized and issued shares of beneficial interest, and as dividend disbursing agent of the Trust. The Distributor SEI would be the distributor of shares of the Trust (“Distributor”). The Distributor has entered into a Distribution Agreement with the Trust pursuant to which it would distribute Shares of the Fund. Shares would be offered continuously for sale by the Fund through the Distributor only in Creation Unit Aggregations (as described more fully below). Shares in less than Creation Unit Aggregations would not be distributed by the Distributor. The Distributor would deliver the prospectus and, upon request, the Statement of Additional Information (“SAI”) to persons purchasing Creation Unit Aggregations and would maintain records of both orders placed with it and confirmations of acceptance furnished by it. The Distributor is a broker-dealer registered under the Act and a member of NASD. The Fund intends to qualify as a “regulated investment company” (“RIC”) under the Internal Revenue Code (“Code”). The Fund must, among other things, meet certain diversification tests imposed by the Code to satisfy RIC requirements. 11 11 Among these is a requirement that, at the close of each quarter of the Fund's taxable year:
(i)At least 50% of the market value of the Fund's total assets must be represented by cash items, U.S. government securities, securities of other RICs, and other securities, with such other securities limited for the purpose of this calculation with respect to any one issuer to an amount not greater than 5% of the value of the Fund's assets and not greater than 10% of the outstanding voting securities of such issuer; and
(ii)not more than 25% of the value of its total assets may be invested in securities of any one issuer, or two or more issuers that are controlled by the Fund (within the meaning of Section 851(b)(4)(B) of the Code) and that are engaged in the same or similar trades or business (other than U.S. government securities or other RICs). Description of the Fund and the Underlying Index The Underlying Index is sponsored by the Index Provider. The Index Provider determines the relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index. The Advisor would use a “passive” or “indexing” approach to try to achieve the Fund's investment objective. The Fund would not try to “beat” the index it tracks and would not seek temporary defensive positions when markets decline or appear overvalued. Indexing eliminates the chance that the Fund may substantially outperform the Underlying Index, but also may eliminate some of the risk of active management, such as poor security selection. Indexing seeks to achieve lower costs and better after-tax performance by keeping portfolio turnover low in comparison to actively managed investment companies. The Fund would invest at least 90% of its assets in the securities of its Underlying Index or in American Depositary Receipts, Global Depositary Receipts or European Depositary Receipts representing securities in the Underlying Index. The Fund may invest the remainder of its assets in securities not included in the Underlying Index, but which the Advisor believes would help the Fund track the Underlying Index. For example, the Fund may invest in securities not included in the Underlying Index to reflect various corporate actions (such as mergers) and other changes in the Underlying Index (such as reconstitutions, additions, and deletions). The Fund also may invest its other assets in futures contracts or other derivatives related to the Underlying Index, as well as cash and cash equivalents, including shares of money market funds affiliated with the Advisor. The Advisor would use a representative sampling indexing strategy for the Fund. 12 12 “Representative sampling” is an indexing strategy that involves investing in a representative sample of the securities, included in the Underlying Index, that collectively have an investment profile similar to the Underlying Index. The securities selected are expected to have, in the aggregate, investment characteristics (based on factors such as market capitalization and industry weightings), fundamental characteristics (such as return variability, earnings valuation, and yield), and liquidity measures similar to those of the Underlying Index. The Fund may or may not hold all of the securities that are included in the Underlying Index. The Advisor expects that, over time, the correlation between the Fund's performance and that of the Underlying Index, before fees and expenses, would be 95% or better. A correlation percentage of 100% would indicate perfect correlation. The difference between 100% correlation and the Fund's actual percentage correlation with the Underlying Index is called “tracking error.” The Fund's use of a representative sampling indexing strategy can be expected to result in greater tracking error than if the Fund used a replication indexing strategy. “Replication” is an indexing strategy in which a fund invests in substantially all of the securities in its underlying index in approximately the same proportions as in the underlying index. The Underlying Index is included in the FTSE EPRA/NAREIT Global Real Estate Index Series (“FTSE EPRA/NAREIT Indices”). The FTSE EPRA/NAREIT Indices are primarily rule-based, but are also monitored by the applicable regional FTSE EPRA/NAREIT Global Index Advisory Committees. FTSE EPRA/NAREIT defines the Global Real Estate market as: North America (including Canada and the United States), Europe (including Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the United Kingdom (including the Channel Islands)) and Asia (including Australia, Hong Kong, Japan, New Zealand, South Korea, and Singapore). In determining geographic allocations, FTSE EPRA/NAREIT primarily considers the REIT's country of incorporation and listing. The FTSE EPRA/NAREIT Indices are free float-adjusted market capitalization weighted. To qualify for inclusion in the FTSE EPRA/NAREIT Indices, a company must be a closed-end company and listed on an official stock exchange and meet certain trading volume requirements as determined by FTSE EPRA/NAREIT. 13 Also, companies must meet geographic financial standards demonstrating that a majority of a company's earnings or bulk of total assets is the result of real estate activity as determined by FTSE EPRA/NAREIT. Relevant real estate activities are defined as the ownership, trading and development of income-producing real estate. 13 All securities in the Index are listed on exchanges with last-sale reporting. *See* e-mail on June 13, 2007 from Tim Malinowski, Director, NYSE Group, Inc. to Mitra Mehr, Special Counsel, Division, Commission (“June 13th E-mail”). The components of the FTSE EPRA/NAREIT Indices are generally required to meet the following criteria where applicable: to be added to the Index, at the quarterly review, non-components must have an investable market capitalization equal to or greater than the amounts as determined by FTSE EPRA/NAREIT. 14 An existing component of the FTSE EPRA/NAREIT Indices would be removed from the Indices unless it has an investable market capitalization above certain thresholds determined by FTSE EPRA/NAREIT. 14 *See* June 13th E-mail. Under normal circumstances, the quarterly review occurs on the Wednesday following the first Friday of March, June, September and December, using data from the close of business on the first Friday of March, June, September and December. Adjustments in stock weightings and components resulting from the periodic assessment become effective on the next trading day following the third Friday of March, June, September and December. In between reviews, a new issue with an investable market capitalization ( *i.e.* , after the application of investability weightings) of equal or greater than the amounts as determined by FTSE EPRA/NAREIT for the respective region would be included into the FTSE EPRA/NAREIT Indices after the close of business on the first day of trading of the new issue. The FTSE EPRA/NAREIT Indices are calculated in real time and generally published throughout the business day, and distributed primarily through international data vendors. Daily values are also made available to major newspapers and can be found at the FTSE Web site and the EPRA Web site. The FTSE EPRA/NAREIT Indices are published and calculated using trading values (real-time throughout the day, and closing values at the end of the day) and WM/Reuters Closing Spot Rates for currency values. The Fund would issue and redeem, on a continuous basis, shares at its net asset value (“NAV”) only in blocks of 50,000 shares or multiples thereof (each, a “Creation Unit” or a “Creation Unit Aggregation”). Only certain large institutional investors known as Authorized Participants (as defined below) may purchase or redeem Creation Units directly with the Fund at the NAV. These transactions are usually in exchange for a basket of securities similar to the Fund's portfolio and an amount of cash. Except when aggregated in Creation Units, Shares of the Fund are not redeemable securities. Shareholders who are not Authorized Participants may not redeem shares directly from the Fund. The Fund would impose a purchase transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. Purchasers and redeemers of Creation Units for cash are required to pay an additional variable charge to compensate for brokerage and market impact expenses. The creation and redemption transaction fees for creations and redemptions in-kind for the Fund are described in the Fund's prospectus. All orders to purchase Shares of the Fund in Creation Units must be placed with the Distributor by or through an “Authorized Participant,” which is either:
(i)A “Participating Party,” *i.e.* , a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation (“NSCC”), a clearing agency that is registered with the Commission (“Clearing Process”); or
(ii)a Depository Trust Company (“DTC”) Participant that has executed a “Participant Agreement” with the Distributor. Consideration for Purchase of Creation Units The consideration for purchase of Creation Unit Aggregations of the Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, the Deposit Securities, which constitutes a substantial replication, or a portfolio sampling representation, of the stocks included in the Fund's Underlying Index and an amount of cash (“Cash Component”) computed as described below. Together, the Deposit Securities and the Cash Component constitute the “Fund Deposit,” which represents the minimum initial and subsequent investment amount for a Creation Unit Aggregation. The Cash Component is sometimes also referred to as the “Balancing Amount.” The Cash Component serves the function of compensating for any difference between the NAV per Creation Unit Aggregation and the Deposit Amount. The Cash Component is an amount equal to the difference between the NAV of the shares (per Creation Unit Aggregation) and the “Deposit Amount,” which is an amount equal to the market value of the Deposit Securities. If the Cash Component is a positive number ( *i.e.* , the NAV per Creation Unit Aggregation exceeds the Deposit Amount), the creator would deliver the Cash Component. If the Cash Component is a negative number ( *i.e.* , the NAV per Creation Unit Aggregation is less than the Deposit Amount), the creator would receive the Cash Component. Computation of the Cash Component excludes any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Authorized Participant. BGFA, through the NSCC, makes available on each business day, prior to 9:30 a.m. Eastern Time, the list of the names and the required number of shares of each Deposit Security to be included in the current Fund Deposit (based on information at the end of the previous business day) for the Fund. Such Deposit Securities are applicable, subject to any adjustments as described below, to effect creations of Creation Unit Aggregations of the Fund until such time as the next-announced composition of the Deposit Securities is made available. The identity and number of shares of the Deposit Securities required for the Fund Deposit changes as rebalancing adjustments and corporate action events are reflected from time to time by BGFA with a view to the investment objective of the Fund. The composition of the Fund may also change in response to adjustments to the weighting or composition of the component securities of the Underlying Index. In addition, the Trust reserves the right to permit or require the substitution of an amount of cash ( *i.e.* , a “cash in lieu” amount) to be added to the Cash Component to replace any Deposit Security that may not be available in sufficient quantity for delivery or that may not be eligible for transfer through the systems of DTC or the Clearing Process. The Trust also reserves the right to permit or require a “cash in lieu” amount where the delivery of the Deposit Security by the Authorized Participant would be restricted under the securities laws or where the delivery of the Deposit Security to the Authorized Participant would result in the disposition of the Deposit Security by the Authorized Participant becoming restricted under the securities laws, or in certain other situations. The adjustments described above would reflect changes known to BGFA on the date of announcement to be in effect by the time of delivery of the Fund Deposit, in the composition of the Underlying Index or resulting from certain corporate actions. Redemption of Shares in Creation Units Shares may be redeemed only in Creation Unit Aggregations at their NAV next determined after receipt of a redemption request in proper form by the Fund through Investors Bank and only on a business day. The Fund would not redeem Shares in amounts less than Creation Unit Aggregations. A beneficial owner must accumulate enough Shares in the secondary market to constitute a Creation Unit Aggregation to have such Shares redeemed by the Trust. There can be no assurance, however, that there would be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit Aggregation. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of Shares to constitute a redeemable Creation Unit Aggregation. With respect to the Fund, BGFA, through the NSCC and the Distributor, would make available immediately prior to 9:30 a.m. Eastern Time on each business day, the identity of the Fund securities that would be applicable (subject to possible amendment or correction) to redemption requests received in proper form on that day (“Fund Securities”). Fund Securities received on redemption may not be identical to Deposit Securities that are applicable to creations of Creation Unit Aggregations. Unless cash redemptions are available or specified for the Fund, the redemption proceeds for a Creation Unit Aggregation would generally consist of Fund Securities—as announced on the business day of the request for redemption received in proper form—plus cash in an amount equal to the difference between the NAV of the shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities (“Cash Redemption Amount”), less a redemption transaction fee as described below. If the Fund Securities have a value greater than the NAV of the Shares, a compensating cash payment equal to the difference must be made by or through an Authorized Participant by the redeeming shareholder. Redemptions of shares for Fund Securities would be subject to compliance with applicable federal and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Unit Aggregations for cash to the extent that the Trust could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or an investor for which it is acting subject to a legal restriction with respect to a particular stock included in the Fund Securities applicable to the redemption of a Creation Unit Aggregation, may be paid an equivalent amount of cash. This would specifically prohibit delivery of Fund Securities that are not registered in reliance upon Rule 144A under the Securities Act of 1933 (“Securities Act”) to a redeeming beneficial owner that is not a “qualified institutional buyer,” as such term is defined under Rule 144A of the Securities Act. The Authorized Participant may request the redeeming beneficial owner of the shares to complete an order form or to enter into agreements with respect to such matters as compensating cash payment. The right of redemption may be suspended or the date of payment postponed for the Fund:
(i)For any period during which the Exchange is closed (other than customary weekend and holiday closings);
(ii)for any period during which trading on the Exchange is suspended or restricted;
(iii)for any period during which an emergency exists as a result of which disposal of the shares of the Fund or determination of the Fund's NAV is not reasonably practicable; or
(iv)in such other circumstances as is permitted by the Commission. Dividends and Distributions Dividends from net investment income, if any, would be declared and paid at least annually by the Fund. Distributions of net realized securities gains, if any, generally would be declared and paid once a year, but the Trust may make distributions on a more frequent basis for the Fund. The Trust reserves the right to declare special distributions if, in its reasonable discretion, such action is necessary or advisable to preserve the status of the Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income. Dividends and other distributions on shares would be distributed on a pro-rata basis to beneficial owners of such shares. Dividend payments would be made through DTC Participants to beneficial owners then of record with proceeds received from the Fund. Dividend Reinvestment Service No dividend reinvestment service would be provided by the Trust. Broker-dealers may make available the DTC book-entry Dividend Reinvestment Service for use by beneficial owners of the Fund for reinvestment of their dividend distributions. Beneficial owners should contact their broker to determine the availability and costs of the service and the details of participation therein. Brokers may require beneficial owners to adhere to specific procedures and timetables. If this service is available and used, dividend distributions of both income and realized gains would be automatically reinvested in additional whole shares of the Fund purchased in the secondary market. Availability of Information Regarding Shares and Underlying Index The Advisor, through the NSCC, would make available on each business day, prior to 9:30 a.m. Eastern Time, a list of the names and the required number of shares of each Deposit Security to be included in the current Fund Deposit (based on information at the end of the previous business day) for the Fund. Additional information regarding the indicative value of shares of the Fund, also known as the “indicative optimized portfolio value” (“IOPV”), would be disseminated at least every 15 seconds through the Consolidated Tape from 9:30 a.m. to 4:15 p.m. Eastern Time by the Exchange or a major market data vendor. If the IOPV does not change during the Exchange's Opening Session or Late Trading Session, then the last official calculated IOPV would remain available to investors. 15 The IOPV does not necessarily reflect the precise composition of the current portfolio of securities held by the Fund at a particular point in time or the best possible valuation of the current portfolio. Therefore, the IOPV should not be viewed as a “real-time” update of the NAV, which is computed only once a day. The IOPV is generally determined by using both current market quotations and/or price quotations obtained from broker-dealers that may trade in the portfolio securities held by the Fund. 15 *See* e-mail on June 21, 2007 from Andrew Stevens, Assistant General Counsel, NYSE Group, Inc. to Mitra Mehr, Special Counsel, Division, Commission. All of the exchanges on which the underlying components of the Index trade will be closed during the Exchange's Opening Session. *See* June 13th E-mail. According to the Fund's Registration Statement, Investors Bank would calculate the NAV for the Fund generally once daily Monday through Friday generally as of the regularly scheduled close of business of the NYSE (normally 4 p.m. Eastern Time) on each day that the NYSE is open for trading, based on prices at the time of closing, provided that:
(i)Any assets or liabilities denominated in currencies other than the U.S. dollar shall be translated into U.S. dollars at the prevailing market rates on the date of valuation as quoted by one or more major banks or dealers that makes a two-way market in such currencies (or a data service provider based on quotations received from such banks or dealers); and
(ii)U.S. fixed income assets may be valued as of the announced closing time for trading in fixed income instruments on any day that the Securities Industry and Financial Markets Association (SIFMA) announces an early closing time. The NAV of the Fund would be calculated by dividing the value of the net assets of the Fund ( *i.e.* , the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent. In calculating a Fund's NAV, a Fund's investments are generally valued using market valuations. If current market valuations are not readily available or such valuations do not reflect current market values, the affected investments would be valued using fair value pricing pursuant to the pricing policy and procedures approved by the Board of Trustees. The frequency with which a Fund's investments are valued using fair value pricing is primarily a function of the types of securities and other assets in which a Fund invests pursuant to its investment objective, strategies, and limitations. 16 Because foreign markets may be open on different days than the days during which a shareholder may purchase the Fund's Shares, the value of the Fund's investments may change on days when shareholders are not able to purchase the Fund's Shares. 16 Valuing a Fund's investments using fair value pricing would result in using prices for those investments that may differ from current market valuations. Use of fair value prices and certain current market valuations could result in a difference between the prices used to calculate a Fund's NAV and the prices used by the Fund's Underlying Index, which in turn could result in a difference between the Fund's performance and the performance of the Fund's Underlying Index. The value of assets denominated in foreign currencies is converted into U.S. dollars using exchange rates deemed appropriate by BGFA. Any use of a different rate from the rates used by an Index Provider may adversely affect a Fund's ability to track its Underlying Index. The NAV for the Fund would be calculated and disseminated daily. In addition, the Trust's Web site would include the Fund's Prospectus and SAI, information regarding the Underlying Index for the Fund, the prior business day's NAV, and the mid-point of the bid-ask spread at the time of calculation of the NAV (“Bid/Ask Price”), a calculation of the premium or discount of the Bid/Ask Price at the time of calculation of the NAV against such NAV, the component securities of the Underlying Index, and a description of the methodology used in these computations. The Bid/Ask Price of the Fund is determined using the highest bid and the lowest offer on the exchange on which the shares are listed for trading. The Exchange would also make available quotation information including Total Cash Amount Per Creation Unit, Shares Outstanding, and the Fund's NAV on a daily basis by means of CTA and CQ High Speed Lines. BGFA has informed the Exchange that the Fund would make the Fund's NAV available to all market participants at the same time. If the Exchange becomes aware that the NAV is not disseminated to all market participants at the same time, the Exchange would halt trading in the Fund Shares. The closing prices of the Fund's Deposit Securities are readily available from, as applicable, the relevant exchange, automated quotation systems, and published or other public sources or on-line information services that are major market data vendors, such as Bloomberg or Reuters. Similarly, information regarding market prices and volume of Shares would be broadly available on a real-time basis throughout the trading day. Quotation and last-sale information for the Shares would be widely disseminated pursuant to the CTA Plan. The previous day's closing price and volume information for the Shares would be published daily in the financial sections of many newspapers. The value of the Underlying Index would be updated intra-day as individual component securities change in price and would be widely disseminated at least every 60 seconds throughout NYSE Arca Marketplace trading hours (4 a.m. to 8 p.m. Eastern Time) by one or more major market data vendors. If the official index value does not change during some or all of the period when trading is occurring on the NYSE Arca Marketplace (for example, for indexes of non-U.S. component stocks because of time zone differences or holidays in the countries where such indexes' component stocks trade), then the last calculated official index value would remain available throughout NYSE Arca Marketplace trading hours. The Underlying Index As of May 2, 2007, the FTSE EPRA/NAREIT Asia Index component securities had a market capitalization of approximately $300,860,000,000, representing 85 securities. The average market capitalization was approximately $3,540,000,000. The five highest weighted securities represented approximately 39.44% of the index weight. The heaviest weighted security represented approximately 10.2% of the index weight. 17 17 Source: Bloomberg. Criteria for Initial and Continued Listing The Shares would be required to satisfy the criteria for initial and continued listing of ICUs under NYSE Arca Equities Rules 5.2(j)(3) (including the “generic” listing standards under Commentary .01 except the trading volume requirement of Commentary .01(a)(B)(2)) 18 and 5.5(g)(2). For instance, a minimum of two Creation Units (at least 100,000 Shares) would be required to be outstanding at the start of trading. This minimum number of Shares required to be outstanding at the start of trading would be comparable to requirements that have been applied to previously listed series of ICUs. The Exchange believes that the proposed minimum number of Shares outstanding at the start of trading is sufficient to provide market liquidity. 18 *See* June 28th E-mail, *supra* note 10. The continued listing criteria for ICUs under NYSE Arca Equities Rule 5.5(g)(2) provide that the Exchange would consider the suspension of trading and delisting (if applicable) of the Shares in any of the following circumstances: • Following the initial 12-month period beginning upon the commencement of trading of the Shares of the Fund, there are fewer than 50 record and/or beneficial holders of such Shares for 30 or more consecutive trading days; • The value of the Underlying Index of the Fund is no longer calculated or available; or • Such other event occurs or condition exists that, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. In addition, the Exchange would remove the Shares from trading and listing upon termination of the Trust. The Exchange represents the Trust is required to comply with Rule 10A-3 under the Act 19 for the initial and continued listing of the Shares. 19 17 CFR 240.10A-3. Trading Rules The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. The trading hours for the Fund on the Exchange are the same as those set forth in NYSE Arca Equities Rule 7.34 (4 a.m. to 8 p.m. Eastern Time). The minimum trading increment for shares of the Fund on the Exchange would be $0.01. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Fund. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include:
(i)The extent to which trading is not occurring in the securities comprising an Underlying Index and/or the financial instruments of a Fund; or
(ii)whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in the Shares could be halted pursuant to the Exchange's “circuit breaker” rule 20 or by the halt or suspension of trading of the underlying securities. If the IOPV or the Index value is not being calculated or widely disseminated as required, the Exchange may halt trading during the day in which the interruption to the calculation or wide dissemination of the IOPV or the Index value occurs. If the interruption to the calculation or wide dissemination of the IOPV or the Index value persists past the trading day in which it occurred, the Exchange would halt trading no later than the beginning of the trading day following the interruption. 21 20 *See* NYSE Arca Equities Rule 7.12. 21 *See* NYSE Arca Equities Rule 5.5(g)(2)(b). Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative products to monitor trading in the Shares. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules. The Exchange's current trading surveillance focuses on detecting when securities trade outside their normal patterns. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations. The Exchange may obtain information via the Intermarket Surveillance Group (“ISG”) from other exchanges who are members or affiliates of the ISG. 22 In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. 22 For a list of the current members and affiliate members of ISG, *see http://www.isgportal.com.* The Exchange notes that not all of the underlying securities may trade on exchanges that are members or affiliate members of the ISG. Information Bulletin Prior to the commencement of trading, the Exchange would inform its ETP Holders in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin would discuss the following:
(i)The procedures for purchases and redemptions of Shares in Creation Unit Aggregations (and that Shares are not individually redeemable);
(ii)NYSE Arca Equities Rule 9.2(a), 23 which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares;
(iii)how information regarding the IOPV is disseminated;
(iv)the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and
(v)trading information. 23 NYSE Arca Equities Rule 9.2(a) provides that an ETP Holder, before recommending a transaction, must have reasonable grounds to believe that the recommendation is suitable for its customer based on any facts disclosed by the customer as to his other security holdings and as to his financial situation and needs. Further, the rule provides, with a limited exception, that prior to the execution of a transaction recommended to a non-institutional customer, the ETP Holder shall make reasonable efforts to obtain information concerning the customer's financial status, tax status, investment objectives, and any other information that it believes would be useful to make a recommendation. *See* Securities Exchange Act Release No. 54045 (June 26, 2006), 71 FR 37971 (July 3, 2006) (SR-PCX-2005-115). In addition, the Bulletin would reference that the Trust is subject to various fees and expenses described in the Registration Statement. The Bulletin would also discuss any exemptive, no-action, and interpretive relief granted by the Commission from section 11(d)(1) of the Act 24 and certain rules under the Act, including Rule 10a-1, Regulation SHO, Rule 10b-10, Rule 14e-5, Rule 10b-17, Rule 11d1-2, Rules 15c1-5 and 15c1-6, and Rules 101 and 102 of Regulation M under the Act. 24 15 U.S.C. 78k(d)(1). The Bulletin would also disclose that the NAV for the Shares would be calculated after 4 p.m. Eastern Time each trading day. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act, 25 in general, and furthers the objectives of section 6(b)(5), 26 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 25 15 U.S.C. 78f(b). 26 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. 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-2007-47 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-2007-47. 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-NYSEArca-2007-47 and should be submitted on or before July 30, 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 is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 27 In particular, the Commission finds that the proposed rule change is consistent with section 6(b)(5) of the Act, 28 which requires that the rules of an exchange be designed, among other things, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Although NYSE Arca Equities Rule 5.2(j)(3) permits the Exchange to either originally list and trade ICUs or trade ICUs pursuant to UTP, the Shares do not meet the “generic” listing requirements of NYSE Arca Rule 5.2(j)(3) (permitting listing in reliance upon Rule 19b-4(e) under the Act 29 ) because the components of the Index underlying the Fund do not meet the initial listing requirements of Commentary .01(a)(B)(2) to NYSE Arca Equities Rule 5.2(j)(3). Commentary .01(a)(B)(2) to NYSE Arca Equities Rule 5.2(j)(3) requires that, upon the initial listing of any series of ICUs, the component stocks that in the aggregate account for at least 90% of the weight of the index or portfolio each must have a minimum worldwide trading volume during each of the last six months of at least 250,000 shares. The Exchange represents that Index component stocks each having a worldwide monthly trading volume of at least 250,000 shares in the aggregate accounted for 89.3% of the weight of the Underlying Index in the aggregate during each month from November 2006 through April 2007. 30 Because such percentage misses the minimum required threshold by approximately 0.7%, the Shares cannot be listed and traded pursuant to NYSE Arca Equities Rule 5.2(j)(3). The Commission believes, however, that the listing and trading of the Shares, would be consistent with the Act. The Commission notes that it has previously approved exchange rules that contemplate the listing and trading of derivative securities products based on indices that were composed of stocks that did not meet certain quantitative generic listing criteria by only a slight margin. 31 27 In approving this 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). 28 15 U.S.C. 78f(b)(5). 29 17 CFR 240.19b-4(e). 30 *See* supra note 7. 31 *See* Securities Exchange Act Release Nos. 55890 (June 8, 2007), 72 FR 33264 (June 15, 2007) (NYSEArca-2007-37) (approving the listing and trading of shares of four funds of StateShares, Inc. where the Underlying Index of each fund did not meet the requirement of NYSE Arca's generic listing standards that component stocks representing at least 90% of the weight of each Underlying Index have a minimum monthly trading volume during each of the last six months of at least 250,000 shares); 55699 (May 3, 2007), 72 FR 26435 (May 9, 2007) (SR-NYSEArca-2007-27) (approving the listing and trading of shares of the iShares FTSE NAREIT Residential Index Fund where the weighting of the five highest components of the underlying index was marginally higher than that required by NYSE Arca's generic listing standards); and 52826 (November 22, 2005), 70 FR 71874 (November 30, 2005) (SR-NYSEArca-2005-67) (approving the listing and trading of shares of the iShares Dow Jones U.S. Energy Sector Index Fund and the iShares Dow Jones U.S. Telecommunications Sector Index Fund where the weightings of the most heavily weighted component stock and the five highest components of the underlying indexes, respectively, were higher than that required by NYSE Arca, Inc.'s relevant generic listing standards). *See also* Securities Exchange Act Release No. 46306 (August 2, 2002), 67 FR 51916 (August 9, 2002) (SR-NYSE-2002-28) (approving the trading pursuant to UTP of shares of Vanguard Total Stock Market—VIPERs, iShares Russell 2000 Index Funds, iShares Russell 2000 Value Index Funds and iShares Russell 2000 Growth Funds, none of which met the trading volume requirement of the generic listing criteria for NYSE). The Commission further believes that the proposal is consistent with section 11A(a)(1)(C)(iii) of the Act, 32 which sets forth Congress' finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Quotation and last-sale information for the Shares will be widely disseminated pursuant to the CTA Plan. Moreover, the Index value will be calculated and disseminated at least every 60 seconds throughout NYSE Arca's three trading sessions, and the IOPV will be calculated and disseminated every 15 seconds during the Exchange's Core Trading Session. The NAV of the Fund will be calculated and disseminated once each trading day. The Fund's Web site would include, among other things, the Fund's prospectus and SAI, the prior business day's closing NAV, a calculation of the premium or discount of the Bid/Ask Price at the time of calculation of the NAV against such NAV, the component securities of the Underlying Index, and a description of the methodology used in these computations. In sum, the Commission believes that the proposal is reasonably designed to facilitate access to and provide fair disclosure of information that could assist investors in properly valuing the Shares. 32 15 U.S.C. 78k-1(a)(1)(C)(iii). The Commission finds that the Exchange's proposed rules and procedures for trading of the Shares are consistent with the Act. The Shares will trade as equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. In support of this proposal, the Exchange has made the following representations: 1. The Exchange would utilize its existing surveillance procedures applicable to derivative products to monitor trading in the Shares. These procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules. The Exchange may obtain information via the ISG from other exchanges that are members or affiliates of the ISG. 2. The Index Provider is neither a registered broker-dealer nor is it affiliated with the Trust, the Advisor (or its affiliates), or the Distributor. 3. If the IOPV or the Index value applicable to a series of Shares is not being calculated and disseminated as required, the Exchange may halt trading during the day in which the interruption to the calculation or dissemination of the IOPV or the Index value occurs. If the interruption to the calculation and dissemination of the IOPV or the Index value persists past the trading day in which it occurred, the Exchange would halt trading no later than the beginning of the trading day following the interruption. If the Exchange becomes aware that the NAV is not disseminated to all market participants at the same time, the Exchange would halt trading in the Fund Shares. 4. Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. This order is conditioned on the Exchange's adherence to the foregoing representations. The Commission finds good cause for approving this proposal before the thirtieth day after the publication of notice thereof in the **Federal Register** . The Commission notes that it has previously approved exchange rules that contemplate the listing and trading of derivative securities products based on indices that were composed of stocks that did not meet certain generic listing criteria by similar amounts. 33 Although the Fund Shares do not meet the initial “generic” listing requirement of NYSE Arca Equities Rule 5.2(j)(3) and therefore cannot be listed pursuant to Rule 19b-4(e), the Commission believes that the Shares are substantially similar to the other ICUs trading on the Exchange and will otherwise comply with all other “generic” listing requirements under Commentary .01(a)(B) to NYSE Arca Equities Rule 5.2(j)(3). 34 The listing and trading of the Shares do not appear to present any new or significant regulatory concerns. Therefore, the Commission believes that accelerating approval of this proposal would allow the Shares to trade on the Exchange without undue delay and should generate additional competition in the market for such products. 33 *See supra* note 31. 34 *Id* . V. Conclusion *It is therefore ordered* , pursuant to section 19(b)(2) of the Act, 35 that the proposed rule change (SR-NYSEArca-2007-47), be and it hereby is, approved on an accelerated basis. 35 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 36 36 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13159 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55951; File No. SR-Phlx-2007-35] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment No. 1 Thereto Relating to Options on Commodity Pool ETFs June 25, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on April 18, 2007, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. On May 23, 2007, Phlx filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice and order to solicit comments on the proposed rule change, as amended, from interested persons and to approve the proposal on an accelerated basis. 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 Phlx proposes to amend certain rules to permit the listing and trading of options on equity interests issued by trust issued receipts (“Commodity TIRs”), partnership units, and other entities (referred herein to as “Commodity Pool ETFs”) that hold or invest in commodity futures products. The text of the proposed rule change is available on Phlx's Web site at *http://www.phlx.com,* at Phlx'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 Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Phlx has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to enable the listing and trading on the Exchange of options on interests in Commodity Pool ETFs that trade directly or indirectly commodity futures products. As a result, Commodity Pool ETFs are subject to the Commodity Exchange Act due to their status as a commodity pool, 4 and therefore, are regulated by the Commodity Futures Trading Commission (“CFTC”). 5 Commodity Pool ETFs may hold or trade in one or more types of investments that may include any combination of securities, commodity futures contracts, options on commodity futures contracts, swaps, and forward contracts. 4 A “commodity pool” is defined in CFTC Regulation 4.10(d)(1) as any investment trust, syndicate, or similar form of enterprise operated for the purpose of trading commodity interests. CFTC regulations further provide that a “commodity interest” means a commodity futures contract and any contract, agreement or transaction subject to Commission regulation under section 4c or 19 of the Act. *See* CFTC Regulation 4.10(a). 5 The manager or operator of a “commodity pool” is required to register, unless applicable exclusions apply, as a commodity pool operator (“CPO”) and commodity trading advisor (“CTA”) with the CFTC and become a member of the National Futures Association. Currently, Commentary .06 to Phlx Rule 1009 provides that securities deemed appropriate for options trading shall include shares or other securities (“Exchange-Traded Fund Shares”) that are principally traded on a national securities exchange or through the facilities of a national securities association and reported as a national market system security, and that represent an interest in a registered investment company organized as an open-end management investment company, a unit investment trust or a similar entity which holds securities constituting or otherwise based on or representing an investment in an index or portfolio of securities. The Exchange proposes to amend Commentary .06 to Rule 1009 to expand the type of options to include the listing and trading of options based on shares of Commodity Pool ETFs (the “Shares”) that may hold or invest directly or indirectly in commodity futures products, including but not limited to, commodity futures contracts, options on commodity futures contracts, swaps, and forward contracts. As part of this revision to Commentary .06 to Rule 1009, the Exchange proposes to add subsection (b)(iv) requiring for Commodity Pool ETFs that a comprehensive surveillance sharing agreement be in place with the marketplace or marketplaces with last sale reporting that represent(s) the highest volume in such commodity futures contracts and/or options on commodity futures contracts on the specified commodities or non-U.S. currency, which are utilized by the national securities exchange where the underlying Commodity Pool ETFs are listed and traded. As set forth in proposed amended Commentary .06 to Rule 1009, Commodity Pool ETFs must be traded on a national securities exchange or through the facilities of a national securities association and must be reported as a national market security. In addition, shares of Commodity Pool ETFs must meet either:
(i)The criteria and guidelines under Commentary .01 to Rule 1009; or
(ii)be available for creation or redemption each business day in cash or in kind from the commodity pool, trust, or similar entity at a price related to net asset value. In addition, the commodity pool, trust or other similar entity shall provide that shares may be created even though some or all of the securities needed to be deposited have not been received by the commodity pool, trust or other similar entity, provided the authorized creation participant has undertaken to deliver the shares as soon as possible and such undertaking has been secured by the delivery and maintenance of collateral consisting of cash or cash equivalents satisfactory to the commodity pool, trust, or other similar entity which underlies the option as described in the prospectus. New Commentary .08 to Rule 1010 defines “Partnership Units.” The definition tracks the definition that recently has been proposed by the Chicago Board Options Exchange (“CBOE”) in its proposal to list and trade Commodity Pool ETFs, and approved by the Commission. 6 The proposed definition of “Partnership Units” includes a broad universe of securities, including those of entities that invest in physical commodities. However, the current filing proposes to list and trade options only on Commodity Pool ETFs that invest in a combination of commodity derivative products, and not in physical commodities. 6 *See* SR-CBOE-2007-21, Amendment No. 1. CBOE explained in its proposed rule change that the American Stock Exchange (“Amex”) had filed a proposed rule change seeking to add “Commodity Pool ETFs” to the types of securities on which it lists equity options, and that in Section 1(a) of Amex's filing, the term “Commodity Pool ETFs” is defined to include, but is not limited to, Trust Issued Receipts, Partnership Units and other entities. *See* Securities Exchange Act Release No. 55187 (January 29, 2007), 72 FR 5467 (February 6, 2007) (Notice of Filing of Proposed Rule Change Relating to Options Based on Commodity Pool ETFs). CBOE noted that it did not have a definition of Partnership Units and was proposing to add one, as Phlx is doing now. The definition Phlx is proposing to add is the same as that proposed by CBOE. CBOE's proposal was approved in Securities Exchange Act Release No. 55630 (April 16, 2007), 72 FR 19993 (April 20, 2007). Under the applicable continued listing criteria in Commentary .08 to Phlx Rule 1010, the Shares may be subject to delisting as follows:
(1)Following the initial twelve-month period beginning upon the commencement of trading of the Shares, there are fewer than 50 record and/or beneficial holders of the Shares for 30 or more consecutive trading days;
(2)the value of the index or, pursuant to new language being added to the Commentary by this proposed rule change, the value of the non-U.S. currency, portfolio of commodities including commodity futures contracts, options on commodity futures contracts, swaps, forward contracts and/or options on physical commodities, or portfolio of securities on which the Shares are based is no longer calculated or available; or
(3)such other event occurs or condition exists that in the opinion of the Exchange makes further dealing on the Exchange inadvisable. Additionally, the Shares shall not be deemed to meet the requirements for continued approval, and the Exchange shall not open for trading any additional series of option contracts of the class covering such Shares, if the Shares are halted from trading on their primary market, or if the Shares are delisted in accordance with the terms of Phlx Rule 1010, or the value of the index or portfolio on which the Shares are based is no longer calculated or available. The Exchange further proposes to amend Phlx Rule 1022 to ensure that the specialist and Registered Options Traders handling the Shares provide the Exchange with all necessary information relating to their trading in the applicable physical commodities, physical commodity options, commodity futures contracts, options on commodity futures contracts, any other derivatives based on such commodity. In addition, the revision to Phlx Rule 1022 will prohibit a specialist or Registered Options Trader from engaging in trading activities in physical commodities, physical commodity options, commodity futures contracts, options on commodity futures contracts, any other derivatives based on such commodity from trading in an account which has not been reported to the Exchange. The Exchange also proposes to amend Commentary .02 to Rule 1022 to require Specialists and Registered Options Traders in commodity futures contracts, options on commodity futures contracts or any other derivatives based on such commodity, to make available to the Exchange such books, records or other information pertaining to transactions in the applicable physical commodity, physical commodity options, commodity futures contracts, options on commodity futures contracts, or any other derivatives on such commodity, as may be requested by the Exchange. This proposal is necessary to enable the Exchange to list and trade options on an expanding range of Commodity Pool ETFs currently approved for trading. The Exchange notes that The DB Commodity Index Tracking Fund (the “DBC Fund”), the United States Oil Fund, L.P. (the “Oil Fund”), and the PowerShares DB G10 Currency Harvest Fund (the “DBV Fund”) are listed and traded on the American Stock Exchange. The DBC Fund is a Commodity TIR and tracks the performance of the Deutsche Bank Liquid Commodity Index TM—Excess Return, while the Oil Fund is a Partnership Unit and tracks the spot price of West Texas Intermediate light, sweet crude oil delivered to Cushing, Oklahoma. The DBC Fund is a “feeder fund” that invests substantially all of its assets in the DB Commodity Index Tracking Master Fund, and the Master Fund in turn maintains a portfolio of exchange-traded futures on aluminum, gold, corn, wheat, heating oil and light, sweet crude oil. The Index is derived from the prices of those futures contracts. The Master Fund's portfolio is managed on an ongoing basis by DB Commodity Services LLC, a registered CPO and CTA, so that the value of the portfolio closely tracks the value of the Index over time. The DBV Fund is a “feeder fund” that invests substantially all of its assets in the PowerShares DB G10 Currency Harvest Master Fund, and the Master Fund in turn maintains a portfolio of exchange-traded futures on foreign currencies that comprise the G-10 countries. The Index is derived from the prices of those futures contracts. The Master Fund's portfolio is managed on an ongoing basis by DB Commodity Services LLC, a registered CPO and CTA, so that the value of the portfolio closely tracks the value of the Index over time. Unlike the DBC and DBV Funds, the Oil Fund does not invest through a master-feeder structure but rather trades directly in futures on crude and heating oil, natural gas, gasoline and other petroleum-based fuels, options on such futures contracts, forward contracts on oil and other over-the-counter derivatives based on the price of oil, other petroleum-based fuels, the futures contracts described above, and the indexes based on any of the foregoing. The Oil Fund's portfolio is managed by Victoria Bay Asset Management LLC with the aim of tracking the West Texas Intermediate light, sweet crude oil futures contract listed and traded on the New York Mercantile Exchange. The Exchange believes that it is reasonable to expect other types of Commodity Pool ETFs to be introduced for trading in the near future and also believes that the proposed amendment to the Exchange's listing criteria for options on Commodity TIRs and Partnership Units is necessary to ensure that the Exchange will be able to list options on Commodity Pool ETFs that have been recently launched as well as any other similar Commodity Pool ETFs that may be listed and traded in the future. The Exchange represents that it has an adequate surveillance program in place for options based on Commodity Pool ETFs. The Exchange may obtain trading information via the Intermarket Surveillance Group (“ISG”) from other exchanges who are members or affiliates of the ISG and expects that it will enter into numerous comprehensive surveillance sharing agreements with various commodity futures exchanges worldwide. Prior to listing and trading options on Commodity Pool ETFs, the Exchange represents that it will either have the ability to obtain specific trading information via ISG or through a comprehensive surveillance sharing agreement with the primary exchange or exchanges where the particular commodity futures and/or options on commodity futures are traded. The Exchange also added rule text relating to the prevention of misuse of material nonpublic information. Under the proposed rules, members and member organizations must establish, maintain and enforce written policies and procedures reasonably designed, taking into consideration the nature of the member's business, to prevent the misuse of material nonpublic information relating to, among other things, options on Commodity Pool ETFs. The addition of Commodity Pool ETF options will not have any effect on the rules pertaining to position and exercise limits 7 or margin. 8 7 *See* Phlx Rules 1001 and 1002. 8 *See* Phlx Rule 722. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(5) of the Act 10 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition 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 either solicited or received. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-Phlx-2007-35 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Phlx-2007-35. 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 Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2007-07 and should be submitted on or before July 30, 2007. IV. Commission Findings After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and rules and regulations thereunder applicable to a national securities exchange 11 and, in particular, the requirements of Section 6 of the Act. 12 Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 13 which requires, among other things, that the rules of a national securities exchange be designed 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. 11 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 12 15 U.S.C. 78f. 13 15 U.S.C. 78f(b)(5). Surveillance The Commission notes that the Exchange has represented that it has an adequate surveillance program in place for options based on Commodity Pool ETFs. The Exchange may obtain trading information via the ISG from other exchanges who are members or affiliates of the ISG and expects that it will enter into numerous comprehensive surveillance sharing agreements with various commodity futures exchanges worldwide. Prior to listing and trading options on Commodity Pool ETFs, the Exchange represented that it will either have the ability to obtain specific trading information via ISG or through a comprehensive surveillance sharing agreement with the primary exchange or exchanges where the particular commodity futures and/or options on commodity futures are traded. In addition, the Exchange represented that the addition of Commodity Pool ETF options will not have any effect on the rules pertaining to position and exercise limits 14 or margin. 15 14 *See* Phlx Rules 1001 and 1002. 15 *See* Phlx Rule 722. Listing and Trading of Options on Commodity Pool ETFs The Commission notes that, pursuant to the proposed rule change, a Commodity Pool ETF will be subject to the provisions of Exchange Rules 1009 and 1010. These provisions include requirements regarding initial and continued listing standards, as well as the creation/redemption process for Commodity Pool ETFs. All Commodity Pool ETFs must be traded through a national securities exchange or through the facilities of a national securities association and reported as a national market system security. The Commission believes that this proposal is necessary to enable the Exchange to list and trade options on an expanding range of Commodity Pool ETFs currently approved for trading and that it is reasonable to expect other types of Commodity Pool ETFs to be introduced for trading in the future. This proposal would help ensure that the Exchange will be able to list options on Commodity Pool ETFs that have been recently launched, as well as any other similar Commodity Pool ETFs that may be listed and traded in the future thereby offering investors greater option choices. Acceleration The Commission finds good cause, pursuant to Section 19(b)(2) of the Act, 16 for approving the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice in the **Federal Register** . The Commission notes that the proposal is consistent with previously approved proposals to enable the listing and trading of options on interests in Commodity Pool ETFs that trade directly or indirectly commodity futures products. 17 Therefore, the Commission does not believe that the proposed rule change, as amended, raises novel regulatory issues. Consequently, the Commission believes that it is appropriate to permit investors to benefit from the flexibility afforded by trading these products without delay. 16 15 U.S.C. 78s(b)(2). 17 *See* Securities Exchange Act Release Nos. 55547 (March 28, 2007), 72 FR 16388 (April 4, 2007) (SR-Amex-2006-110); 55630 (April 13, 2007), 72 FR 19993 (April 20, 2007) (SR-CBOE-2007-21); and 55635 (April 16, 2007), 72 FR 19999 (April 20, 2007) (SR-ISE-2007-16). V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR-Phlx-2007-35), as amended, is hereby approved on an accelerated basis. 18 18 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 19 Florence E. Harmon, Deputy Secretary. 19 17 CFR 200.30-3(a)(12). [FR Doc. E7-13155 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55993; File No. SR-Phlx-2007-44] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Make Permanent a Pilot Program Relating to Split Price Priority in Open Outcry June 29, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 2 thereunder, notice is hereby given that on June 21, 2007, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Phlx. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) 4 thereunder, which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to adopt, on a permanent basis, a rule that is currently subject to a pilot program (“pilot”) as set forth in Rule 1014(g)(i)(B) relating to priority on split-price transactions in open outcry. The pilot currently affords priority to a member with an order for at least 100 contracts 5 who buys (sells) at least 50 contracts at a particular price to have priority over all others in purchasing (selling) up to an equivalent number of contracts of the same order at the next lower (higher) price without being required to yield priority, including to existing customer interest in the limit order book. The pilot also establishes priority for in-crowd participants in split price transactions represented in open outcry over the quotations of participants that are not located in the crowd ( *i.e.* , out-of-crowd Streaming Quote Traders (“SQTs”) 6 and Remote Streaming Quote Traders (“RSQTs”) 7 ) even where the market has a bid/ask differential of one minimum trading increment. 8 The current pilot is scheduled to expire June 30, 2007. 5 Orders for a size of less than 100 contracts are not affected by the current pilot and would not be affected by this proposed rule change. 6 An SQT is an Exchange Registered Options Trader (“ROT”) who has received permission from the Exchange to generate and submit option quotations electronically through AUTOM in eligible options to which such SQT is assigned. (AUTOM is Phlx's Automated Options Market.) An SQT may only submit such quotations while such SQT is physically present on the floor of the Exchange. *See* Phlx Rule 1014(b)(ii)(A). 7 An RSQT is an ROT that is a member or member organization with no physical trading floor presence who has received permission from the Exchange to generate and submit option quotations electronically through AUTOM in eligible options to which such RSQT has been assigned. An RSQT may only submit such quotations electronically from off the floor of the Exchange. *See* Phlx Rule 1014(b)(ii)(B). 8 Generally, all options on stocks, indexes, and exchange traded funds quoting in decimals at $3.00 or higher have a minimum increment of $.10, and those quoting in decimals under $3.00 have a minimum increment of $.05. *See* Phlx Rule 1034(a). The text of the proposed rule change is available on the Phlx Web site ( *http://www.phlx.com* ), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Phlx included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Phlx has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to establish, on a permanent basis, Exchange Rule 1014(g)(i)(C), concerning priority in split-price transactions, which by virtue of their size and the need to execute them at multiple prices, may be difficult to execute without a limited exception to current Exchange priority rules, as described below. The pilot is scheduled to expire June 30, 2007. The pilot was originally adopted in June 2005, 9 and subsequently extended in December 2005. 10 In May 2006, the pilot was expanded to include priority for in-crowd participants in both trades of the split price transaction where there is a minimum trading increment market, but only over RSQTs and out-of-crowd SQTs in that circumstance. 11 Such priority applies only when the bid and/or offer, as applicable, represent the quotation of an out-of-crowd SQT or RSQT. 9 *See* Securities Exchange Act Release No. 51820 (June 10, 2005), 70 FR 35759 (June 21, 2005) (SR-Phlx-2005-28). 10 *See* Securities Exchange Act Release No. 53021 (December 23, 2005), 70 FR 77435 (December 30, 2005) (SR-Phlx-2005-86). 11 *See* Securities Exchange Act Release No. 53874 (May 25, 2006), 71 FR 32171 (June 2, 2006) (SR-Phlx-2006-18). The current rule is applicable to equity options (including options overlying Exchange Traded Fund Shares (“ETFs”)). 12 The rule operates in two ways. First, it permits a member with an order for at least 100 contracts 13 who buys (sells) at least 50 contracts at a particular price to have priority over all others in purchasing (selling) up to an equivalent number of contracts of the same order at the next lower (higher) price without being required to yield priority, including to existing customer interest in the limit order book. Absent this rule, such orders would be required to yield priority. 14 12 In a separate filing, the Exchange has requested approval of an amendment that would standardize the rule such that it would apply equally to options on equities, ETFs and index options. See SR-Phlx-2007-27. 13 Orders for a size of less than 100 contracts are not affected by the current pilot and would not be affected by this proposed rule change. 14 *See e.g.* Phlx Rule 119(a). For example, where the market is $.25—$.35, a Floor Broker representing an order to purchase 100 contracts that executes a purchase of 50 of those contracts at a price of $.30 has priority over all market participants to purchase the remaining 50 contracts in the order at $.25. Two trades would be reported to the tape, one a purchase of 50 contracts at $.30, and the other a purchase of 50 contracts at $.25. The effect to that Floor Broker's customer would be a net purchase price of $.275 for 100 contracts. Second, as stated above, the rule contemplates that a member who purchases (sells) 50 or more option contracts of a particular series at a particular price or prices has priority at the next lower (higher) price in purchasing (selling) up to the equivalent number of option contracts of the same series that he purchased
(sold)at the higher (lower) price or prices. The pilot, respecting split price transactions, also affords priority to members physically located in the crowd even where the market has a bid/ask differential of one minimum trading increment. The Exchange believes that this provision should enable it to compete for order flow in situations where Floor Brokers seek split price executions in open outcry when the market consists of RSQT quotations and/or SQT quotations where the SQT is located out of that trading crowd with a bid/ask differential of one minimum trading increment, and the bid and/or offer represent quotations of members physically located out of the crowd. For example, assume a Floor Broker represents an order to purchase 100 contracts in a series where the market is $.25 bid, $.30 offer, and both the bid and offer represent quotations submitted by out-of-crowd SQTs 15 or RSQTs. Under the proposal, the Floor Broker and the contra-side participant in the trading crowd would be afforded priority over the out-of-crowd SQT or RSQT at both $.25 and $.30, because the bid/ask differential is one minimum trading increment ($.05). This would enable the Floor Broker to execute a split-price order at a net price ($.275) that improves the market. The effect (and ultimate benefit) to that Floor Broker's customer would be a net purchase price of $.275 for 100 contracts. This provision only applies regarding quotations submitted by out-of-crowd SQTs and RSQTs, and thus would not operate to afford priority over, for example, customer or broker-dealer orders or in-crowd SQT quotes. 15 The specialist and/or SQTs participating in a trading crowd may, in response to a verbal request for a market by a floor broker, state a bid or offer that is different than their electronically submitted bid or offer, provided that such stated bid or offer is not inferior to such electronically submitted bid or offer. *See* Phlx Rule 1014, Commentary .05(c). The Exchange believes that, in situations where the market has a bid/ask differential of one minimum trading increment, it is potentially difficult for the Floor Broker to achieve price improvement for the Floor Broker's customer on the Phlx. Instead, the order might trade at another exchange that has no impediments, *i.e.* , rules that afford priority to in-crowd participants over out-of-crowd participants generally, regardless of split price priority. The Exchange is seeking permanent approval of the pilot in order to ensure continuity of the rule and to eliminate the need for continued pilot extensions. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 16 in general, and furthers the objectives of Section 6(b)(5) of the Act 17 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest, enabling Floor Brokers representing split price orders in open outcry to provide split-price executions at improved prices on behalf of customers by establishing a limited priority rule regarding split-price transactions. 16 15 U.S.C. 78f(b). 17 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 either solicited or 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)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, 18 and Rule 19b-4(f)(6) thereunder. 19 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. 18 15 U.S.C. 78s(b)(3)(A). 19 17 CFR 240.19b-4(f)(6). A proposed rule change filed under Rule 19b-4(f)(6) 20 normally does not become operative prior to 30 days after the date of filing. However, pursuant to Rule 19b-4(f)(6)(iii), 21 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day pre-operative delay. The Commission believes that implementing the pilot program on a permanent basis does not present any new issues, and waiving the 30-day pre-operative delay is consistent with the protection of investors and the public interest because it will allow the Exchange's split-price priority rule in its present form to remain in effect without interruption. For these reasons, the Commission designates the proposed rule change to be effective upon filing with the Commission. 22 20 17 CFR 240.19b-4(f)(6). 21 17 CFR 240.19b-4(f)(6)(iii). 22 For purposes only of accelerating the operative date of this proposal, the Commission has considered the rule's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 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-Phlx-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-Phlx-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 the filing also will be available for inspection and copying at the principal office of the Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2007-44 and should be submitted on or before July 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 23 23 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-13157 Filed 7-6-07; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION Interest Rates The Small Business Administration publishes an interest rate called the optional “peg” rate (13 CFR 120.214) on a quarterly basis. This rate is a weighted average cost of money to the government for maturities similar to the average SBA direct loan. This rate may be used as a base rate for guaranteed fluctuating interest rate SBA loans. This rate will be 4.875 (4 7/8 ) percent for the July-September quarter of FY 2007. Grady B. Hedgespeth, Director, Office of Financial Assistance. [FR Doc. E7-13150 Filed 7-6-07; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF STATE [Public Notice 5862] U.S. Advisory Commission for Public Diplomacy *Renewal of Advisory Commission.* The Department of State has renewed the Charter of the U.S. Advisory Commission for Public Diplomacy. The Advisory Commission was originally established under Section 604 of the United States Information and Exchange Act of 1948, as amended (22 U.S.C. 1469) and Section 8 of Reorganization Plan Numbered 2 of 1977. It was reauthorized pursuant to Public Law 110-21 (2007). The Commission is a bipartisan panel appointed by the President and created by Congress in 1948 to assess public diplomacy policies and programs of the U.S. government and publicly funded nongovernmental organizations. It submits reports to the Congress, the President, and the Secretary of State to develop a better understanding of and support for public diplomacy programs and activities. For further information, please call the Commission at 202-203-7883. Dated: June 28, 2007. Carl Chan, Interim Executive Director, ACPD, Department of State. [FR Doc. E7-13214 Filed 7-6-07; 8:45 am] BILLING CODE 4710-11-P DEPARTMENT OF STATE [Public Notice 5863] U.S. Advisory Commission on Public Diplomacy; Notice of Meeting The U.S. Advisory Commission on Public Diplomacy will hold a public meeting on July 27, 2007, at the Meridian International Center at 1630 Crescent Place, NW., Washington, DC 20009. The meeting will be held from 9 to 11 a.m. The Commissioners will discuss public diplomacy issues, including those related to Foreign Service personnel recruitment and career development and advancement. The Advisory Commission was originally established under Section 604 of the United States Information and Exchange Act of 1948, as amended (22 U.S.C. 1469) and Section 8 of Reorganization Plan Numbered 2 of 1977. It was reauthorized pursuant to Public Law 110-21 (2007). The Commission is a bipartisan panel created by Congress in 1948 to assess public diplomacy policies and programs of the U.S. government and publicly funded nongovernmental organizations. The Commission reports its findings and recommendations to the President, the Congress and the Secretary of State and the American people. Current Commission members include Barbara M. Barrett of Arizona, who is the Chairman; Harold Pachios of Maine; Ambassador Penne Percy Korth of Washington, DC.; Ambassador Elizabeth Bagley of Washington, DC.; Jay T. Snyder of New York; and Maria Sophia Aguirre of Washington, DC. To attend the meeting and for more information, please contact Carl Chan at
(202)203-7883. Dated: June 28, 2007. Carl Chan, Interim Executive Director, ACPD Department of State. [FR Doc. E7-13213 Filed 7-6-07; 8:45 am] BILLING CODE 4710-11-P DEPARTMENT OF STATE [Public Notice 5865] Notice of Receipt of Application for a Presidential Permit to Construct a New Cattle Crossing to the East of an Existing Cattle Crossing Near San Luis, AZ AGENCY: Department of State. ACTION: Notice. SUMMARY: Notice is hereby given that the Department of State has received an application for a Presidential permit authorizing the construction of a new cattle crossing (the “San Luis Cattle Crossing”) at the United States-Mexican border 2,500 feet (approximately half a mile) east of an existing cattle crossing near San Luis, Arizona. The closing of the existing cattle crossing and its relocation to a new location approximately half a mile to the east is necessitated by construction of the new San Luis II commercial border crossing (scheduled to begin in the summer of 2007) at the location of the existing cattle crossing. This application has been filed by the Greater Yuma Port Authority (GYPA), the original applicant for the San Luis II commercial border crossing project. A Presidential permit for the San Luis II commercial border crossing was issued by the Department of State, effective June 30, 2007, to the General Services Administration (GSA). The Department of State has determined that, under Executive Order 11423, as amended, a separate Presidential permit is required for the San Luis cattle crossing since it would constitute a new piercing of the border. The Department of State's jurisdiction with respect to this application is based upon Executive Order 11423, dated August 16, 1968, as amended, which authorizes the Secretary of State to receive all applications for permits for the construction, connection, operation or maintenance at the borders of the United States of “border crossings for land transportation * * * to or from a foreign country” whether or not in conjunction with “facilities for the transportation of persons or things, or both, to or from a foreign country.” According to the application, the relocation of the existing San Luis cattle crossing would primarily involve the dismantling of the existing cattle pens (most of which are on the Mexican side of the border) and their construction or reassembly at the new site. The Department is in possession of an Environmental Assessment
(EA)prepared in connection with the Department's evaluation of the Presidential permit application for the San Luis II commercial border crossing and intends to also use that EA in connection with its evaluation of the San Luis cattle crossing. The Department has determined, however, that this EA does not adequately address the issues of the odor and manure that would be generated at the proposed new cattle crossing site, as well as the issue of water and sewage services at the new cattle crossing site. In light of that determination, the GYPA has submitted to the Department of State an EA addendum that specifically addresses these environmental concerns. As provided in E.O. 11423, the Department is circulating the GYPA application, along with the EA and the EA Addendum, to concerned agencies for comment. DATES: Interested parties are invited to submit written comments relative to this application on or before July 27, 2007 to Daniel D. Darrach, Coordinator, U.S.-Mexico Border Affairs, WHA/MEX, HST Room 4258, Department of State, 2201 C St., NW., Washington, DC 20520. FOR FURTHER INFORMATION CONTACT: Daniel D. Darrach, Coordinator, U.S.-Mexico Border Affairs, WHA/MEX, HST Room 4258, Department of State, 2201 C St., NW., Washington, DC 20520. Telephone:
(202)647-8529, fax:
(202)647-5752. SUPPLEMENTARY INFORMATION: The application and related documents that are a part of the record to be considered by the Department of State in connection with this application are available for review in the Office of Mexican Affairs, Border Affairs Unit, Department of State, during normal business hours throughout the comment period. Any questions related to this notice may be addressed to Mr. Darrach using the contact information above. Dated: June 29, 2007. Richard M. Sanders, Acting Director, Office of Mexican Affairs, Department of State. [FR Doc. E7-13212 Filed 7-6-07; 8:45 am] BILLING CODE 4710-29-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Intent To Request Approval From the Office of Management and Budget of a New Information Collection Activity, Request for Comments; 2008 Newly Certificated Airframe and/or Powerplant Mechanics: Assessment of the Mechanic's Practical Test Program AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice and request for comments. SUMMARY: The FAA invites public comments about our intention to request the Office of Management and Budget
(OMB)to approve a new information collection. This project involves collecting data from individual applicants who have recently taken, for the first time, and passed an oral and/or practical Airframe and/or Powerplant (A and/or P) Mechanic Certification test. DATES: Please submit comments by September 7, 2007. FOR FURTHER INFORMATION CONTACT: Carla Mauney on
(202)267-9895, or by e-mail at: *Carla.Mauney@faa.gov.* SUPPLEMENTARY INFORMATION: Federal Aviation Administration
(FAA)*Title:* 2008 Newly Certificated Airframe and/or Powerplant Mechanics: Assessment of the Mechanic's Practical Test Program. *Type of Request:* New collection. *OMB Control Number:* 2121-XXXX. *Form(s):* There are no FAA forms associated with this collection. *Affected Public:* A total of 2,200 Respondents. *Frequency:* The information is collected on occasion. *Estimated Average Burden per Response:* Approximately 1 hour per response. *Estimated Annual Burden Hours:* An estimated 2,200 hours annually. *Abstract:* This project involves collecting data from individual applicants who have recently taken, for the first time, and passed an oral and/or practical Airframe and/or Powerplant (A and/or P) Mechanic Certification test. The goal of this effort is “to reduce the number of fatal accidents in general aviation” by identifying areas of concern so that the FAA may affect corrections in FAA policy, guidance material, and FAA-sponsored programs in order to improve the overall quality of the designated mechanic examiner oral and/or practical test program. ADDRESSES: Send comments to the FAA at the following address: Ms. Carla Mauney, Room 712, Federal Aviation Administration, IT Enterprises Business Services Division, AES-200, 800 Independence Avenue, SW., Washington, DC 20591. *Comments Are Invited on:* Whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; the accuracy of the Department's estimates of the burden of the proposed information collection; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology. Issued in Washington, DC, on July 3, 2007. Carla Mauney, FAA Information Collection Clearance Officer, IT Enterprises Business Services Division, AES-200. [FR Doc. 07-3314 Filed 7-6-07; 8:45 am]
Connectionstraces to 19
Traces to 19 documents
11 references not yet in our index
  • 17 CFR 240.6
  • 17 CFR 240.19
  • 17 USC 78a
  • Pub. L. 94-409
  • 15 USC 78(f)(b)(5)
  • 17 CFR 19
  • 17 CFR 200.30(a)(12)
  • 15 USC 78
  • 15 USC 80b
  • 17 CFR 240.10
  • Pub. L. 110-21
Citation graph
cites case law
Notices
Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 15(a) of the Act and rule 18f-2 under the Act, as well as from certain disclosure requirements
U.S.C.§ 3501
C.F.R.§ 249.312
U.S.C.§ 78a
U.S.C.§ 552b
C.F.R.§ 200.402
C.F.R.§ 210.2-01
U.S.C.§ 552
U.S.C.§ 78s
C.F.R.§ 200.30-3
Cite17 CFR 240.6
Cite17 CFR 240.19
Cite17 USC 78a
Cites 30 · showing 12Cited by 0 across 0 sources
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