Notices. 30-Day Notice of Information Collection Under Review: Form SF-15, Application for 10-Point Veteran Preference; OMB Control Number 3206-0001
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BILLING CODE 7590-01-P OFFICE OF PERSONNEL MANAGEMENT Submission for OMB Review; Comment Request for a Revised Information Collection: SF-15 Application for 10-Point Veteran Preference AGENCY: Office of Personnel Management. ACTION: 30-Day Notice of Information Collection Under Review: Form SF-15, Application for 10-Point Veteran Preference; OMB Control Number 3206-0001. SUMMARY: The Office of Personnel Management
(OPM)has submitted the following information collection request to the Office of Management and Budget
(OMB)for review and clearance in accordance with the Paperwork Reduction Act of 1995 (PRA). The information collection was previously published in the **Federal Register** Volume 72, Number 17, page 3880 on January 26, 2007, allowing for a 60 day comment period on the Standard Form 15 (SF-15) Application for 10-Point Veteran Preference. The purpose of this Notice is to allow for an additional 30 days for public comments. This process is in accordance with 5 CFR 1320.10. The SF-15 is used by agencies, OPM examining offices, and agency appointing officials to adjudicate individuals' claims for veterans' preference in accordance with the Veterans' Preference Act of 1944. Approximately 11,252 forms were completed last year. Each form requires approximately 10 minutes to complete. The annual estimated burden is 1,875 hours. In the 60-Day Notice published January 26, 2007, OPM announced our request for clearance for the SF-15 and invited public comments. OPM received 14 comments by the closing date on March 27, 2007. A discussion of the comments is provided below. One commenter asked why we were reviewing the SF-15. The purpose of reviewing the SF-15 is to seek public comment concerning whether the content and questions still serve their intended purposes. Primarily, we are reviewing the form to see whether the form should be simplified. One commenter asked OPM to maintain the SF-15 in its current form without changes because the instructions are simple. We will consider this comment, but we will also review all other collected comments and accept proposed changes that we conclude will improve the form. We received comments from three individuals and two veteran service organizations
(VSOs)recommending that OPM continue to use the form. Another commenter asked whether this review process was intended to remove 10-point veterans' preference for disabled veterans seeking Federal employment. OPM is not removing the SF-15 form from use. The SF-15 is a useful information collection instrument that enables disabled veterans and those seeking entitlement for derived preference (e.g., spouses, widows, and mothers) to select the particular type of preference depending on their individual circumstances. Agencies use the information on the form to adjudicate claims for veterans' preference, in part by identifying the basis on which each individual is claiming entitlement to preference (e.g., ten-point (non-compensable disability); ten-point (compensable disability); ten-point (spouse); ten-point (widow or widower); ten-point (mother, deceased veteran); and ten-point (mother, disabled veteran). One commenter noted that the SF-15 is dated December 2004 and has no expiration date and questioned why we were seeking re-clearance. Under the PRA, OMB requires continuing approval for the use of any information collection (e.g., forms, surveys). OPM submits a periodic request (every three years) for approval by OMB to continue the use of the SF-15 form. The Notice informs the public, as required by law, that we are reviewing the form and will consider any questions and comments regarding its content and use. One commenter asked why VSO liaison members who regularly meet with OPM were not notified in advance of this Notice. Another individual suggested that the Department of Veterans Affairs
(DVA)should be queried for their input in reviewing the form. The purpose of publishing revisions in advance and establishing a comment period is to provide interested parties with an opportunity to comment on proposed revisions. We welcome comments from VSOs, the DVA, and any other individual or organization that wishes to comment. Pursuant to this notice, we are now providing an additional 30 days for interested parties to comment. One VSO submitted a consolidated listing of questions and recommendations from its constituents, addressing the content and design of the SF-15 form. Their first question was whether the full social security number
(SSN)was needed on the form and if so, could it be masked to protect an individual from identity theft. We agree protection of applicants' SSNs is important and have removed those blocks on the SF-15 that specifically ask for the SSN. Another individual asked who processes the SF-15 after an individual completes it. Once the SF-15 is completed by the applicant, the applicant sends the SF-15 to the agency to which the individual is applying. One commenter wanted to know who signs the SF-15 at the bottom of the form in the block: Signature of Appointing Officer. This block is signed by the Federal agency's designated Appointing Officer if the applicant is selected for employment. One commenter questioned the use of the term “burden” as used in the Notice. Americans spend incalculable hours each year providing information to Federal agencies by filling out forms, surveys, and or questionnaires. A major aim of the PRA is to minimize the “burden”—a term used in the law—which the information collection imposes on the public. Under the PRA, OMB must approve all such information collections and has broad authority over annual Governmentwide paperwork reduction goals established by law. Generally, when a Federal agency seeks to collect information from ten or more people, OMB must approve the collection. Information collections that fall under OMB's purview include application forms, questionnaires, surveys, and reporting or recordkeeping requirements. The total “annual burden hours” and “annual burden dollars” for each such form are tracked by OMB and monitored by Congress. Another commenter wanted to know whether the SF-15 is used to collect data for statistical or census purposes. The information on the SF-15 form is used for identifying the individual's claim to the type of veterans' preference entitlement on the form. OPM uses data from the SF-15 to identify the number of persons employed and entitled to the various types of veterans' preference. One commenter asked if there is a general clearinghouse to maintain all the SF-15's so veterans do not have to keep filling out the form each time they apply for a Federal job. OPM does not maintain a clearinghouse on all SF-15's. Agencies may do this as a part of their applicant supply files, but are not required to do so. Agencies are required to keep all hiring records for two years but are not required to match an SF-15 already on file with a new application. One group of veterans collectively submitted their recommendations to revise the content on the SF-15 form. These recommendations are as follows: Page 1 of the Standard Form 15, Block 2: delete three (e.g., civil service exam, postal exam, and position you currently occupy) of the four areas and use the block only for the job announcement number. We have considered this recommendation and do not concur. Block 2 has multiple uses that are still valid today (e.g., identifying an exam that was recently taken or notifying an agency that a current employee is changing his or her entitlement to veterans' preference based on a call-up for military service that resulted in a service-connected disability). Removing the three areas (e.g., civil service exam, postal exam, and position you currently occupy) would limit the form to only those applying for specific job announcements. Block 5: drop the “Date exam was held” and use the block only for the “Date the application was submitted” to the agency. We do not concur with the recommendation. As long as we are retaining a reference to an exam in Block 2, we should retain a reference to an exam here as well. The applicant can select his or her choice in Block 5 and provide the date as applicable. Blocks 4 (SSN), 7 (Service Number), 8 (SSN), and 9 (VA Claim Number) are asking the applicant to provide potentially the same information and the group recommended consolidating these four blocks. We have considered the recommendation and find Blocks 7 and 9 should remain on the form. We have removed Blocks 4 and 8 that asked for an SSN and have renumbered all applicable blocks on the SF-15. The group recommended that OPM be cognizant of visually impaired disabled veterans and increase the size of text on the form. We concur and will increase the smaller size font used on the SF-15. We wish to remind readers that a fillable version of the updated form will be available on the OPM Web site ( *http://www.opm.gov/forms/pdf_fill/SF15.pdf* ). Anyone completing this version of the form can adjust the font size as needed. The group recommended using one line for stating the full title of the form (Application for 10-Point Veterans Preference) instead of the title being separated into two lines. We agree. We have changed the title of the form to be on one line. One suggestion was that OPM replace Block 10 with Block 11, because many of the veterans currently filling out this form are rated by VA as 30% or higher disabled and this being the first block would provide a more user-friendly format for efficiency and effectiveness purposes. We have considered this recommendation, but decided not to change the order in which these blocks appear. The flow of information on the form begins in Block 10 (now renumbered as Block 8), with those veterans entitled to veterans' preference based on non-compensable service-connected disabilities of less than 10% followed by Block 11 (now Block 9), used by those veterans who are in receipt of or eligible for compensation based on service-connected disabilities rated as 10% or more. The group recommended adding “at 30% or greater” in Block 11 after “compensation from the VA” We agree that adding a percentage to this sentence assists veterans to understand that Block 11 is for those receiving compensation. As compensation is provided to those service men and women rated as 10% or more disabled as a result of service-connected injuries, we have added “of 10% or more” to what is now Block 9. The group recommended adding “dashes and arrows” to Blocks 12, 13, and 14 to connect the narrative with the questions, similar to what was done in Blocks 10 and 11. We disagree, as adding dashes and arrows to Blocks 12, 13, and 14 would clutter this area of the document potentially making it harder for the applicant to read in completing this form. The group recommended moving the statement “This form must be signed by all persons claiming 10-Point preference,” which appears at the lower right side of the form, and placing it directly under the statement “I certify that all of the statements made in this claim * * *” block on the lower left side of the page. We agree and revised the form accordingly. The group also recommended moving the block containing the statement “Preference entitlement was verified” to the space where the block containing the statement “This form must be signed by all persons claiming 10-Point preference” was previously located. We agree and the SF-15 shows we have changed the form. The group recommended moving the “For Use by Appointing Officer only” and placing this under the “Preference entitlement was verified” block. We agree and the SF-15 shows we have changed the form. The group recommended increasing the font size of “Signature of person claiming preference.” We agree and have changed both signature blocks on the form. One commenter asked why page 2 contains questions 1 and 2 when that information is already provided in the applicant's resume. The SF-15 is a summarized document that readily assists both the veteran and the agency in reviewing the correct documents for adjudicating veterans' preference. By asking these two questions on the form, the agency saves time and effort in not having to research the resume or application in finding this information. One commenter questioned why we are requiring the information requested in Block 3 and Block 4 at the bottom of page 2. The primary reason for asking these two questions is to enable the agency to identify the employability of the disabled veteran and entitlement of the spouse to receive derived preference. If a disabled veteran is disqualified for a Federal position along the general lines of his or her usual occupation because of a service-connected disability, and if the spouse of the disabled veteran has competed for a Federal position, then the spouse is entitled to have ten points added to a passing examination score or rating. Such a disqualification may be presumed when the veteran is unemployed and is rated by the appropriate military or Department of Veterans Affairs authority to be 100 percent disabled and/or unemployable; has retired, been separated, or resigned from a civil service position on the basis of a disability that is service-connected in origin; or has attempted to obtain a civil service position or other position along the lines of his or her usual occupation and has failed to qualify because of a service-connected disability. These two questions identify these occupations and further assist the agency in adjudicating the claim to the particular veterans' preference sought. One commenter recommended shifting the “Privacy Act statement” from the bottom of Page 1 to the bottom of Page 2. We have considered this recommendation and find that the Privacy Act and Public Burden Statement is best located on the front page with the majority of information collected. For copies of this proposal, contact Mary Beth Smith-Toomey on
(202)606-8358, Fax
(202)418-3251 or e-mail to *mbtoomey@opm.gov* . Please include a mailing address with your request. DATES: Comments on this proposal should be received within 30 calendar days from the date of this publication August 7, 2007. ADDRESSES: Written comments and or suggestions regarding this notice should be directed to: Karen Jacobs, Acting Deputy Associate Director, Center for Talent and Capacity, U.S. Office of Personnel Management, 1900 E Street, NW., Room 6551, Washington, DC 20415; and Brenda Aguilar, OPM Desk Officer, Office of Information & Regulatory Affairs, Office of Management & Budget, New Executive Office Building NW., Room 10235, Washington, DC 20503. For Administrative Coordination Contact: Scott A. Wilander by telephone at
(202)606-0960; by fax at
(202)606-0390; TTY at
(202)606-3134; or by e-mail at *scott.wilander@opm.gov* . Office of Personnel Management, Tricia Hollis, Chief of Staff & Director of External Affairs. [FR Doc. E7-15164 Filed 8-6-07; 8:45 am] BILLING CODE 6325-39-P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 27920; 812-12973] Lehman Brothers Asset Management, LLC., et al.; Notice of Application August 1, 2007. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of application under sections 6(c) and 17(b) of the Investment Company Act of 1940 (the “Act”) for an exemption from section 17(a). APPLICANTS: Lehman Brothers Asset Management LLC (“LBAM”), Neuberger Berman Management, Inc. (“NBMI”), any other existing or future investment adviser registered under the Investment Advisers Act of 1940 (the “Advisers Act”) which controls, is controlled by, or is under common control (as defined in section 2(a)(9) of the Act) with, LBH (as defined below) (individually, a “Future Adviser” and collectively, the “Future Advisers”), 1 Merrimac Master Portfolio (“Merrimac”), Institutional Liquidity Trust (the “Master Trust”), Lehman Brothers Institutional Liquidity Funds (“LB Institutional Liquidity Funds”), Lehman Brothers Institutional Liquidity Cash Management Funds (“LB Institutional Cash Management Funds”), Lehman Brothers Reserve Liquidity Funds (“LB Reserve Funds”), Neuberger Berman Institutional Liquidity Series (“NB Liquidity Funds”), Lehman Brothers Income Funds (“LB Income Funds”), 2 any existing or future registered money market funds that are advised or subadvised by an Adviser, 3 Lehman Brothers, Inc. (“LBI”), and Lehman Commercial Paper, Inc. (“LCP”), (LBI and LCP collectively are referred to as the “Dealer” or “Lehman Brothers”). 1 LBAM, NBMI, and the Future Advisers are referred to individually in this notice as an “Adviser” and collectively as the “Advisers.” Any Adviser that currently intends to rely on the requested order is named as an applicant in the application. Any other Adviser that relies on the order in the future will comply with the terms and conditions of the application. 2 LB Income Funds offers six series that operate as money market funds subject to rule 2a-7 under the Act: Neuberger Berman Cash Reserves, Neuberger Berman Government Money Fund, Lehman Brothers Municipal Money Fund, Lehman Brothers New York Municipal Money Fund, Lehman Brothers National Municipal Money Fund, and Lehman Brothers Tax-Free Money Fund (collectively, the “LB Income Money Market Series”). The Master Trust, LB Institutional Liquidity Funds, LB Institutional Cash Management Funds, LB Reserve Funds, NB Liquidity Funds, and the LB Income Money Market Series are collectively referred to as the “LB Money Market Funds.” 3 All such investment companies and series, including Merrimac and the LB Money Market Funds and their series, are referred to individually in this notice as a “Money Market Portfolio” and collectively as the “Money Market Portfolios.” The requested relief will not extend to any investment company advised or sub-advised by LBI (as defined below). Any Money Market Portfolios not existing as of the date of the application are referred to in this notice individually as a “Future Money Market Portfolio” and collectively as the “Future Money Market Portfolios.” Any Money Market Portfolio that currently intends to rely on the requested order is named as an applicant in the application. Any other Money Market Portfolio that relies on the order in the future will comply with the terms and conditions of the application. SUMMARY OF APPLICATION: Applicants request an order to permit the Money Market Portfolios to engage in certain principal transactions with Lehman Brothers. FILING DATES: The application was filed on May 12, 2003, and amended on January 2, 2004, and February 12, 2007. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice. 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 August 27, 2007, and should be accompanied by proof of service on the 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 may request notification of a hearing by writing to the Commission's Secretary. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. *Applicants:* LBAM, 190 South LaSalle Street, Chicago, IL 60603; NBMI, the Master Trust, LB Institutional Liquidity Funds, LB Institutional Cash Management Funds, LB Reserve Funds, NB Liquidity Funds, and LB Income Funds, 605 Third Avenue, New York, NY 10158-3698; Merrimac, 200 Clarendon Street, Boston, MA 02117; LBI and LCP, 399 Park Avenue, New York, NY 10022. FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior Counsel, at
(202)551-6879, or Mary Kay Frech, Branch Chief, 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 from the Commission's Public Reference Branch, 100 F Street, NE., Washington, DC 20549-0102 (tel. 202-551-8090). Applicants' Representations 1. Merrimac, a New York common law trust, is an open-end management investment company registered under the Act. The Master Trust, a Delaware statutory trust, is an open-end management investment company registered under the Act. LB Institutional Liquidity Funds, a Delaware statutory trust, is an open-end management investment company registered under the Act. LB Institutional Cash Management Funds and LB Reserve Funds are both Delaware statutory trusts that are open-end management investment companies registered under the Act. NB Liquidity Funds and LB Income Funds are both Delaware statutory trusts that are open-end management investment companies registered under the Act. Each Money Market Portfolio invests all of its assets in various types of taxable money market instruments and repurchase agreements (collectively, “Money Market Instruments”) and is subject to rule 2a-7 under the Act. 2. LBAM is a Delaware corporation and wholly-owned subsidiary of Lehman Brothers Holdings Inc (“LBH”). NBMI is a New York corporation and a wholly-owned subsidiary of Neuberger Berman, Inc. (“NBI”). LBAM and NBMI are each registered as an investment adviser under the Advisers Act. LB Money Market Funds have entered into investment advisory agreements with NBMI under which NBMI will provide investment advisory and management services. NBMI, in turn, has entered into sub-investment advisory agreements with LBAM under which LBAM will provide day to day investment management services to the LB Money Market Funds. LBAM has also entered into a sub-investment advisory agreement with Investors Bank and Trust Company (“IBT”) under which LBAM will provide investment advisory and management services to Merrimac. NBMI is the investment adviser and administrator to, and principal underwriter of, the LB Money Market Funds. 3. LBI is a wholly-owned subsidiary of LBH and is registered as a broker-dealer under the Securities Exchange Act of 1934 (the “1934 Act”). LBI, a primary dealer in U.S. Government securities, currently is one of the largest dealers in commercial paper, repurchase agreements and other Money Market Instruments in the United States. LCP is a Delaware corporation and wholly- owned subsidiary of LBI. LCP trades exempt securities, as defined in section 3(a)(12) of the 1934 Act, and other instruments, including Money Market Instruments, and is a certified dealer in the State of Utah. 4. Applicants state that the Dealer and each of the Advisers are functionally independent of each other and operate as completely separate entities. Specifically, the Dealer and the Advisers: Are separately capitalized, maintain their own books and records and, except as described in the application with respect to certain dual officers, have separate employees. Additionally, each of the Advisers and the Dealer operate on different sides of appropriate information barriers with respect to portfolio management activities and investment banking activities. 5. Investment management decisions for the Money Market Portfolios are determined solely by the Advisers. The portfolio managers and other employees that are responsible for portfolio management for registered investment companies function exclusively on behalf of one or more of the Advisers, and not the Dealer. The compensation of persons assigned to the Advisers does not depend on the volume or nature of trades effected by the Advisers with the Dealer, except to the extent that such trades may affect general firmwide compensation of LBH and its subsidiaries as a whole. 6. The portfolio securities in which the Money Market Portfolios invest that are the subject of the application are Money Market Instruments. Practically all trading in Money Market Instruments takes place in over-the-counter markets consisting of groups of dealers who are primarily major securities firms or large commercial banks. Money Market Instruments generally are traded in lots of $1,000,000 or more on a net basis and normally do not involve payment of either brokerage commissions or transfer taxes. The costs of portfolio transactions to the Money Market Portfolios consist primarily of dealer or underwriter spreads. Spreads vary somewhat among Money Market Instruments, but generally spread levels for short-term investment grade products are in the range of 1 to 5 basis points (.01% to .05%). In the Money Market Portfolios' experience, there is not a great deal of variation in the spreads on Money Market Instruments quoted by the various dealers, except perhaps during turbulent market conditions. 7. The money market consists of an elaborate telephonic and electronic communications network among dealer firms, principal issuers of Money Market Instruments and principal institutional buyers of such instruments. Because the money market is a dealer market, there is not a single obtainable price for a given instrument that generally prevails at any given time. A dealer acts either as “agent” on behalf of issuer clients or as “principal” for its own account. In either capacity, a dealer posts rates throughout its internal and external distribution networks that are intended to reflect “market clearing price levels,” as determined by the dealer. Only customers of the dealer seeking to purchase Money Market Instruments have access to these postings. 8. Because of the variety of types of Money Market Instruments and other factors, the money market tends to be segmented. The markets for the various types of instruments will vary in terms of price, volatility, liquidity and availability. Although the rates for the different types of instruments tend to fluctuate closely together, there may be significant differences in yield among the various types of instruments, even within a particular instrument category, depending upon the maturity of the instrument and the credit quality of the issuer. Moreover, from time to time, segmenting exists within Money Market Instruments with the same maturity date and rating. The segmenting is based on such factors as whether the issuer is an industrial or financial company, whether the issuer is domestic or foreign and whether the securities are asset-backed or unsecured. Because dealers tend to specialize in certain types of Money Market Instruments, the particular needs of a potential buyer or seller with respect to a certain type of security, maturity or credit quality may limit the number of dealers who can provide optimum pricing and execution. Hence, with respect to any given type of instrument, there may be only a few dealers who can be expected to have the instrument available and be in a position to quote an acceptable price. 9. Lehman Brothers is one of the world's largest dealers in Money Market Instruments, ranking among the top firms in each of the major markets and product areas. As of December 2006, Lehman Brothers had become the third largest dealer in terms of the number of U.S. commercial paper programs. LBI is an active participant in the public auction market for U.S. Treasuries, being one of only 22 primary dealers. LBI also has been an active participant in the market for government agency securities. LBI also is one of the leading participants in the medium-term note (“MTNs”) market. MTNs are offered continuously in public or private offerings, with maturities beginning at nine months. Because commercial paper is not issued for a maturity of longer than nine months and bankers acceptances are not issued for a maturity of longer than six months, there are fewer longer term investment alternatives than shorter term investment alternatives for the Money Market Portfolios. Thus, MTNs represent a significant portion of the longer-term money market investment alternatives. In 2006, Lehman Brothers ranked as the fifth largest manager or co-manager of the MTN/BKNT/DPNT/CD market in terms of proceeds ($36.4 billion) and market share (8.7%). Applicants further believe that LBI plays a relatively significant role in the repurchase agreement market. As of September 27, 2006, LBI had outstanding repurchase agreements of approximately $379 billion, which represented approximately 11% of the overall market. LBI also is one of the leading dealers in asset-backed floating rate notes. According to information published by Thompson Financial, as of December 31, 2006, LBI ranked eighth among the leading dealers for the year in the asset-backed floating rate notes market. 10. Applicants state that because of substantial consolidation in the money market industry, there are fewer major dealers who are active in the market than was the case only a few years ago. In light of this consolidation, applicants believe that it has become very important for investors to have access to as many dealers who are actively engaged in the money market as possible. Applicants state that there are far fewer sources of information available to investors. Applicants also contend that the decline in the number of active money market dealers has affected the competition in the pricing of investment opportunities. 11. Subject to the general supervision of the respective boards of directors or trustees for each Money Market Portfolio (each a “Board”), the Advisers are responsible for making investment decisions and for the placement of portfolio transactions. The Money Market Portfolios have no obligation to deal with any dealer or group of dealers in the execution of their portfolio transactions. When placing orders, an Adviser has an obligation to obtain the best net price and the most favorable execution of its orders. In doing so, it takes into account such factors as price, the size, type and difficulty of the transaction involved and the dealer's general execution and operational facilities. Applicants' Legal Analysis 1. Applicants request an order pursuant to sections 6(c) and 17(b) of the Act exempting certain transactions from the provisions of section 17(a) of the Act to permit the Dealer, acting as principal, to sell to or purchase from the Money Market Portfolios certain Money Market Instruments, subject to the conditions set forth below. 2. Section 17(a) of the Act generally prohibits an affiliated person or principal underwriter of a registered investment company, or any affiliated person of that person, acting as principal, from selling to or purchasing from the registered company, or any company controlled by the registered company, any security or other property. Because each Adviser is an affiliated person of the Money Market Portfolios it advises and the Dealer and each of the Advisers are under common control, the Money Market Portfolios are currently prohibited from conducting portfolio transactions with the Dealer in transactions in which the Dealer acts as principal. 3. Section 17(b) of the Act provides that the Commission, upon application, may exempt a transaction from the provisions of section 17(a) if evidence establishes that the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair, and do not involve overreaching on the part of any person concerned, and that the proposed transaction is consistent with the policy of the registered investment company concerned and with the general purposes of the Act. Section 6(c) of the Act provides that the Commission may conditionally or unconditionally exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision or provisions of the Act or of any rule or regulation 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 policy and provisions of the Act. 4. Applicants contend that the rationale for the proposed order is based upon the decreased liquidity in the money market, the important role played in the money market by the Dealer and the special requirements of the Money Market Portfolios with respect to their portfolio transactions. In particular applicants note the following:
(a)The Money Market Portfolios have a strong need for a constant flow of large quantities of high quality Money Market Instruments. The applicants believe that access to such significant dealers as the Dealer in these markets increases the Money Market Portfolios' abilities to manage their portfolios effectively.
(b)The fact that the Money Market Portfolios regularly invest in securities with short maturities and repurchase agreements, combined with the active portfolio management techniques employed by the Advisers, often results in high portfolio activity and the need to make numerous purchases and sales of securities and instruments. Such high portfolio activity makes the need to obtain suitable portfolio securities and best price and execution especially compelling.
(c)The Dealer is such an important participant in the money market, including the market for repurchase agreements, that being unable to deal directly with it may, upon occasion, deprive the Money Market Portfolios of obtaining best price and execution.
(d)The money market, including the market for repurchase agreements, is highly competitive, and removing a competitive factor as important as the Dealer from the universe of dealers with which the Money Market Portfolios may conduct principal transactions may indirectly deprive the Money Market Portfolios of obtaining best price and execution even when the Money Market Portfolios trade with other dealers. 5. Applicants believe that the requested order will provide the Money Market Portfolios with broader and more complete access to the money market, which is necessary to carry out the policies and objectives of each of the Money Market Portfolios in obtaining the best price, execution and quality in all portfolio transactions, and will provide the Money Market Portfolios with important new information sources in the money market, to the direct benefit of the shareholders in the Money Market Portfolios. Applicants believe that the transactions contemplated by the application are identical to those in which they currently are engaged except for the proposed participation of the Dealer, and that such transactions are consistent with the policies of the Money Market Portfolios as recited in their registration statements and reports filed under the Act. 6. Applicants believe that the procedures set forth with respect to transactions with the Dealer will be structured in such a way as to insure that the transactions will be, in all instances, reasonable and fair, and will not involve overreaching on the part of any person concerned, and that the requested exemption is appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants' Conditions The applicants agree that the order granting the requested relief will be subject to the following conditions: 1. Transactions Subject to the Exemption—The exemption shall be applicable to principal transactions in the secondary market and primary or secondary fixed price dealer offerings not made pursuant to underwriting syndicates. The principal transactions which may be conducted pursuant to the exemption will be limited to transactions in *Eligible Securities* . 4 As the Money Market Portfolios are subject to rule 2a-7, such *Eligible Securities* must meet the portfolio maturity and quality requirements of paragraphs (c)(2) and (c)(3) of rule 2a-7. Additionally, 4 Italicized terms are defined as set forth in paragraph
(a)of rule 2a-7, unless otherwise indicated.
(a)No Money Market Portfolio shall make portfolio purchases pursuant to the exemption that would result directly or indirectly in the Money Market Portfolio investing pursuant to the exemption more than 2% of its *Total Assets* in securities which, when acquired by the Money Market Portfolio (either initially or upon any subsequent roll over) were *Second Tier Securities* ; provided that any Money Market Portfolio may make portfolio sales of *Second Tier Securities* pursuant to the exemption without regard to this limitation.
(b)The exemption shall not apply to an *Unrated Security* other than a *Government Security* .
(c)The exemption shall not apply to any security, other than a repurchase agreement, issued by LBH or any affiliated person thereof, or to any security subject to a *Demand Feature* or *Guarantee* issued by LBH or any affiliated person thereof. 2. Repurchase Agreement Requirements—The Money Market Portfolios may engage in repurchase agreements with LBI or LCP only if it has:
(a)Net capital, as defined in rule 15c3-1 under the 1934 Act, of at least $100 million and
(b)a record (including the record of predecessors) of at least five years continuous operations as a dealer during which time it engaged in repurchase agreements relating to the kind of security subject to the repurchase agreement. LBI or LCP, as applicable, shall furnish the Advisers with financial statements for its most recent fiscal year and the most recent semi-annual financial statements made available to its customers. The Advisers shall determine that LBI or LCP, as applicable, complies with the above requirements and with other repurchase agreement guidelines adopted by the Boards. Each repurchase agreement will be *Collateralized Fully* . 3. Volume Limitations on Transactions—Transactions other than repurchase agreements conducted pursuant to the exemption shall be limited to no more than 25% of
(a)The direct or indirect purchases or sales, as the case may be, by each Money Market Portfolio of *Eligible Securities* other than repurchase agreements; and
(b)the purchases or sales, as the case may be, by the Dealer of *Eligible Securities* other than repurchase agreements. Transactions comprising repurchase agreements conducted pursuant to the exemption shall be limited to no more than 10% of
(a)the repurchase agreements directly or indirectly entered into by the relevant Money Market Portfolio and
(b)the repurchase agreements transacted by the Dealer. These calculations shall be measured on an annual basis (the fiscal year of each Money Market Portfolio and of the Dealer) and shall be computed with respect to the dollar volume thereof. 4. Information Required to Document Compliance with Price Tests—Before any transaction may be conducted pursuant to the exemption, the relevant Money Market Portfolio or the Advisers must obtain such information as they deem necessary to determine that the price test (as defined in condition
(5)below) applicable to such transaction has been satisfied. In the case of purchase or sale transactions, the Money Market Portfolios or the Advisers must make and document a good faith determination with respect to compliance with the price test based upon current price information obtained through the contemporaneous solicitation of bona fide offers in connection with the type of security involved (the same instrument type, credit rating, maturity and segment, if any, but not necessarily the identical security or issuer). With respect to prospective purchases of securities, these dealers must be those who have in their inventories or otherwise have access to Money Market Instruments of the categories and the types desired and who are in a position to quote favorable prices with respect thereto. With respect to the prospective disposition of securities, these dealers must be those who, in the experience of the Money Market Portfolios and the Advisers, are in a position to quote favorable prices. Before any repurchase agreements are entered into pursuant to the exemption, the Money Market Portfolios or the Advisers must obtain and document competitive quotations from at least two other dealers with respect to repurchase agreements comparable to the type of repurchase agreement involved, except that if quotations are unavailable from two such dealers only one other competitive quotation is required. 5. Price Tests—In the case of purchase and sale transactions, a determination will be required in each instance, based upon the information available to the Money Market Portfolios and the Advisers, that the price available from the Dealer is at least as favorable as that available from other sources. In the case of “swaps” involving trades of one security for another, the price test will be based upon the transaction viewed as a whole, and not upon the two components thereof individually. With respect to transactions involving repurchase agreements, a determination will be required in each instance, based on the information available to the Money Market Portfolios and the Advisers, that the income to be earned from the repurchase agreement is at least equal to that available from other sources. 6. Permissible Spread—The Dealer's spreads in regard to any transaction between the Dealer and a Money Market Portfolio will be no greater than its customary dealer spreads which will in turn be consistent with the average or standard spread charged by dealers in money market securities for the type of security and the size of transaction involved. 7. Parties Must Be Factually Independent—The Advisers, on the one hand, and the Dealer, on the other, will operate on different sides of appropriate walls of separation with respect to the Money Market Portfolios and *Eligible Securities* . The walls of separation will include all of the following characteristics, and such others as may from time to time be considered reasonable by the Dealer and the Advisers to facilitate the factual independence of the Advisers from the Dealer.
(a)Each of the Advisers will maintain offices physically separate from those of the Dealer.
(b)The compensation of persons assigned to any of the Advisers (i.e., executive, administrative or investment personnel) will not depend on the volume or nature of trades effected by the Advisers for the Money Market Portfolios with the Dealer under this exemption, except to the extent that such trades may affect the profits and losses of LBH and its subsidiaries as a whole.
(c)The Dealer will not share any of its respective profits or losses on such transactions with any of the Advisers, except to the extent that such profits and losses affect the general firmwide compensation of LBH and its subsidiaries as a whole.
(d)Personnel assigned to the Advisers' investment advisory operations on behalf of the Money Market Portfolios will be exclusively devoted to the business and affairs of one or more of the Advisers.
(e)Personnel assigned to the Dealer will not participate in the decision-making process for the Advisers or otherwise seek to influence the Advisers other than in the normal course of sales and dealer activities of the same nature as are simultaneously being carried out with respect to nonaffiliated institutional clients. Each Adviser, on the one hand, and the Dealer, on the other, may nonetheless maintain affiliations other than with respect to the Money Market Portfolios, and in addition with respect to the Money Market Portfolios as follows:
(i)Adviser personnel may rely on research, including credit analysis and reports prepared internally by various subsidiaries and divisions of the Dealer.
(ii)Certain senior executives of LBH with responsibility for overseeing operations of various divisions, subsidiaries and affiliates of LBH are not precluded from exercising those functions over the Advisers because they oversee the Dealer as well, provided that such persons shall not have any involvement with respect to proposed transactions pursuant to the exemption and will not in any way attempt to influence or control the placing by the Money Market Portfolios or the Advisers of orders in respect of *Eligible Securities* with the Dealer. 8. Record-Keeping Requirements—The Money Market Portfolios and the Advisers will maintain such records with respect to those transactions conducted pursuant to the exemption as may be necessary to confirm compliance with the conditions to the requested relief. In this regard:
(a)Each Money Market Portfolio shall maintain an itemized daily record of all purchases and sales of securities pursuant to the exemption showing for each transaction: The name and quantity of securities; the unit purchase or sale price; the time and date of the transaction; and whether the security was a *First Tier Security* or a *Second Tier Security* . The records also shall, for each transaction, document two quotations received from other dealers for comparable securities, including: The names of the dealers; the names of the securities; the prices quoted; the times and dates the quotations were received; and whether such securities were *First Tier Securities* or *Second Tier Securities* .
(b)Each Money Market Portfolio shall maintain a ledger or other record showing, on a daily basis, the percentage of the Money Market Portfolio's *Total Assets* represented by *Second Tier Securities* acquired from the Dealer.
(c)Each Money Market Portfolio will maintain records sufficient to verify compliance with the volume limitations contained in condition 3, above. The Dealer will provide the Money Market Portfolios with all records and information necessary to implement this requirement.
(d)Each Money Market Portfolio will maintain records sufficient to verify compliance with the repurchase agreement requirements contained in condition 2, above. The records required by this condition 8 will be maintained and preserved in the same manner as records required under rule 31a-1(b)(1). 9. Guidelines—Each of the compliance departments of the Advisers and of the Dealers (the “Compliance Departments”) will prepare and, as necessary, update guidelines for personnel of the Advisers and the Dealer, as the case may be, to make certain that transactions conducted pursuant to the exemption comply with the conditions of the exemption, and that the parties generally maintain arm's-length relationships. In training personnel of the Dealer, particular emphasis will be given to the fact that the Money Market Portfolios are to receive rates as favorable as other institutional purchasers buying the same quantities. The Compliance Departments will periodically monitor the activities of the Advisers and Dealer to make certain that the conditions set forth in the exemption are adhered to. 10. Audit Committee Review—The audit committees of the respective Boards of each of the Money Market Portfolios (each an “Audit Committee”), comprised of trustees or directors who are not “interested persons” as defined in section 2(a)(19) of the Act (“Independent Trustees”), will prepare, periodically review and update the guidelines for the Advisers and the Dealer to ensure that transactions conducted pursuant to the exemption comply with the conditions set forth therein and that the above procedures are followed in all respects. The respective Audit Committees will periodically monitor the activities of the Money Market Portfolios, the Advisers, and the Dealer in this regard to ensure that these matters are being accomplished. 11. Scope of Exemption—Applicants expressly acknowledge that any order issued on the application would grant relief from section 17(a) of the Act only, and would not grant relief from any other section of, or rule under, the Act including, without limitation, rule 2a-7. Any order issued on the application will not extend to any investment company advised or sub-advised by LBI. 12. Board Review—The respective Boards, including a majority of the Independent Trustees, have approved the Money Market Portfolio's participation in transactions conducted pursuant to the exemption and have determined that such participation by the Money Market Portfolios is in the best interests of the Money Market Portfolios and their investors. The minutes of the meetings of the Boards at which this approval was given reflect in detail the reasons for the Boards' determinations. The Boards will review no less frequently than annually the Money Market Portfolios' participation in transactions conducted pursuant to the exemption during the prior year and determine whether the Money Market Portfolios' participation in such transactions continues to be in the best interests of the Money Market Portfolios and their investors. Such review will include (but not be limited to)
(a)A comparison of the volume of transactions in each type of security conducted pursuant to the exemption to the market presence of the Dealer in the market for that type of security, and
(b)a determination that the Money Market Portfolios are maintaining appropriate trading relationships with other sources for each type of security to ensure that there are appropriate sources for the quotations required by condition 4 above. The minutes of the meetings of the Boards at which such determinations are made will reflect in detail the reasons for the Boards' determinations. For the Commission, by the Division of Investment Management, under delegated authority. Nancy M. Morris, Secretary. [FR Doc. E7-15309 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56177; File No. SR-CBOE-2007-89] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Duration of CBOE Rule 6.45A(b) Pertaining to Orders Represented in Open Outcry August 1, 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 July 25, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the CBOE. The Exchange filed the proposal as a “non-controversial” proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders it effective upon filing with the Commission. 5 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). 5 The Exchange has requested that the Commission waive the 5 day pre-filing notice and 30-day operative delay required by Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii). *See* discussion *infra* Section III. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The CBOE proposes to extend the duration of CBOE Rule 6.45A(b) (the “Rule”), relating to the allocation of orders represented in open outcry in equity option classes designated by the Exchange to be traded on the CBOE Hybrid Trading System (“Hybrid”) through December 31, 2007. No other changes are being made to the Rule. The text of the proposed rule change is available at CBOE, the Commission's Public Reference Room, and ( *http://www.cboe.org/Legal* ). 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 CBOE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those 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 parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose In March 2005, the Commission approved revisions to CBOE Rule 6.45A related to the introduction of Remote Market-Makers. 6 Among other things, the Rule, pertaining to the allocation of orders represented in open outcry in equity options classes traded on Hybrid, was amended to clarify that only in-crowd market participants would be eligible to participate in open outcry trade allocations. In addition, the Rule was amended to limit the duration of the Rule until September 14, 2005. The duration of the Rule was thereafter extended through July 31, 2007. 7 As the duration period expires on July 31, 2007, the Exchange proposes to extend the effectiveness of the Rule through December 31, 2007. 8 6 *See* Securities Exchange Act Release No. 51366 (March 14, 2005), 70 FR 13217 (March 18, 2005) (SR-CBOE-2004-75). 7 *See* Securities Exchange Act Release Nos. 52423 (September 14, 2005), 70 FR 55194 (September 20, 2005) (SR-CBOE-2005-76) (extending the duration of the Rule through December 14, 2005); 52957 (December 15, 2005), 70 FR 76085 (December 22, 2005) (SR-CBOE-2005-102) (extending the Rule through March 14, 2006); 53524 (March 21, 2006), 71 FR 15235 (March 27, 2006) (SR-CBOE-2006-22) (extending the duration of the Rule through July 14, 2006); 54164 (July 17, 2006), 71 FR 42143 (July 25, 2006) (SR-CBOE-2006-60) (extending the duration of the Rule through October 31, 2006); 54680 (November 1, 2006), 71 FR 65554 (November 8, 2006) (SR-CBOE-2006-86) (extending the duration of the Rule through January 31, 2007); 55219 (February 1, 2007), 72 FR 6305 (February 9, 2007) (SR-CBOE-2007-10) (extending the duration of the Rule through April 30, 2007) and 55676 (April 27, 2007), 72 FR 25348 (May 4, 2007) (SR-CBOE-2007-40) (extending the duration of the Rule through July 31, 2007). 8 In order to effect proprietary transactions on the floor of the Exchange, in addition to complying with the requirements of the Rule, members are also required to comply with the requirements of Section 11(a)(1) of the Act, 15 U.S.C. 78k(a)(1), or qualify for an exemption. Section 11(a)(1) restricts securities transactions of a member of any national securities exchange effected on that exchange for
(i)the member's own account,
(ii)the account of a person associated with the member, or
(iii)an account over which the member or a person associated with the member exercises discretion, unless a specific exemption is available. The Exchange has issued regulatory circulars to members informing them of the applicability of these Section 11(a)(1) requirements each time the duration of the Rule was extended. *See* CBOE Regulatory Circulars RG05-103 (November 2, 2005), RG06-001 (January 3, 2006), RG06-34 (April 7, 2006), RG06-79 (July 31, 2006), RG06-115 (November 8, 2006), RG07-21 (February 8, 2007) and RG07-53 (May 17, 2007). The Exchange represents that it expects to issue a similar regulatory circular to members reminding them of the applicability of the Section 11(a)(1) requirements with respect to the proposed rule change. 2. Statutory Basis Extension of the duration of the Rule will allow the Exchange to continue to operate under the existing allocation parameters for orders represented in open outcry in Hybrid on an uninterrupted basis. Accordingly, CBOE believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of section 6(b) of the Act. 9 Specifically, the Exchange believes the proposed rule change is consistent with the section 6(b)(5) 10 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, and, in general, to protect investors and the public interest. 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 CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:
(1)Significantly affect the protection of investors or the public interest;
(2)impose any significant burden on competition; and
(3)become operative for thirty 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 11 and Rule 19b-4(f)(6) 12 thereunder. 13 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b-4(f)(6). 13 The Exchange has requested that the Commission waive the requirement that the Exchange provide 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 on which the Exchange filed the proposed rule change pursuant to Rule 19b-4(f)(6)(iii). The Commission hereby grants this request. *See* 17 CFR 240.19b-4(f)(6)(iii). A proposed rule change filed under Commission Rule 19b-4(f)(6) 14 normally does not become operative prior to thirty days after the date of filing. The CBOE requests that the Commission waive the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii), and designate the proposed rule change to become operative immediately to allow the Exchange to continue to operate under the existing allocation parameters for orders represented in open outcry in Hybrid on an uninterrupted basis. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the CBOE to continue to operate under the Rule without interruption. For these reasons, the Commission designates the proposed rule change as operative upon filing. 15 14 17 CFR 240.19b-4(f)(6). 15 For the purposes only of waiving the operative date of this proposal, 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 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-CBOE-2007-89 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-2007-89. 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-CBOE-2007-89 and should be submitted on or before August 28, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E7-15310 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56172; File No. SR-NASDAQ-2006-065] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Approving Proposed Rule Change as Modified by Amendments No. 1, 3, and 4 Thereto To Reestablish a Quotation and Trading System, The PORTAL® Market, for Securities That Are Designated by Nasdaq as PORTAL Securities July 31, 2007. I. Introduction On December 22, 2006, The NASDAQ Stock Market LLC (“Nasdaq” or “Exchange”), filed with the Securities and Exchange Commission (“SEC” or “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 reestablish a quotation and trading system, The PORTAL® Market (“PORTAL” or the “PORTAL Market”), for securities that are designated by Nasdaq as PORTAL securities. The system would allow PORTAL Participants 3 to trade with one another in a closed system. On March 6, 2007, Nasdaq filed Amendment No. 1 to the proposed rule change. 4 On April 3, 2007, Nasdaq filed Amendment No. 3 to the proposed rule change. The proposed rule change was published for comment in the **Federal Register** on May 1, 2007. 5 The Commission received seven comment letters on the proposal from six commenters. 6 On July 16, 2007, Nasdaq filed Amendment No. 4 to the proposed rule change. 7 This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b-4. 3 Defined *infra.* 4 Amendment No. 2 was filed and withdrawn on April 3, 2007. 5 *See* Securities Exchange Act Release No. 55669 (April 25, 2007), 72 FR 23874 (May 1, 2007) (the “Notice”). 6 *See* letters to Nancy M. Morris, Secretary, Commission, from NYPPEX, dated May 18, 2007; Lezlee Westine, President and CEO, TechNet, dated May 22, 2007; William J. Ginivan, General Counsel, Friedman, Billings, Ramsey & Co., Inc. (“FBR”), dated May 22, 2007 and July 18, 2007; Deborah L. Wince-Smith, President, Council on Competitiveness, dated May 25, 2007; and Mary Kuan, Managing Director and Assistant General Counsel, Securities Industry and Financial Markets Association (“SIFMA”), dated May 30, 2007. In addition, an individual affiliated with Morgan Stanley, John McGuire, submitted a general inquiry with respect to the filing via e-mail on May 9, 2007. 7 In response to a comment made by SIFMA, in Amendment No. 4, Nasdaq amended proposed Rule 6513 (Compliance with Rules and Registration Requirements) so that it applies only to PORTAL Dealers and PORTAL Brokers. Nasdaq stated that the inclusion of PORTAL Qualified Investors (defined *infra* ) in this rule was an error. In addition, Nasdaq stated that PORTAL would not be operational for debt securities at this time. Once the necessary changes are in place, Nasdaq will file a proposed rule change stating when PORTAL will be available for debt trading. Finally, Nasdaq removed obsolete references in the PORTAL Rules to CINS. This is a technical amendment and is not subject to notice and comment. II. Description of the Proposal The National Association of Securities Dealers, Inc. (“NASD”) created the PORTAL Market in 1990, 8 simultaneously with the SEC's adoption of Rule 144A (“Rule 144A”) under the Securities Act of 1933 (“Securities Act”), 9 to be a new trading system for the purpose of quoting, trading, and reporting trades in securities eligible for resale by Qualified Institutional Buyers (“QIBs”) under Rule 144A. 10 8 *See* Securities Exchange Act Release No. 27956 (April 27, 1990), 55 FR 18781 (May 4, 1990) (SR-NASD-88-23). The PORTAL Rules were subsequently amended. *See* Securities Exchange Act Release Nos. 28678 (December 6, 1990), 55 FR 51194 (December 12, 1990) (SR-NASD-90-50); 33326 (December 13, 1993), 58 FR 66388 (December 20, 1993) (SR-NASD-91-5); 34562 (August 19, 1994), 59 FR 44210 (August 26, 1994) (SR-NASD-94-39); 35083 (December 12, 1994), 59 FR 65104 (December 16, 1994) (SR-NASD-94-65); 40424 (September 10, 1998), 63 FR 49623 (September 16, 1998) (SR-NASD-98-68); 43873 (January 23, 2001), 66 FR 8131 (January 29, 2001) (SR-NASD-99-65); 44042 (March 6, 2001), 66 FR 14969 (March 14, 2001) (SR-NASD-99-66). 9 *See* Securities Act Release No. 6862 (April 23, 1990), 55 FR 17933 (April 30, 1990). 10 17 CFR 230.144A. The PORTAL Market did not develop as anticipated. The Exchange believes this is, in part, because PORTAL securities could only be traded in the PORTAL Market and the original PORTAL rules imposed trade reporting for all transactions in PORTAL securities at a time when there were no trade reporting requirements for privately-placed securities. 11 In addition, Nasdaq believes PORTAL did not develop because it required use of cumbersome technology for access to the PORTAL Market computer system for reporting purposes, which was a stand-alone computer system. 11 Currently, NASD Rule 6732 requires that transactions in PORTAL equity securities be reported to the OTC Reporting Facility and PORTAL debt securities be reported to the Trade Reporting and Compliance Engine Service (“TRACE”). After nearly a decade, NASD filed a proposed rule change to delete many features of the PORTAL Market that had become obsolete including rules governing the registration of PORTAL Dealers, PORTAL Brokers, and PORTAL Qualified Investors and rules that were intended to regulate the quotation and trade reporting of PORTAL securities between PORTAL participants using the PORTAL system. 12 Following approval of this proposed rule change, Nasdaq's primary role in the PORTAL Market became designating securities as PORTAL eligible 13 which made those securities eligible for book entry services at The Depository Trust Company (“DTC”). 14 12 *See* Securities Exchange Act Release No. 44042 (March 6, 2001), 66 FR 14969 (March 14, 2001) (order approving SR-NASD-99-66). In this order, the Commission also approved rules replacing NASD's trade reporting requirements with a requirement that NASD members submit trade reports of secondary market transactions in PORTAL-designated equity securities through the Automated Confirmation Transaction Service (now know as the OTC Reporting Facility) and in PORTAL U.S. high-yield debt securities through TRACE. 13 Nasdaq staff historically had responsibility for review of PORTAL Market applications to determine the eligibility of securities and of PORTAL Participants (including broker-dealers and investors). Upon the separation of Nasdaq from the NASD and the approval of Nasdaq as a registered national securities exchange under Section 6 of the Act, the review functions for PORTAL Market eligibility were retained by Nasdaq, and the PORTAL Market rules in the NASD Rule 5300 Series became the Nasdaq Rule 6500 Series. *See* Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006). 14 Securities Exchange Act Release No. 33327 (December 13, 1993), 58 FR 67878 (December 22, 1993) (order approving a proposed rule change that authorized DTC to make securities sold pursuant to Rule 144A depository eligible provided that such securities are designated for inclusion in a system of a self-regulatory organization (“SRO”) approved by the Commission for the reporting of quotation and trade information on Rule 144A transactions). Nasdaq's PORTAL Proposal Nasdaq has proposed an updated version of the PORTAL Market, which would operate as a facility of the Exchange. 15 The proposed amendments to the PORTAL rules would:
(i)Establish qualification requirements for brokers and dealers that are Nasdaq members, and QIBs 16 that wish to have access to PORTAL; and
(ii)implement quotation, trade negotiation, and trade reporting functions in the PORTAL Market for PORTAL-designated securities. Many of the rules proposed by Nasdaq are substantially the same as those approved by the Commission when the PORTAL Market was first implemented by NASD in 1990. 17 The proposed PORTAL Market, described in detail in the Notice, is summarized below. 15 Because the PORTAL Market is a facility of Nasdaq, trades done on the PORTAL Market could be considered trades done on a national securities exchange and thus would be subject to Section 12(a) of the Exchange Act. This section provides that it “shall be unlawful for any member, broker or dealer to effect any transaction in any security (other than an exempted security) on a national securities exchange unless a registration is effective as to such security.” 15 U.S.C. 78l(a). Section 12(b) of the Act provides all equity and debt securities must be registered before such securities may be traded on a national securities exchange, unless they are “exempted securities” or are otherwise exempt from Exchange Act registration requirements. In order to trade unregistered 144A securities on the PORTAL Market, Nasdaq requested, and the Commission provided, exemptive relief pursuant to Section 36 of the Exchange Act from Section 12(a) of the Exchange Act to permit Nasdaq members to trade PORTAL-designated securities that are not registered under Section 12(b) of the Exchange Act. *See* note 55, *infra.* 16 The requirements for QIBs are set forth in Rule 144A. 17 *See* note 8, *supra.* *Security Designation:* PORTAL designation is limited to those Rule 144A securities that are initially sold to QIBs by a broker-dealer acting as initial placement agent or initial purchaser. Nasdaq would continue to qualify “restricted securities,” as that term is defined in SEC Rule 144(a)(3), 18 and securities that are restricted pursuant to contract or through the terms of the security, for designation as PORTAL securities based on, among other things, the requirements for the resale of a security under Rule 144A(d)(3) and (d)(4). 19 Nasdaq would have authority under the PORTAL Rules to suspend or terminate the designation of a PORTAL security, thus removing the ability to negotiate trades in the security through PORTAL. 18 17 CFR 230.144(a)(3). 19 17 CFR 230.144A(d)(3) and (d)(4). Nasdaq has represented that in the future, it will consider allowing Regulation D securities to participate in PORTAL so long as PORTAL Market Information would continue to be available only to PORTAL Participants. *See* Response to Comments, *infra* note 29, at 3. *Broker-Dealer Access:* Nasdaq members that meet the PORTAL qualification requirements would be designated as “PORTAL Dealers,” who could trade as principal, and “PORTAL Brokers,” who would act as agent for customers. PORTAL Dealers and PORTAL Brokers would be permitted to post anonymous one- or two-sided indicative quotations in PORTAL securities. In addition, PORTAL Dealers and PORTAL Brokers would be permitted to negotiate anonymously and execute trades in PORTAL securities. *QIB Access:* An institution that executes a subscriber agreement, agrees to comply with the PORTAL rules and meets the $100 million and other standards in Rule 144A to be a QIB would be qualified by Nasdaq as a “PORTAL Qualified Investor.” PORTAL Qualified Investors would be permitted to access the PORTAL Market through a password protected linkage and view quotations of PORTAL Dealers and PORTAL Brokers, and confirm transactions when the PORTAL Qualified Investor uses a PORTAL Dealer or PORTAL Broker to execute a trade in PORTAL. PORTAL Qualified Investors would not be permitted to enter quotations in the PORTAL system or enter orders directly into PORTAL. *Trade Negotiation/Execution:* PORTAL has electronic negotiation features that allow PORTAL Dealers and PORTAL Brokers to negotiate both openly and anonymously and execute trades in PORTAL securities. All quotes in PORTAL would be indicative. PORTAL Qualified Investors would not be permitted to participate in negotiations. Once an anonymous trade was negotiated in PORTAL, the identity of the counter-parties would be revealed to each other for purposes of comparison, confirmation, and settlement of the trade. *Trade Reporting:* Trade reports in reportable PORTAL debt and equity securities pursuant to NASD Rule 6732 would be forwarded by Nasdaq to TRACE and the OTC Reporting Facility, respectively. *Dissemination of PORTAL Trade Report Information:* All trade report information for trades negotiated via PORTAL would be disseminated in PORTAL to PORTAL Brokers, PORTAL Dealers, and PORTAL Qualified Investors (“PORTAL Participants”), but would not include the identity of the parties and, in the case of PORTAL debt, would not aggregate or otherwise follow the dissemination protocols applicable to debt trades reported to TRACE. 20 PORTAL Participants would be prohibited from disclosing any PORTAL Market information, including quotations, transactions, and other information 21 displayed in the PORTAL Market (“PORTAL Market Information”), to any party other than another PORTAL Participant. Nasdaq would not disseminate PORTAL Market Information to the public. 20 *See* Notice, 72 FR at 23877. To quote, execute, and view trade report information on any Rule 144A investment-grade debt security in PORTAL, the security must be qualified as a PORTAL security. Trade report information on Rule 144A investment-grade debt that is not a PORTAL security cannot be viewed in PORTAL. 21 “Other information” may include information such as which other PORTAL Participants are in the system, for example. *Settlement:* Trades in equity securities that have been compared and confirmed will be forwarded automatically to an appropriate subsidiary of Depository Trust & Clearing Corporation (“DTCC”) for settlement. Nasdaq also intends, at a future date, to provide the ability to forward all PORTAL trades in debt securities to an appropriate subsidiary of DTCC for settlement. *Regulatory Surveillance:* NASD currently provides and would continue to provide surveillance of the trade reports in PORTAL securities that are submitted through TRACE and the OTC Reporting Facility. Real-time surveillance of quoting and trading activity in PORTAL will be conducted by Nasdaq's MarketWatch Department. *SEC Exemptions:* Nasdaq has requested exemptions and no-action relief so that the PORTAL Market can operate as described in this filing. 22 In summary, Nasdaq requested the following exemptions: Rule 15c2-11 under the Act to allow broker-dealers to post quotations in PORTAL securities without gathering the information required by that rule; 23 Section 12(a) 24 of the Act which requires securities traded on a national securities exchange to be registered, to permit Nasdaq members to trade securities that are not registered under section 12(b) of the Act; 25 and staff no-action relief from Section 12(g) of the Act 26 to permit foreign private issuers to continue to be eligible for the exemption under Rule 12g3-2(b) under the Exchange Act. 27 22 In connection with its approval of PORTAL in 1990 ( *see* note 8, *supra* ), the Commission issued similar exemptions. *See* letter to Frank J. Wilson, Executive Vice President and General Counsel, NASD (“Wilson”), from Mary E.T. Beach, Associate Director, Division of Corporation Finance, Commission, dated January 16, 1990, and letter to Wilson from Jonathan G. Katz, Secretary, Commission, dated April 27, 1990. 23 17 CFR 240.15c2-11. *See* letter from Thomas P. Moran, Associate General Counsel, Nasdaq, to James A. Brigagliano, Assistant Director, Division of Market Regulation, Commission, dated June 28, 2007. 24 15 U.S.C. 78 *l* (a). 25 15 U.S.C. 78 *l*
(a)and 15 U.S.C. 78 *l* (b). *See* letter to Nancy M. Morris, Secretary, Commission, from Thomas P. Moran, Associate General Counsel, Nasdaq, dated June 28, 2007. 26 15 U.S.C. 78 *l* (g). 27 17 CFR 240.12g3-2(b). *See* letter to Paul Dudek, Chief Counsel, Division of Corporation Finance, Commission, from Thomas P. Moran, Associate General Counsel, Nasdaq, dated July 24, 2007. III. Comments Seven comment letters were received on the proposal. The letters from NYPPEX, TechNet, and the Council on Competitiveness expressed general support for the proposal. 28 The letters from SIFMA and FBR raised questions and issues discussed below. Nasdaq responded to those comments. 29 28 Mr. McGuire submitted a one-line, non-substantive e-mail regarding the proposal. 29 *See* letters to Nancy M. Morris, Secretary, Commission, from Thomas P. Moran, Associate General Counsel, Nasdaq, dated June 28, 2007 and July 23, 2007 (“Response to Comments”). A. SIFMA In its comment letter, SIFMA sought clarification on numerous points, including: trade reporting (the scope of information that would be reported, who would be responsible for submitting the information, and the timing of submission); the information that would be disseminated to PORTAL Participants; the role of third-party vendors in the dissemination of PORTAL Market Information; the extent to which PORTAL Qualified Investors would have direct access to the trading and negotiation functionality of PORTAL; and the rationale for limiting order size. In its Response to Comments, Nasdaq provided further explanation and details regarding these points. 30 30 *See* Response to Comments, *supra* note 29, at 2-4 and 7-8. SIFMA expressed concern regarding dissemination of PORTAL Market Information. SIFMA requested that Nasdaq consider whether dissemination of any trade information regarding PORTAL securities is necessary or beneficial and whether such dissemination would negatively affect liquidity and the willingness of investors to commit capital in unregistered securities. Nasdaq responded, in part, that it believes dissemination of information to PORTAL Participants is likely to increase their ability to make better informed decisions, thereby increasing confidence and liquidity in the market for 144A securities. SIFMA also suggested that if trade report information is to be disseminated to PORTAL Participants, dissemination should follow protocols currently applicable to trade report information provided to TRACE 31 and the OTC Reporting Facility to avoid immediately exposing “trading patterns and intentions of market participants.” Nasdaq responded that it disagrees and does not believe dissemination of transaction information should be restricted based on limits or time periods applicable to TRACE or the OTC Reporting Facility, because participation in PORTAL is voluntary, and PORTAL Participants know that their trades will be immediately disseminated to other PORTAL Participants and, if required, reported for regulatory purposes. 32 31 SIFMA states that TRACE provides that the volumes for investment grade securities are capped at five million, and volumes for non-investment grade securities are capped at one million. TRACE does not provide information on mortgage- or asset-backed securities or collateralized mortgage obligations. *See* NASD Rule 6710. NASD Rule 6230 requires that trades be reported with 15 minutes. 32 Nasdaq stated that it is willing to consider modifying the dissemination parameters of PORTAL debt trades in the system to follow current TRACE standards where the quantity for individual debt trades disseminated is capped at five million for investment-grade securities, and one million for non-investment grade securities. *See* Response to Comments, *supra* note 29, at 3. SIFMA also raised concerns with respect to regulatory jurisdiction. First, SIFMA encouraged Nasdaq, the NASD, and the SEC to work together with respect to PORTAL to avoid overlapping and potentially inconsistent regulation. Nasdaq stated it agrees that regulatory inconsistencies should be avoided where possible, and noted that the proposal is not expected to materially increase any such burdens. Next, SIFMA took issue with the requirement that access to the system as a PORTAL Broker or PORTAL Dealer is limited to Nasdaq members and sought clarification of Nasdaq's scope of authority over PORTAL Qualified Investors under proposed Rule 6513 (Compliance with Rules and Registration Requirements). Nasdaq noted that since PORTAL is a trading facility of the Nasdaq exchange, execution access to its system must be limited to Nasdaq members registered as PORTAL Brokers and PORTAL Dealers. Nasdaq has limited authority over non-members. With regard to SIFMA's request for clarification regarding the appropriate scope of Nasdaq's authority over PORTAL Qualified Investors, Nasdaq acknowledged that its regulatory authority over those participating in PORTAL is limited to PORTAL Brokers and PORTAL Dealers, as these would be the only PORTAL Participants that are required to be Nasdaq members and thus subject to Nasdaq's regulatory jurisdiction. Nasdaq stated that it had included PORTAL Qualified Investors in the rule in error. In Amendment No. 4, Nasdaq amended Rule 6513 to reflect that Nasdaq's authority to discipline a participant for failure to comply with any of the rules or requirements applicable to the PORTAL Market extends only to PORTAL Brokers and PORTAL Dealers. Nasdaq does not have authority to discipline PORTAL Qualified Investors that are not Nasdaq members. It can enforce, however, the PORTAL rules through its ability to approve, deny, suspend or terminate the registration of an investor as a PORTAL Qualified Investor. 33 33 *See* Proposed Rule 6506(c). Finally, SIFMA argued that the subscriber and related agreements should be included in the proposal. Nasdaq stated that the SEC does not routinely require commercial agreements of an SRO to be filed, and Nasdaq believes that nothing in the present proposal should require inclusion of these agreements. SIFMA commented that Nasdaq should make its exemptive requests public so that its members may review the legal analysis and policy basis for those requests. Nasdaq declined and noted that it is not the general practice of the SEC to seek public comment on exemptions, and Nasdaq does not believe that the Commission needs to do so for this proposal. B. FBR FBR's comments focused on three areas: The PORTAL Qualified Investor concept; accredited investors; and depository eligibility. First, FBR argues that limiting participation in the PORTAL Market to PORTAL Qualified Investors, and limiting access to PORTAL Market Information to those participants, will create a hidden market. FBR believes that PORTAL Brokers and PORTAL Dealers should be permitted to share PORTAL Market Information with anyone who is eligible to sell restricted shares pursuant to Rule 144A, including Accredited Investors and all QIBs. FBR states that its inability to share PORTAL Market Information with its customers is in conflict with its obligations under the securities laws and rules and NASD Rules, to treat customers, who are qualified to buy and sell under Rule 144A, fairly. Nasdaq responds that nothing in its proposal prevents FBR from sharing PORTAL Market Information with its QIB customers so long as those customers are qualified as PORTAL Qualified Investors by Nasdaq. Nasdaq states that the limitation exists to ensure that Nasdaq has reasonable procedures to prevent pricing information from reaching non-QIBs, given that it is an SRO responsible for enforcing its rules. Further, Nasdaq notes that the dissemination by PORTAL Dealers and PORTAL Brokers of PORTAL Market quotations and last sale report information of other PORTAL Dealers and PORTAL Brokers to investors not qualified by Nasdaq could constitute a prohibited general solicitation under Rule 144A. Nasdaq does, however, agree that restrictions on dissemination of PORTAL Market Information could prohibit a PORTAL Dealer from sharing its own quote in a PORTAL security with its own customers. 34 Nasdaq stated it would consider how to modify the rules before PORTAL is operational so that restrictions on transmission of PORTAL information do not apply to a PORTAL Dealer's provision of its proprietary quote information to an established customer of that dealer, 35 however, FBR argues that this is not an acceptable modification because it could result in a situation in which a PORTAL Broker or PORTAL Dealer is permitted to disclose to its customers certain prices that are available but are not the best price if the PORTAL Broker or PORTAL Dealer is not itself quoting at the best price. Further, FBR notes, the modification would not permit disclosure of last sale information. FBR believes that such a result would not be in the best interest of investors and could violate a broker-dealer's duty of fair dealing and subject them to liability under Rule 10b-5 under the Exchange Act. 34 *See* Response to Comments, *supra* note 29, at 10. 35 *Id.* Any such change must be filed as a proposed rule change with the Commission. FBR also believes that Nasdaq's proposed requirement that QIBs be approved by Nasdaq in order to have access to PORTAL Market Information is a departure from the PORTAL Rules that were approved by the Commission when the PORTAL Market was first established. 36 Nasdaq notes that PORTAL will operate under uniform, explicit standards governing access and information receipt, and a QIB would incur only modest costs to become a PORTAL Qualified Investor if it wants access to PORTAL Market Information. Further, Nasdaq points out that the original PORTAL Market was intended to be an entirely “closed” system. Investors were only permitted to execute a transaction in a PORTAL security if the investor registered as a PORTAL Qualified Investor and then executed the transaction through a PORTAL Dealer or PORTAL Broker through the PORTAL system. Therefore, Nasdaq argues, there was no need in the original PORTAL system to restrict the dissemination of PORTAL Market Information outside of the PORTAL Market. 36 *See* note 6, *supra.* Finally, FBR argues that depository eligibility of a security should not be premised on PORTAL eligibility. FBR argues that DTC's rule requiring Rule 144A securities to be included in an SRO system for the reporting of quotation and trade information of resale transactions, in order for those securities to be eligible for DTC's depository services is unnecessary and could impede competition between Nasdaq and alternative trading systems (“ATSs”). Currently, PORTAL is the only facility that satisfies the eligibility standard. Nasdaq disagrees and points out that nothing in DTC's rules would preclude another SRO from establishing and operating a system for quoting, trading, and reporting Rule 144A securities and thereby be eligible to obtain DTC's depository services on behalf of such securities. IV. Discussion and Commission Findings A. Sections 6 and 11A(a)(1) of the Act After careful consideration of the proposal, the comment letters, and Nasdaq's Response to Comments, the Commission finds that the proposed rule change is consistent with the provisions of section 6 of the Act, 37 in general and with section 6(b)(5) of the Act, 38 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to a free and open market and a national market system, and, in general, to protect investors and the public interest. The PORTAL Market will facilitate the trading of Rule 144A securities and will provide a centralized system for the display of interest in Rule 144A securities. Rule 144A(d) conditions the exemption from registration of securities pursuant to Section 5 of the Securities Act 39 on offering and selling the securities only to QIBs. Consequently, Nasdaq structured the PORTAL Market as a closed system for trading of Rule 144A securities among QIBs. Nasdaq has implemented procedures to qualify QIBs under its rules. In light of Nasdaq's procedures as described in the proposed rule change, PORTAL Participants may rely on Nasdaq's procedures for establishing a reasonable belief that a prospective purchaser is a QIB. 40 37 15 U.S.C. 78f. 38 15 U.S.C. 78f(b)(5). 39 15 U.S.C. 77e. 40 If all the conditions in Rule 144A(d) are not met, transactions in restricted securities may be deemed distributions and persons offering or selling such securities may be deemed underwriters within the meaning of Sections 2(a)(11) and 4(1) of the Securities Act or a participant in a distribution of securities with the meaning of Section 4(3)(C) of the Securities Act. *See* discussion at nn. 9-13, *supra.* In addition, the Commission believes that the proposed rule change is consistent with the goals of section 11A(a)(1) of the Act. 41 Section 11A(a)(1) articulates the Congressional findings and policy goals and objectives respecting the development of a national market system. Essentially, Congress found that new data processing and communication techniques should be applied to improve the efficiency of market operations, broaden the distribution of market information, enhance opportunities to achieve best execution and promote competition among market participants. That provision stresses the importance of implementing communication enhancements that will advance the efficiency and effectiveness of a securities market in servicing the needs of investors. The Commission believes that the changes to the PORTAL Market contained in this proposed rule change should provide these benefits and help to enhance the efficiency of the market for Rule 144A-eligible securities. 41 15 U.S.C. 78k-1(a)(1). B. Rule 144A Under the Securities Act Because Nasdaq has designed the amendments to the PORTAL Market to facilitate compliance with Rule 144A, section 6(b)(1) of the Act 42 also requires a determination as to whether it is reasonably designed to accomplish this purpose. 43 The Commission believes that the PORTAL system is designed so that participants who comply with its requirements will also be in compliance with the requirements of Rule 144A, assuming they also provide information upon request in compliance with Rule 144A(d)(4). 42 15 U.S.C. 78f(b)(1). 43 Section 6(b)(1) of the Act requires that Nasdaq, as a national securities exchange, be so organized and have the capacity to enforce compliance with, among other things, the federal securities laws. *See* 15 U.S.C. 78f(b)(1). Rule 144A is available only to institutional investors meeting the definition of QIB in Rule 144A(a)(1). A seller is required to form a reasonable belief that a purchaser is a QIB as the term is defined in Rule 144A(a)(1). With the exception of broker-dealers, a QIB is required to, in the aggregate, own and invest on a discretionary basis at least $100 million in securities of non-affiliated issuers. The proposed amendments to the PORTAL rules require that any investor applying to qualify as a PORTAL Qualified Investor meet the Rule 144A standards for QIBs. Rule 144A(d)(2) requires that the seller of 144A securities take reasonable steps to ensure that the purchaser is aware that the seller may rely on Rule 144A. To meet this requirement of Rule 144A, the proposed amendments to the PORTAL rules also provide in the designation requirements for PORTAL Qualified Investors that applicants sign an undertaking in a subscriber agreement that states that they are aware that they may purchase a PORTAL security from another QIB who may rely on an exemption from the provisions of section 5 of the Securities Act 44 pursuant to Rule 144A. 44 15 U.S.C. 77(e). The PORTAL rules also have eligibility requirements for admitting securities into PORTAL that parallel the Rule 144A eligibility requirements for securities. The PORTAL rules require that the security be eligible to be sold pursuant to Rule 144A under the Securities Act. The application for designation of a PORTAL security requires the submission of specific information to Nasdaq necessary to support the applicant's claim that the security meets the requirements of Rule 144A. Furthermore, Rule 144A conditions the availability of the exemption on certain information being available to holders and prospective purchasers. Rule 144A(d)(4) provides that, with respect to securities of an issuer that is not subject to section 13 of the Act, 45 section 15(d) of the Act, 46 exempt from reporting pursuant to Rule 12g3-2(b) under the Act, 47 or a foreign government eligible to register securities under Schedule B of the Securities Act, the holder and a prospective purchaser designated by the holder must have the right to obtain from the issuer, upon request of the holder, and the purchaser must have received at or prior to the time of sale, upon such purchaser's request to the holder, certain information about the issuer. Nasdaq has designed PORTAL to comply with this aspect of Rule 144A because the PORTAL rules currently require that a security meet these Rule 144A requirements and that the issuer undertake to provide the information required by Rule 144A(d)(4) where applicable. 45 15 U.S.C. 78m. 46 15 U.S.C. 78o(d). 47 17 CFR 240.12g3-2(b). PORTAL is designed to be a trading market in restricted securities limited to highly sophisticated investors. In adopting Rule 144A, the Commission noted that “[t]he transactions covered by the safe harbor are private transactions” that do not require the protections of section 5 of the Securities Act. 48 The Commission believes that broad dissemination of trading information in this limited context is not desirable. Nasdaq's restricting the information to PORTAL Qualified Investors to allow Nasdaq to prevent PORTAL Market Information from reaching non-QIBs in this context is reasonable. 48 *See* note 9, *supra.* In addition to designing the PORTAL rules to facilitate compliance with the requirements of Rule 144A, the proposed rule change would structure PORTAL to limit the possibility that restricted securities enter the U.S. retail market by requiring that PORTAL-designated securities be assigned a CUSIP 49 number that is different than the CUSIP number assigned to any securities of the same class that do not satisfy the eligibility requirements for PORTAL securities. The security explanation protocol employed by Standard & Poor's related to the CUSIP number assigned to PORTAL securities specifically distinguishes those securities from all other publicly-traded and restricted securities by using the words “Rule 144A” and “PORTAL.” For these reasons, the Commission believes that PORTAL, as proposed, is reasonably designed to facilitate compliance with Rule 144A, so long as there is compliance with the PORTAL rules and procedures. 50 49 Committee on Uniform Securities Identification Procedures. 50 The Commission notes that information shall still be provided on request, regardless of the exemption for PORTAL securities, as applicable, pursuant to Rule 144A(d)(4). Further, Rule 6502 authorizes Nasdaq to suspend or terminate a security's PORTAL designation if a holder or prospective purchaser did not receive information as required by Rule 144A(d)(4). C. Exemptions and No-Action Relief Requests The Commission has granted Nasdaq exemptions from Rule 15c2-11 under the Act 51 to allow brokers and dealers to post quotations in PORTAL securities without first gathering information required by that rule 52 and Section 12(a) 53 of the Act to permit trading of securities not registered under section 12(b) 54 of the Act; 55 and the staff has granted no-action relief with respect to section 12(g) 56 of the Act to permit foreign private issuers to continue to be eligible for the exemption under Rule 12g3-2(b) 57 of the Act. 58 51 17 CFR 240.15c2-11. 52 *See* letter from James A. Brigagliano, Associate Director, Division of Market Regulation, Commission, to Thomas P. Moran, Associate General Counsel, Nasdaq, dated July 31, 2007. 53 15 U.S.C. 78 *l* (a). 54 15 U.S.C. 78 *l* (b). 55 *See* Securities Exchange Act Release No. 56176, (July 31, 2007), Order Granting The NASDAQ Stock Market, LLC's Application for an Exemption Pursuant to Section 36 of the Securities Exchange Act of 1934 (“Exemption Order”). 56 15 U.S.C. 78 *l* (g). 57 17 CFR 240.12g3-2(b). 58 *See* letter from Paul Dudek, Chief, Office of International Corporate Finance, Division of Corporation Finance, Commission, to Thomas P. Moran, Associate General Counsel, Nasdaq, dated July 31, 2007. D. Impact on Competition, Efficiency and Capital Formation Section 3(f) of the Act requires that the Commission consider whether Nasdaq's proposal will promote efficiency, competition, and capital formation. 59 The Commission has considered the merits of the issues raised by each of the commenters and has concluded that the PORTAL rules, as proposed, are consistent with the Act. 59 15 U.S.C. 78c(f). The Commission notes that in its response to comments, Nasdaq provided SIFMA with additional information regarding the operation of the PORTAL Market and believes Nasdaq sufficiently responded to SIFMA's comments. The Commission agrees with Nasdaq, in particular, that the prompt and complete dissemination of PORTAL Market Information to PORTAL Participants should allow PORTAL Participants to better evaluate their decisions regarding trading in the PORTAL Market and should result in increased investor confidence and liquidity in the PORTAL Market. The Commission also notes that if a PORTAL Participant does not want its trade information disseminated to other PORTAL Participants, there is no requirement that the Participant utilize Nasdaq's system for effecting its trade; use of the PORTAL Market is voluntary. Furthermore, the Commission agrees that Nasdaq need not make the subscriber and related agreements part of this proposal, nor does Nasdaq need to make its exemption requests public. The Commission does not believe that Nasdaq's proposal is anti-competitive because of the eligibility standard in DTC's rules. Nasdaq does not have any authority with respect to DTC's rules. DTC's rules provide that DTC is authorized to make 144A securities eligible for deposit, book-entry delivery, and other depository services, *provided that* any such Rule 144A securities are designated for inclusion in a system of an SRO approved by the Commission for the reporting of quotation and trade information of Rule 144A transactions. 60 In approving the proposed rule change establishing the DTC eligibility requirement that Rule 144A securities must be included in an SRO Rule 144A System, such as the PORTAL Market, the Commission noted a crucial feature of any such system would be a requirement that the SRO's members report trades involving securities using the system on a routine basis to the SRO, along with information that will facilitate detection of securities law violations. 61 60 *See* Securities Exchange Act Release No. 33327 (December 13, 1993); 58 FR 57878 (December 22, 1993) (SR-DTC-90-06). 61 Given the evolution in the market for these securities since DTC's rule was adopted, the Commission believes it would be reasonable for DTC to review this requirement. The Commission believes that re-establishing the PORTAL Market as a quoting and trading system is a reasonable effort by Nasdaq to enhance the quality of the Rule 144A market by providing a centralized market and information to QIBs, promoting greater efficiency in executions, and increasing overall market transparency. While the PORTAL Market will provide a system for quoting and trading Rule 144A securities, it does not represent an exclusive means for selling or purchasing Rule 144A securities, nor does it prevent broker-dealers from seeking alternative trading venues for such transactions. V. Conclusion *It is therefore ordered* , pursuant to section 19(b)(2) of the Act, 62 that the proposed rule change (SR-NASDAQ-2006-065), as amended, be, and hereby is, approved. 62 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 63 63 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15288 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56175; File No. SR-NASD-2007-055] Self-Regulatory Organizations; National Association of Securities Dealers, Inc. (n/k/a Financial Industry Regulatory Authority, Inc.); Notice of Filing of Proposed Rule Change Relating to Interpretative Material 9216, Violations Appropriate for Disposition Under Plan Pursuant to SEC Rule 19d-1(c)(2) July 31, 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 July 24, 2007, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by NASD. 3 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 On July 26, 2007, the Commission approved a proposed rule change filed by NASD to amend NASD's Certificate of Incorporation to reflect its name change to the Financial Industry Regulatory Authority, Inc., or FINRA, in connection with the consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc. *See* Securities Exchange Act Release No. 56146 (July 26, 2007). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing to amend Interpretative Material 9216 (Violations Appropriate for Disposition Under Plan Pursuant to SEC Rule 19d-1(c)(2)) (“IM-9216”) to expand the list of violations eligible for disposition under NASD's Minor Rule Violation Plan (“MRVP”). The proposed rule change also would delete from IM-9216 references to NASD rules that have been rescinded. The text of the proposed rule change is available at NASD, the Commission's Public Reference Room, and *http://www.finra.org.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NASD has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On November 28, 2006, NASD and the NYSE Group, Inc. (“NYSE Group”) announced a plan to consolidate their member regulation operations into a combined organization (the “Transaction”) that will be the sole U.S. private-sector provider of member firm regulation for securities firms that do business with the public. 4 This consolidation will streamline the broker-dealer regulatory system, combine technologies, permit the establishment of a single set of rules and group examiners with complementary areas of expertise in a single organization—all of which will serve to enhance oversight of U.S. securities firms and help ensure investor protection. 4 On July 26, 2007, the Commission approved amendments to NASD's By-Laws to implement governance and related changes to accommodate the consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc. *See* Securities Exchange Act Release No. 56145 (July 26, 2007). The combined organization, FINRA, 5 will work expeditiously to consolidate the rules that apply to its member firms, reducing to one the two sets of rules currently applicable to members of both the NASD and NYSE (“Dual Members”). During an interim period, however, until the adoption of a consolidated rulebook, NASD has proposed to incorporate into FINRA's rulebook certain NYSE Rules that pertain to the regulation of member firm conduct (the “Incorporated NYSE Rules”). 6 The Incorporated NYSE Rules will apply solely to Dual Members until such time as FINRA adopts, subject to Commission approval, consolidated rules applicable to all of its members. 5 *See supra* note 3. The Commission notes that the Transaction closed on July 30, 2007. *See* telephone conference between Nancy Burke-Sanow, Assistant Director, Commission, and Patrice Gliniecki, Senior Vice President and Deputy General Counsel, FINRA, on July 31, 2007. 6 *See* Securities Exchange Act Release No. 56147 (July 26, 2007) (SR-NASD-2007-054, Exhibit 5) (incorporating certain NYSE Rules relating to member firm conduct into FINRA's rulebook). As discussed in SR-NASD-2007-054, NASD is not proposing to incorporate, among other rules, the NYSE Disciplinary Rules or related interpretations, including NYSE's MRVP as set forth in NYSE Rule 476A (Imposition of Fines for Minor Violation(s) of Rules). 7 However, the instant proposed rule change would amend NASD's MRVP to include those Incorporated NYSE Rules currently enumerated in NYSE's MRVP. This would permit FINRA, during the interim period until the adoption of a consolidated rulebook, to impose a fine for minor rule violations by a Dual Member of the Incorporated NYSE Rules in lieu of commencing disciplinary proceedings. 7 NASD is not proposing to incorporate NYSE's MRVP (NYSE Rule 476A), because NYSE Rule 476A contains procedures that would conflict with the finding of a minor rule violation by FINRA. For example, NYSE Rule 476A permits a person against whom a fine is imposed to contest the NYSE's fine determination by, among other things, appealing to the NYSE board of directors. The proposed amendments to IM-9216 also would specify the applicability of the rules listed therein to various members of FINRA. Specifically, any Dual Member (including any persons affiliated with such member) may be subject to a fine under Rule 9216(b) with respect to any rule listed in IM-9216 that applies to such member or person; provided, however, that any Dual Member that was not also a member of NASD as of the date of closing of the Transaction and that does not engage in any activities that would have required it to be an NASD member (and its affiliated persons that are not otherwise subject to NASD rules) would only be subject to a fine under Rule 9216(b) with respect to the following rules listed in IM-9216: Any NYSE rule, SEC Exchange Act rule, NASD By-Law or Schedule to By-Laws, or the NASD Rule 8000 Series. In addition, any member of FINRA that is not also a member of the NYSE (and its associated persons that are not otherwise subject to NYSE rules) may be subject to a fine under Rule 9216(b) with respect to any rule listed in IM-9216, with the exception of the NYSE rules. NASD is not proposing to adopt the provision in NYSE's MRVP that establishes a $5,000 maximum fine that may be imposed under NYSE's MRVP for minor violations of NYSE rules. Rather, FINRA would continue to apply the $2,500 maximum fine level under NASD's MRVP in determining fine levels for minor violations of either an NASD or NYSE rule included in NASD's MRVP. Among other things, such an approach helps to ensure greater consistency in the administration of the disciplinary process for FINRA and its members, as well as in the related reporting obligations for minor violations of rules. 8 8 Rule 19d-1(c)(2) under the Act provides that any disciplinary action taken by a self-regulatory organization (“SRO”) against any person of a rule of the SRO that has been designated as a minor rule violation pursuant to a plan is not considered “final” for purposes of Rule 19d-1(c)(1) if the sanction imposed consists of a fine not exceeding $2,500 and the sanctioned person has not sought an adjudication, including a hearing, or otherwise exhausted his administrative remedies at the SRO with respect to the matter. SROs are permitted to report such minor rule violations (where the fine does not exceed $2,500) to the SEC on a periodic, rather than immediate, basis. In addition, members are not required to report “minor rule violations” on the Forms BD, U4 or U5 (as such term is defined on the forms). These forms provide that a rule violation may be designated as “minor” under a plan approved by the SEC if, among other things, the sanction imposed consists of a fine of $2,500 or less. *See also* Securities Exchange Act Release No. 40193 (July 10, 1998), 63 FR 39338 (July 22, 1998) (Order Granting Approval to Proposed Rule Change Relating to Fines for Disruptive Action on the Options Floor) (SR-PCX-98-21) (stating in the context of amendments to the Pacific Exchange's (now NYSE Arca) MRVP that, as noted in PCX's MRVP, pursuant to Securities Exchange Act Release No. 30958, any person or organization found in violation of a minor rule under the MRVP is not required to report such violation on Form BD, provided that, among other things, the sanction imposed consists of a fine not exceeding $2,500). Finally, the proposed rule change would delete from IM-9216 references to NASD rules that have been rescinded. On June 30, 2006, the Commission approved SR-NASD-2005-087, which, among other things, deleted NASD Rules 4619, 4642, 4652, 5430, 6720, and 8212 from the NASD Manual. 9 On September 28, 2006, the Commission approved SR-NASD-2006-091, which, among other things, deleted NASD Rule 6420. 10 9 Securities Exchange Act Release No. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) (Order Approving SR-NASD-2005-087). 10 Securities Exchange Act Release No. 54537 (September 28, 2006), 71 FR 59173 (October 6, 2006) (Order Approving SR-NASD-2006-091). The proposed rule change will become effective upon the later of the closing of the Transaction or the Commission's approval of the proposed rule change. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of section 15A of the Act, 11 including section 15A(b)(2) of the Act, 12 in that it will permit FINRA to carry out the purposes of the Act, to comply with the Act and to enforce compliance by FINRA members and persons associated with members with the Act, the rules and regulations thereunder and FINRA rules. The proposed rule change also is consistent with section 15A(b)(7) of the Act, 13 in that it will provide that FINRA members and their associated persons are appropriately disciplined for violations of FINRA rules. The proposed rule change also is consistent with section 15A(b)(8) of the Act 14 in that it furthers the statutory goals of providing a fair procedure for disciplining members and their associated persons. The addition of these violations to NASD's MRVP will provide FINRA staff with the ability to impose minor rule violations for the Incorporated NYSE Rules that are currently enumerated in NYSE's MRVP. 11 15 U.S.C. 78o-3. 12 15 U.S.C. 78o-3(b)(2). 13 15 U.S.C. 78o-3(b)(7). 14 15 U.S.C. 78o-3(b)(8). B. Self-Regulatory Organization's Statement on Burden on Competition NASD does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the NASD consents, the Commission will:
(A)By order approve such proposed rule change, or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NASD-2007-055 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASD-2007-055. 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 FINRA. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASD-2007-055 and should be submitted on or before August 28, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E7-15290 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56179; File No. SR-NASD-2007-034] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change as Modified by Amendment No. 1 Creating NASD Rule 1160 (Firm Contact Information) Regarding the Reporting and Annual Review of Designated Contact Information to NASD August 1, 2007. I. Introduction On May 11, 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 seeking to adopt new NASD Rule 1160 (Firm Contact Information) regarding the reporting of designated contact information to NASD and the annual review of such information. The proposed rule change also proposed amendments to Rule 1120 (Continuing Education Requirements), Rule 1150 (Executive Representative), Interpretive Material (IM)-3011-2 (Review of Anti-Money Laundering Compliance Person Information), and Rule 3520 (Emergency Contact Information) to eliminate the requirement that members review and update, at the end of each calendar quarter, the contact information required by these rules. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. The proposed rule change was published for comment in the **Federal Register** on May 31, 2007. 3 The Commission received two comment letters on the proposal. 4 On July 27, 2007, NASD filed Amendment No. 1 to the proposed rule change. 5 This order approves the proposed rule change, as amended. 3 *See* Securities Exchange Act Release No. 55810 (May 24, 2007), 72 FR 30404. 4 *See* letter to Nancy Morris, Secretary, Commission, from Lisa Roth, Members Advocacy Chairman, National Association of Independent Broker-Dealers (“NAIBD”), dated June 13, 2007; letter from Kenneth M. Cherrier, JD, Chief Compliance Officer, Fintegra Financial Solutions (“Fintegra”), dated June 21, 2007. 5 In Amendment No. 1, NASD responded to comments and made a technical correction to the proposed rule text. This is a technical amendment and is not subject to notice and comment. II. Description of the Proposal Currently, there are several NASD rules requiring firms to identify and report to NASD certain designated contact persons: Rule 1120 (Continuing Education Requirements); Rule 1150 (Executive Representative); IM-3011-2 (Review of Anti-Money Laundering Compliance Person Information); and Rule 3520 (Emergency Contact Information). These rules further require firms to review the contact information at the end of each calendar quarter, and if necessary, update such information within 17 business days after the end of each quarter. Members review this information and provide any updates online via the NASD Contact System (“NCS”). 6 6 NASD also currently requires each firm to report, via NCS, contact information for its Executive Officer and the Head of Compliance. NCS also includes several optional fields for other contact persons. Based on recommendations made by its Small Firm Rules Impact Task Force, 7 NASD has proposed to eliminate these quarterly review requirements in favor of a more comprehensive approach for verifying and updating all contact information required to be reported. Specifically, proposed new Rule 1160 would require members to provide the required contact information via NCS or such other means as NASD may specify. New Rule 1160 also would require members to update the contact information promptly, but in any event not later than 30 days following any change in such information, as well as to review and, if necessary, update the information within 17 business days after the end of each calendar year. In addition, the rule would require members to comply with any NASD request for such information promptly, but in any event not later than 15 days following the request, or such longer period that may be agreed to by NASD staff. The proposed rule change would not relieve members from any separate requirements to update such information. 8 7 NASD established the Small Firm Rules Impact Task Force in September 2006 to examine how existing NASD rules affect smaller firms. In particular, the Task Force focuses on possible opportunities to amend or modernize certain conduct rules that may be particularly burdensome for small firms, where such changes are consistent with investor protection and market integrity. 8 For example, a firm must identify, among others, its Chief Executive Officer and Chief Compliance Officer on Form BD, and promptly update such information by submitting an amendment whenever the information becomes inaccurate or incomplete for any reason. *See also* Article IV, Section 1(c) of the NASD By-Laws, requiring each member to ensure that its membership application is kept current at all times by supplementary amendments, and to file any such amendment no later than 30 days after learning of the facts or circumstances giving rise to the amendment. The proposed rule change also would amend Rule 3520 to eliminate the requirement that only a firm's Executive Representative, or his or her written designee, be permitted to review and update the firm's emergency contact information The effective date of these proposed changes would be December 31, 2007. III. Comment Summary Two comment letters were received on the proposed rule change. 9 NASD responded to these comment letters in Amendment No. 1. 10 Both commenters endorsed replacing the current quarterly verification requirement with an annual obligation. Fintegra praised the efficiencies that would result from that aspect of the proposal, while NAIBD noted that an annual verification requirement was more consistent with the infrequent changes in contact information generally experienced at most member firms. 9 *See* note 4, *supra.* 10 *See* note 5, *supra.* NAIBD, however, suggested that the requirement to update information when a change occurs remain a quarterly requirement, rather than the proposed 30-day requirement, stating that some firms' electronic filing systems and reminders have been programmed to accommodate a systemic quarterly update. In response, NASD noted that, at least with respect to Rule 1120, IM-3011-2, and Rule 3520, firms currently are required to “promptly” update such information in the event of a change, in addition to being required to review, and if necessary, update the designated contact information on a quarterly basis. 11 In proposing new Rule 1160, NASD explained that it is seeking to clarify the requirement that firms both promptly update such information upon any change, as well as verify the accuracy of the required contact information on an annual basis. Further, NASD noted that it is seeking to clarify that any such updates must occur not later than 30 days following the change. 11 *See* Rule 1120(a)(7) (Regulatory Element Contact Person), Rule 3011(d) (Anti-Money Laundering Compliance Program), and Rule 3520(b) (Emergency Contact Information). *See also* Article IV, Section 3 of the NASD By-Laws, addressing procedures for members to change their Executive Representatives. Fintegra objected to proposed Rule 1160's 17-business-day time frame for members to verify and update their required contact information after the end of each calendar year. Fintegra suggested that the time frame be shortened to 15 days to align it with the provision in proposed Rule 1160 that would require members to promptly comply with any NASD request for such contact information, but no later than 15 days following the request. The commenter stated that consistent time frames would simplify adherence to the proposed rule and that there appeared to be no justification for the differing compliance timelines. In response to this comment, NASD explained that the two time periods serve difference purposes, and that retaining the 17-business-day window for the annual verification will aid members' compliance efforts. NASD stated that firms currently are required to update such information within 17 business days following each quarter, 12 and therefore are already familiar with the proposed end of year schedule. In addition, NASD noted that the 17-business-day window is consistent with the requirement that a member's FOCUS report be submitted within 17 business days after the end of each calendar quarter. Currently, when members file FOCUS reports each quarter, NASD reminds them of the need to review and update their designated contact information on NCS. NASD represented that it intends to continue this practice, and will remind members of the need to verify the required contact information at the time they file their fourth quarter FOCUS report. 12 *See* Rule 1120(a)(7); Rule 1150; IM-3011-2; Rule 3520(b) (all requiring members to update the contact information required by the respective rules within 17 business days after the end of each calendar quarter). IV. Discussion After careful consideration of the proposal, the comment letters, and NASD's response thereto, the Commission finds that the proposed rule change is consistent with the provisions of section 15A of the Act, 13 in general and with section 15A(b)(6) of the Act, 14 in particular, which requires, among other things, that NASD rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. 15 13 15 U.S.C. 78o-3. 14 15 U.S.C. 78o-3(b)(6). 15 In approving the proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). The Commission believes that the proposed rule change sets forth a reasonable approach for member firms to provide and keep current required contact information, which should reduce unnecessary burdens on firms by eliminating the requirement that firms review and update the contact information on a quarterly basis; instead, firms would be required to conduct such reviews on an annual basis as well as to promptly update the information following any change. The proposed rule change should also assure NASD's ability to contact its members in the event of an emergency, as well as support members' compliance with certain NASD rules, such as continuing education requirements and anti-money laundering obligations, and facilitate member voting through the Executive Representatives. V. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 16 that the proposed rule change (SR-NASD-2007-034), as amended, be, and hereby is, approved. 16 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E7-15311 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56173; File No. SR-NYSE-2007-67] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Relating to NYSE Rule 2 (“Member,” “Membership,” “Member Firm,” etc.) July 31, 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 July 24, 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, II, and III below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change reflects changes in the requirements for membership in the Exchange as a result of the proposed consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc. (“NYSE Regulation”) that will result in a combined self-regulatory organization that will be called Financial Industry Regulatory Authority, Inc. (“FINRA”). 3 The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nyse.com* ), at the principal office of the Exchange, and at the Commission's Public Reference Room. 3 On July 26, 2007, the Commission approved a proposed rule change filed by NASD to amend NASD's Certificate of Incorporation to reflect its name change to the Financial Industry Regulatory Authority, Inc., or FINRA, in connection with the consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc. *See* Securities Exchange Act Release No. 56146 (July 26, 2007). 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend its membership rules to reflect the changes to the regulatory landscape that will result from the proposed consolidation of the member firm regulatory functions of NASD and NYSE Regulation. On November 28, 2006, NYSE Regulation and NASD announced a plan to consolidate their member regulation operations into a combined organization that will be the sole U.S. private-sector provider of member firm regulation for securities firms that conduct business with the public (the “Transaction”). 4 The objective of the Transaction is to increase consistency and efficiency of member firm regulation, including examination, enforcement, and rulemaking, for the benefit of individual investors and overall market integrity. It is also an objective of the Transaction to reduce the regulatory and financial burdens placed on member firms as a result of duplicate self-regulatory structures. 4 On July 26, 2007, the Commission approved amendments to NASD's By-Laws to implement governance and related changes to accommodate the consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc. *See* Securities Exchange Act Release No. 56145 (July 26, 2007). The concentration of member firm regulation in FINRA will further the goal that the NYSE, NASD and the securities industry have already been working on: To harmonize the member firm rules of the two organizations to eliminate overlapping but slightly different (or differently interpreted) rules. Because that harmonization process will not be complete by the closing of the Transaction, the Transaction contemplates a transition period during which FINRA will continue to apply to NYSE member organizations the member firm rules of the NYSE. To effect this transition, FINRA will adopt the relevant NYSE member firm rules. For administrative convenience, FINRA will accomplish this by incorporating these rules into FINRA's rulebook, necessitating that the rules also remain as rules of the NYSE. The NYSE and FINRA will execute a Rule 17d-2 agreement that will allocate the regulatory responsibility for those rules to FINRA. 5 5 Pursuant to the Rule 17d-2 Agreement, NYSE and NASD will share responsibility for certain non-exclusive common rules, including rules relating to supervision, books and records, and conduct. *See* Securities Exchange Act Release No. 56148 (July 26, 2007). A necessary part of this arrangement is that NYSE will require all organizations that currently are or propose to become NYSE member organizations to also be members of FINRA. It is also intended that FINRA will become the designated examining authority (“DEA”) for all NYSE member organizations. 6 So, for example, NYSE rules will provide that it will be a condition to purchase of a NYSE trading license that the organization is a member of FINRA. 7 6 Historically, NYSE was the DEA for virtually all its member organizations. As part of the Transaction, it is contemplated that the Commission will name FINRA as the DEA for all the organizations for which NYSE was the DEA. 7 NYSE has also allowed an organization to be an NYSE “regulation only” member without purchasing a trading license, if the organization qualifies and subjects itself to NYSE regulatory jurisdiction. After the Transaction, NYSE will continue to provide this status to an organization that is or becomes a FINRA member and subjects itself to NYSE jurisdiction, even though the organization does not have a NYSE trading license. Most NYSE member organizations are already also members of NASD, and thus will automatically be members of FINRA. There are approximately 95 NYSE member organizations that are not currently NASD members, and these are the organizations that will be required to become FINRA members in order to remain NYSE member organizations, and remain entitled to utilize a NYSE trading license (“NYSE-only member organizations”). 8 8 NASD has filed with the Commission a rule filing to specify the terms on which these member organizations will be accommodated with FINRA membership. Pursuant to that proposed rule filing, NASD is proposing to establish Interpretive Material 1013-1 (“IM-1013-1”), which creates a membership waive-in process for NYSE-only member organizations, and Interpretative Material Section 4(e) to Schedule A of the NASD By-Laws, which creates a membership application fee waiver for those NYSE firms that apply for membership pursuant to IM-1013-1. *See* SR-NASD-2007-056. To address these changes, the Exchange proposes amending the definition of “member organization” in NYSE Rule 2(b). Under the Exchange's current rules, NYSE Rule 2(b) defines the term “member organization” as a “registered broker or dealer (unless exempt pursuant to Securities Exchange Act of 1934) approved by the Exchange and authorized to designate an associated natural person to effect transactions on the floor of the Exchange or any facility thereof.” 9 9 In 2006, in connection with the creation of NYSE Group, Inc., which is now known as NYSE Euronext, Inc., a publicly-traded corporation, the Exchange amended its rules to reflect the separation of trading privileges at the Exchange from equity ownership in the Exchange. Securities Exchange Act Release No. 53382 (February 27, 2006), 71 FR 11251 (March 6, 2006) (File No. SR-NYSE-2005-77). The Exchange proposes to amend NYSE Rule 2(b) to provide that membership in FINRA is a condition to becoming a member organization of NYSE. NYSE intends to retain for itself the discretion to deem an applicant unacceptable for NYSE membership, and is retaining Rule 308 (Acceptability Proceedings) for this purpose. The Exchange recognizes that the proposed amendments to both the NYSE's and NASD's membership rules will not be approved as of the date of the closing of the Transaction and therefore, as of the closing of the Transaction, NYSE-only firms may not yet be approved FINRA members. Accordingly, the Exchange proposes that NYSE-only member organizations be provided a 60-day grace period within which they must apply for and be approved for FINRA membership. This grace period would run from the later of the date of Commission approval of either this proposed filing or NASD's proposed filing to amend its membership rules. 2. Statutory Basis The Exchange states that the statutory basis for proposed rule change is the requirement under section 6(b)(5) 10 of the Act. Section 6(b)(5) requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 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 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the NYSE consents, the Commission will:
(A)By order approve such proposed rule change, or
(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSE-2007-67 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-2007-67. 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-2007-67 and should be submitted on or before August 28, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15274 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56181; File No. SR-NYSE-2007-70] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Amend the Gross FOCUS Fee August 1, 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 July 27, 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, II, and III below, which Items have been prepared by the NYSE. On August 1, 2007, NYSE filed Amendment No. 1 to the proposed rule change. 3 The NYSE has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the NYSE under section 19(b)(3)(A)(ii) of the Act, 4 and Rule 19b-4(f)(2) thereunder, 5 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 modified by Amendment No. 1, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 deleted a sentence in the statutory basis section of Exhibit 1 to the proposed rule change that was mistakenly included in the proposal and amended the Fee Schedule in Exhibit 5 to reference the file number of this proposal. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to reduce its gross FOCUS (Financial and Operational Combined Uniform Single Report) fee by 75% as of January 1, 2008. In addition, following the closing of the proposed consolidation of the member firm regulatory functions of the National Association of Securities Dealers, Inc. (“NASD”) and NYSE Regulation, Inc. (“NYSE Regulation”), the Exchange will transfer 75% of the gross FOCUS fees paid by member organizations for the remainder of 2007 to the resultant combined self-regulatory organization, Financial Industry Regulatory Authority, Inc. (“FINRA”). The text of the proposed rule change is available on the NYSE's Web site ( *http://www.nyse.com* ), at the principal office of 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 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 On November 28, 2006, NYSE Regulation and NASD announced a plan to consolidate their member regulation operations into a combined organization that will be the sole U.S. private-sector provider of member firm regulation for securities firms that conduct business with the public (the “Transaction”). The objective of the Transaction is to increase consistency and efficiency of member firm regulation, including examination, enforcement, and rule making, for the benefit of individual investors and overall market integrity. It is also an objective of the Transaction to reduce the regulatory and financial burdens placed on member firms as a result of duplicate self-regulatory structures. The Exchange charges its member organizations a fee of $0.42 per $1,000 of gross revenues as reported by each member firm in its FOCUS report, 6 subject to minimum annual fees of $180.00 for member organizations who do not conduct a public business, $1,000.00 for introducing firms, and $2,000.00 for carrying firms and specialists. These fees are imposed on all Exchange member organizations other than those members for whom another self-regulatory organization is the designated examining authority (“DEA”) under Rule 17d-1 7 of the Act. The Exchange allocates the FOCUS fees to NYSE Regulation to fund its performance of its regulatory activities with respect to member organizations. 6 FOCUS (Securities Exchange Act Form X-17A-5) is an acronym for Financial and Operational Combined Uniform Single Report. The report is filed periodically with the Commission pursuant to Rule 17a-5 under the Act. 7 17 CFR 240.17d-1. As a substantial proportion of these regulatory activities will be performed by FINRA after the Transaction, the Exchange has agreed with the NASD that, subject to the closing of the Transaction, 75% of the gross FOCUS fees paid to the Exchange during the remainder of 2007 after the closing of the Transaction will be remitted to FINRA. The Exchange believes that this apportionment of the FOCUS fee revenues is consistent with the relative regulatory activities that will be performed by NYSE Regulation and FINRA respectively after the Transaction. NYSE Regulation and the NASD have agreed upon this transitional period in which the Exchange remits FOCUS fee revenue to FINRA as a matter of administrative convenience to avoid the need for substantial adjustment of member firm billing arrangements mid-year. Assuming that the Transaction has closed, commencing January 1, 2008, the Exchange will reduce its FOCUS fees, including the minimum fees, by 75%, but will charge these fees to all members notwithstanding that they will be members of both the Exchange and FINRA. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of section 6 of the Act 8 in general and furthers the objectives of section 6(b)(4) of the Act 9 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that 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 Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(2) 11 thereunder because it changes a fee imposed by the Exchange. 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. 12 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(2). 12 The effective date of the original proposed rule is July 27, 2007. The effective date of Amendment No. 1 is August 1, 2007. 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 August 1, 2007, the date on which the NYSE 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-NYSE-2007-70 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-2007-70. 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-2007-70 and should be submitted on or before August 28, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E7-15313 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56180; File No. SR-NYSEArca-2007-72] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Auction Only Limit Order Type August 1, 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 July 25, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”), through its wholly owned subsidiary, NYSE Arca Equities, Inc. (“NYSE Arca Equities” or “Corporation”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange filed the proposed rule change pursuant to section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, which renders it effective upon filing with the Commission. 4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange, through NYSE Arca Equities, is proposing to amend its Rule 7.31(t) in order to modify the Auction Only Limit Order. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and *http://www.nyse.com.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The 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 As part of its continuing efforts to provide additional flexibility and increased functionality to its system and its Users, 5 the Exchange proposes to modify the Auction Only Limit Order (“Auction Only”). Currently, this order type is defined as a limit order that may be executed only during the Market Order Auction 6 or the Trading Halt Auction. 7 The Exchange proposes to amend and expand Rule 7.31(t) to include market orders and to make the order available in all auctions. 5 *See* NYSE Arca Rule 1.1(yy) for the definition of “User.” 6 *See* NYSE Arca Rule 7.35(c) for a description of the “Market Order Auction.” 7 *See* NYSE Arca Rule 7.35(f) for a description of the “Trading Halt Auction.” According to the proposed rule change, the Auction Only order will be executable during the next auction following entry of the order and that any unexecuted balance will be cancelled. Auction Only orders are only available for auctions on the Exchange and are not routed to other exchanges. The Exchange believes that the implementation of the aforementioned rule change will enhance order entry and execution opportunities on NYSE Arca. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act 8 in general, and furthers the objectives of section 6(b)(5) of the Act 9 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 mechanisms of a free and open market and a national market system. 8 15 U.S.C. 78f(b). 9 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 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, it has become effective pursuant to section 19(b)(3)(A) 10 of the Act and Rule 19b-4(f)(6) thereunder. 11 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. 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). NYSE Arca has asked the Commission to waive the 30-day operative delay. The Commission believes such a waiver is consistent with the protection of investors and the public interest because it would permit the Exchange to modify the Auction Only order without delay. 12 For this reason, the Commission designates the proposal to be operative upon filing with the Commission. 12 For purposes only of waiving the 30-day pre-operative period, the Commission has considered the proposed 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-NYSEArca-2007-72 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-2007-72. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of NYSE Arca. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2007-72 and should be submitted on or before August 28, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E7-15312 Filed 8-6-07; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION Reporting and Recordkeeping Requirements Under OMB Review. AGENCY: Small Business Administration. ACTION: Notice of reporting requirements submitted for OMB review. SUMMARY: Under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35), agencies are required to submit proposed reporting and recordkeeping requirements to OMB for review and approval, and to publish a notice in the **Federal Register** notifying the public that the agency has made such a submission. DATES: Submit comments on or before September 6, 2007. If you intend to comment but cannot prepare comments promptly, please advise the OMB Reviewer and the Agency Clearance Officer before the deadline. *Copies:* Request for clearance (OMB 83-1), supporting statement, and other documents submitted to OMB for review may be obtained from the Agency Clearance Officer. ADDRESSES: Address all comments concerning this notice to: *Agency Clearance Officer,* Jacqueline White, Small Business Administration, 409 3rd Street, SW., 5th Floor, Washington, DC 20416; and *OMB Reviewer,* Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503. FOR FURTHER INFORMATION CONTACT: Jacqueline White, Agency Clearance Officer,
(202)205-7044. SUPPLEMENTARY INFORMATION: *Title:* Small Business Week Award Nominees. *No:* SBA Form 3300. *Frequency:* On occasion. *Description of Respondents:* Respondents Are Entrepreneurs and Small Business, Owners Nominated for SBA's National Small Business Week Awards. *Annual Responses:* 600. *Annual Burden:* 450. *Title:* Small Business Administration Application for Certificate of Competency. *No:* SBA Form 1531. *Frequency:* On occasion. *Description of Respondents:* Small Business Owners. *Annual Responses:* 300. *Annual Burden:* 2,400. *Title:* SBIC Financial Reports. *No:* SBA Forms 468, 468.1, 468.2, 468.3, 468.4. *Frequency:* On occasion. *Description of Respondents:* Small Business Investment Companies. *Annual Responses:* 1,265. *Annual Burden:* 19,855. *Title:* Small Business Investment Companies. *No:* SBA Form 1031. *Frequency:* On occasion. *Description of Respondents:* Small Business Investment Companies. *Annual Responses:* 4,000. *Annual Burden:* 800. *Title:* Financing Eligibility Statement Social Disadvantage. *No:* SBA Forms 1941A, 1941B, 1941C. *Frequency:* On occasion. *Description of Respondents:* Small Business Investment Companies (SSBIC). *Annual Responses:* 190. *Annual Burden:* 380. *Title:* Size Status Declaration. *No:* SBA Form 480. *Frequency:* On occasion. *Description of Respondents:* New Licensees. *Annual Responses:* 4,200. *Annual Burden:* 700. *Title:* Stockholders Confirmation (Corporation) Owership Confirmation (Partnership). *No:* SBA Forms 1405, 1405a. *Frequency:* On occasion. *Description of Respondents:* Newly Licensed SBICs. *Annual Responses:* 600. *Annual Burden:* 600. *Title:* CDC Annual Report Guide. *No:* SBA Form 1253. *Frequency:* On occasion. *Description of Respondents:* Certified Development Companies. *Annual Responses:* 1. *Annual Burden:* 7,500. Jacqueline White, Chief, Administrative Information Branch. [FR Doc. E7-15243 Filed 8-6-07; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #10923 and #10924] Kansas Disaster Number KS-00022 AGENCY: U.S. Small Business Administration. ACTION: Amendment 4. SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of Kansas (FEMA-1711-DR), dated 07/05/2007. *Incident:* Severe Storms and Flooding. *Incident Period:* 06/26/2007 and continuing through 07/25/2007. *Effective Date:* 07/25/2007. *Physical Loan Application Deadline Date:* 09/04/2007. *EIDL Loan Application Deadline Date:* 04/07/2008. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the President's major disaster declaration for the State of Kansas, dated 07/05/2007 is hereby amended to establish the incident period for this disaster as beginning 06/26/2007 and continuing through 07/25/2007. All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Herbert L. Mitchell, Associate Administrator for Disaster Assistance. [FR Doc. E7-15304 Filed 8-6-07; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #10919 and #10920] Texas Disaster Number TX-00254 AGENCY: U.S. Small Business Administration. ACTION: Amendment 4. SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of Texas ( FEMA-1709-DR), dated 06/29/2007. *Incident:* Severe Storms, Tornadoes, and Flooding. *Incident Period* : 06/16/2007 and continuing. *Effective Date:* 07/31/2007. *Physical Loan Application Deadline Date:* 08/28/2007. *EIDL Loan Application Deadline Date:* 03/31/2008. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the Presidential disaster declaration for the State of Texas, dated 06/29/2007 is hereby amended to include the following areas as adversely affected by the disaster: *Primary Counties:* Bee, Medina. *Contiguous Counties:* Texas: Atascosa, Bandera, Bexar, Frio, Karnes, Live Oak, San Patricio, Uvalde, Zavala. All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Herbert L. Mitchell, Associate Administrator for Disaster Assistance. [FR Doc. E7-15303 Filed 8-6-07; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION National Small Business Development Center Advisory Board; Public Meeting Pursuant to the Federal Advisory Committee Act, Appendix 2 of Title 5, United States Code, Public Law 92-463, notice is hereby given that the U.S. Small Business Administration, National Small Business Development Center Advisory Board will be hosting a public meeting via conference call to discuss such matters that may be presented by members, staff of the U.S. Small Business Administration, and interested others. The conference will be held on Tuesday, August 21, 2007 at 1 p.m. Eastern Standard Time. The purpose of the meeting is to discuss updates about the Board site visit for the July 2007 Ohio Small Business Development Center Network and logistics for the upcoming National Association of SBDC Annual Conference on September 16-20, 2007 in Denver, Colorado. Anyone wishing to make an oral presentation to the Board must contact Alanna Falcone, Program Analyst, U.S. Small Business Administration, Office of Small Business Development Centers, 409 3rd Street, SW., Washington, DC 20416, telephone
(202)619-1612 or fax
(202)481-0134. Matthew Teague, Committee Management Officer. [FR Doc. E7-15305 Filed 8-6-07; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION National Women's Business Council; Notice of Public Meeting In accordance with the Women's Business Ownership Act, Public Law 106-554 as amended, the National Women's Business Council
(NWBC)would like to announce a forthcoming Council meeting. The meeting will be held on Wednesday, September 19, 2007, starting at 8:30 a.m. to 1 p.m. at the U.S. Small Business Administration, Eisenhower Conference Rooms A&B, 409 Third Street, SW., Second Floor, Washington, DC 20024. The purpose of the meeting is to discuss the NWBC's fiscal year 2007 and 2008 projects, congressional briefing on U.S. Small Business Administration/Entrepreneurial Development reauthorization, legislative updates, and swearing-in of new members. Anyone wishing to attend the Council meeting should contact Emily Reynolds no later than Monday, September 17, 2007 by e-mail at *Emily.reynolds@nwbc.gov* or fax to 202-205-6825. Anyone wishing to make a presentation to the Council during the meeting must contact Margaret M. Barton in writing at the National Women's Business Council, 409 Third Street, SW., Suite 210, Washington, DC 20024, by e-mail at *Margaret.barton@nwbc.gov* or fax to 202-205-6825 by Friday, September 7, 2007, in order to be put on the agenda. The meeting is open to the public, and attendance is by RSVP only. Matthew Teague, Committee Management Officer. [FR Doc. E7-15307 Filed 8-6-07; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION Public Federal Regulatory Enforcement Fairness Hearing; Region I Regulatory Fairness Board The U.S. Small Business Administration
(SBA)Region I Regulatory Fairness Board and the SBA Office of the National Ombudsman will hold a National Regulatory Fairness Hearing on Thursday, August 16, 2007, at 10 a.m. The forum will take place at the Portland SCORE Office, 100 Middle Street, 2nd Floor, Portland, ME 04101. The purpose of the meeting is for Business Organizations, Trade Associations, Chambers of Commerce and related organizations serving small business concerns to report experiences regarding unfair or excessive Federal regulatory enforcement issues affecting their members. Anyone wishing to attend or to make a presentation must contact Bonnie Erickson, in writing or by fax in order to be placed on the agenda. Bonnie Erickson, Public Information Officer, SBA, Augusta District Office, 68 Sewall Street, Room 512, Augusta, ME 04330, phone
(207)622-8275 and fax
(207)622-8277, e-mail: *Bonnie.erickson@sba.gov* . For more information, see our Web site at *http://www.sba.gov/ombudsman* . Matthew Teague, Committee Management Officer. [FR Doc. E7-15315 Filed 8-6-07; 8:45 am] BILLING CODE 8025-01-P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities: Proposed Request and Comment Request The Social Security Administration
(SSA)publishes a list of information collection packages that will require clearance by the Office of Management and Budget
(OMB)in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. The information collection packages that may be included in this notice are for new information collections, approval of existing information collections, revisions to OMB-approved information collections, and extensions (no change) of OMB-approved information collections. SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and on ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Written comments and recommendations regarding the information collection(s) should be submitted to the OMB Desk Officer and the SSA Reports Clearance Officer. The information can be mailed, faxed or e-mailed to the individuals at the addresses and fax numbers listed below: (OMB), Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202-395-6974, E-mail address: *OIRA_Submission@omb.eop.gov* (SSA), Social Security Administration, DCBFM, Attn: Reports Clearance Officer, 1333 Annex Building, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410-965-6400, E-mail address: *OPLM.RCO@ssa.gov* I. The information collections listed below are pending at SSA and will be submitted to OMB within 60 days from the date of this notice. Therefore, your comments should be submitted to SSA within 60 days from the date of this publication. You can obtain copies of the collection instruments by calling the SSA Reports Clearance Officer at 410-965-0454 or by writing to the address listed above. 1. Authorization for SSA to Disclose Tax Information for Your Appeal of Your Medicare Part B Income-Related Monthly Adjustment Premium Amount—20 CFR 418.1350—NEW. Medicare Part B beneficiaries who wish to appeal SSA's reconsideration of their Income-Related Monthly Adjustment Amount (IRMAA) must ensure that the relevant Internal Revenue Service
(IRS)income tax data is made available to the Health and Human Services Administrative Law Judge
(ALJ)who will consider their appeal. Currently, SSA is using IRS Form-8821 to obtain beneficiary authorization to disclose the IRS beneficiary tax data to the ALJ. With IRS's permission, SSA has developed its own form for this purpose, the SSA-54. The respondents are Medicare Part B recipients who want to appeal SSA's reconsideration of their IRMAA amount. *Type of Request:* New information collection. *Number of Respondents:* 6,000. *Frequency of Response:* 1. *Average Burden per Response:* 15 minutes. *Estimated Annual Burden:* 1,500 hours. 2. Request for Corrections of Earnings Record—20 CFR 404.820 & 20 CFR 422.125—0960-0029. The information collected by Form SSA-7008 is needed when an individual alleges his/her earnings record is inaccurate. The information is used to check against the record maintained by SSA and, as necessary, initiate development to resolve the issue. The respondents are individuals who request correction of earnings posted to their Social Security earnings record. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 375,000. *Estimated Annual Burden:* 62,500 hours. Number of respondents Frequency of response Estimated burden per response (minutes) Estimated annual burden (hours) Paper Version 37,500 1 10 6,250. In-person or telephone interview 337,500 1 10 56,250. Total 375,000 62,500. II. The information collections listed below have been submitted to OMB for clearance. Your comments on the information collections would be most useful if received by OMB and SSA within 30 days from the date of this publication. You can obtain a copy of the OMB clearance packages by calling the SSA Reports Clearance Officer at 410-965-0454, or by writing to the address listed above. 1. Electronic Records Express Third-Party Registration Form—0960-NEW. ERE (Electronic Records Express) is an online system which enables medical providers and various third parties to submit disability claimant information electronically to SSA as part of the disability application process. Third parties who wish to use this system must complete a unique registration process so the Agency can ensure they are authorized to access a claimant's electronic disability folder. This request is for the Third-Party Registration Form. The respondents are third-party representatives of disability applicants or recipients who want to use ERE to electronically access beneficiary folders and submit information to SSA. *Type of Request:* New information collection. *Number of Respondents:* 75,784. *Frequency of Response:* 1. *Average Burden per Response:* 3 minutes. *Estimated Annual Burden:* 3,789 hours. 2. Representative Payee Evaluation Report—20 CFR 404.2065 & 416.665—0960-0069. Sections 205(j) and 1631(a)(2) of the Social Security Act provide that a representative payee may be appointed to receive benefits on behalf of an individual entitled to Title II and/or Title XVI benefits when that individual is unable to manage or direct the management of those funds him/herself. The representative payee is required to report to SSA at least once per year on how those funds received have been used or conserved. When a representative payee fails to adequately report to SSA as required, SSA will conduct a face-to-face interview with the payee to complete an SSA-624, Representative Payee Evaluation Report, in order to determine the continued suitability of the representative payee to serve as a payee. The respondents are individuals and organizations who act as representative payees for Title II and Title XVI benefits who fail to comply with SSA's statutory annual reporting requirement. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 252,000. *Frequency of Response:* 1. *Average Burden per Response:* 30 minutes. *Estimated Annual Burden:* 126,000 hours. 3. Request for Change in Time/Place of Disability Hearing—20 CFR 404.914(c)(2) and 416.1414(c)(2)—0960-0348. The information on Form SSA-769 is used by SSA and the State Disability Determination Services to provide claimants with a structured format to exercise their right to request a change in time or place of a scheduled disability hearing. The information will be used as a basis for granting or denying requests for changes and for rescheduling disability hearings. Respondents are claimants who wish to request a change in the time and/or place of their hearing. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 7,483. *Frequency of Response:* 1. *Average Burden per Response:* 8 minutes. *Estimated Annual Burden:* 998 hours. 4. Agency/Employer Government Pension Offset Questionnaire—20 CFR 404.408(a)—0960-0470. The information collected by form SSA-4163 will provide SSA with accurate information from the agency paying the pension, for purposes of applying the pension-offset provision. The form will be used only when
(1)The claimant does not have the information and
(2)the pension-paying agency has not cooperated with the claimant. Respondents are Federal and State Government agencies which have information needed by SSA to determine if the GPO applies and the amount of offset. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 1,000. *Frequency of Response:* 1. *Average Burden per Response:* 3 minutes. *Estimated Annual Burden:* 50 hours. Dated: July 31, 2007. Elizabeth A. Davidson, Reports Clearance Officer, Social Security Administration. [FR Doc. E7-15153 Filed 8-3-07; 8:45 am] BILLING CODE 4191-02-P SOCIAL SECURITY ADMINISTRATION [Docket No. SSA-2007-0055] The Ticket to Work and Work Incentives Advisory Panel Meeting AGENCY: Social Security Administration (SSA). ACTION: Notice of teleconference. DATES: August 23, 2007—2 p.m. to 4 p.m. Eastern Daylight Savings Time; Ticket to Work and Work Incentives Advisory Panel Conference Call; Call-in number: 1-888-790-4158; Pass code: PANEL TELECONFERENCE; Leader/Host: Berthy De la Rosa-Aponte. SUPPLEMENTARY INFORMATION: Type of meeting: On August 23, 2007, the Ticket to Work and Work Incentives Advisory Panel (the “Panel”) will hold a teleconference. This teleconference meeting is open to the public. Purpose: In accordance with section 10(a)(2) of the Federal Advisory Committee Act, the Social Security Administration
(SSA)announces this teleconference meeting of the Ticket to Work and Work Incentives Advisory Panel. Section 101(f) of Public Law 106-170 establishes the Panel to advise the President, the Congress, and the Commissioner of Social Security on issues related to work incentive programs, planning, and assistance for individuals with disabilities as provided under section 101(f)(2)(A) of the Act. The Panel is also to advise the Commissioner on matters specified in section 101(f)(2)(B) of the Act, including certain issues related to the Ticket to Work and Self-Sufficiency Program established under section 101(a). The interested public is invited to listen to the teleconference by calling the phone number listed above. Public testimony will be taken from 3:30 p.m. until 4 p.m. Eastern Standard Time. You must be registered to give public comment. Contact information is given at the end of this notice. Agenda: The full agenda for the meeting will be posted on the Internet at *http://www.ssa.gov/work/panel* at least one week before the starting date or can be received, in advance, electronically or by fax upon request. Contact Information: Records are kept of all proceedings and will be available for public inspection by appointment at the Panel office. Anyone requiring information regarding the Panel should contact the staff by: • Mail addressed to the Social Security Administration, Ticket to Work and Work Incentives Advisory Panel Staff, 400 Virginia Avenue, SW., Suite 700, Washington, DC 20024. Telephone contact with Debra Tidwell-Peters at
(202)358-6126. • Fax at
(202)358-6440. • E-mail to *TWWIIAPanel@ssa.gov* . • To register for the public comment portion of the meeting please contact Debra Tidwell-Peters by calling
(202)358-6126, or by e-mail to *debra.tidwell-peters@ssa.gov* . Dated: July 27, 2007. Chris Silanskis, Designated Federal Officer. [FR Doc. E7-15252 Filed 8-6-07; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF STATE [Public Notice 5876] Culturally Significant Objects Imported for Exhibition Determinations: “Inspiring Impressionism” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Inspiring Impressionism”, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at the High Museum of Art, Atlanta, GA, from on or about October 16, 2007, until on or about January 13, 2008, at the Denver Art Museum, Denver, CO, from on or about February 23, 2008, until on or about May 25, 2008, and at the Seattle Art Museum, Seattle, WA, from on or about June 19, 2008, until on or about September 21, 2008, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact attorney, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/453-8058). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: July 30, 2007. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-15338 Filed 8-6-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5860] Shipping Coordinating Committee; Notice of Meeting The Subcommittee on Dangerous Goods, Solid Cargos and Containers of the Shipping Coordinating Committee
(SHC)will conduct an open meeting at 10 a.m. on Thursday, September 6, 2007, in Room 6103 of the United States Coast Guard Headquarters Building, 2100 Second Street, SW., Washington, DC 20593-0001. The primary purpose of the meeting is to prepare for the 12th Session of the International Maritime Organization
(IMO)Sub-Committee on Dangerous Goods, Solid Cargoes and Containers to be held at the Central Hall Westminster in London, England from September 17 to September 21, 2007. Items of principal interest on the agenda are: —Amendments to the International Maritime Dangerous Goods
(IMDG)Code and Supplements including harmonization of the IMDG Code with the United Nations Recommendations on the Transport of Dangerous Goods. —Amendments to the Code of Safe Practice for Solid Bulk Cargoes (BC Code) including evaluation of properties of solid bulk cargos and mandatory application of the BC Code. —Casualty and incident reports and analysis. —Review of the Code of Safety for Special Purpose Ships (SPS Code). —Amendments to the Code of Safe Practice for Cargo Stowage and Securing (CSS Code). —Extension of the Code of Practice for the Safe Unloading and Loading of Bulk Carriers (BLU Code) to include grain. —Guidance on providing safe working conditions for securing of containers. —Review of the Recommendations on the Safe Use of Pesticides in Ships. —Application of requirements for dangerous goods in packaged form in the International Convention for the Safety of Life at Sea (SOLAS) and the 2000 High Speed Craft
(HSC)Code. —Guidance on protective clothing. —Revision of the Code of Safe Practice for Ships Carrying Timber Deck Cargoes. —Form and procedure for approval of the Cargo Securing Manual. Members of the public may attend the meeting up to the seating capacity of the room. Interested persons may seek information by writing: Mr. R.C. Bornhorst, U.S. Coast Guard (CG-3PSO-3), Room 1210, 2100 Second Street, SW., Washington, DC 20593-0001 or by calling
(202)372-1426. Dated: July 30, 2007. Mark W. Skolnicki, Executive Secretary, Shipping Coordinating Committee, Department of State. [FR Doc. E7-15335 Filed 8-6-07; 8:45 am] BILLING CODE 4710-09-P DEPARTMENT OF STATE [Public Notice 5764] Shipping Coordinating Committee; Notice of Meeting The Subcommittee on Safety of Life at Sea of the Shipping Coordinating Committee
(SHC)will conduct an open meeting at 9:30 a.m. on Monday, September 10, 2007 in Room 2415, at U.S. Coast Guard Headquarters, 2100 2nd Street, SW., Washington, DC 20593-0001. The primary purpose of this meeting will be to finalize preparations for the 83rd Session of the Maritime Safety Committee, and associated bodies of the International Maritime Organization (IMO), which is scheduled for 3-12 October, 2007 at Bella Center in Copenhagen, Denmark. At this meeting, papers received and the draft U.S. positions for the Maritime Safety Committee will be discussed. Items of principal interest on the agenda are: —Adoption of amendments to the following international conventions and codes: International Convention for the Safety of Life at Sea (SOLAS) for Long Range Identification and Tracking
(LRIT)of ships; the International Maritime Dangerous Goods
(IMDG)Code; the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW); the Fire Safety Systems
(FSS)Code; and the International Lifesaving Appliance
(LSA)Code. —Measures to enhance maritime security. —Goal-based new ship construction standards. —Formal safety assessment. —Reports of nine related Subcommittees of the SHC: Stability, Load Lines and Fishing Vessel Safety; Dangerous Goods, Solid Cargoes and Containers; Training, Certification and Watchkeeping; Fire Protection; Radio Communications and Search and Rescue; Ship Design and Equipment; Flag State Implementation; Carriage of Bulk Liquids and Gases; and Safety of Navigation. Members of the public may attend this meeting up to the seating capacity of the room. Interested persons may seek information by writing to LCDR Kevin Ferrie, Commandant (CG-3PSE-1), U.S. Coast Guard Headquarters, 2100 2nd St., SW., Room 1218, Washington, DC 20593-0001 or by calling
(202)372-1357. Dated: July 30, 2007. Mark W. Skolnicki, Executive Secretary, Shipping Coordinating Committee, Department of State. [FR Doc. E7-15333 Filed 8-6-07; 8:45 am] BILLING CODE 4710-09-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Docket No. FAA-2006-25755] Operating Limitations at New York LaGuardia Airport; Proposed Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Proposed amendments and request for comments. SUMMARY: The Federal Aviation Administration
(FAA)has tentatively determined that it will be necessary to amend the December 12, 2006, order that places temporary limitations on flight operations at New York's LaGuardia Airport (LaGuardia). FOR FURTHER INFORMATION CONTACT: Komal Jain, Regulations Division, Office of the Chief Counsel; Telephone:
(202)267-3073; E-mail: *komal.jain@faa.gov* . SUPPLEMENTARY INFORMATION: Proposed Amendments to Order The Federal Aviation Administration
(FAA)proposes to modify its December 12, 2006, order (the Order) that temporarily limits flight operations at New York's LaGuardia Airport (LaGuardia), pending its promulgation of a long-term regulation to manage congestion at the airport. We propose to
(1)provide an approval process for Operating Authorization
(OA)transfers for day-of carrier substitutions;
(2)amend provisions affecting the 80 percent minimum-use requirement by adding a waiver for holiday periods and providing the Administrator greater discretion to suspend the requirement under certain conditions; and
(3)provide a mechanism for withdrawal of OAs for FAA operational reasons. These proposed amendments would not affect unscheduled operations. The FAA invites air carriers and other interested persons to submit written comments on this proposal by no later than September 6, 2007 in Docket FAA-2006-25755. We will give full consideration to comments received before we issue a final modification to the Order. You may send comments using any of the following methods: *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. *Mail:* U.S. Department of Transportation, Docket Operations, M-30, Room W12-140, 1200 New Jersey Ave., SE., Washington, DC 20590. *Fax:*
(202)493-2251. *Hand Delivery:* West Building, Ground Floor, Room W12-140, U.S. Department of Transportation, 1200 New Jersey Ave., SE., Washington, DC 20590 between 9 a.m. and 5 p.m., Monday through Friday, except for Federal holidays. I. Background Due to LaGuardia's limited runway capacity, the airport cannot accommodate the number of flights that airlines would like to operate without causing significant congestion. The FAA has long limited the number of arrivals and departures at LaGuardia during peak demand periods through the promulgation and implementation of the High Density Rule (HDR). 1 By statute enacted in April 2000, the HDR's applicability to LaGuardia operations terminated as of January 1, 2007. 2 On August 29, 2006, the FAA published a notice of proposed rulemaking
(NPRM)in anticipation of the HDR's expiration (71 FR 51360). In the NPRM, the agency proposed another congestion management program for LaGuardia, which, among other things, proposed to continue to limit the number of scheduled and unscheduled operations at LaGuardia. Because the rulemaking was not completed before January 1, 2007, the FAA, after notice and comment, adopted interim operational limitations on LaGuardia flights through the Order (71 FR 77854; Dec. 27, 2006). Without the limits contained in the Order, the FAA projected that severe congestion-related delays would occur as a result of excessive demand at LaGuardia, leading to delays both at LaGuardia and at other airports throughout the National Airspace System (NAS). 1 *See* 49 CFR part 93, subpart K. 2 Aviation Investment and Reform Act for the 21st Century (AIR-21), Pub. L. 106-181 (April 5, 2000), 49 U.S.C. 41715(a)(2). When the FAA issued the Order, we
(1)maintained hourly limits at 75 scheduled and six unscheduled operations at LaGuardia from 6 a.m. through 9:59 p.m., Eastern time, Monday through Friday, and from noon through 9:59 p.m., Eastern time on Sundays;
(2)imposed an 80 percent minimum usage requirement for OAs;
(3)provided for a lottery to reallocate withdrawn, surrendered or unallocated OAs; and
(4)allowed for trades and leases of OAs for consideration for the duration of the Order. II. Proposed Amendments The Order, which took effect on January 1, 2007, is a temporary measure while the FAA completes its final rule
(Rule)to manage congestion at LaGuardia. The agency is in the process of reviewing comments received on the NPRM, but the review is not complete. Until the Rule becomes effective, we propose several amendments to the Order to improve the administration of the congestion management program at LaGuardia. The FAA's authority to limit the number of flight operations at LaGuardia is an essential component of the FAA's statutory responsibilities. The FAA holds broad authority under 49 U.S.C. 40103(b) to regulate the use of the navigable airspace of the United States. This provision authorizes the FAA to develop plans and policy for the use of navigable airspace and, by order or rule, to regulate the use of the airspace as necessary to ensure its efficient use. Secondary Market: Approval Process Some air carriers with affiliated or regional carrier flights expressed concerns about the burden associated with obtaining prior approval from the FAA for OA transfers when making day-of carrier substitutions. Due to the around-the-clock nature of an airline's operations, and the real-time nature of operational logistics, it is not unusual for an air carrier to make day-of flight service substitutions from one carrier to another. The FAA recognizes that advance approval of an OA transfer is not always possible, in part because the FAA Slot Administration Office is not open 24 hours a day. Therefore, we propose to amend the Order to permit a transfer request to be submitted for FAA approval up to 72-hours after the actual operation. In order to support the request for the post-transfer approval, the FAA would require flight information, including flight number, origin, destination and scheduled time of operation. The FAA is not prepared to eliminate entirely the requirement that we receive advance notice of OA transfers. The initial scheduling decisions are normally made with sufficient time to obtain the requisite approval, even in the case of common ownership and affiliated carriers. The FAA proposes to limit post-transaction approvals to unplanned, day-of operational schedule changes between commonly owned or affiliated carriers under the same marketing control, and we are seeking comment on whether the transfer provisions should be revised to recognize these operational issues and whether the procedure outlined meets carrier needs. Minimum Usage Requirements and Waivers Holiday Waiver On January 9, 2007, the Air Transport Association
(ATA)submitted a petition for an amendment to the Order related to the minimum usage requirement. 3 ATA noted that the Order contains no provision to address the “predictable drop-off in operations on and immediately after certain holidays.” By contrast, ATA noted that the HDR and the governing rules for O'Hare state “the FAA will treat as used any slot held by a carrier at a High Density Traffic Airport on Thanksgiving Day, the Friday following Thanksgiving Day, and the period from December 24 through the first Saturday in January.” 3 See Docket FAA-2006-25755. ATA is correct in its conclusion that the FAA inadvertently omitted a holiday waiver provision under the Order. The FAA proposes to correct that omission and include a holiday waiver under this proposed amendment. Start-up Waiver The FAA recognizes that carriers obtaining an OA in a lottery would require time prior to its use to market the flights and arrange for aircraft, crew, gate, and terminal availability. Most carriers have indicated in past proceedings for LaGuardia that 120 days provides sufficient planning time. Therefore, the FAA proposes to adopt a waiver of the minimum usage requirements for 120 days after an OA is allocated in a lottery. A similar start-up waiver is not warranted when an OA is leased or transferred because carriers should consider the usage requirements in their discussions. Administrator's Waiver Authority Under the Order, the FAA Administrator can “waive the 80 percent usage requirement in the event of a highly unusual and unpredictable condition which is beyond the control of the carrier and which exists for a period of 5 consecutive days or more.” We propose the Administrator be given greater discretion to issue a waiver if the *impact* of a particular event is five consecutive days versus the duration of the event existing for more than five days. This recognizes that carrier operations may require several days to return to normal after significant disruptions to service; for example, aircraft and crew may need to be repositioned. We believe this proposed amendment allows carriers and the FAA, in its administration of the congestion management program at LaGuardia, greater latitude and flexibility to deal with unpredictable conditions; while still maintaining the integrity and purpose of the usage requirement. Reversion and Withdrawal of Operating Authorizations As the FAA has indicated in various proceedings related to capacity-constrained airports, operating authority is subject to absolute FAA control. The FAA may reduce flight operations at an airport in order to meet operational needs or to recognize reductions in available airport capacity. The Order currently does not provide a process for the FAA to reduce the number of OAs should that become necessary. The FAA proposes to use a weighted lottery system if we determine that OAs need to be withdrawn or temporarily suspended. Under this weighted lottery proposal, all air carriers holding OAs at the airport would be included. The FAA will use weights when establishing the air carrier rank order for OA selections. For example, if an air carrier has a weight equal to seven, the carrier's name will be placed seven times in a random draw. Once we have completed this process for all lottery participants, a representative of the FAA will begin drawing names. Although there is a possibility that any air carrier participating in the lottery could be chosen first in the rank order, carriers with greater operations at LaGuardia would have higher odds of being selected. Using a random drawing to establish a carrier rank order, carriers would relinquish two OAs in each sequence until the FAA's reduced level of operations by half-hour or hour, as appropriate, has been achieved. Withdrawal would not be made from any carrier if the result would reduce its holdings below 20 OAs on any weekday. For these purposes, the FAA would consider commonly owned and affiliated carriers to be single air carriers. The FAA would provide at least 45 days' notice unless otherwise required by operational needs. Any OA that is withdrawn or temporarily suspended would, if reallocated, be reallocated to the carrier from which it was taken, provided that the carrier continues to operate scheduled service at LaGuardia. III. Proposed Amendment to the Order A. Scheduled Operations With respect to scheduled operations at LaGuardia, the FAA proposes the following amendments to ordering paragraphs: 5. An air carrier can lease or trade an Operating Authorization to another carrier for any consideration, not to exceed the duration of the Order. Notice of a trade or lease under this paragraph would be submitted in writing to the FAA Slot Administration Office, facsimile
(202)267-7277 or e-mail *7-AWA-Slotadmin@faa.gov* , and must come from a designated representative of each carrier. The FAA must confirm and approve these transactions in writing prior to the effective date of the transaction. However, the FAA would approve transfers between carriers under the same marketing control up to 72-hours after the actual operation. This post-transfer approval would be limited to accommodate operational disruptions that occur on the same day of the scheduled operation. 6. Each air carrier holding an Operating Authorization would forward in writing to the FAA Slot Administration Office a list of all Operating Authorizations held by the carrier along with a listing of the Operating Authorizations actually operated for each day of the two-month reporting period within 14 days after the last day of the two-month reporting period beginning January 1 and every two months thereafter. Any Operating Authorization not used at least 80 percent of the time over a two-month period would be withdrawn by the FAA except: The FAA would treat as used any Operating Authorization held by an air carrier on Thanksgiving Day, the Friday following Thanksgiving Day, and the period from December 24 through the first Saturday in January. The FAA would treat as used any Operating Authorization obtained by an air carrier through a lottery under paragraph 7 for the first 120 days after allocation in the lottery. The Administrator of the FAA could waive the 80 percent usage requirement in the event of a highly unusual and unpredictable condition which is beyond the control of the air carrier and which affects carrier operations for a period of five consecutive days or more. [ *The following paragraph would be inserted as ordering paragraph 8, and existing paragraph 8 would be renumbered as ordering paragraph 9* ]. 8. If the FAA determines that a reduction in the number of allocated Operating Authorizations is required to meet operational needs, such as reduced airport capacity, the FAA would conduct a weighted lottery to withdraw Operating Authorizations to meet a reduced hourly or half-hourly limit for scheduled operations. Withdrawal would not be made from any air carrier if the result would reduce their holdings below 20 Operating Authorizations on any weekday. The FAA would provide at least 45 days' notice unless otherwise required by operational needs. Any Operating Authorization that is withdrawn or temporarily suspended would, if reallocated, be reallocated to the air carrier from which it was taken, provided that the air carrier continues to operate scheduled service at LaGuardia. IV. Request for Comments The FAA invites all interested persons to submit written comments on the proposals described in this Order by filing their written views in Docket FAA-2006-25755 on or before September 6, 2007. Issued in Washington, DC on August 2, 2007. Kerry B. Long, Chief Counsel. [FR Doc. 07-3855 Filed 8-2-07; 4:30 pm]
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Traces to 26 documents
U.S. Code
- Registration, responsibilities, and oversight of self-regulatory organizations§ 78s
- Trading by members of exchanges, brokers, and dealers§ 78k
- National securities exchanges§ 78f
- Definitions and application§ 78c
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Registration requirements for securities§ 78l
- Prohibitions relating to interstate commerce and the mails§ 77e
- National market system for securities; securities information processors§ 78k–1
- Discrimination against neutral Americans in time of war§ 77
- Periodical and other reports§ 78m
- Registration and regulation of brokers and dealers§ 78o
- Registered securities associations§ 78o–3
- Immunity from seizure under judicial process of cultural objects imported for temporary exhibition or display§ 2459
- Purposes§ 6501
- Phase-out of slot rules at certain airports§ 41715
- Sovereignty and use of airspace§ 40103
CFR
- Delegation of authority to Director of Division of Trading and Markets.§ 200.30-3
- Persons deemed not to be engaged in a distribution and therefore not underwriters.§ 230.144
- What are the rules for review of a reconsidered determination or an administrative law judge decision?§ 418.1350
- Filing a request for correction of the record of your earnings.§ 404.820
- Statements of earnings; resolving earnings discrepancies.§ 422.125
- How does your representative payee account for the use of benefits?§ 404.2065
- Disability hearing—general.§ 404.914
- Reduction of benefits based on disability on account of receipt of certain other disability benefits provided under Federal, State, or local laws or plans.§ 404.408
register
public-private-law
14 references not yet in our index
- 5 CFR 1320.10
- 17 CFR 240.19
- 17 CFR 240.15
- 15 USC 78
- 17 CFR 240.12
- 15 CFR 200.30-3(a)(12)
- 17 CFR 240.17
- Pub. L. 92-463
- Pub. L. 106-554
- Pub. L. 104-13
- Pub. L. 106-170
- 79 Stat. 985
- 49 CFR 93
- Pub. L. 106-181
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Notices
30-Day Notice of Information Collection Under Review: Form SF-15, Application for 10-Point Veteran Preference; OMB Control Number 3206-0001
Cite5 CFR 1320.10
Cite17 CFR 240.19
Cite17 CFR 240.15
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