Notices. Notice of Centennial Challenges 2007 Tether Challenge SUMMARY: This notice is issued in accordance with 42 U

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BILLING CODE 9211-03-P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice: (07-055)] Notice of Centennial Challenges 2007 Tether Challenge AGENCY: National Aeronautics and Space Administration (NASA). ACTION: Notice of Centennial Challenges 2007 Tether Challenge SUMMARY: This notice is issued in accordance with 42 U.S.C. 2451

(314)(d). The 2007 Tether Challenge is now scheduled, and teams that wish to compete may now register. The NASA Centennial Challenges Program is a program of prize contests to stimulate innovation and competition in space exploration and ongoing NASA mission areas. The 2007 Tether Challenge is a prize contest designed to develop very strong tether material for use in various structural applications. The 2007 Tether Challenge is being administered for NASA by the Spaceward Foundation. Their Web site is: *http://www.spaceward.org.* The Centennial Challenges Web site is *http://www.centennialchallenges.nasa.gov.* DATES: The 2007 Tether Challenge will be held on the dates of October 19-21, 2007. ADDRESSES: The location of the 2007 Tether Challenge will be held at the Davis County Event Center just outside of Salt Lake City, Utah. Questions and comments regarding the NASA Centennial Challenges Program should be addressed to Mr. Ken Davidian, Centennial Challenges Program, Innovative Partnerships Program Office, NASA Headquarters, 20546-0001. FOR FURTHER INFORMATION CONTACT: Mr. Ken Davidian, Centennial Challenges Program, Innovative Partnerships Program Office, NASA Headquarters, 20546-0001,

(202)358-0748, *kdavidian@nasa.gov.* To register for and get additional information regarding the 2007 Tether Challenge, visit: *http://www.elevator2010.org/site/competitionTether2007.html.* SUPPLEMENTARY INFORMATION: Summary The purpose of the 2007 Tether Challenge is to develop very strong tether material for use in various structural applications. The competition requires a 50% improvement in breaking force from year to year, starting with a commercially available tether in 2006. Additional requirements (such as operating temperature range, vacuum compatibility, and controlled electrical conductivity) will be added in future years. I. Challenge Basis and Prize Amount The complete 2007 Tether Challenge purse is $500,000. The 2007 Tether Challenge will be conducted in two rounds. The first round will pit tethers from two teams directly against each other to determine the team with the strongest tether. The second round will determine if the first-round winner(s) is/are at least 50% stronger than a house tether that represents off-the-shelf materials. If it is (or they are), that/those team(s) will win the competition and share the prize purse. II. Eligibility The Centennial Challenges Program has established the following language in the 2007 Tether Challenge Team Agreement governing eligibility. For this section, challenge is the 2007 Tether Challenge. A team is an individual or private entity, or a group of individuals or private entities, that register to participate in challenge. A team is comprised of a team leader and team members. A team leader is, by definition, also a team member. Team members are participants on the team that are not the team leader. To be eligible to win the challenge prize, an individual or entity,

(a)In the case of a private entity, shall be incorporated in and maintain a primary place of business in the United States, and

(b)in the case of an individual, whether participating individually or as a member of a group, shall be a citizen or permanent resident of the United States. A team leader is a single private entity or individual which is the sole agent representing a team regarding its participation in challenge. In the case of the team leader that is a private entity, it must appoint an individual who is an officer of the private entity to represent the team leader. All team members will apply to register for the challenge through team leader and must receive written concurrence by Spaceward. All team members must execute an “Adoption of Agreement” committing to all terms of this agreement. By signing below, team leader represents that all team members have executed the Adoption of Agreement and that no one else will become a member of the team or participate in the challenge until such new team member has signed this agreement. Spaceward may disqualify any team if it discovers that a person is acting as a team member who has not signed this agreement. Team leader will provide Spaceward with a copy of the “Adoption of Agreement” signed by each team member. Any U.S. Government organization or organization principally or substantially funded by the Federal Government, including Federally Funded Research and Development Centers, Government-owned, contractor operated

(GOCO)facilities, and University Affiliated Research Centers, are ineligible to be a team leader or team member. Rules The rules for the 2007 Tether Challenge can be found at: *http://www.elevator2010.org/site/competitionTether2007.html.* Dated: July 31, 2007. Douglas A. Comstock, Director, Innovative Partnerships Program Office. [FR Doc. E7-15518 Filed 8-8-07; 8:45 am] BILLING CODE 7510-13-P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice: (07-056)] Notice of Centennial Challenges 2007 Beam Power Challenge AGENCY: National Aeronautics and Space Administration (NASA). ACTION: Notice of Centennial Challenges 2007 Beam Power Challenge. SUMMARY: This notice is issued in accordance with 42 U.S.C. 2451 (314)(d). The 2007 Beam Power Challenge is now scheduled and teams that wish to compete may now register. The NASA Centennial Challenges Program is a program of prize contests to stimulate innovation and competition in space exploration and ongoing NASA mission areas. The 2007 Beam Power Challenge is a prize contest designed to promote the development of new power distribution technologies. The 2007 Beam Power Challenge is being administered for NASA by the Spaceward Foundation. Their Web site is: *http://www.spaceward.org.* The Centennial Challenges Web site is *http://www.centennialchallenges.nasa.gov.* DATES: The qualifying rounds of the 2007 Beam Power Challenge will start on October 15, and the final competition event will be open to the public between the dates of October 19-21. ADDRESSES: The location of the 2007 Beam Power Challenge will be held at the Davis County Event Center just outside of Salt Lake City, Utah. Questions and comments regarding the NASA Centennial Challenges Program should be addressed to Mr. Ken Davidian, Centennial Challenges Program, Innovative Partnerships Program Office, NASA Headquarters, 20546-0001. FOR FURTHER INFORMATION CONTACT: Requests for additional information regarding the NASA Centennial Challenges Program should be directed to Mr. Ken Davidian, Centennial Challenges Program, Innovative Partnerships Program Office, NASA Headquarters, 20546-0001,

(202)358-0748, *kdavidian@nasa.gov.* To register for and get additional information regarding the 2007 Beam Power Challenge, visit: *http://www.elevator2010.org/site/competitionClimber2007.html.* SUPPLEMENTARY INFORMATION: Summary The 2007 Beam Power Challenge is designed to promote the development of new power distribution technologies. These technologies can be applied to many aspects of space exploration, including surface- or space-based point-to-point power transmission or delivery for robotic and/or human expeditions to planetary surfaces. This challenge may also support the development of far-term space infrastructure concepts such as space elevators and solar power satellites. This challenge requires teams to design and build a climber (a machine that can go up and down a tether ribbon) while carrying a payload. Power will be beamed from a transmitter to a receiver on the climber. I. Challenge Basis and Prize Amount The 2007 Beam Power Challenge total purse is $500,000. Each climber must climb to a specified height traveling at a minimum speed of 1 meter per second. The teams with the highest score (the product of average velocity and payload mass normalized by the climber mass) will win the competition. II. Eligibility The Centennial Challenges Program has established the following language in the 2007 Beam Power Challenge Team Agreement governing eligibility. For this section, CHALLENGE is the 2007 Beam Power Challenge. A TEAM is an individual or private entity, or a group of individuals or private entities, that register to participate in CHALLENGE. A TEAM is comprised of a TEAM LEADER and TEAM MEMBERS. A TEAM LEADER is, by definition, also a TEAM MEMBER. TEAM MEMBERS are participants on the TEAM that are not the TEAM LEADER. To be eligible to win the CHALLENGE prize, an individual or entity,

(a)in the case of a private entity, shall be incorporated in and maintain a primary place of business in the United States, and

(b)in the case of an individual, whether participating individually or as a member of a group, shall be a citizen or permanent resident of the United States. A TEAM LEADER is a single private entity or individual which is the sole agent representing TEAM regarding its participation in CHALLENGE. In the case of the TEAM LEADER that is a private entity, it must appoint an individual who is an officer of the private entity to represent the TEAM LEADER. All TEAM MEMBERS will apply to register for the CHALLENGE through TEAM LEADER and must receive written concurrence by SPACEWARD. All TEAM MEMBERS must execute an “Adoption of AGREEMENT” committing to all terms of this AGREEMENT. By signing below, TEAM LEADER represents that all Team Members have executed the Adoption of Agreement and that no one else will become a member of the TEAM or participate in the CHALLENGE until such new TEAM MEMBER has signed this Agreement. SPACEWARD may disqualify any TEAM if it discovers that a person is acting as a TEAM MEMBER who has not signed this Agreement. TEAM LEADER will provide SPACEWARD with a copy of the “Adoption of Agreement” signed by each team member. Any U.S. Government organization or organization principally or substantially funded by the Federal Government, including Federally Funded Research and Development Centers, Government-owned, contractor operated

(GOCO)facilities, and University Affiliated Research Centers, are ineligible to be a TEAM LEADER or TEAM MEMBER. U.S. Government employees may not participate in the CHALLENGE as TEAM LEADER or TEAM MEMBER. TEAM MEMBERS may participate in CHALLENGE on more than one TEAM. III. Rules The rules for the 2007 Beam Power Challenge can be found at: *http://www.elevator2010.org/site/documents/climber_rulebook_2007.current.pdf.* Dated: July 31, 2007. Douglas A. Comstock, Director, Innovative Partnerships Program Office. [FR Doc. E7-15519 Filed 8-8-07; 8:45 am] BILLING CODE 7510-13-P NATIONAL ARCHIVES AND RECORDS ADMINISTRATION Agency Information Collection Activities: Proposed Collection; Comment Request AGENCY: National Archives and Records Administration (NARA). ACTION: Notice. SUMMARY: NARA is giving public notice that the agency proposes to request use of a voluntary survey of museum visitors at each Presidential library. The information will provide feedback about our visitors' experiences at the libraries. The public is invited to comment on the proposed information collection pursuant to the Paperwork Reduction Act of 1995. DATES: Written comments must be received on or before October 9, 2007 to be assured of consideration. ADDRESSES: Comments should be sent to: Paperwork Reduction Act Comments (NHP), Room 4400, National Archives and Records Administration, 8601 Adelphi Rd., College Park, MD 20740-6001; or faxed to 301-713-7409; or electronically mailed to *tamee.fechhelm@nara.gov.* FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the proposed information collection and supporting statement should be directed to Tamee Fechhelm at telephone number 301-837-1694, or fax number 301-713-7409. SUPPLEMENTARY INFORMATION: Pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13), NARA invites the general public and other Federal agencies to comment on proposed information collections. The comments and suggestions should address one or more of the following points:

(a)Whether the proposed information collection is necessary for the proper performance of the functions of NARA;

(b)the accuracy of NARA's estimate of the burden of the proposed information collection;

(c)ways to enhance the quality, utility, and clarity of the information to be collected; and

(d)ways to minimize the burden of the collection of information on respondents, including the use of information technology; and

(e)whether small businesses are affected by this collection. The comments that are submitted will be summarized and included in the NARA request for Office of Management and Budget

(OMB)approval. All comments will become a matter of public record. In this notice, NARA is soliciting comments concerning the following information collection: *Title:* Presidential Libraries Museum Visitor Survey. *OMB number:* 3095-00XX. *Agency form number:* N/A. *Type of review:* Regular. *Affected public:* Individuals who visit the museums at the Presidential libraries. *Estimated number of respondents:* 75,000. *Estimated time per response:* 15 minutes. *Frequency of response:* On occasion (when an individual visits a Presidential Library or Museum.) *Estimated total annual burden hours:* 18,750 hours. *Abstract:* The survey will be comprised of a set of questions designed to allow for a statistical analysis that will ultimately provide actionable information to NARA. The survey includes questions that measure the visitor's satisfaction in general and with specific aspects of their visit. These questions serve as dependent variables for analytical purposes. Other questions provide attitudinal, behavioral, and demographic data that are used to help understand variation in the satisfaction variables. Using statistical analyses, Harris Interactive will determine the factors that drive the visitor's perceptions of quality and satisfaction with the Library they visited. Additionally, natural groupings of visitors defined by similarity based on these attitudinal, behavioral, and demographic variables can be developed and targeted for outreach purposes. The information collected through this effort will inform program activity, operation, and oversight, and will benefit Library and NARA staff and management in making critical decisions about resource allocation, museum operation and program direction. Dated: August 2, 2007. Martha Morphy, Assistant Archivist for Information Services. [FR Doc. E7-15609 Filed 8-8-07; 8:45 am] BILLING CODE 7515-01-P NATIONAL ARCHIVES AND RECORDS ADMINISTRATION Records Schedules; Availability and Request for Comments AGENCY: National Archives and Records Administration (NARA). ACTION: Notice of availability of proposed records schedules; request for comments. SUMMARY: The National Archives and Records Administration

(NARA)publishes notice at least once monthly of certain Federal agency requests for records disposition authority (records schedules). Once approved by NARA, records schedules provide mandatory instructions on what happens to records when no longer needed for current Government business. They authorize the preservation of records of continuing value in the National Archives of the United States and the destruction, after a specified period, of records lacking administrative, legal, research, or other value. Notice is published for records schedules in which agencies propose to destroy records not previously authorized for disposal or reduce the retention period of records already authorized for disposal. NARA invites public comments on such records schedules, as required by 44 U.S.C. 3303a(a). DATES: Requests for copies must be received in writing on or before September 10, 2007 (Note that the new time period for requesting copies has changed from 45 to 30 days after publication). Once the appraisal of the records is completed, NARA will send a copy of the schedule. NARA staff usually prepare appraisal memorandums that contain additional information concerning the records covered by a proposed schedule. These, too, may be requested and will be provided once the appraisal is completed. Requesters will be given 30 days to submit comments. ADDRESSES: You may request a copy of any records schedule identified in this notice by contacting the Life Cycle Management Division

(NWML)using one of the following means: Mail: NARA (NWML), 8601 Adelphi Road, College Park, MD 20740-6001. *E-mail:* *requestschedule@nara.gov.* *FAX:* 301-837-3698. Requesters must cite the control number, which appears in parentheses after the name of the agency which submitted the schedule, and must provide a mailing address. Those who desire appraisal reports should so indicate in their request. FOR FURTHER INFORMATION CONTACT: Laurence Brewer, Director, Life Cycle Management Division (NWML), National Archives and Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001. Telephone: 301-837-1539. E-mail: *records.mgt@nara.gov.* SUPPLEMENTARY INFORMATION: Each year Federal agencies create billions of records on paper, film, magnetic tape, and other media. To control this accumulation, agency records managers prepare schedules proposing retention periods for records and submit these schedules for NARA's approval, using the Standard Form

(SF)115, Request for Records Disposition Authority. These schedules provide for the timely transfer into the National Archives of historically valuable records and authorize the disposal of all other records after the agency no longer needs them to conduct its business. Some schedules are comprehensive and cover all the records of an agency or one of its major subdivisions. Most schedules, however, cover records of only one office or program or a few series of records. Many of these update previously approved schedules, and some include records proposed as permanent. No Federal records are authorized for destruction without the approval of the Archivist of the United States. This approval is granted only after a thorough consideration of their administrative use by the agency of origin, the rights of the Government and of private persons directly affected by the Government's activities, and whether or not they have historical or other value. Besides identifying the Federal agencies and any subdivisions requesting disposition authority, this public notice lists the organizational unit(s) accumulating the records or indicates agency-wide applicability in the case of schedules that cover records that may be accumulated throughout an agency. This notice provides the control number assigned to each schedule, the total number of schedule items, and the number of temporary items (the records proposed for destruction). It also includes a brief description of the temporary records. The records schedule itself contains a full description of the records at the file unit level as well as their disposition. If NARA staff has prepared an appraisal memorandum for the schedule, it too includes information about the records. Further information about the disposition process is available on request. *Schedules Pending (Note that the new time period for requesting copies has changed from 45 to 30 days after publication):* 1. Department of Agriculture, Cooperative State Research, Education, and Extension Service (N1-540-07-3, 18 items, 18 temporary items). Records of the Office of Extramural Program Policy and Oversight, including audit, investigation, review, and reporting records; rulemaking records, opinions, and commentaries; policies, procedures, terms and conditions, memoranda of understanding, agreements, and requests for proposals relating to the awarding of grants; internal administrative policies and procedures; and working files. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 2. Department of Agriculture, Food Safety and Inspection Service (N1-462-05-7, 9 items, 9 temporary items). Records of the Environmental, Health and Safety Branch relating to emergency planning records. Included are emergency occupant plans, lockout and tagout procedures, health hazard reports, air contaminants monitoring exposure reports, industrial hygiene surveys, hearing conservation and hazard communication programs records, log reports on unsafe and unhealthful working conditions, and safety and workplace inspections. 3. Department of State, Bureau of Overseas Buildings Operations (N1-59-07-7, 1 item, 1 temporary item). Background information files used to analyze and monitor operations and prepare final internal review reports. 4. Department of State, Office of Civil Rights (N1-59-07-10, 3 items, 3 temporary items). Photographs, audio tapes, and video tapes relating to notables, and fragmentary textual files. 5. Environmental Protection Agency (N1-412-06-12, 2 items, 2 temporary items). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. Included are site-specific grants and other program support agreements to which the agency is a party and which support the Superfund program. Paper recordkeeping copies of these files were previously approved for disposal. 6. Environmental Protection Agency (N1-412-06-15, 5 items, 5 temporary items). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. Included are records created by laboratories relating to chemical analysis services performed to support Superfund remedial and removal site-specific activities. Paper recordkeeping copies of these files were previously approved for disposal. 7. Environmental Protection Agency (N1-412-06-17, 3 items, 3 temporary items). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. Included are Superfund site-specific contract management files, including correspondence and related records pertaining to requests for proposals, procurement award and administration, receipt, inspection and payment of contracts, and other contract matters. Paper recordkeeping copies of these files were previously approved for disposal. 8. Environmental Protection Agency (N1-412-06-18, 1 item, 1 temporary item). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. Included are site-specific records relating to activities undertaken to secure response costs from responsible parties at Superfund remedial and removal sites and oil spills. Records include compilations of documentation that describe technical aspects of the response action and cost accounting information necessary to document the costs incurred to implement the response action. Paper recordkeeping copies of these files were previously approved for disposal. 9. Environmental Protection Agency (N1-412-06-19, 2 items, 1 temporary item). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. Included are Superfund site-specific case files, covering such actions as injunctive relief, natural resource damage actions, remedial investigation/feasibility study special notices, administrative and judicial cost recovery settlements, administrative orders, and other matters. Paper recordkeeping copies of these files were previously approved for disposal. Proposed for permanent retention are landmark cases, including cases resulting in a legal precedent that establishes or affirms agency policy with respect to environmental actions of national importance, for which paper recordkeeping copies previously were approved as permanent. 10. Environmental Protection Agency (N1-412-07-25, 4 items, 2 temporary items). This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. Included are Superfund and Brownfields site assessment files, comprising site-specific records, including site discovery, preliminary assessment, site investigation and hazard ranking system package documents and other records, related to sites investigated for listing on the National Priorities List and the Brownfields program. Proposed for permanent retention are files for sites placed on the National Priorities List and for sites warranting a removal action, for which paper recordkeeping copies previously were approved as permanent. 11. National Archives and Records Administration, Government-wide (N1-GRS-07-1, 3 items, 3 temporary items). Addition to the General Records Schedules covering records relating to the planning, implementation, operation, audit or monitoring, reorganization or termination, and transaction interoperability of a public key infrastructure

(PKI)system. 12. National Archives and Records Administration, Government-wide (N1-GRS-07-4, 11 items, 7 temporary items). Revision to General Records Schedule 20, Items 2, 3, and 11. The schedule revises Item 2a to provide disposal authority for non-electronic documents that are used to create electronic records, and also records not created solely for that purpose, such as reports, correspondence, memorandums, and other records that are scanned into an electronic recordkeeping system. Proposed revised Item 3 provides coverage for electronic records that replace temporary hard copy records covered by previously approved schedules that do not explicitly *exclude* electronic records. Revised GRS 20, Item 11, provides disposition instruction for documentation associated with electronic records. Proposed for permanent retention are hardcopy documents that NARA has specifically designated as permanent records that must be transferred to NARA in hard copy format, even if records have been copies/converted to an electronic format; hardcopy records previously approved as permanent that are converted to electronic records where the electronic records do not meet NARA's transfer standards for permanent electronic records in effect at the time of conversion; electronic records that replace hard copy records approved as permanent in a previously approved schedule; and documentation relating to electronic records that are scheduled for permanent retention in the GRS or in a NARA-approved agency schedule. 13. Social Security Administration, Office of Disability and Income Security Programs (N1-47-07-1, 1 item, 1 temporary item). Eligibility records accumulated after a determination for Medicare benefits has been made. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. Dated: August 1, 2007. Michael J. Kurtz, Assistant Archivist for Records Services—Washington, DC. [FR Doc. E7-15610 Filed 8-8-07; 8:45 am] BILLING CODE 7515-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 70-3098-MLA; ASLBP No.: 07-856-02-MLA-BD01] Atomic Safety and Licensing Board; In the Matter of Shaw Areva MOX Services (Mixed Oxide Fuel Fabrication Facility); Notice of Oral Argument and of Opportunity To Make Limited Appearance Statements August 3, 2007. Before Administrative Judges: Michael C. Farrar, Chairman, Nicholas G. Trikouros, Lawrence G. McDade. This proceeding involves the September 2006 application of Shaw AREVA MOX Services (MOX Services, or Applicant) for a license to possess and use byproduct, source, and special nuclear materials at the Mixed Oxide Fuel Fabrication Facility

(MFFF)at the Department of Energy's Savannah River Site, which lies south of Aiken, South Carolina, and extends to the Georgia border. This Atomic Safety and Licensing Board hereby gives NOTICE that it will, on Wednesday, August 22, 2007, in Augusta, Georgia, be hearing oral argument from the formal participants in the proceeding regarding the petition to intervene that has been submitted by three organizations. Information about that oral argument appears in Section A below. In addition, the Board gives notice that, in accordance with 10 CFR 2.315(a), it will entertain oral “limited appearance” statements from members of the public in North Augusta, South Carolina, on the evening of Tuesday, August 21, 2007. Information about these statements appears in Section B below. This matter began on March 15, 2007, when the Commission published a notice of acceptance for docketing of the MOX Services license application and a notice of opportunity to request a hearing on the application. 72 FR 12,204 (Mar. 15, 2007). Thereafter, a “Petition for Intervention and Request for Hearing” (hereinafter Petition) was timely filed on May 14, 2007, by a group of three organizations (collectively, Petitioners): The Blue Ridge Environmental Defense League (BREDL), Nuclear Watch South (NWS), 1 and the Nuclear Information Service (NIRS). 1 Nuclear Watch South was previously known as Georgians Against Nuclear Energy

(GANE)and participated in the prior proceeding related to this facility under that name. On June 5, 2007, this Atomic Safety and Licensing Board was established to conduct this adjudication. 2 As part of that process, this Board will now hear oral argument on the standing of the Petitioners to intervene in this proceeding and on the admissibility of the five contentions they submitted as part of the petition to intervene. 2 72 FR 32,139 (June 11, 2007). The Board was subsequently reconstituted, pursuant to 10 CFR 2.313(c), due to the unavailability of one of the judges. 72 FR 40,344 (July 24, 2007). A. Nature, Timing, and Location of Oral Argument The oral argument is currently scheduled to cover two categories of issues: Standing and contention admissibility. The Petitioners have claimed representational standing on behalf of their members who reside within 50 miles of the proposed facility, a claim that is disputed by the Applicant and by the NRC Staff. The Petitioners have also submitted five contentions, which they list in summary as follows:

(1)Whether MOX Services' License Application and/or EIS meet the relevant requirements in the National Environmental Policy Act and/or the Clean Air Act because of failures to address critical aspects regarding limits on emissions of hazardous air pollutants necessary for the protection of public health and safety;

(2)Whether MOX Services License Application meets the relevant requirements of the Atomic Energy Act because of its failure to prepare and submit an emergency plan to the NRC for potential radioactive releases to the public;

(3)Whether the Final Environmental Impact Statement on the construction and operation of a plutonium fuel factory is adequate to satisfy the requirements of NEPA and NRC implementing regulations because it fails to address new and significant information showing that neither MOX Services nor the U.S. Department of Energy (“DOE”) has any concrete plans for the Waste Solidification Building (“WSB”) that was proposed in the EIS and, as a result, high-alpha liquid waste from the proposed facility may have to be stored onsite posing hazards which have not been addressed by the NRC in the EIS;

(4)Whether the License Application for the proposed plutonium processing facility is inadequate because it does not address safety and public health risks posed by indefinite storage of liquid high-alpha waste at the site or contain measures for the safe storage of that waste; and

(5)Whether the Final Environmental Impact Statement for the proposed plutonium processing facility meets the relevant requirements of NEPA because it does not evaluate the environmental impacts of a terrorist attack on the proposed factory. Petition at 5-6. The Board will hear argument from counsel for the Applicant and for the NRC Staff and from *pro se* representatives of the Petitioners regarding the Petitioners' standing claim and the admissibility of these contentions under 10 CFR 2.309(f)(1). The specific date, time, and location of the oral argument is as follows: *Dates:* Wednesday, August 22, 2007. *Location:* Courtroom # 2 (Second Floor), Augusta Federal Courthouse, 600 James Brown Blvd., Augusta, Georgia 30901. *Time:* 9 a.m. to 11:30 a.m (EDT). Members of the public are welcome to attend the oral argument as spectators (this session is a formal adjudicatory proceeding open to public observation but not to public participation those who wish to participate in other aspects are invited to offer limited appearance statements as provided in Section B, below.) Conduct of members of the public at NRC adjudicatory proceedings is governed by 66 FR 31,719 (June 12, 2001), an excerpt from which follows this notice. In addition, normal federal courthouse security procedures will be followed. Attendees are strongly advised to arrive sufficiently early to allow time to pass through a security screening checkpoint. Further, in the interest of permitting prompt access to the hearing room, attendees are requested to refrain from bringing any unnecessary hand-carried items. (Items such as packages, briefcases, and backpacks may need to be examined individually, and items that could readily be used as weapons will not be permitted in the hearing room.) There will be no facilities available for storing any items outside the hearing room, and attendees with items requiring inspection may be delayed in obtaining entry. B. Oral Limited Appearance Statement Session 1. Date, Time, and Location The Board will conduct a session to provide members of the public with an opportunity to make oral limited appearance statements on the following date at the specified location and time: *Dates:* Tuesday, August 21, 2007. *Location:* Banquet Room A-2, North Augusta Community Center, 495 Brookside Avenue, North Augusta, South Carolina 29861. *Time:* 5-8 p.m. (EDT). 2. Participation Guidelines for Oral Limited Appearance Statements Any person not party to the proceeding has the opportunity, as specified below, to make an oral statement setting forth his or her position on matters of concern relating to this proceeding. These statements will be transcribed and will become part of the record of the proceeding for future reference, and they may ( if focused on the contentions under consideration—assist the Board in formulating questions to ask the parties during oral argument or prompt the parties to address particular matters at the argument or in some other fashion. They do not, however, constitute evidence upon which a decision may be based. Oral limited appearance statements will be entertained during the hours specified above, although a lesser time period may be sufficient to accommodate the speakers who are present. If all scheduled and unscheduled speakers present at a session have made a presentation, the Licensing Board reserves the right to terminate the session before the ending time listed above. In order to accommodate as many speakers as feasible, the time allotted for each statement normally will be no more than three minutes, and speakers should prepare accordingly. That time limit may be altered, depending on the number of written requests that are submitted in accordance with subsection 3 below, and/or the number of persons present at the designated time. The same security guidelines applicable to the oral argument will be applicable to the limited appearance session as well, although limited appearance sessions are not deemed to be “adjudicatory proceedings” within the meaning of those guidelines. 3. Submitting a Request to Make an Oral Limited Appearance Statement Persons wishing to make an oral statement who have submitted a timely written request to do so will be given priority over those who have not filed such a request. In order to be considered timely for priority purposes, a written request to make an oral statement must be mailed, faxed, or sent by e-mail so as to be received at NRC Headquarters by noon, EDT on Friday, August 17, 2007. In light of possible mail delivery delays, persons able to do so may wish to use fax or e-mail to assure that their requests are timely received. These written requests to make an oral statement are to be submitted in one of the following fashions: *Mail:* Office of the Secretary, Rulemakings and Adjudications Staff, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. *Fax:*

(301)415-1101 (verification

(301)415-1966). *E-mail:* *hearingdocket@nrc.gov* . In addition, using the same method of service, a copy of the request must be sent to the Licensing Board as follows: *Mail:* MOX Limited Appearance Box, Atomic Safety and Licensing Board Panel, Mail Stop T-3F23, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. *Fax:*

(301)415-5599 (verification

(301)415-7550). *E-mail:* *pah@nrc.gov* and *mxc7@nrc.gov* . Phone requests to make limited appearance statements will not be accepted. 4. Submitting Written Limited Appearance Statements A written limited appearance statement (in lieu of or in addition to an oral presentation) may be submitted at any time. Such statements should be sent to the Office of the Secretary using the methods prescribed above, with a copy to the Licensing Board as noted above. * * * Documents relating to the MOX facility license application at issue in this proceeding are on file at the Commission's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland 20850, and may also be obtained electronically through ADAMS, the Agencywide Documents Access and Management System, accessible through the NRC Web site at *http://www.nrc.gov/reading-rm/adams.html* . Persons who do not have access to ADAMS or who encounter problems in accessing the documents located therein should contact the PDR reference staff by telephone at 800-397-4209 or 301-415-4737, or by e-mail to *pdr@nrc.gov* . Any updated/revised scheduling information regarding the oral argument or the limited appearance session can be found on the NRC Web site at *http://www.nrc.gov/public-involve/public-meetings/index.cfm* . For the Atomic Safety and Licensing Board. Rockville, Maryland, August 3, 2007. Michael C. Farrar, Chairman, Administrative Judge, Copies of this notice were sent this date by Internet e-mail transmission to

(1)Counsel for Applicant Shaw AREVA MOX Services and for the NRC Staff; and

(2)each of the individuals who entered an appearance on behalf of Petitioners Blue Ridge Environmental Defense League (BREDL), Nuclear Watch South (NWS), and the Nuclear Information Service (NIRS). Excerpt from **Federal Register** notice published on June 12, 2001 (66 FR 31,719): In order to balance the orderly conduct of government business with the right of free speech, the following procedures regarding attendance at NRC public meetings and hearings have been established: Visitors (other than properly identified Congressional, press, and government personnel) may be subject to personnel screening, such as passing through metal detectors and inspecting visitors' briefcases, packages, etc. Signs, banners, posters and displays will be prohibited from all NRC adjudicatory proceedings (Commission and Atomic Safety and Licensing Board Panel hearings) because they are disruptive to the conduct of the adjudicatory process. Signs, banners, posters and displays not larger than 18″ × 18″ will be permitted at all other NRC proceedings, but cannot be waved, held over one's head or generally moved about while in the meeting room. Signs, banners, posters and displays larger than 18″ × 18″ will not be permitted in the meeting room because they are disruptive both to the participants and the audience. Additionally, signs, banners, posters, and displays affixed to any sticks, poles or other similar devices will not be permitted in the meeting room. The presiding official will note, on the record, any disruptive behavior and warn the person to cease the behavior. If the person does not cease the behavior, the presiding official may call a brief recess to restore order and/or ask one of the security personnel on hand to remove the person. [FR Doc. E7-15557 Filed 8-8-07; 8:45 am] BILLING CODE 7590-01-P PEACE CORPS Proposed Routine Use; Request for Public Comment SUMMARY: The Peace Corps proposes to adopt a new routine use that would permit disclosure of Peace Corps records governed by the Privacy Act when reasonably necessary to respond to, prevent, minimize, or remedy, harm that may result from an agency data breach or compromise. DATES: The deadline for public comments is September 24, 2007. Comments received after that date will be considered at the Peace Corps' discretion. ADDRESSES: You may submit comments by e-mail to *sglasow@peacecorps.gov.* Include Privacy Act System of Records Routine Use in the subject line of the message. You may also submit comments by mail to Suzanne Glasow, Office of the General Counsel, Peace Corps, Suite 8200, 1111 20th Street, NW., Washington, DC 20526. Contact Suzanne Glasow for copies of comments. FOR FURTHER INFORMATION CONTACT: Suzanne Glasow, Associate General Counsel, 202-692-2150, *sglasow@peacecorps.gov.* SUPPLEMENTARY INFORMATION: In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, this document provides public notice that the Peace Corps is proposing to adopt a new “routine use” that will apply to all Peace Corps records systems covered by the Privacy Act of 1974. The Act applies to agency systems of records identified in the list below (including number of system, system name, volume number in the **Federal Register** , and the date(s) of publication). The new routine use would be added to the list of General Routine Uses, which describes routine uses that apply to all Peace Corps Privacy Act records systems listed below. PC system number System name Date published FR volume number PC-1 Accounts Receivable (Collection of Debts Claims Records) 09-05-00 65 FR 53772 PC-2 Congressional Files 09-05-00 65 FR 53772 PC-3 Contractors and Consultants Files 09-05-00 65 FR 53772 PC-4 Discrimination Complaint Files 09-05-00 65 FR 53772 PC-5 Employee Occupational Injury and Illness Reports 09-05-00 65 FR 53772 PC-6 Employee Pay and Leave Records 09-05-00 65 FR 53772 PC-7 Peace Corps Volunteers: Reasons for Resignation 09-05-00 65 FR 53772 PC-8 Legal Files—Staff, Volunteers and Applicants 09-05-00 65 FR 53772 PC-9 Payment Records: Transportation, Travel Authorizations, and Household Storage 09-05-00 65 FR 53772 PC-10 Office of Private Sector Cooperation and International Volunteerism Database 09-05-00 65 FR 53772 PC-11 Personal Services Contracts 09-05-00 65 FR 53772 PC-12 Property Records 09-05-00 65 FR 53772 PC-13 Personnel Security Records 09-05-00 65 FR 53772 PC-14 Administrative Grievance Records 09-05-00 65 FR 53772 PC-15 Overseas Executive Selection and Support 09-05-00 65 FR 53772 PC-16 Travel Files 09-05-00 65 FR 53772 PC-17 Peace Corps Volunteer Database Management System 01-14-85 50 FR 1950 PC-18 Former Peace Corps Volunteers and Staff Database 09-05-00 65 FR 53772 PC-19 Office of Inspector General Investigative Records 09-05-00 65 FR 53772 PC-20 Building Management, Parking, and Metro Pool 09-05-00 65 FR 53772 PC-21 Crisis Corps Database 09-05-00 65 FR 53772 PC-22 Financial Management System 05-04-07 72 FR 25343 PC-23 Health Benefits Program for Peace Corps Volunteers 09-05-00 65 FR 53772 PC-24 Privacy and Freedom of Information Act Requests 09-05-00 65 FR 53772 PC-25 Early Termination and Special Action 09-05-00 65 FR 53772 PC-26 Peace Corps Computer Systems Activity and Access Records 07-29-02 67 FR 49048 PC-27 Antimalaria Tolerance Survey 07-16-04 updated 10-03-05 69 FR 42784 70 FR 57630 PC-28 Applications for Employment 09-23-05 70 FR 55929 PC-29 World Wise Schools 05-25-07 72 FR 29357 This new routine use is needed in order to allow for disclosure of records to appropriate persons and entities for purposes of response and remedial efforts in the event of a breach of data contained in the protected systems. This routine use will facilitate an effective response to a confirmed or suspected breach by allowing for disclosure to individuals affected by the breach, in cases, if any, where such disclosure is not otherwise authorized under the Act. This routine use will also authorize disclosures to others who are in a position to assist in response efforts, either by assisting in notification to affected individuals or otherwise playing a role in preventing, minimizing, or remedying harms from the breach. The Privacy Act authorizes the agency to adopt routine uses that are consistent with the purpose for which information is collected and subject to that Act. 5 U.S.C. 552a(b)(3); *see also* 5 U.S.C. 552a(a)(7). The Peace Corps believes that it is consistent with the collection of information pertaining to such individuals to disclose Privacy Act records when, in doing so, it will help prevent, minimize or remedy a data breach or compromise that may affect such individuals. The Peace Corps believes that failure to take reasonable steps to help prevent or minimize the harm that may result from such a breach or compromise would jeopardize, rather than promote, the privacy of such individuals. Accordingly, the Peace Corps concludes that it is authorized under the Privacy Act to adopt a routine use permitting disclosure of Privacy Act records for such purposes. In accordance with the Privacy Act, see 5 U.S.C. 552a(e)(4) and (11), the Peace Corps is publishing notice of this routine use and giving the public a 30-day period to comment before adopting it as final. The Peace Corps is also providing at least 40 days advance notice of this proposed system notice amendment to OMB and the Congress, as required by the Act, 5 U.S.C. 552a(r), and OMB Circular A-130, Revised, Appendix I. We note that the text of this routine use is taken from the routine use that has already been published in final form by the Department of Justice and the Federal Trade Commission after public comment. *See* 72 FR 3410 (Jan. 25, 2007); 72 FR 31835 (June 8, 2007). Similarly, after taking into account comments, if any, received by the Peace Corps, the Peace Corps intends to publish its proposed routine use as final after the period for OMB and Congressional review is complete. Accordingly, the Peace Corps hereby proposes to amend General Routine Uses of its Privacy Act system notices, as published at 65 FR 53,772 (September 5, 2000), by adding the following new routine use: General Routine Use M: To all appropriate agencies, entities, and persons when

(1)The Peace Corps suspects or has confirmed that the security or confidentiality of information in the system of records has been compromised;

(2)the Peace Corps has determined that as a result of the suspected or confirmed compromise there is a risk of harm to economic or property interests, identity theft or fraud, or harm to the security or integrity of this system or other systems or programs (whether maintained by the Peace Corps or another agency or entity) that rely upon the compromised information; and

(3)the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the Peace Corps' efforts to respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm. Dated: August 3, 2007. Wilbert Bryant, Associate Director—Management. [FR Doc. E7-15602 Filed 8-8-07; 8:45 am] BILLING CODE 6015-01-P POSTAL REGULATORY COMMISSION [Docket No. MC2007-3; Order No. 22] Premium Forwarding Service AGENCY: Postal Regulatory Commission. ACTION: Notice and order. SUMMARY: This document announces a formal docket to consider changing the status of Premium Forwarding Service

(PFS)from experimental to permanent. It describes the Postal Service's proposal and makes several preliminary administrative decisions. Issuance of this document meets legal publication requirements and informs interested persons about key details, including opportunities for public participation and the decisionmaking timetable. DATES: 1. *August 21, 2007:* Deadline for intervention. 2. *August 22, 2007:* Deadline for response to motion for waiver. 3. *August 28, 2007:* Prehearing conference (10 a.m.). ADDRESSES: Submit comments electronically via the Commission's Filing Online system at *http://www.prc.gov* . FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 202-789-6820 and *stephen.sharfman@prc.gov* . SUPPLEMENTARY INFORMATION: On July 31, 2007, the Postal Service filed a request seeking a recommended decision approving a change in the Domestic Mail Classification Schedule

(DMCS)making Premium Forwarding Service

(PFS)permanent. 1 The request, which was filed pursuant to chapter 36 of title 39, United States Code, includes five attachments. 2 In support of the Request, the Postal Service has filed Direct Testimony of Laraine B. Hope (USPS-T-1), Abdulkadir M. Abdirahman (USPS-T-2) and Gregory Dawson (USPS-T-3). 1 Request of the United States Postal Service for a Recommended Decision on Premium Forwarding Service, July 31, 2007 (Request). 2 Attachment A contains the proposed Domestic Mail Classification Schedule language changes; Attachment B sets forth proposed Fee Schedule 937 for PFS; Attachment C is the Compliance Statement composed of responses to the Commission's filing requirements; Attachment D is an index of testimony; and Attachment E is the certification required by Commission rule 54(p). For two years the Postal Service has been offering experimental PFS in accordance with the Commission's Recommended Decision Approving the Stipulation and Agreement in Docket No. MC2005-1 and the Governor's Decision of May 10, 2005, approving the recommendation. Based on the results of the experiment, the Postal Service has concluded that PFS is an attractive supplement to pre-existing options for customers who temporarily relocate. Request at 1-2. The Postal Service concurrently filed a conditional motion for waiver of certain filing requirements. 3 The Postal Service claims that its submissions comply with the Commission's filing requirements through incorporation by reference. It also acknowledges that it has supplemented materials developed for this request by incorporating documentation submitted by the Postal Service in the most recently concluded omnibus rate proceeding, Docket No. R2006-1. Accordingly, the Service requests a waiver of certain filing requirements pursuant to 39 CFR 3001.22, 3001.54(r), and 3001.64(h)(3) if the Commission finds that materials incorporated from Docket No. R2006-1 are not sufficient. Motion for Waiver at 2-3. 3 Statement of the United States Postal Service Concerning Compliance with Filing Requirements and Conditional Motion for Waiver, July 31, 2007 (Motion for Waiver). The Postal Service also has filed United States Postal Service Request for Establishment of Settlement Procedures, August 2, 2007 (Settlement Request). The Postal Service contends that the testimony of its three witnesses in support of the Settlement Request is straightforward and the proposal to make PFS permanent would not change the terms of the existing service or its prices. Further, it maintains that PFS customer benefits and minor financial impact may increase the likelihood of settlement. *Id.* at 1. Thus, the Postal Service requests the Commission's assistance in establishing settlement procedures for this proceeding. *Id.* at 3. The Request, accompanying testimony and other related material can be accessed electronically, via the Internet, on the Commission's Web site ( *http://www.prc.gov* ). I. Proposed Premium Forwarding Service The Postal Service proposes to make Premium Forwarding Service permanent. PFS is intended for residential customers. When residential customers temporarily relocate to another domestic address this service reships all of their mail once a week. After a customer enrolls in PFS and his or her application is accepted, the Postal Service bundles and reships the mail to a temporary address. The customer's mail is reshipped via Priority Mail in a Priority Mail package. PFS is available for a period of at least two weeks and no longer than one year (per application). This service also allows customers to specify whether to include the mail of the entire household or merely an individual addressee. *Id.* at 2. The Postal Service proposes that the existing application and weekly prices be retained. The fee for mail reshipped by PFS includes a $10.00 enrollment fee for the service and a weekly reshipment fee of $2.85. The customer also will be charged the Priority Mail postage appropriate for a 3-pound parcel to zone 6, currently $9.10. Altogether, customers will pay $11.95 for the weekly reshipment of their mail. The Postal Service asserts that permanent PFS would advance the general policies of the Postal Reorganization Act by reducing the time between entry of mail and recipients' access to its valuable contents. II. Commission's Response *Intervention.* Those wishing to be heard in this matter are directed to file a notice of intervention on or before August 21, 2007. The notice of intervention shall be filed using the Internet (Filing Online) at the Commission's Web site ( *http://www.prc.gov* ), unless a waiver is obtained for hardcopy filing. 39 CFR 3001.9(a) and 10(a). *Settlement.* The Commission will authorize settlement negotiations in this proceeding and appoint Postal Service counsel as settlement coordinator. In this capacity, Postal Service counsel shall file periodic reports on the status of settlement discussions. The Commission authorizes the settlement coordinator to hold a settlement conference, and will make its hearing room available for this purpose upon request. Authorization of settlement discussions does not constitute a finding on the necessity of hearings in this case. *Prehearing conference.* A prehearing conference will be held August 28, 2007, at 10 a.m. in the Commission's hearing room. Participants shall be prepared to identify any issues(s) that would indicate a need to schedule a hearing, along with other matters referred to in this order. *Conditional Motion for Waiver.* Participants may comment on the Postal Service's conditional motion to waive certain filing requirements. Responses to the Postal Service's Motion for Waiver are due on or before August 22, 2007. *Representation of the general public.* In conformance with section 3624(a) of title 39, the Commission designates Kenneth E. Richardson, acting director of the Commission's Office of the Consumer Advocate (OCA), to represent the interests of the general public in this proceeding. Pursuant to this designation, Mr. Richardson will direct the activities of Commission personnel assigned to assist him and, upon request, will supply their names for the record. Neither Mr. Richardson nor any of the assigned personnel will participate in or provide advice on any Commission decision in this proceeding. It is ordered: 1. The Commission establishes Docket No. MC2007-3, Premium Forwarding Service, to consider the Postal Service Request referred to in the body of this order. 2. The Commission will sit *en banc* for this proceeding. 3. Postal Service counsel is appointed to serve as settlement coordinator in this proceeding. 4. Kenneth E. Richardson, acting director of the Commission's Office of the Consumer Advocate, is designated to represent the interests of the general public. 5. The deadline for filing notices of intervention is August 21, 2007. 6. A prehearing conference will be held August 28, 2007 at 10 a.m. in the Commission's hearing room. 7. Responses to the Postal Service's Conditional Motion for Waiver of certain filing requirements are due on or before August 22, 2007. 8. The Secretary shall arrange for publication of this notice and order in the **Federal Register.** By the Commission. Steven W. Williams, Secretary. [FR Doc. E7-15529 Filed 8-8-07; 8:45 am] BILLING CODE 7710-FW-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27921; File No. 812-13353] Sentinel Variable Products Trust, et al.; Notice of Application August 3, 2007. AGENCY: The Securities and Exchange Commission (“Commission”). ACTION: Notice of application for an exemption pursuant to section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”) from the provisions of sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder. Applicants: Sentinel Variable Products Trust (the “Trust”), Sentinel Asset Management, Inc. (“SAM”) (collectively, “Applicants”). Summary of Application: Applicants seek an order pursuant to section 6(c) of the 1940 Act, exempting each life insurance company separate account supporting variable life insurance contracts (“VLI Accounts”) (and its insurance company depositor) that may invest in shares of the Trust or a “future trust” as defined below, from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder to the extent necessary to permit such VLI Accounts to hold shares of the Trust or a future trust when one or more of the following other types of investors also hold shares of the Trust or a future trust:

(1)A life insurance company separate account supporting variable annuity contracts (a “VA Account”),

(2)a VLI Account of a life insurance company that is not an affiliated person of the insurance company depositor of any other VLI Account,

(3)the general account of an insurance company depositor of a VLI Account (representing seed money investments in the Trust or future trust),

(4)the Trust's or future trust's investment adviser (representing seed money investments in the Trust or future trust), or

(5)trustees of group qualified pension and group retirement plans (hereinafter, a “Plan”) outside the separate account context. As used herein, a “future trust” is any investment company (or investment portfolio or series thereof), other than the Trust, shares of which are sold to VLI Accounts and to which Applicants or their affiliates may in the future serve as investment advisers, investment sub-advisers, investment managers, administrators, principal underwriters or sponsors. Investment portfolios or series of the Trust or any future trust are referred to herein as “Insurance Funds.” Filing Date: The application was filed on December 21, 2006, and amended on July 30, 2007. Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Secretary of the Commission and serving Applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on August 28, 2007, and should be accompanied by proof of service on Applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons may request notification of a hearing by writing to the Secretary of the Commission. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, c/o Kerry A. Jung, National Life Insurance Company, 1 National Life Drive, Montpelier, Vermont 05604; copies to David S. Goldstein, Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue, NW., Washington, DC 20004-2404. FOR FURTHER INFORMATION CONTACT: Ellen J. Sazzman, Senior Counsel, at

(202)551-6762, or Harry Eisenstein, Branch Chief, at

(202)551-6795, Office of Insurance Products, Division of Investment Management. SUPPLEMENTARY INFORMATION: The following is a summary of the Application. The complete Application is available for a fee from the SEC's Public Reference Branch, 100 F Street, NE., Washington, DC 20549 ((202) 551-8090). Applicants' Representations 1. The Trust was formed as a Delaware business trust on March 14, 2000. The Trust is registered under the Act as an open-end management investment company. The Trust is a series investment company as defined by Rule 18f-2 under the 1940 Act and is currently comprised of six series: Sentinel Variable Products Common Stock Fund, Sentinel Variable Products Mid Cap Growth Fund, Sentinel Variable Products Small Company Fund, Sentinel Variable Products Balanced Fund, Sentinel Variable Products Bond Fund, Sentinel Variable Products Money Market Fund. The Trust issues a separate series of shares of beneficial interest for each Fund and has filed a registration statement under the Securities Act of 1933 (the “1933 Act”) on Form N-1A (File No. 333-35832) to register such shares. The Trust may establish additional Funds in the future and additional classes of shares for such Funds. 2. The Trust and future trusts may offer each series of their shares to: VLI Accounts and VA Accounts of various life insurance companies (“Participating Insurance Companies”); Participating Insurance Company depositors of VLI Accounts investing seed money in one or more Funds through their general accounts; SAM, as a seed money investment in one or more Funds; an investment adviser of a future trust investing seed money in one or more Insurance Funds; and Plans. The VLI Accounts, VA Accounts, Participating Insurance Companies, Plans, and SAM are described below. 3. Each VLI Account and VA Account is or will be established as a segregated asset account by a Participating Insurance Company pursuant to the insurance law of the insurance company's state of domicile. As such, the assets of each will be the property of the Participating Insurance Company, and that portion of the assets of such an Account equal to the reserves and other contract liabilities with respect to the Account will not be chargeable with liabilities arising out of any other business that the insurance company may conduct. The income, gains and losses, realized or unrealized from such an Account's assets will be credited to or charged against the Account without regard to other income, gains or losses of the Participating Insurance Company. If a VLI Account or VA Account is registered as an investment company, it will be a “separate account” as defined by Rule 0-1(e) (or any successor rule) under the 1940 Act and will be registered as a unit investment trust. For purposes of the 1940 Act, the life insurance company that establishes such a registered VLI Account or VA Account is the depositor and sponsor of the Account as those terms have been interpreted by the Commission with respect to variable life insurance and variable annuity separate accounts. 4. The Participating Insurance Companies are National Life Insurance Company (“National Life”) and various other life insurance companies that are not affiliated persons of National Life. National Life is an affiliated person of SAM and the Trust. At the current time, the following VLI Accounts and VA Accounts of National Life invest in the Trust:

(2)National Variable Life Insurance Account, and

(2)National Variable Annuity Account II. 5. SAM serves as the investment adviser to the Trust and each of its Funds. SAM is a Delaware corporation and is registered as an investment adviser under the Investment Advisers Act of 1940. It is a wholly owned subsidiary of NLV Financial Corporation and an affiliate of National Life Insurance Company. Under the supervision of the Trust's board of trustees, SAM is responsible for making all investment decisions for the Funds. 6. The Trust proposes to offer and sell its shares (and a future trust would offer and sell its shares) to VLI Accounts and VA Accounts of various Participating Insurance Companies as an investment medium to support variable life insurance contracts (“VLI Contracts”) and variable annuity contracts (“VA Contracts”) (together, “Variable Contracts”) issued through such Accounts. As described more fully below, the Trust (or a future trust) will only sell its shares to registered VLI Accounts and registered VA Accounts if each Participating Insurance Company sponsoring such a VLI Account or VA Account enters into a participation agreement with the Trust (or a future trust). The participation agreements will define the relationship between the Trust (or a future trust) and a Participating Insurance Company and will memorialize, among other matters, the fact that, except where the agreement specifically provides otherwise, the Participating Insurance Company will remain responsible for establishing and maintaining any VLI Account or VA Account covered by the agreement and for complying with all applicable requirements of state and federal law pertaining to such Accounts and to the sale and distribution of Variable Contracts issued through such Accounts. The participation agreements also will memorialize, among other matters, the fact that, unless the agreement specifically states otherwise, the Trust (or a future trust) will remain responsible for establishing and maintaining any Insurance Fund covered by the agreement, for complying with all applicable requirements of state and federal law pertaining to such Funds and to the offer and sale of its shares to VLI Accounts and VA Accounts covered by the agreement, and for compliance with the conditions stated in this application. 7. The use of a common management investment company (or investment portfolio thereof) as an investment medium for both VLI Accounts and VA Accounts of the same Participating Insurance Company, or of two or more insurance companies that are affiliated persons of each other, is referred to herein as “mixed funding.” The use of a common management investment company (or investment portfolio thereof) as an investment medium for VLI Accounts and/or VA Accounts of two or more Participating Insurance Companies that are not affiliated persons of each other, is referred to herein as “shared funding.” 8. The Trust (or a future trust) may sell its shares directly to the Plans (i.e., not to VLI Accounts or VA Accounts supporting Variable Contracts issued to Plans). As described below, federal tax law permits investment companies such as the Insurance Funds to increase their net assets by selling shares to Plans. 9. Section 817(h) of the Internal Revenue Code of 1986, as amended (the “Code”), imposes certain diversification standards on the assets underlying Variable Contracts, such as those in each Insurance Fund. The Code provides that Variable Contracts will not be treated as annuity contracts or life insurance contracts, as the case may be, for any period (or any subsequent period) for which the underlying assets are not, in accordance with regulations issued by the Treasury Department, adequately diversified. On March 2, 1989, the Treasury Department issued regulations (Treas. Reg. 1.817-5) that established diversification requirements for Variable Contracts, which require the separate accounts upon which these Contracts are based to be diversified as provided in the Treasury Regulations. In the case of separate accounts that invest in underlying investment companies, the Treasury Regulations provide a “look through” rule that permits the separate account to look to the underlying investment company for purposes of meeting the diversification requirements, provided that the beneficial interests in the investment company are held only by the segregated asset accounts of one or more insurance companies. However, the Treasury Regulations also contain certain exceptions to this requirement, one of which permits shares in an investment company to be held by a Plan without adversely affecting the ability of shares in the same investment company to also be held by separate accounts funding Variable Contracts (Treas. Reg. section 1.817-5(f)(3)(iii)). Another exception allows the investment adviser of the investment company (and certain companies related to the investment adviser) to hold shares of the investment company representing seed capital. 10. Plans may invest in shares of an investment company as the sole investment under the Plan, or as one of several investments. Plan participants may or may not be given an investment choice depending on the terms of the Plan itself. The trustees or other fiduciaries of a Plan may vote investment company shares held by the Plan in their own discretion or, if the applicable Plan so provides, vote such shares in accordance with instructions from participants in such Plans. Applicants have no control over whether trustees or other fiduciaries of Plans, rather than participants in the Plans, have the right to vote under any particular Plan. Each Plan must be administered in accordance with the terms of the Plan and as determined by its trustee or trustees. 11. Applicants propose that any Insurance Fund also be permitted to sell shares to its investment adviser. The Treasury Regulations permit such sales as long as the return on shares held by the adviser is computed in the same manner as shares held by VLI Accounts and VA Accounts, the adviser does not intend to sell the shares to the public, and sales to an investment adviser are only made in connection with the creation or management of the Insurance Fund for the purpose of providing seed capital. 12. Applicants propose that any Insurance Fund also be permitted to sell shares to the general account of a Participating Insurance Company. The Treasury Regulations also permit such sales as long as the return on shares held by general accounts are computed in the same manner as shares held by VLI Accounts and VA Accounts, and the Participating Insurance Company does not intend to sell the shares to the public. Applicants anticipate that sales of shares may be made to general accounts of Participating Insurance Companies in return for seed money. 13. The promulgation of Rules 6e-2(b)(15) and 6e-3(T)(b)(15) preceded the issuance of the Treasury Regulations permitting the shares of Insurance Funds to be held by a Plan, an adviser for the Fund, or the general account of a Participating Insurance Company without adversely affecting the ability of the VLI Account to also hold shares. 14. The use of a common management investment company (or investment portfolio thereof) as an investment medium for VLI Accounts, VA Accounts, Plans, investment advisers and general accounts of Participating Insurance Companies is referred to herein as “extended mixed funding.” Applicants’ Legal Analysis 1. Section 9(a)(2) of the 1940 Act makes it unlawful for any company to serve as an investment adviser or principal underwriter of any investment company, including a unit investment trust, if an affiliated person of that company is subject to disqualification enumerated in section 9(a)(1) or

(2)of the 1940 Act. Sections 13(a), 15(a), and 15(b) of the 1940 Act have been deemed by the Commission to require “pass-through” voting with respect to an underlying investment company's shares. 2. Rule 6e-2(b)(15) under the Act provides partial exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act to VLI Accounts supporting scheduled premium VLI Contracts and to their life insurance company depositors. The exemptions granted by the Rule are available, however, only where an Insurance Fund offers its shares *exclusively* to VLI Accounts of the same Participating Insurance Company and/or of Participating Insurance Companies that are affiliated persons of the same Participating Insurance Company and then, only where *scheduled* premium VLI Contracts are issued through such VLI Accounts. Therefore, VLI Accounts, their depositors and their principal underwriters may not rely on the exemptions provided by Rule 6e-2(b)(15) if shares of the Insurance Fund are held by a VLI Account through which flexible premium VLI Contracts are issued, a VLI Account of an unaffiliated Participating Insurance Company, an unaffiliated investment adviser, any VA Account or a Plan. In other words, Rule 6e-2(b)(15) does not permit a scheduled premium VLI Account to invest in shares of a management investment company that serves as a vehicle for mixed funding, extended mixed funding or shared funding. 3. Accordingly, Applicants request an order of the Commission granting exemptions from sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act, and Rule 6e-2(b)(15) thereunder, to the extent necessary to permit a scheduled premium VLI Account to hold shares of Insurance Funds when one or more of the following types of investors also hold shares of the Insurance Funds:

(1)VA Accounts,

(2)VLI Accounts supporting flexible premium VLI Contracts,

(3)VA Accounts or VLI Accounts of Participating Insurance Companies that are not affiliated persons of the depositor of the scheduled premium VLI Account,

(4)the general account of a Participating Insurance Company,

(5)the investment adviser (or an affiliated person of the investment adviser) of an Insurance Fund, or

(6)a Plan. 4. Rule 6e-3(T)(b)(15) under the 1940 Act provides partial exemptions from sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act to VLI Accounts supporting flexible premium variable life insurance contracts and their life insurance company depositors. The exemptions granted by the Rule are available, however, only where an Insurance Fund offers its shares *exclusively* to VLI Accounts (through which either scheduled premium or flexible premium VLI Contracts are issued) of the same Participating Insurance Company and/or of Participating Insurance Companies that are affiliated persons of the same Participating Insurance Company, VA Accounts of the same Participating Insurance Company or of affiliated Participating Insurance Companies, or the general account of the same Participating Insurance Company or of affiliated Participating Insurance Companies. Therefore, VLI Accounts, their depositors and their principal underwriters may not rely on the exemptions provided by Rule 6e-3(T)(b)(15) if shares of the Insurance Fund are held by a VLI Account of an unaffiliated Participating Insurance Company, a VA Account of an unaffiliated Participating Insurance Company, the general account of an unaffiliated Participating Insurance Company, an unaffiliated investment adviser, or a Plan. In other words, Rule 6e-3(T)(b)(15) permits VLI Accounts supporting flexible premium VLI Contracts to invest in shares of a management investment company that serves as a vehicle for mixed funding but does not permit such a VLI Account to invest in shares of a management investment company that serves as a vehicle for extended mixed funding or shared funding. 5. Accordingly, Applicants request an order of the Commission granting exemptions from sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and Rule 6e-3(T)(b)(15) (and any comparable permanent rule) thereunder, to the extent necessary to permit a flexible premium VLI Account to hold shares of Insurance Funds when one or more of the following types of investors also hold shares of the Insurance Funds:

(1)VA Accounts,

(2)VA Accounts or VLI Accounts of Participating Insurance Companies that are not affiliated persons of the depositor of the flexible premium VLI Account,

(3)the general account of a Participating Insurance Company,

(4)the investment adviser (or an affiliated person of the investment adviser) of an Insurance Fund, or

(5)a Plan. 6. As explained below, Applicants maintain that there is no public policy reason why VLI Accounts and their Participating Insurance Company depositors (or principal underwriters) should not be able to rely on the exemptions provided by Rules 6e-2(b)(15) and 6e-3(T)(b)(15) just because shares of Insurance Funds held by the VLI Accounts are also held by a Fund's investment adviser (or affiliated person), the general account of the Participating Insurance Company (or another Participating Insurance Company), or a Plan (“Eligible 817(h) Purchasers”). Rather, Applicants assert that the proposed sale of Insurance Fund shares to Plans may allow for the development of larger pools of assets, resulting in the potential for greater investment and diversification opportunities and decreased expenses at higher asset levels. Similarly, Applicants believe that the proposed sale of Insurance Fund shares to investment advisers (or their affiliates) and general accounts of Participating Insurance Companies for seed money may result in the creation of more Insurance Funds as investment options for certain VA Contracts and VLI Contracts than would otherwise be the case. 7. Applicants maintain that the reason the Commission did not grant more extensive relief in the area of mixed and shared funding when it adopted Rule 6e-3(T) is because of the Commission's uncertainty in this area with respect to issues such as conflicts of interest. Applicants believe, however, that the Commission's concern in this area is not warranted here. For the reasons explained below, Applicants have concluded that investment by Eligible 817(h) Purchasers in the Insurance Funds should not increase the risk of material irreconcilable conflicts between owners of VLI Contracts and other types of investors or between owners of VLI Contracts issued by unaffiliated Participating Insurance Companies. 8. Pursuant to the Commission's authority under section 6(c) of the 1940 Act to grant exemptive orders to a class or classes of persons and transactions, Applicants request exemptions for a class of parties consisting of VLI Accounts, their Participating Insurance Company depositors and their principal underwriters. 9. In the context of mixed funding, extended mixed funding and shared funding, the Commission has granted numerous orders of exemption covering a class composed of registered VLI Accounts, their insurance company depositors and principal underwriters. Applicants assert that the scope of the exemptions and the conditions proposed in their Application are largely identical to these precedents. Applicants believe that the same policies and considerations that led the Commission to grant such exemptions to other similarly situated applicants are present should apply here. 10. Section 6(c) of the 1940 Act provides, in part, that the Commission, by order upon application, 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 1940 Act, or 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 1940 Act. The Applicants submit that the exemptions requested are appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. 11. Section 9(a)(3) of the 1940 Act provides, among other things, that it is unlawful for any company to serve as investment adviser or principal underwriter of any registered open-end investment company if an affiliated person of that company is subject to a disqualification enumerated in sections 9(a)(1) or (2). Rules 6e-2(b)(15)(i) and

(ii)and Rules 6e-3(T)(b)(15)(i) and

(ii)under the 1940 Act provide exemptions from Section 9(a) under certain circumstances, subject to the limitations discussed above on mixed funding, extended mixed funding and shared funding. These exemptions limit the application of the eligibility restrictions to affiliated individuals or companies that directly participate in management of the underlying investment company. 12. The relief provided by Rules 6e-2(b)(15)(i) and 6e-3(T)(b)(15)(i) permits a person that is disqualified under sections 9(a)(1) or

(2)of the Act to serve as an officer, director, or employee of the life insurance company, or any of its affiliates, as long as that person does not participate directly in the management or administration of the underlying investment company. The relief provided by Rules 6e-2(b)(15)(ii) and 6e-3(T)(b)(15)(ii) under the 1940 Act permits the life insurance company to serve as the underlying investment company's investment adviser or principal underwriter, provided that none of the insurer's personnel who are ineligible pursuant to section 9(a) participates in the management or administration of the investment company. 13. In effect, the partial relief granted in Rules 6e-2(b)(15) and 6e-3(T)(b)(15) under the 1940 Act from the requirements of section 9 of the 1940 Act limits the amount of monitoring necessary to ensure compliance with section 9 to that which is appropriate in light of the policy and purposes of section 9. Those rules recognize that it is not necessary for the protection of investors or the purposes fairly intended by the policy and provisions of the 1940 Act to apply the provisions of section 9(a) to all individuals in a large insurance complex, most of whom will have no involvement in matters pertaining to investment companies in that organization. Applicants assert that it is also unnecessary to apply section 9(a) of the 1940 Act to the many individuals in various unaffiliated insurance companies (or affiliated companies of Participating Insurance Companies) that may utilize the Insurance Funds as investment vehicles for VLI Accounts and VA Accounts. Applicants maintain there is no regulatory purpose served in extending the monitoring requirements to embrace a full application of section 9(a)'s eligibility restrictions because of mixed funding, extended mixed funding or shared funding. The Participating Insurance Companies and Plans are not expected to play any role in the management of the Insurance Funds. Those individuals who participate in the management of the Insurance Funds will remain the same regardless of which VA Accounts, VLI Accounts, Plans or other Eligible 817(h) Purchasers invest in the Insurance Funds. Applicants assert that applying the monitoring requirements of section 9(a) of the Act because of investment by VLI Accounts would be unjustified and would not serve any regulatory purpose. Furthermore, the increased monitoring costs could reduce the net rates of return realized by owners of VLI Contracts and Plan participants. 14. Rules 6e-2(b)(15)(iii) and 6e-3(T)(b)(15)(iii) under the 1940 Act provide exemptions from pass-through voting requirements with respect to several significant matters, assuming the limitations on mixed funding, extended mixed funding and shared funding are observed. Rules 6e-2(b)(15)(iii)(A) and 6e-3(T)(b)(15)(iii)(A) provide that the insurance company may disregard the voting instructions of its variable life insurance contract owners with respect to the investments of an underlying investment company, or any contract between such an investment company and its investment adviser, when required to do so by an insurance regulatory authority (subject to the provisions of paragraphs (b)(5)(i) and (b)(7)(ii)(A) of Rules 6e-2 and 6e-3(T)). 15. Rules 6e-2(b)(15)(iii)(B) and 6e-3(T)(b)(15)(iii)(A)(2) provide that an insurance company may disregard the voting instructions of owners of its variable life insurance contracts if such owners initiate any change in an underlying investment company's investment policies, principal underwriter or any investment adviser (provided that disregarding such voting instructions is reasonable and subject to the other provisions of paragraphs (b)(5)(ii), (b)(7)(ii)(B) and (b)(7)(ii)(C) of Rules 6e-2 and 6e-3(T)). 16. In the case of a change in the investment policies of the underlying investment company, the insurance company, in order to disregard contract owner voting instructions, must make a good faith determination that such a change either would:

(1)Violate state law, or

(2)result in investments that either

(a)would not be consistent with the investment objectives of its separate account, or

(b)would vary from the general quality and nature of investments and investment techniques used by other separate accounts of the company, or of an affiliated life insurance company with similar investment objectives. 17. Both Rule 6e-2 and Rule 6e-3(T) generally recognize that a variable life insurance contract is primarily a life insurance contract containing many important elements unique to life insurance contracts and subject to extensive state insurance regulation. In adopting subparagraph (b)(15)(iii) of these Rules, the Commission implicitly recognized that state insurance regulators have authority, pursuant to state insurance laws or regulations, to disapprove or require changes in investment policies, investment advisers, or principal underwriters. 18. Applicants assert that the sale of Insurance Fund shares to Eligible 817(h) Purchasers will not have any impact on the exemptions requested herein regarding the disregard of pass-through voting rights. Shares sold to Plans will be held by such Plans. Applicants believe that the exercise of voting rights by Plans, whether by trustees, participants, beneficiaries, or investment managers engaged by the Plans, does not raise the type of issues respecting disregard of voting rights that are raised by VLI Accounts. With respect to Plans, which are not registered as investment companies under the 1940 Act, there is no requirement to pass through voting rights to Plan participants. Indeed, to the contrary, applicable law expressly reserves voting rights associated with Plan assets to certain specified persons. Under section 403(a) of the Employee Retirement Income Security Act of 1974 (“ERISA”), shares of a portfolio of an investment company sold to a Plan must be held by the trust(s) funding the Plan. Section 403(a) also provides that the trustee(s) of such trusts must have exclusive authority and discretion to manage and control the Plan, with two exceptions:

(1)When the Plan expressly provides that the trustee(s) are subject to the direction of a named fiduciary who is not a trustee, in which case the trustee(s) are subject to proper directions made in accordance with the terms of the Plan and not contrary to ERISA, and

(2)when the authority to manage, acquire, or dispose of assets of the Plan is delegated to one or more investment managers pursuant to section 402(c)(3) of ERISA. Unless one of the above two exceptions stated in section 403(a) applies, Plan trustees have the exclusive authority and responsibility for voting investment company shares (or related proxies) held by their Plan. 19. Where a Plan does not provide participants with the right to give voting instructions, Applicants do not see any potential for material irreconcilable conflicts of interest between or among the Variable Contract owners and Plan participants with respect to voting of the respective Insurance Fund shares. Accordingly, unlike the circumstances surrounding VLI Accounts and VA Accounts, because Plans are not required to pass through voting rights to participants, Applicants believe that the issue of resolution of material irreconcilable conflicts of interest should not arise with respect to voting Insurance Fund shares. 20. In addition, if a Plan were to hold a controlling interest in an Insurance Fund, Applicants do not believe that such control would disadvantage other investors in such Insurance Fund to any greater extent than is the case when any institutional shareholder holds a majority of the shares of any open-end management investment company. In this regard, Applicants submit that investment in an Insurance Fund by a Plan will not create any of the voting complications occasioned by VLI Account investments in the Fund. Unlike VLI Account investments, Plan voting rights cannot be frustrated by veto rights of Participating Insurance Companies or state insurance regulators. 21. Where a Plan provides participants with the right to instruct the trustee(s) as to how to vote Insurance Fund shares, Applicants see no reason why such participants generally or those in a particular Plan, either as a single group or in combination with participants in other Plans, would vote in a manner that would disadvantage VLI Contract owners. Applicants believe that the purchase of shares by Plans that provide voting rights does not present any complications not otherwise occasioned by mixed or shared funding. 22. Similarly, an investment adviser to an Insurance Fund (or its affiliates) and the general accounts of Participating Insurance Companies are not subject to any pass-through voting requirements. Accordingly, Applicants submit that, unlike the circumstances surrounding VLI Account and VA Account investments in Insurance Fund shares, investment in such shares by Eligible 817(h) Purchasers should not raise issues of resolution of material irreconcilable conflicts of interest with respect to voting. 23. Applicants recognize that the Commission's primary concern with respect to mixed funding, extended mixed funding and shared funding issues is the potential for irreconcilable conflicts between the interests of owners of variable life insurance contracts and those of other investors in an open end investment company serving as an investment vehicle for such contracts. Applicants submit that the prohibitions on mixed and shared funding might reflect concern regarding possible different investment motivations among investors. When Rule 6e-2 was first adopted, variable annuity separate accounts could invest in mutual funds whose shares were also offered to the general public. Therefore, the Commission staff may have been concerned with the potentially different investment motivations of public shareholders and owners of variable life insurance contracts. Applicants submit there also may have been some concern with respect to the problems of permitting a state insurance regulatory authority to affect the operations of a publicly available mutual fund and the investment decisions of public shareholders. 24. For reasons unrelated to the 1940 Act, however, Revenue Ruling 81-225 (Sept. 25, 1981) effectively deprived variable annuity contracts funded by publicly available mutual funds of their tax-benefited status. The Tax Reform Act of 1984 codified the prohibition against the use of publicly available mutual funds as an investment vehicle for both variable annuity contracts and variable life insurance contracts. In particular, section 817(h) of the Code, in effect, requires that the investments made by both variable annuity and variable life insurance separate accounts be “adequately diversified.” If such a separate account is organized as part of a “two-tiered” arrangement where the account invests in shares of an underlying open-end investment company ( *i.e.* , an underlying fund), the diversification test will be applied to the underlying fund (or to each of several underlying funds), rather than to the separate account itself, but only if “all of the beneficial interests” in the underlying fund “are held by one or more insurance companies (or affiliated companies) in their general account or in segregated asset accounts.” Accordingly, a separate account that invests in a publicly available mutual fund will not be adequately diversified for these purposes. As a result, any underlying fund, including any Insurance Fund that sells shares to VA Accounts or VLI Accounts, would, in effect, be precluded from also selling its shares to the public. Consequently, the Insurance Funds may not sell their shares to the public. 25. Applicants submit that the rights of an insurance company or a state insurance regulator to disregard the voting instructions of owners of Variable Contracts is not inconsistent with either mixed funding or shared funding. The National Association of Insurance Commissioners Variable Life Insurance Model Regulation (the “NAIC Model Regulation”) suggests that it is unlikely that insurance regulators would find an underlying fund's investment policy, investment adviser or principal underwriter objectionable for one type of Variable Contract but not another type. The NAIC Model Regulation has long permitted the use of a single underlying fund for different separate accounts. Moreover, Article VI, section 3 of the NAIC Model Regulation has been amended to remove a previous prohibition on one separate account investing in another separate account. Lastly, the NAIC Model Regulation does not distinguish between scheduled premium and flexible premium variable life insurance contracts. Applicants contend that the NAIC Model Regulation therefore reflects the NAIC's apparent confidence that such combined funding is appropriate and that state insurance regulators can adequately protect the interests of owners of all variable contracts. 26. Applicants submit that shared funding by unaffiliated insurance companies does not present any issues that do not already exist where a single insurance company is licensed to do business in several or all states. A particular state insurance regulator could require action that is inconsistent with the requirements of other states in which the insurance company offers its contracts. However, Applicants believe that the fact that different insurers may be domiciled in different states does not create a significantly different or enlarged problem. 27. Applicants submit that shared funding by unaffiliated insurers, in this respect, is no different than the use of the same investment company as the funding vehicle for affiliated insurers, which Rules 6e-2(b)(15) and 6e-3(T)(b)(15) permit. Affiliated insurers may be domiciled in different states and be subject to differing state law requirements. Affiliation does not reduce the potential, if any exists, for differences in state regulatory requirements. In any event, the conditions set forth below are designed to safeguard against, and provide procedures for resolving, any adverse effects that differences among state regulatory requirements may produce. If a particular state insurance regulator's decision conflicts with the majority of other state regulators, then the affected Participating Insurance Company will be required to withdraw its separate account investments in the relevant Insurance Fund. This requirement will be provided for in the Participation Agreement that will be entered into by Participating Insurance Companies with the relevant Insurance Fund. 28. Rules 6e-2(b)(15) and 6e-3(T)(b)(15) give the Participating Insurance Company the right to disregard the voting instructions of VLI Contract owners in certain circumstances. This right derives from the authority of state insurance regulators over VLI Accounts and VA Accounts. Under Rules 6e-2(b)(15) and 6e-3(T)(b)(15), a Participating Insurance Company may disregard VLI Contract owner voting instructions only with respect to certain specified items. Applicants maintain that affiliation does not eliminate the potential, if any exists, for divergent judgments as to the advisability or legality of a change in investment policies, principal underwriter or investment adviser initiated by such Contract owners. The potential for disagreement is limited by the requirements in Rules 6e-2 and 6e-3(T) that the Participating Insurance Company's disregard of voting instructions be reasonable and based on specific good faith determinations. 29. A particular Participating Insurance Company's disregard of voting instructions, nevertheless, could conflict with the voting instructions of a majority of VLI Contract owners. The Participating Insurance Company's action possibly could be different than the determination of all or some of the other Participating Insurance Companies (including affiliated insurers) that the voting instructions of VLI Contract owners should prevail, and either could preclude a majority vote approving the change or could represent a minority view. If the Participating Insurance Company's judgment represents a minority position or would preclude a majority vote, then the Participating Insurance Company may be required, at the relevant Insurance Fund's election, to withdraw its VLI Accounts' and VA Accounts' investments in the relevant Insurance Fund. No charge or penalty will be imposed as a result of such withdrawal. This requirement will be provided for in the Participation Agreement entered into by the Participating Insurance Companies with the relevant Insurance Fund. 30. Applicants submit that there is no reason why the investment policies of an Insurance Fund would or should be materially different from what these policies would or should be if the Insurance Fund supported only VA Accounts or VLI Accounts, whether flexible premium or scheduled premium VLI Contrasts. Each type of insurance contract is designed as a long-term investment program. 31. Applicants represent that each Insurance Fund will be managed to attempt to achieve its specified investment objective, and not favor or disfavor any particular Participating Insurance Company or type of insurance contract. Applicants contend that there is no reason to believe that different features of various types of Variable Contracts will lead to different investment policies for each or for different VLI Accounts and VA Accounts. The sale of Variable Contracts and ultimate success of all VA Accounts and VLI Accounts depends, at least in part, on satisfactory investment performance, which provides an incentive for each Participating Insurance Company to seek optimal investment performance. 32. Applicants represent that no single investment strategy can be identified as appropriate to a particular Variable Contract. Each “pool” of VLI Contract and VA Contract owners is composed of individuals of diverse financial status, age, insurance needs and investment goals. An Insurance Fund supporting even one type of Variable Contract must accommodate these diverse factors in order to attract and retain purchasers. Applicants contend that permitting mixed and shared funding will provide economic support for the continuation of the Insurance Funds, and will broaden the base of potential Variable Contract owner investors, which may facilitate the establishment of additional Insurance Funds serving diverse goals. 33. Applicants do not believe that the sale of the shares to Plans will increase the potential for material irreconcilable conflicts of interest between or among different types of investors. In particular, Applicants see very little potential for such conflicts beyond those that would otherwise exist between owners of VLI Contracts and VA Contracts. Applicants submit that either there are no conflicts of interest or that there exists the ability by the affected parties to resolve such conflicts consistent with the best interests of VLI Contract owners, VA Contract owners and Plan participants. 34. Applicants considered whether there are any issues raised under the Code, Treasury Regulations, or Revenue Rulings thereunder, if Plans, VA Accounts, and VLI Accounts all invest in the same Insurance Fund. Section 817(h) of the Code is the culmination of a series of Revenue Rulings aimed at the control of investments by owners of Variable Contracts and discusses insurance company separate accounts. Treasury Regulation 1.817-5(f)(3)(iii), which establishes the diversification requirements for underlying funds, specifically permits, among other things, “qualified pension or retirement plans,” separate accounts to invest in the same underlying fund. Applicants have concluded for this reason that neither the Code, nor the Treasury Regulations nor Revenue Rulings thereunder, present any inherent conflicts of interest if Plans, VLI Accounts, and VA Accounts all invest in the same Insurance Fund. 35. Applicants note that, while there are differences in the manner in which distributions from VLI Accounts and Plans are taxed, these differences have no impact on the Insurance Funds. When distributions are to be made, and a VLI Account or Plan is unable to net purchase payments to make distributions, the VLI Account or Plan will redeem shares of the relevant Insurance Fund at its net asset values in conformity with Rule 22c-1 under the Act (without the imposition of any sales charge) to provide proceeds to meet distribution needs. A Participating Insurance Company will then make distributions in accordance with the terms of its VLI Contract and a Plan will then make distributions in accordance with the terms of the Plan. 36. Applicants considered whether it is possible to provide an equitable means of giving voting rights to VLI Contract owners and Plans. In connection with any meeting of Insurance Fund shareholders, the Fund's transfer agent will inform each Participating Insurance Company and other Eligible 817(h) Purchaser of their share holdings and provide other information necessary for such shareholders to participate in the meeting (e.g., proxy materials). Each Participating Insurance Company then will solicit voting instructions from owners of VLI Contracts and VA Contracts as required by either Rules 6e-2 or 6e-3(T), or section 12(d)(1)(E)(iii)(aa) of the Act, as applicable, and its Participation Agreement with the relevant Insurance Fund. Shares held by a Participating Insurance Company general account will be voted by the Company in the same proportion of shares for which it receives voting instructions from its Variable Contract owners. Shares held by Plans will be voted in accordance with applicable law. The voting rights provided to Plans with respect to the shares would be no different from the voting rights that are provided to Plans with respect to shares of mutual funds sold to the general public. Furthermore, if a material irreconcilable conflict arises because of a Plan's decision to disregard Plan participant voting instructions, if applicable, and that decision represents a minority position or would preclude a majority vote, the Plan may be required, at the election of the relevant Insurance Fund, to withdraw its investment in the Insurance Fund, and no charge or penalty will be imposed as a result of such withdrawal. 37. Applicants do not believe that the veto power of state insurance commissioners over certain potential changes to Insurance Fund investment objectives approved by owners of VLI Contracts creates conflicts between the interests of such owners and the interests of Plan participants. Applicants note that a basic premise of corporate democracy and shareholder voting is that not all shareholders may agree with a particular proposal. Their interests and opinions may differ, but this does not mean that inherent conflicts of interest exist between or among such shareholders or that occasional conflicts of interest that do occur between or among them are likely to be irreconcilable. 38. Applicants represent that although Participating Insurance Companies may have to overcome regulatory impediments in redeeming shares of an Insurance Fund held by their VLI Accounts, the Plans and the participants in participant-directed Plans can make decisions quickly and redeem their shares in a Fund and reinvest in another investment company or other funding vehicle without impediments, or as is the case with most Plans, hold cash pending suitable investment. As a result, conflicts between the interests of VLI Contract owners and the interests of Plans and Plan participants can usually be resolved quickly since the Plans can, on their own, redeem their Insurance Fund shares. 39. Finally, Applicants considered whether there is a potential for future conflicts of interest between Participating Insurance Companies and Plans created by future changes in the tax laws. Applicants do not see any greater potential for material irreconcilable conflicts arising between the interests of VLI Contract owners (or, for that matter, VA Contract owners) and Plan participants from future changes in the federal tax laws than that which already exists between VLI Contract owners and VA Contract owners. 40. Applicants recognize that the issues described above are not all-inclusive, but rather are representative of issues that they believe are relevant to the application. In light of the above, Applicants believe that the sale of Insurance Fund shares to Plans trustees would not increase the risk of material irreconcilable conflicts between the interests of Plan participants and VLI Contract owners or other investors. Further, Applicants submit that the use of the Insurance Funds with respect to Plans is not substantially dissimilar from each Insurance Fund's anticipated use, in that Plans, like VLI Accounts, are generally long-term investors. 41. Applicants represent that a potential source of initial capital is an Insurance Fund's investment adviser or a Participating Insurance Company. Either of these parties may have an interest in making a capital investment and in assisting an Insurance Fund in its organization. However, provision of seed capital or the purchase of shares in connection with the management of an Insurance Fund by its investment adviser or by a Participating Insurance Company may be deemed to violate the exclusivity requirement of Rule 6e-2(b)(15) and/or Rule 6e-3(T)(b)(15). 42. Applicants assert that permitting an Insurance Fund to sell its shares to its investment adviser (or the adviser's affiliates) or to the general account of a Participating Insurance Company for the purpose of obtaining seed money will enhance management of each Insurance Fund without raising significant concerns regarding material irreconcilable conflicts among different types of investors. 43. Given the conditions of Treasury Regulation 1.817-5(f)(3) and the harmony of interest between an Insurance Fund, on the one hand, and its investment adviser (or affiliates) or a Participating Insurance Company, on the other, Applicants assert that little incentive for overreaching exists. Furthermore, such investment should not implicate the concerns discussed above regarding the creation of material irreconcilable conflicts. Instead, permitting investments by an investment adviser (or its affiliates), or by general accounts of Participating Insurance Companies, will permit the orderly and efficient creation and operation of an Insurance Fund, and reduce the expense and uncertainty of using outside parties at the early stages of the Insurance Fund's operations. 44. Applicants also submit that, regardless of the type of shareholder in an Insurance Fund, its investment adviser (and the adviser's affiliates) are or would be contractually and otherwise obligated to manage the Insurance Fund solely and exclusively in accordance with that Fund's investment objectives, policies and restrictions, as well as any guidelines established by the its board of trustees (a “Board”). Thus, each Insurance Fund will be managed in the same manner as any other mutual fund. 45. Applicants do not believe that the ability of an Insurance Fund to sell its shares to its investment adviser (or an affiliated person of the adviser), to Plans, or to the general account of a Participating Insurance Company gives rise to a senior security. A “Senior Security” is defined in section 18(g) of the Act to include “any stock of a class having priority over any other class as to distribution of assets or payment of dividends.” As noted above, regardless of the rights and benefits of participants under Plans and owners of VLI Contracts, VLI Accounts, VA Accounts, Participating Insurance Companies, Plans, and investment advisers (or their affiliates), only have, or will only have, rights with respect to their respective shares of an Insurance Fund. These parties can only redeem such shares at net asset value. No shareholder of an Insurance Fund has any preference over any other shareholder with respect to distribution of assets or payment of dividends. 46. In addition, Applicants note that the Commission has issued numerous orders permitting mixed funding, extended mixed funding and shared funding. Therefore, Applicants submit that granting the exemptions requested herein is in the public interest and, as discussed above, will not compromise the regulatory purposes of sections 9(a), 13(a), 15(a), or 15(b) of the Act or Rules 6e-2 or 6e-3(T) thereunder. Applicants' Conditions Applicants agree that the order granting the requested relief shall be subject to the following conditions which shall apply to the Trust as well as any future trust that relies on the order: 1. A majority of the Board of each Insurance Fund will consist of persons who are not “interested persons” of the Insurance Fund, as defined by section 2(a)(19) of the 1940 Act, and the rules thereunder, and as modified by any applicable orders of the Commission, except that if this condition is not met by reason of death, disqualification or bona fide resignation of any trustee or trustees, then the operation of this condition will be suspended:

(a)For a period of 90 days if the vacancy or vacancies may be filled by the Board,

(b)for a period of 150 days if a vote of shareholders is required to fill the vacancy or vacancies, or

(c)for such longer period as the Commission may prescribe by order upon application, or by future rule. 2. The Board of each Insurance Fund will monitor the Insurance Fund for the existence of any material irreconcilable conflict between and among the interests of the owners of all VLI Contracts and VA Contracts and participants of all Plans investing in the Insurance Fund, and determine what action, if any, should be taken in response to such conflicts. A material irreconcilable conflict may arise for a variety of reasons, including:

(a)An action by any state insurance regulatory authority,

(b)a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretive letter, or any similar action by insurance, tax or securities regulatory authorities,

(c)an administrative or judicial decision in any relevant proceeding,

(d)the manner in which the investments of the Insurance Fund are being managed,

(e)a difference in voting instructions given by VA Contract owners, VLI Contract owners, and Plans or Plan participants,

(f)a decision by a Participating Insurance Company to disregard the voting instructions of contract owners; or

(g)if applicable, a decision by a Plan to disregard the voting instructions of Plan participants. 3. Participating Insurance Companies (on their own behalf, as well as by virtue of any investment of general account assets in an Insurance Fund), an adviser and its affiliates, and any Plan that executes a Participation Agreement upon its becoming an owner of 10% or more of the net assets of an Insurance Fund (collectively, “Participants”) will report any potential or existing conflicts to the Board of the Insurance Fund. Each Participant will be responsible for assisting the Board in carrying out the Board's responsibilities under these conditions by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This responsibility includes, but is not limited to, an obligation by each Participating Insurance Company to inform the Board whenever Variable Contract owner voting instructions are disregarded, and, if pass-through voting is applicable, an obligation by each Plan to inform the Board whenever it has determined to disregard Plan participant voting instructions. The responsibility to report such information and conflicts, and to assist the Board, will be a contractual obligation of all Participating Insurance Companies under their Participation Agreement with an Insurance Fund, and these responsibilities will be carried out with a view only to the interests of the Variable Contract owners. The responsibility to report such information and conflicts, and to assist the Board, also will be contractual obligations of all Plans under their Participation Agreement with an Insurance Fund, and such agreements will provide that these responsibilities will be carried out with a view only to the interests of Plan participants. 4. If it is determined by a majority of the Board of an Insurance Fund, or a majority of the disinterested directors/trustees of such Board, that a material irreconcilable conflict exists, then the relevant Participant will, at its expense and to the extent reasonably practicable (as determined by a majority of the disinterested directors/trustees), take whatever steps are necessary to remedy or eliminate the material irreconcilable conflict, up to and including:

(a)Withdrawing the assets allocable to some or all of their VLI Accounts or VA Accounts from the Insurance Fund and reinvesting such assets in a different investment vehicle including another Insurance Fund,

(b)in the case of a Participating Insurance Company, submitting the question as to whether such segregation should be implemented to a vote of all affected Variable Contract owners and, as appropriate, segregating the assets of any appropriate group ( *i.e.* , VA Contract owners or VLI Contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected Contract owners the option of making such a change,

(c)withdrawing the assets allocable to some or all of the Plans from the affected Insurance Fund and reinvesting them in a different investment medium, and

(d)establishing a new registered management investment company or managed separate account. If a material irreconcilable conflict arises because of a decision by a Participating Insurance Company to disregard Variable Contract owner voting instructions, and that decision represents a minority position or would preclude a majority vote, then the Participating Insurance Company may be required, at the election of the Insurance Fund, to withdraw such Participating Insurance Company's VA Account and VLI Account investments in the Insurance Fund, and no charge or penalty will be imposed as a result of such withdrawal. If a material irreconcilable conflict arises because of a Plan's decision to disregard Plan participant voting instructions, if applicable, and that decision represents a minority position or would preclude a majority vote, the Plan may be required, at the election of the Insurance Fund, to withdraw its investment in the Insurance Fund, and no charge or penalty will be imposed as a result of such withdrawal. The responsibility to take remedial action in the event of a Board determination of a material irreconcilable conflict and to bear the cost of such remedial action will be a contractual obligation of all Participants under their Participation Agreement with an Insurance Fund, and these responsibilities will be carried out with a view only to the interests of Variable Contract owners or, as applicable, Plan participants. For purposes of this Condition 4, a majority of the disinterested directors/trustees of the Board of each Insurance Fund will determine whether or not any proposed action adequately remedies any material irreconcilable conflict, but, in no event, will the Insurance Fund or its investment adviser be required to establish a new funding vehicle for any Variable Contract or Plan. No Participating Insurance Company will be required by this Condition 4 to establish a new funding vehicle for any Variable Contract if any offer to do so has been declined by vote of a majority of the Contract owners materially and adversely affected by the material irreconcilable conflict. Further, no Plan will be required by this Condition 4 to establish a new funding vehicle for the Plan if:

(a)A majority of the Plan participants materially and adversely affected by the irreconcilable material conflict vote to decline such offer, or

(b)pursuant to documents governing the Plan, the Plan trustee makes such decision without a Plan participant vote. 5. The Board of each Insurance Fund's determination of the existence of a material irreconcilable conflict and its implications will be made known in writing promptly to all Participants. 6. Participating Insurance Companies will provide pass-through voting privileges to all Variable Contract owners whose Contracts are issued through registered VLI Accounts or registered VA Accounts for as long as required by the Act as interpreted by the Commission. However, as to Variable Contracts issued through VA Accounts or VLI Accounts not registered as investment companies under the Act, pass-through voting privileges will be extended to owners of such Contracts to the extent granted by the Participating Insurance Company. Accordingly, such Participating Insurance Companies, where applicable, will vote the shares of each Insurance Fund held in their VLI Accounts and VA Accounts in a manner consistent with voting instructions timely received from Variable Contract owners. Participating Insurance Companies will be responsible for assuring that each of their VLI and VA Accounts investing in an Insurance Fund calculates voting privileges in a manner consistent with all other Participating Insurance Companies investing in that Fund. The obligation to calculate voting privileges as provided in this Application shall be a contractual obligation of all Participating Insurance Companies under their Participation Agreement with the Fund. Each Participating Insurance Company will vote shares of each Insurance Fund held in its VLI or VA Accounts for which no timely voting instructions are received, as well as shares held by its general account or otherwise attributed to it, in the same proportion as those shares for which voting instructions are received. Each Plan will vote as required by applicable law, governing Plan documents and as provided in this application. 7. As long as the Act requires pass-through voting privileges to be provided to Variable Contract owners or the Commission interprets the Act to require the same, an Insurance Fund investment adviser (or its affiliates) or any general account will vote their shares of the Fund in the same proportion as all votes cast on behalf of all Variable Contract owners having voting rights; provided, however, that such an investment adviser (or affiliates) shall vote its shares in such other manner as may be required by the Commission or its staff. 8. Each Insurance Fund will comply with all provisions of the Act requiring voting by shareholders (which, for these purposes, shall be the persons having a voting interest in its shares), and, in particular, the Insurance Fund will either provide for annual meetings (except to the extent that the Commission may interpret Section 16 of the Act not to require such meetings) or comply with section 16(c) of the Act (although each Insurance Fund is not, or will not be, one of those trusts of the type described in section 16(c) of the Act), as well as with section 16(a) of the Act and, if and when applicable, section 16(b) of the Act. Further, each Insurance Fund will act in accordance with the Commission's interpretations of the requirements of section 16(a) with respect to periodic elections of directors/trustees and with whatever rules the Commission may promulgate thereto. 9. An Insurance Fund will make its shares available to the VLI Accounts, VA Accounts, and Plans at or about the time it accepts any seed capital from its investment adviser (or affiliates) or from a general account of a Participating Insurance Company. 10. Each Insurance Fund has notified, or will notify, all Participants that disclosure regarding potential risks of mixed and shared funding may be appropriate in VLI Account and VA Account prospectuses or Plan documents. Each Insurance Fund will disclose, in its prospectus that:

(a)Shares of the Fund may be offered to both VA Accounts and VLI Accounts and, if applicable, to Plans,

(b)due to differences in tax treatment and other considerations, the interests of various Variable Contract owners participating in the Insurance Fund and the interests of Plan participants investing in the Insurance Fund, if applicable, may conflict, and

(c)the Insurance Fund's Board will monitor events in order to identify the existence of any material irreconcilable conflicts and to determine what action, if any, should be taken in response to any such conflicts. 11. If and to the extent Rule 6e-2 and Rule 6e-3(T) under the Act are amended, or Rule 6e-3 under the Act is adopted, to provide exemptive relief from any provision of the Act, or the rules thereunder, with respect to mixed or shared funding, on terms and conditions materially different from any exemptions granted in the order requested in this Application, then each Insurance Fund and/or Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 or 6e-3(T), as amended, or Rule 6e-3, to the extent such rules are applicable. 12. Each Participant, at least annually, shall submit to the Board of each Insurance Fund such reports, materials or data as the Board reasonably may request so that the directors/trustees of the Board may fully carry out the obligations imposed upon the Board by the conditions contained in this Application. Such reports, materials and data shall be submitted more frequently if deemed appropriate by the Board of an Insurance Fund. The obligations of the Participants to provide these reports, materials and data to the Board, when it so reasonably requests, shall be a contractual obligation of all Participants under their Participation Agreement with the Insurance Fund. 13. All reports of potential or existing conflicts received by the Board of each Insurance Fund, and all Board action with regard to determining the existence of a conflict, notifying Participants of a conflict and determining whether any proposed action adequately remedies a conflict, will be properly recorded in the minutes of the Board or other appropriate records, and such minutes or other records shall be made available to the Commission upon request. 14. Each Insurance Fund will not accept a purchase order from a Plan if such purchase would make the Plan an owner of 10 percent or more of the net assets of the Insurance Fund unless the Plan executes an agreement with the Insurance Fund governing participation in the Insurance Fund that includes the conditions set forth herein to the extent applicable. A Plan will execute an application containing an acknowledgement of this condition at the time of its initial purchase of shares. Conclusions Applicants submit, for all the reasons explained above, that the exemptions requested are appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15550 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56193; File No. SR-Amex-2007-38] Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving Proposed Rule Change Amending Preferred Stock Voting Rights August 2, 2007. I. Introduction On April 20, 2007, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to amend the minimum voting rights that must be provided to preferred shareholders in order for a preferred stock issue to list on the Amex. The proposed rule change was published for comment in the **Federal Register** on July 7, 2007. 3 The Commission received no comments on the proposal. This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55963 (June 26, 2007), 72 FR 36081. II. Description of the Proposal Section 124 of the Amex Company Guide, “Preferred Voting Rights,” provides that the Exchange may decline to list a preferred stock issue on the Amex if the issuer does not provide certain minimum voting rights to holders of preferred stock. Specifically, under the current rule, the Exchange may decline to list a preferred stock issue unless the preferred shareholders have the right, voting as a class, to vote on:

(i)Any change in the rights, privileges or preferences of their preferred shares; and

(ii)the creation of any additional class of preferred stock senior to or equal in preference to their preferred shares. The rule provides that any such change in the rights, privileges or preferences of preferred shares and any creation of an additional class of senior preferred stock must be approved by at least two-thirds of the preferred shareholders. Any creation of an additional class of preferred stock equal in preference must be approved by at least a majority of the preferred shareholders. The Exchange now proposes to modify the minimum preferred voting rights required for listing of a preferred stock issue on the Amex. First, the Exchange proposes to amend the provision relating to changes in the rights, privileges, or preferences of preferred shareholders, to provide that holders of at least two-thirds of the outstanding shares of a preferred stock issue should be required for the adoption of any charter or by-law amendment that would materially affect existing terms of the preferred stock. The amended rule would also provide that, if all series of a class of preferred stock are not equally affected by a proposed change to the terms of the preferred stock, two-thirds approval of both the class and the series that will have a diminished status should be required to authorize such change. The Exchange also proposes to require that an issuer's charter not hinder the preferred shareholders' right to alter the terms of their stock by limiting modification to specific items, *e.g.,* interest rate, redemption price. With respect to the creation of a senior issue, the amended rule would continue to provide that the creation of a senior issue should require approval of at least two-thirds of the outstanding preferred shares. However, the Exchange proposes to amend the rule to also provide that a vote by an existing series of preferred stock is not required for the board of directors of an issuer to create a senior series of preferred stock if shareholders authorized such action when the existing series was created. Further, a vote by an existing class is not required for the creation of a senior issue if the existing class received adequate notice of redemption to occur within 90 days and the existing issue is not being retired with proceeds from the sale of the new issue. The amended rule would also provide that an increase in the authorized amount of a class of preferred stock or the creation of a pari passu issue is required to be approved by a majority of the outstanding shares of the class or classes to be affected by such change. However, a majority vote would not be required if, at the time a class of preferred stock was created, the preferred shareholders gave the board of directors the authority to increase the authorized amount of a series of preferred stock or create an additional series of preferred stock equal in preference. III. Discussion After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, with section 6(b)(5) of the Act, 4 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, to protect investors and the public interest. 5 4 15 U.S.C. 78f(b)(5). 5 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). The Commission notes that the proposed rule change will make Amex's listing requirements relating to minimum preferred voting rights substantially similar to those of the New York Stock Exchange LLC (“NYSE”). 6 The Commission believes that the proposed rule change may provide additional flexibility to issuers of preferred stock with regard to their ability to raise capital, while at the same time, ensuring that preferred shareholders will retain important voting rights. The proposal also ensures that the rights and privileges of the preferred shareholders are protected and cannot be changed without prior approval of the preferred shareholders. 6 *See* Section 313.00(C) of the NYSE Listed Company Manual. IV. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 7 that the proposed rule change (SR-Amex-2007-38) be, and hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 7 15 U.S.C. 78s(b)(2). 8 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15541 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56194; File No. SR-BSE-2007-32] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto to Amend the Existing Fee Schedule August 2, 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 5, 2007, the Boston Stock Exchange, Inc. (“BSE” 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 BSE has designated this proposal as one changing a due, fee, or other charge under section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. On July 20, 2007, BSE filed Amendment No. 1 to the proposed rule change. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). 5 In Amendment No. 1, the Exchange replaced the term Intermarket Sweep Order (“ISO”) with the phrase “order routed as a part of an NMS Cross Order” and the term “Reg NMS cross” with the phrase “NMS Cross Order”. In addition, the Exchange updated the BeX fee schedule to reflect these changes. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The BSE proposes to amend certain transaction fees set forth in the Boston Equities Exchange (“BeX”) fee schedule. The text of the proposed rule change is available at *http://www.bostonstock.com* , at the BSE, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. 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 On November 20, 2006, the BSE filed File No. SR-BSE-2006-44, 6 a rule filing that amended the existing BSE fee schedule and established a fee schedule for the BeX, a facility of the Exchange. On March 5, 2007, a subsequent filing, SR-BSE-2007-13, 7 was made to add a new Smart Order Routing fee. On June 28, 2007, the Exchange filed an additional fee filing, SR-BSE-2007-29 8 to lower the rate for this service. 6 *See* Securities Exchange Act Release No. 54795 (November 20, 2006), 71 FR 68850 (November 28, 2007). 7 *See* Securities Exchange Act Release No. 55529 (March 26, 2007), 72 FR 15734 (April 2, 2007). 8 *See* Securities Exchange Act Release No. 56129 (July 25, 2007), 72 FR 42157 (August 1, 2007). In this filing, the Exchange is proposing to implement a fee for orders routed as a part of an NMS Cross Order, 9 which the Exchange has developed to help firms comply with the trade-through requirements of Regulation NMS. An NMS Cross Order consists of a priced cross with two quantities:

(i)The quantity that the customer wants to cross; and

(ii)the “disinterest” quantity, which is the additional single-sided amount that the customer is willing to add in order to fulfill Regulation NMS obligations. 9 *See* Securities Exchange Act Release No. 55903 (June 13, 2007), 72 FR 33792 (June 19, 2007) (SR-BSE-2007-24). When this new order type is received, the Exchange will look at the best bids and offers at all Regulation NMS venues and route orders, as needed, up to the disinterest quantity. The cross will then be executed and reported back to the customer, along with any executions from the routed orders. If the disinterest quantity is not large enough to satisfy the size of the total trade-through on all markets, no orders will be routed and the entire cross will be rejected. The orders routed as a result of an NMS Cross Order will be added to the Exchange's other order routing products and will be charged at a rate of $0.0020 per share if a firm uses its own give-up on another market center and $0.0060 per share if a firm used a BeX provided give-up on another market center. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of section 6(b) of the Act, 10 in general, and furthers the objectives of section 6(b)(4) of the Act, 11 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among Exchange members and issuers and other persons using Exchange facilities. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has been designated as a fee change pursuant to section 19(b)(3)(A)(ii) of the Act 12 and Rule 19b-4(f)(2) thereunder, 13 because it establishes or changes a due, fee, or other charge imposed by the Exchange. Accordingly, the proposal will take effect upon filing with the Commission. 12 15 U.S.C. 78s(b)(3)(A)(ii). 13 17 CFR 240.19b-4(f)(2). At any time within 60 days of the filing of the proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-BSE-2007-32 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BSE-2007-32. 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 BSE. 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-BSE-2007-32 and should be submitted on or before August 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15545 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56190; File No. SR-CBOE-2007-04] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Amending Its Obvious Error Rule for Equity Options August 2, 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 February 21, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On July 2, 2007, the CBOE submitted Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 supersedes and replaces the original filing in its entirety. The substance of Amendment No. 1 is incorporated into this notice. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend CBOE Rule 6.25, which is the Exchange's rule applicable to the nullification and adjustment of transactions in equity options, to revise its obvious error provision related to “no bid” series. The Exchange is also proposing to make a non-substantive change by adding a cross-reference within the text of Rule 6.25. Below is the text of the proposed rule change. Proposed new language is in italics and proposed deletions are in [brackets]. Chicago Board Options Exchange, Incorporated Rules Rule 6.25—Nullification and Adjustment of Equity Options Transactions RULE 6.25. This Rule governs the nullification and adjustment of transactions involving equity options. Rule 24.16 governs the nullification and adjustment of transactions involving index options and options on ETFs and HOLDRs. Paragraphs (a)(1), [and]

(2)*and (5)* of this Rule have no applicability to trades executed in open outcry.

(a)Trades Subject to Review A member or person associated with a member may have a trade adjusted or nullified if, in addition to satisfying the procedural requirements of paragraph

(b)below, one of the following conditions is satisfied:

(1)No change.

(2)No Bid Series. Electronic transactions in series quoted no bid *on the Exchange* will be nullified provided: *(i) The bid in that series immediately preceding the execution was, and for five seconds prior to the execution remained, zero; and* *(ii)* at least one strike price below (for calls) or above (for puts) in the same options class was quoted no bid at the time of execution. *For purposes of subparagraphs (a)(2)(i) and (a)(2)(ii), bids and offers of the parties to the subject trade that are in any of the series in the same options class shall not be considered. In addition, each group of series in an options class with a non-standard deliverable will be treated as a separate options class.* (3)-(5) No change. (b)-(e) No change. * * * Interpretations and Policies: .01-.03 No change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend Rule 6.25, which is its obvious error rule pertaining to equity options, in order to modify the nullification provisions for no bid series. Currently, the Rule simply provides that electronic transactions in series that are quoted no bid on the Exchange are subject to nullification provided that at least one strike price below (for calls) or above (for puts) in the same options class was quoted no bid at the time of execution. Under the revised Rule, additional criteria and clarifying language would be added. Specifically, an electronic transaction in a series quoted no bid on the Exchange would be subject to nullification provided:

(i)The bid in that series immediately preceding the execution was, and for five

(5)seconds prior to the execution remained, zero; and

(ii)at least one strike price below (for calls) or above (for puts) in the same options class was quoted no bid at the time of execution. Thus, for example, if a trade occurs in the ABC 45 call option series when the series was quoted $0.00-$0.10, the trade may be nullified if:

(i)The bid was at $0.00 for at least five

(5)seconds prior to the execution; and

(ii)at least one call option series in ABC with a strike below 45 ( *e.g.* , the ABC 30, 35 or 40 call option series) had a bid of $0.00 at the time of execution. The revised no bid provision would also provide that, when determining the Exchange's quotes in the relevant series for purposes of

(i)and

(ii)above, bids and offers of the parties to the subject trade that are in any of the series in the same options class shall not be considered. The revised rule would also provide that each group of series in an options class with a non-standard deliverable will be treated as a separate options class. Thus, for example, if due to a reorganization, certain of the series in the ABC option class have a deliverable of 150 shares per options contract (as compared to the standard 100 shares per option contract), all ABC option series that are subject to the 150 contract delivery requirements would be considered separately from the ABC option series that are subject to the 100 contract delivery requirements for purposes of applying the no bid provision. Finally, the revised Rule would clarify that the no bid provision is intended to apply to series quoted no bid on the Exchange (as opposed to series for which the national best bid is quoted no bid). 4 4 Consistent with the existing provisions, for a nullification to be granted, any member or person associated with a member that believes it participated in a transaction that falls within the no bid series parameters must also satisfy the notification procedures set forth in paragraph

(b)of Rule 6.25. The Exchange states that the proposed changes to the no bid provision are intended to address the Exchange's experience in applying the provision to particular trading scenarios that have occurred. The Exchange believes that the additional criteria and clarifications are reasonable and objective, and would serve to better identify instances where the no bid provision is intended to apply. The Exchange is also proposing to make a revision to the introductory language in Rule 6.25 in order to cross reference paragraph (a)(5), which pertains to erroneous trades resulting from an erroneous quote in the underlying, as one of the three obvious error provisions that have no applicability to trades executed in open outcry. 5 The Exchange is proposing to include the cross-reference in the introductory language in Rule 6.25 for consistency and completeness. The Exchange asserts that this proposed change is non-substantive because the text of paragraph (a)(5) already explicitly provides that the provision is not applicable to trades executed in open outcry. 5 The other two obvious error provisions that have no applicability to trades executed in open outcry pertain to obvious price errors and no bid series. *See* introductory language to Rule 6.25 and paragraphs (a)(1) and

(2)thereunder. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with section 6(b) of the Act, 6 in general, and furthers the objectives of section 6(b)(5) of the Act, 7 in particular, in that it is designed to promote just and equitable principles of trade, prevent fraudulent and manipulative acts, remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received by the Exchange with respect to 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 Exchange consents, the Commission will: A. By order approve the proposed rule change or; B. Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-CBOE-2007-04 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-2007-04. 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-2007-04 and should be submitted on or before August 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15543 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56191; File No. SR-CBOE-2007-79] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Eliminate Position and Exercise Limits for Options on the Russell 2000 Index, and To Specify That Reduced-Value Options on Broad-Based Security Indexes for Which Full-Value Options Have No Position and Exercise Limits Similarly Have No Position and Exercise Limits August 2, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 1and Rule 19b-4 thereunder, 2 notice is hereby given that on July 17, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by CBOE. On August 2, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange made minor corrections to the rule text and purpose section of the proposed rule change. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to eliminate position and exercise limits for options on the Russell 2000 Index (“RUT”), a broad-based securities index that is multiply-listed and heavily traded. The Exchange also proposes to amend CBOE Rules 24.4(a) and 24.5 to specify that reduced-value options on broad-based security indexes for which full-value options have no position and exercise limits similarly have no position and exercise limits. In addition, the Exchange proposes to make technical changes to Rules 24.4, 24.5, and 24A.7. The text of the proposed rule change is available on CBOE's Web site ( *http://www.cboe.org/legal* ), at CBOE, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to eliminate position and exercise limits for options on RUT, a broad-based securities index that is multiply-listed and heavily traded. 4 The Exchange also proposes to amend Rules 24.4(a) and 24.5 to specify that reduced-value options on broad-based security indexes for which full-value options have no position and exercise limits similarly have no position and exercise limits. In addition, the Exchange proposes to make technical changes to Rules 24.4, 24.5, and 24A.7 to specify that there are no position and exercise limits for European-Style Exercise S&P 100 Index options (“XEO”) and to add “XEO” to the position reporting and margin rules. 4 The current position and exercise limits for RUT options are 50,000 contracts, with no more than 30,000 of such contracts in a series in the nearest expiration month, were established almost 15 years ago when the Commission approved the rule change that provided for the listing and trading of RUT options and have since remained unchanged. *See* Securities Exchange Act Release No. 31382 (October 30, 1992), 57 FR 52802 (November 5, 1992) (SR-CBOE-1992-02). *See also* Rule 24.4, Position Limits for Broad-Based Index Options, and Rule 24.5, Exercise Limits, (providing that exercise limits for index option contracts are equivalent to prescribed position limits). Eliminate Position and Exercise Limits for RUT Options The Exchange believes that the circumstances and considerations relied upon by the Commission in approving the elimination of position and exercise limits for other heavily traded broad-based index options ( *e.g.* , options on the S&P 500 Index (“SPX”), the S&P 100 Index (“OEX”), the Dow Jones Industrial Average Index (“DJX”), and the Nasdaq-100 Index (“NDX”)) equally apply to the current proposal relating to RUT position and exercise limits. 5 5 *See* Securities Exchange Act Release Nos. 44994 (October 26, 2001), 66 FR 55722 (November 2, 2001) (SR-CBOE-2001-22) (order granting permanent approval to the elimination of position and exercise limits on SPX, OEX and DJX options); and 52650 (October 21, 2005), 70 FR 62147 (October 28, 2005) (SR-CBOE-2005-41) (order approving the elimination of position and exercise limits on NDX options). The Exchange also notes that there are no position and exercise limits for volatility index options based on the SPX, DJX and NDX. In approving the elimination of position limits for SPX, OEX, DJX, and NDX options, the Commission considered the enormous capitalization of each of these indexes and the deep and liquid markets for the securities underlying each index significantly reduced concerns of market manipulation or disruption in the underlying markets. The Commission also noted the active trading volume for options on the respective indexes. CBOE believes that RUT shares these factors in common with the SPX, OEX, DJX, and NDX. As of the date of this rule filing, the approximate market capitalizations of the SPX, OEX, DJX, and NDX were $13.95 trillion, $8.06 trillion, $4.4 trillion and $2.36 trillion, respectively, the average daily trading volumes (“ADVs”) for all underlying components of the indexes were 1.27 billion, 540 million, 240 million, and 400 million shares, respectively, and the ADV for options on the indexes were 610,000 contracts, 60,000 contracts, 34,000 contracts, and 58,000 contracts respectively. 6 CBOE believes that RUT has very comparable characteristics. The market capitalization for RUT is $1.73 trillion dollars, the ADV for the underlying securities is 535 million shares, and the ADV for the option is 79,000 contracts. 6 ADVs are calculated over the previous three months of trading. In approving the elimination of position and exercise limits for SPX, OEX, DJX, and NDX options, the Commission also noted that the financial requirements imposed by both the Exchange and the Commission serve to address any concerns that a CBOE member or its customer(s) may try to maintain an inordinately large unhedged position in the indexes. These identical financial requirements would also apply to RUT options. Under CBOE rules, the Exchange has the authority to impose additional margin and/or assess capital charges and is further able to monitor accounts to determine when such action is warranted. 7 7 *See* Interpretation and Policy .04 to Rule 24.4 and also Rule 15c3-1 under the Act. Finally, the Commission relied heavily on the Exchange's ability to provide surveillance and reporting safeguards to detect and deter trading abuses arising from the elimination of position and exercise limits in options on these indexes. The Exchange represents that it monitors trading in RUT options in much the same manner as trading in SPX, OEX, DJX, and NDX options and that the current CBOE surveillance procedures are more than adequate to continue monitoring RUT options. In addition, the Exchange intends to impose a reporting requirement on CBOE members (other than CBOE market-makers) or member organizations that trade RUT options. This reporting requirement, which is currently imposed on members who trade SPX, OEX, and NDX options, would require members or member organization who maintain in excess of 100,000 RUT contracts on the same side of the market, for their own accounts or for the account of customers, to report information as to whether the positions are hedged and provide documentation as to how such contracts are hedged, in a manner and form required by the Exchange's Department of Market Regulation. 8 The Exchange also may specify other reporting requirements, as well as the limit at which the reporting requirement may be triggered. 9 8 *See* Interpretation and Policy .03 to Rule 24.4. The reporting requirements for DJX options are triggered at 1 million contracts. 9 *Id.* In the interest of consistency, the Exchange also proposes to amend Exchange Rules relating to the trading of FLEX broad-based index options to reflect that there shall be no exercise or position limits on RUT options and to adopt the 100,000 contract reporting requirements for FLEX RUT options. 10 10 *See* Rules 24A.7 and 24A.8. These rules are the subject of a pending rule filing, SR-CBOE-2006-99 (proposal to adopt rules related to FLEX Hybrid Trading System). Given the potential timing of the effectiveness of these two filings, the Exchange notes that an amendment may need to be submitted in order to reconcile the text of the two proposals. In order to reflect the above-referenced proposed changes, the Exchange proposes to specify “RUT” in the text of Rules 24.4, Position and Limits for Broad-Based Index Options, and 24.5, Exercise Limits, as an option class on a broad-based index for which there are no position and exercise limits. Similarly, the Exchange proposes deleting the listing of “Russell 2000” from the chart contained in Rule 24.4(a). In addition, the Exchange proposes adding “RUT” to the text of Interpretation and Policy .03 to Rule 24.4, Reporting Requirements, and to the text of Interpretation and Policy .04 to Rule 24.4, Margin and Clearing Firm Requirements. Finally, the Exchange proposes adding “RUT” to the text of Rule 24A.7, Position Limits for FLEX narrow-Based Index Options; Reporting Requirements for Flex Broad-Based Index Options and Flex Equity Options. The Exchange believes that eliminating position and exercise limits for RUT options and FLEX options is consistent with CBOE rules relating to similar broad-based indexes and also allows CBOE members and their customers greater hedging and investment opportunities. No Position and Exercise Limits for Reduced-Value Options on Broad-Based Indexes for Which There Are No Position and Exercise Limits for Full-Value Options The Exchange lists and trades several reduced-value options on broad-based indexes for which the Exchange also lists and trades full-value options ( *e.g.* , Mini-SPX Index (“XSP”) options, Mini-Russell 2000 Index (“RMN”) options and Mini-Nasdaq-100 Index (“MNX”) options). When the Exchange received approval to list and trade reduced-value options on broad-based indexes, the proscribed position and exercise limits were equivalent to the reduced-value contract factor ( *e.g.* , 10) multiplied by the applicable position and exercise limits for the full-value option on the same broad-based index. 11 For example, the position and exercise limits for RMN options (1/10th RUT value) are 500,000 contracts, which is equal to the applicable factor

(10)multiplied by the position limit for RUT options (50,000). In other words, the Exchange's existing rules applicable to position and exercise limits for full-value broad-based index options are used to calculate the position and exercise limits for reduced-value options. 12 11 *See* Securities Exchange Act Release Nos. 32893 (September 14, 1993), 58 FR 49070 (September 21, 1993) (order approving SR-CBOE-1993-12 to list and trade XSP options); 43000 (July 10, 2000), 65 FR 42409 (July 30, 2000) (order approving SR-CBOE-2000-15 to list and trade MNX options); and 51220 (February 17, 2005), 70 FR 9398 (February 25, 2005) (order approving SR-CBOE-2004-89 to list and trade RMN options and other reduced-value options on the Russell 2000 Index). 12 *See* Rule 24.4(d) (“Positions in reduced-value index options shall be aggregated with positions in full-value indices. For example, if an index is reduced by one-tenth, ten

(10)reduced-value contracts shall equal one contract. If an index is reduced by one-fifth, five

(5)reduced-value contracts shall equal one contract.”). Conversely, when the Exchange's rules specifically state that certain full-value broad-based index options have no position and exercise limits, the same equally applies to reduced-value options on those same broad-based indexes. 13 In order to codify this provision, the Exchange proposes to amend Rules 24.4, Position Limits for Broad-Based Index Options, and 24.5, Exercise Limits, by adding the parenthetical phrase, “including reduced-value option contracts” prior to the identification of those full-value broad-based index options for which there are no position and exercise limits. 13 *See e.g.* , Securities Exchange Act Release No. 50759 (November 30, 2004), 69 FR 70728 (December 7, 2004) (SR-CBOE-2004-74) (immediately effective proposal to list, among other things, reduced-value options on the XEO for which there are no position and exercise limits because XEO has no position and exercise limits). To reflect that there are no position limits for reduced-value options on the Russell 2000 Index and the Nasdaq-100 Index, the Exchange proposes deleting the listing of “Nasdaq 100 Index (1/10th) (MNX),” and “Russell 2000 Index (1/10th)” from the chart contained in Rule 24.4(a). Similarly, the Exchange proposes deleting the listing of “Nasdaq 100 Stock Index (1/10th value (MNX),” “Russell 2000 Index (1/10th),” and “Russell 2000 Index (1/5th)” from the chart contained in Interpretation and Policy .01(e) to Rule 24.4. 14 14 The Exchange inadvertently neglected to request the Commission's approval to delete the text listing MNX options in these rules when the Exchange eliminated position and exercise limits for NDX options. *See* Securities Exchange Act Release No. 52650 (October 21, 2005), 70 FR 62147 (October 28, 2005) (order approving elimination of position and exercise limits for NDX options). In addition, because position and exercise limits for reduced-value options are aggregated with full-value options for purposes of determining compliance with position and exercise limits, the Exchange proposes amending Interpretation and Policy .03 to Rule 24.4 and Rule 24A.7 to reflect that such aggregation will apply when calculating reporting requirements. 15 Specifically, the Exchange proposes to add the sentence, “[i]n calculating the applicable contract-reporting amount, reduced-value contracts will be aggregated with full-value contracts and counted by the amount by which they equal a full-value contract ( *e.g.* , 10 XSP options equal 1 SPX full-value contract).” 15 *See also* Rule 24.4(d). Technical XEO Option Changes Lastly, the Exchange proposes to make technical changes to Rules 24.4 and 24.5 to specify that there are no position and exercise limits for XEO options. 16 The Exchange proposes to reflect this by adding “XEO” to the text of Rules 24.4 and 24.5. In addition, the Exchange proposes to add “XEO” to the text of Interpretation and Policy .03 to Rule 24.4, Reporting Requirement, and the text of Interpretation and Policy .04 to Rule 24.4, Margin and Clearing Firm Requirements. Finally, the Exchange proposes to add “XEO” to the text of Rule 24A.7, Position Limits for FLEX narrow-Based Index Options; Reporting Requirements for Flex Broad-Based Index Options and Flex Equity Options. 16 *See* Securities Exchange Act Release No. 44994 (October 26, 2001), 66 FR 55722 (November 2, 2001) (order approving SR-CBOE-2001-22 and granting permanent approval to the elimination of position and exercise limits on SPX, OEX, and DJX options). The only difference between OEX and XEO options is the manner in which the respective contracts are exercised ( *i.e.* , American-style versus European-style). 2. Statutory Basis Because this rule proposal will place position and exercise limits for RUT options that are multiply-listed and heavily-traded on an equal basis with other similar and heavily-traded broad-based index options and because it will make the Exchange's rules more explicit with respect to position and exercise limits and other reporting and margin requirements, the Exchange believes the rule proposal 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. 17 Specifically, the Exchange believes that the proposed rule change is consistent with the section 6(b)(5) Act 18 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. 17 15 U.S.C. 78f(b). 18 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 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 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 self-regulatory organization consents, the Commission will:

(A)By order approve such proposed rule change, or

(b)of Article Fifth of the CBOE Certificate of Incorporation (“Article Fifth(b)”) as of July 1, 2007 will be granted temporary membership status at the Exchange, until the Commission takes final action on SR-CBOE-2006-106, if and only if such person

(i)Remains an exerciser member in good standing as of the close of business on the trading day immediately before the consummation of the CME/CBOT Transaction,

(ii)thereafter remains in good standing and continues to pay all applicable fees, dues, assessments and other like charges that are assessed against CBOE members, and

(iii)pays to the Exchange, for each month starting in the *second* month after the CME/CBOT Transaction is consummated, a monthly access fee [based on the then current monthly lease fees being paid to lessors of the interest that CBOT denominates as a full CBOT membership, with such fee to be] set by the Exchange [on a monthly basis based on published lease fee information]. Such access fee shall be due and payable in *accordance with the provisions of the Exchange Fee Schedule* [advance of each calendar month that the person decides to retain the temporary membership status granted pursuant to this paragraph]. All such access fees shall be payable to and held in an interest-bearing escrow account maintained by the Exchange until the Commission takes final action on SR-CBOE-2006-106. The Exchange will retain such fees if the Commission approves SR-CBOE-2006-106, and such fees will be returned to the payor *, with interest,* if the Commission disapproves SR-CBOE-2006-106. The temporary membership status granted pursuant to this paragraph shall be subject to the regulatory jurisdiction of CBOE under the Act, the Constitution and the Rules, including CBOE's disciplinary jurisdiction under Chapter XVII. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Rule 3.19.01 granted temporary CBOE membership status to certain persons in the event that the proposed merger between Chicago Mercantile Exchange Holdings, Inc. and CBOT Holdings, Inc. (“CME/CBOT Transaction”), the parent company of the Board of Trade of the City of Chicago, Inc. (“CBOT”), were to be consummated before the Commission took final action on CBOE's pending rule filing SR-CBOE-2006-106. 5 5 *See* Securities Exchange Act Release No. 55190 (January 29, 2007), 72 FR 5472 (February 6, 2007) (SR-CBOE-2006-106). Subsequent to the adoption of Rule 3.19.01, the CME/CBOT Transaction was consummated on July 12, 2007. As a result, there are currently persons who have temporary CBOE membership status under Rule 3.19.01 until such time that the Commission takes final action on SR-CBOE-2006-106. Specifically, under Rule 3.19.01, each person who was a member of the Exchange pursuant to paragraph

(b)of Article Fifth of the CBOE Certificate of Incorporation (an “exerciser member”) on July 1, 2007 and who satisfies the following conditions has been granted temporary CBOE membership status until the Commission takes final action on SR-CBOE-2006-106:

(1)The person was an exerciser member in good standing as of the close of business on the trading day immediately before the consummation of the CME/CBOT Transaction;

(2)the person remains in good standing and continues to pay all applicable fees, dues, assessments, and other like charges that are assessed to CBOE members; and

(3)the person pays a monthly access fee to the Exchange. In CBOE rule filing SR-CBOE-2007-77 6 which adopted Rule 3.19.01, the Exchange stated that it was going to submit a subsequent rule filing pursuant to Section 19(b)(3)(A)(ii) of the Act 7 to specify the access fee to be charged under Rule 3.19.01 or the methodology for determining it. 6 *See* Securities Exchange Act Release No. 56016 (July 5, 2007), 72 FR 38106 (July 12, 2007) (SR-CBOE-2007-77). 7 15 U.S.C. 78s(b)(3)(A)(ii). The purpose of this rule filing is to specify the access fee to be charged under Rule 3.19.01. The Exchange proposes to set the access fee for those granted temporary CBOE membership status under Rule 3.19.01 at $4700 per month. The Exchange indicated in SR-CBOE-2007-77 that the access fee would be based on the then current monthly lease fees being paid to lessors of what CBOT denominates as a full CBOT membership as reflected in published lease fee information. Consistent with the foregoing, the Exchange set the access fee to closely approximate the rate published by CBOT on its Web site as the average lease rate as of June 28, 2007 for the month of July 2007 to lease all of the interests that composed a full CBOT membership as of that date (which is $4711.40 per month). The Exchange has determined to have this rate remain in effect until such time that the Exchange submits a further rule filing pursuant to Section 19(b)(3)(A)(ii) of the Act 8 to modify the access fee or the Commission takes final action on SR-CBOE-2006-106. 9 Therefore, the Exchange is proposing to delete the current provisions of Rule 3.19.01 which indicate that the Exchange will set the access fee on a monthly basis based on the then current monthly lease fees being paid to lessors of what CBOT denominates as a full CBOT membership. 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 The Exchange will remove the access fee and the text describing it from the CBOE Fee Schedule when the Commission takes final action on SR-CBOE-2006-106. The Exchange believes that the proposed access fee of $4700 per month is appropriate because it closely approximates an average of the lease rates that exerciser members were paying during the month in which the CME/CBOT Transaction was consummated and temporary CBOE membership status under Rule 3.19.01 was granted. The Exchange removed the requirement that the access fee be re-set each month based upon then current CBOT lease rates because those rates could be impacted by the implementation of Rule 3.19.01 and may not reflect what those rates would have been in the absence of Rule 3.19.01. At the same time, the Exchange will retain the flexibility to adjust the access fee in the future through a rule filing submitted under Section 19(b)(3)(A)(ii) of the Act 10 if the Exchange determines that it would be appropriate to do so taking into consideration factors and circumstances prevailing at that time. 10 15 U.S.C. 78s(b)(3)(A)(ii). The Exchange is also proposing to amend Rule 3.19.01 to delete the provision that the access fee will be due and payable in advance of each calendar month, and instead, to more fully address in the CBOE Fee Schedule the manner in which the access fee will be assessed. This approach is consistent with CBOE's general approach regarding Exchange fees, which is to include the details regarding fee assessment in the Fee Schedule instead of in rules. Accordingly, the Exchange is proposing to amend the CBOE Fee Schedule to specify the amount of the access fee and to add an explanatory provision setting forth the details regarding its assessment. First, the explanatory provision states that the access fee is due and payable for each calendar month on the first day of that calendar month. Rule 3.19.01 previously provided that the access fee would be due and payable in advance of each calendar month. The time at which the access fee will be assessed has been changed to the beginning of the month because that is more consistent with CBOE's general billing practices under which monthly fees are generally assessed at the beginning of a month rather than in advance of a month. Second, the explanatory provision provides that the first month for which the access fee will be assessed is September 2007, and the Exchange proposes to make a corresponding change to Rule 3.19.01. Rule 3.19.01 previously provided that the access fee would be assessed for each month starting in the month after consummation of the CME/CBOT Transaction (which would have been August 2007). In order to effectuate this change, Rule 3.19.01 is proposed to be revised to provide that the access fee will be assessed for each month starting in the second month after consummation of the CME/CBOT Transaction rather than in the first month following its completion. The Exchange is making this change in the interest of fairness so that there is an appropriate transition time for persons granted temporary CBOE membership status under Rule 3.19.01. Third, the explanatory provision indicates that the access fee is non-refundable except as specified below. This is consistent with how other Exchange fees are generally assessed. For example, CBOE Rule 2.20 provides that CBOE membership dues are assessed on a non-refundable basis. Fourth, the explanatory provision states that the access fee and any other applicable monthly fees will be assessed for a calendar month unless a person with temporary CBOE membership status provides written notice to the CBOE Membership Department at least five business days prior to the start of that month that the person is relinquishing that status effective on a date prior to the start of that month. The purpose of this requirement is to allow time for the Exchange to process such a change within its membership and billing systems prior to the beginning of the next month. Fifth, the explanatory provision indicates that the access fee will be assessed through the integrated billing system. This is consistent with how Exchange fees are generally assessed pursuant to CBOE Rule 3.23. Finally, consistent with the provisions of Rule 3.19.01, the explanatory provision indicates that the access fee will terminate when the SEC takes final action on SR-CBOE-2006-106 (at which time the Exchange will also remove the access fee and the text describing it from the CBOE Fee Schedule); that all access fees shall be payable to and held in an interest-bearing escrow account maintained by the Exchange until the Commission takes such final action; that the Exchange will retain such fees if the Exchange approves SR-CBOE-2006-106; and that such fees will be returned to the payor, with interest, if the Commission disapproves SR-CBOE-2006-106. In addition to stating in the explanatory provision that such fees will be returned to the payor with interest if the Commission disapproves SR-CBOE-2006-106, Rule 3.19.01 is also proposed to be revised to make more explicit that a return of these fees will be with interest. The Exchange believes that the return of these fees with interest in the event the Commission disapproves SR-CBOE-2006-106 was already provided for under Rule 3.19.01 and is making the foregoing change to Rule 3.19.01 solely to eliminate any potential for ambiguity in this regard. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 11 in general, and furthers the objectives of Section 6(b)(4) of the Act, 12 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among persons using its facilities. 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 13 and subparagraph (f)(2) of Rule 19b-4 14 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 13 15 U.S.C. 78s(b)(3)(A)(ii). 14 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml)* ; or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2007-91 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-2007-91. 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 am and 3 pm. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-CBOE-2007-91 and should be submitted on or before August 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15547 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56199; File No. SR-FINRA-2007-001] Self-Regulatory Organizations: Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change Relating to the Reporting of Foreign Equity Securities to the Order Audit Trail System August 3, 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 31, 2007, the Financial Industry Regulatory Authority, Inc. (“FINRA”) (f/k/a the National Association of Securities Dealers, Inc. (“NASD”)) 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 FINRA. 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 FINRA is proposing to amend Rule 6952 to exclude certain orders and transactions in foreign equity securities from the Order Audit Trail System (“OATS”) recording and reporting requirements. The text of the proposed rule change is available at FINRA, 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, FINRA 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. FINRA 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 NASD Rules 6950 through 6958 (“OATS Rules”) impose obligations on member firms to record in electronic form and report to OATS on a daily basis certain information regarding orders in Nasdaq-listed equity securities originated, received, transmitted, modified, canceled, or executed by members. 3 FINRA integrates the OATS information with quote and transaction information to create a time-sequenced record of orders, quotes, and transactions. 3 Beginning on February 4, 2008, members also will be required to record and report order information regarding all OTC equity securities, as defined in NASD Rule 6951. *See* Securities Exchange Act Release No. 54585 (October 10, 2006); 71 FR 61112 (October 17, 2006) (SR-NASD-2005-101); NASD *Notice to Members* 06-70 (December 2006); *see also* Securities Exchange Act Release No. 55440 (March 9, 2007), 72 FR 12852 (March 19, 2007) (SR-NASD-2007-019). Currently, a member has recording and reporting obligations under the OATS Rules only with respect to orders in Nasdaq-listed equity securities. On October 10, 2006, the Commission approved SR-NASD-2005-101, which amended the OATS Rules and extended the OATS obligations to include orders in OTC equity securities. 4 As amended by SR-NASD-2005-101, Rule 6951 defines the term “OTC equity security” to mean “any equity security that:

(1)Is not listed on a national securities exchange; or

(2)is listed on one or more regional stock exchanges and does not qualify for dissemination of transaction reports via the facilities of the Consolidated Tape.” This broad definition of “OTC equity security” encompasses essentially all foreign equity securities, except those that are listed on a U.S. national securities exchange. 4 *See* Securities Exchange Act Release No. 54585 (October 10, 2006); 71 FR 61112 (October 17, 2006) (SR-NASD-2005-101); NASD *Notice to Members* 06-70 (December 2006). The effective date of these amendments to the OATS Rules is February 4, 2008. *See* Securities Exchange Act Release No. 55440 (March 9, 2007), 72 FR 12852 (March 19, 2007) (SR-NASD-2007-019). After the Commission's approval of SR-NASD-2005-101 and the publication of NASD *Notice to Members* 06-70 in December 2006, numerous member firms and industry organizations raised issues with FINRA staff regarding the breadth of the application of the OATS Rules to foreign equity securities. The issues that were raised included the lack of U.S. symbols for many foreign securities, the programming difficulties associated with tracking trades in foreign symbols and currencies, and the fact that, for many firms, orders for foreign securities are handled by foreign affiliates that are not currently set up to record and report OATS information. In addition, many trades in foreign equity securities are routed to foreign broker-dealers and executed on a foreign stock exchange. Consequently, although FINRA would receive OATS information regarding the order origination and routing for such orders, FINRA would not receive execution reports, and FINRA would not have trade reporting data to consolidate with the OATS data. 5 5 Trade reporting requirements under NASD Rule 6620 do not extend to a member's transactions in foreign equity securities executed on and reported to a foreign securities exchange or transactions executed over-the-counter in a foreign country that are reported to the regulator of securities markets for that country. *See* NASD Rule 6620(g); Securities Exchange Act Release No. 55745 (May 11, 2007), 72 FR 27891 (May 17, 2007) (SR-NASD-2007-030). In response to these concerns, FINRA reconsidered the issues associated with extending the OATS recording and reporting obligations to all foreign equity securities in light of the regulatory benefit provided by the information. FINRA has filed the proposed rule change to strike an appropriate balance between ensuring that FINRA can effectively monitor members' compliance with their order handling obligations ( *e.g.* , best execution and limit order protection) and avoiding overly burdensome reporting requirements. FINRA has concluded that the appropriate balance would be achieved by requiring firms to record and report order information regarding foreign equity securities only in those instances where any resulting execution is subject to the transaction reporting requirements in Rule 6620. This will provide FINRA with order information for the same transactions for which FINRA receives trade reporting information, thus allowing FINRA to review a complete audit trail of those transactions. At the same time, firms will not be required to record and submit information to FINRA for orders in a foreign equity security that do not result in a trade report to FINRA. At least two situations can arise in connection with orders for foreign equity securities that trade in the U.S. and abroad that may raise questions as to how these orders should be reported to OATS. In some circumstances, an order for a foreign equity security that is traded in the U.S. and abroad may be broken up and executed in multiple markets. If a firm breaks up an order and, as a result, part of the order is executed in the U.S. and part of the order is executed in a foreign market, the firm should report the entire order to OATS. The part of the order that was executed abroad should be reported as a route to a foreign broker-dealer or a foreign market ( *i.e.* , the firm is a member of the foreign market and is able to route the order directly to the foreign market), and the part of the order that was executed in the U.S. would be reported the same way as any other reportable order event. Similarly, with respect to foreign equity securities that trade in the U.S. and abroad, a firm may receive an order for such a security in the U.S. symbol and, at the time the order is received, the firm is uncertain whether the order will be executed in the U.S. or in the foreign market. In some cases, the trade may not be executed the day it is received. If the order is not executed before the firm is required to submit its OATS information for that day, the firm would not know whether it was required to report the receipt of the order to OATS because the firm would not yet have a trade reporting obligation. In such a case, because the security had a U.S. symbol and the customer placed the order in the U.S. symbol, the firm should report the new order to OATS as though it were going to be executed in the U.S. (and, thus be subject to the trade reporting requirements). 6 If the order is later executed in a foreign market, the firm would submit a route report indicating that the order was routed to a foreign broker-dealer or foreign market, as applicable. Of course, if a firm receives an order and executes that order the same day in a foreign market, no OATS report would be necessary if the firm was not required to report the transaction under Rule 6620. 6 If the security had no U.S. symbol, the firm could not report the information to OATS until a U.S. symbol is assigned. If the security has both a U.S. and foreign symbol and the order is received from the customer in the foreign symbol, the member would not be required to report the order to OATS unless the order is executed and trade reported to FINRA pursuant to Rule 6620 on the same day the order was received from the customer. Reportable Order Events for Foreign Equity Securities With No U.S. Symbol When a firm has a trade reporting obligation in a foreign equity security that does not have a U.S. symbol assigned to it at the time of the trade, the firm is required to:

(1)Promptly request a symbol so that it can comply with its trade reporting obligations; and

(2)comply with the OATS recording requirements under Rule 6954. Once a symbol is assigned, the member must report the trade to FINRA and report all applicable order information to OATS in accordance with Rule 6955. When reporting the information to OATS, the firm must properly code the report to indicate that the reported event occurred prior to the date of the OATS report. In these situations, if normal electronic trade reporting submission is not possible ( *e.g.* , the trade reporting facility will not accept a report because the foreign equity security had not been assigned a valid U.S. symbol on the actual trade date), the firm is required to report the transaction as soon as practicable on Form T. 7 7 *See e.g.* , NASD Rule 6620(a)(4) (regarding the use of Form T for trades reported to the OTC Reporting Facility). In these instances where a Form T is used for trade reporting purposes, FINRA intends to provide firms the option of reporting the required OATS information through the firm's normal OATS reporting channels or as part of the Form T submission. In this way, firms will be able to fulfill both the firm's trade reporting and OATS obligations through its Form T submission. 8 The ability to use a Form T to report OATS information will be available only for trades in foreign equity securities that do not have a U.S. symbol assigned at the time the OATS information would ordinarily be reported. 8 The revised *OATS Reporting Technical Specifications* that will be published following Commission approval of the proposed rule change will detail the precise procedures a firm may use to file the OATS report(s) in this situation. The operative date of the proposed rule change will be February 4, 2008, to coincide with the implementation date for the amendments to the OATS Rules requiring members to record and report order information for OTC Equity Securities. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of section 15A(b)(6) of the Act, 9 which requires, among other things, that FINRA 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. FINRA believes that the proposed rule change achieves a proper balance between reporting requirements that improve FINRA's ability to monitor members' order handling obligations and that have reasonable parameters regarding those orders that are subject to the requirements. 9 15 U.S.C. 78o-3(b)(6). B. Self-Regulatory Organization's Statement on Burden on Competition FINRA 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 self-regulatory organization consents, the Commission will:

(A)By order approve such proposed rule change, or

(ii)of the Act 2 and Rule 19b-4(f)(1) and

(2)3 thereunder so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the rule change from interested parties. 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78s(b)(3)(A)(i) and (ii). 3 17 CFR 240.19b-4(f)(1) and (2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purpose of the rule change is to make technical changes to certain provisions of the Government Securities Division (“GSD”) rules and the Mortgage-Backed Securities Division (“MBSD”) rules to update and to align them with current practice. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A), (B), and

(C)below, of the most significant aspects of these statements. 4 4 The Commission has modified the text of the summaries prepared by FICC.

(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

(1)Off-the-Market Transactions The definition of Off-the-Market Transactions in the GSD rules is outdated and does not allow for adjustments in market conditions. FICC proposes to amend this definition by

(i)Deleting the reference to “option exercises” so that they are no longer automatically considered to be Off-the-Market Transactions,

(ii)establishing a System Price 5 as the basis for determining whether a transaction will be an Off-the-Market Transactions, and

(iii)allowing FICC to establish the percentage, based on factors such as market conditions, by which the price of a transaction must exceed or fall short of the System Price in order to constitute an Off-the-Market Transaction. 5 Rule 1 defines System Price as “the uniform price (expressed in dollars per unit of par value), not including accrued interest, established by [FICC] on each Business Day, based on current market information, for each Eligible Netting Security with a separate CUSIP Number. Notwithstanding the above, the System Price for the Generic CUSIP Number that underlies a GCF Net Settlement Position shall be equal to principal value.”

(2)The Bond Market Association The Bond Market Association (“BMA”) has merged with the Securities Industry Association to form the Securities Industry and Financial Markets Association (“SIFMA”). FICC is proposing to revise the MBSD Clearing Rules and MBSD EPN Rules to replace references to the BMA and BMA Guidelines with references to SIFMA and SIFMA Guidelines.

(3)Omnibus Account Fees and Access Fees MBSD's EPN Schedule of Charges currently provides for Omnibus Account fees and for Access fees. These fees no longer exist. FICC is proposing to amend the MBSD EPN Schedule of Charges to delete the reference to Omnibus Account fees and Access fees. The proposed rule change is consistent with section 17A of the Act, 6 as amended, because it constitutes technical changes that do not adversely affect the safeguarding of securities or funds in the custody or control of FICC or for which it is responsible. 6 15 U.S.C. 78q-1.

(B)Self-Regulatory Organization's Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition.

(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission any written comments received by FICC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective upon filing pursuant to section 19(b)(3)(A)(i) and

(ii)of the Act 7 and Rule 19b-4(f)(1) and

(2)8 thereunder because the proposed rule change constitutes a stated policy and interpretation with respect to the meaning of existing FICC rules and changes a fee imposed by FICC. At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 7 15 U.S.C. 78s(b)(3)(A)(i) and (ii). 8 17 CFR 240.19b-4(f)(1) and (2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ) or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-FICC-2007-07 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-FICC-2007-07. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings also will be available for inspection and copying at the principal office of FICC and on FICC's Web site at *http://ficc.com/commondocs/rule.filings/rule.filing.07-07.pdf* . All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-FICC-2007-07 and should be submitted on or before August 30, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15542 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56201; File No. SR-ISE-2007-45] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to a Quote Mitigation Plan for Competitive Market Makers August 3, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on June 8, 2007, the International Securities Exchange, LLC (“ISE” 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 ISE. On August 1, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced the original filing in its entirety. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes, on a one-year pilot basis, a quote mitigation plan for the Exchange's Competitive Market Makers (“CMMs”). The text of the proposed rule change is available at ISE, the Commission's Public Reference Room, and *http://www.iseoptions.com* . II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the ISE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing a quote mitigation plan for its CMMs on a pilot basis for one

(1)year in no more than twenty

(20)securities (“Pilot Program Securities”) designated by the Exchange. With the explosion of quotation traffic—exacerbated by the penny pilot—the Exchange continues to seek ways to mitigate the generation of quotations. At least two exchanges have adopted quote mitigation plans that relieve some market makers of the obligation to quote in every series of every class of options in which they are a market maker. 4 4 *See* Phlx Rule 1014(b)(ii)(D)(1); *see also* Amex Rule 994(c)(iv). Under ISE's current rules, a CMM must enter continuous quotations in all the series of at least 60 percent of the options classes for the group or “bin” to which it is appointed, or 60 options classes in the Group, whichever is less. Further, once a CMM enters a quote in an options class to which it is appointed, it must continuously quote in all series of that options class until the close of trading that day. ISE proposes to amend its rule so that a CMM will be required to enter continuous quotations in just 60 percent of the series, rather than in all series, of the options classes overlying the Pilot Program Securities, to which the CMM is appointed. Once a CMM enters a quote in a series, it must continue to quote in that series until the close of trading that day. The Exchange notes that ISE Rule 804(e)(2)(iii), which states that a CMM may be called upon to submit quotes in one or more series of options to which it is appointed in the interest of maintaining fair and orderly markets, shall continue to apply under the proposed pilot program. Under the proposal, the Exchange will issue a circular to CMMs identifying the initial Pilot Program Securities. The Exchange notes that the Pilot Program Securities selected by the Exchange are subject to change based on the quoting activity in these securities. The proposed pilot will consist of up to 20 of the most active classes, in terms of the number of quotes generated, that are in the Exchange's Penny Pilot Program. 5 Each time a change takes place in the Pilot Program Securities, the Exchange will issue circulars to notify CMMs of this change and shall provide them with adequate notice in order for them to make any required systems changes. 5 *See* Securities Exchange Act Release Nos. 55161 (January 24, 2007), 72 FR 4754 (February 1, 2007) (SR-ISE-2006-62); 56151 (July 26, 2007), 72 FR___ (August ___, 2007) (SR-ISE-2007-68). The Exchange believes the proposed pilot is a good first step towards adopting an internal quote mitigation plan that is beneficial both to the Exchange and its members without adversely affecting the quality of the Exchange's markets. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act, 6 in general, and furthers the objectives of section 6(b)(5) of the Act, 7 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or

(ii)as to which the Exchange consents, the Commission will:

(A)By order approve such proposed rule change, 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 No. SR-ISE-2007-45 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F. Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-ISE-2007-45. 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 at *http://www.sec.gov/rules/sro.shtml* . Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-ISE-2007-45 and should be submitted on or before August 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15549 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56195; File No. SR-NYSE-2007-71] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Exclude from Its Earnings Standard Gains or Losses From Extinguishment of Debt Prior to Maturity on a Six Month Pilot Basis August 2, 2007. Pursuant to section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the “Exchange Act”), 2 and Rule 19b-4 thereunder, 3 notice is hereby given that on July 27, 2007, the New York Stock Exchange LLC (the “NYSE” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated the proposed rule change as a “non-controversial” rule change pursuant to section 19(b)(3)(A) of the Act 4 and Rule 19b-4(f)(6) thereunder, 5 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule changes from interested persons. 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b-4. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the earnings standard of section 102.01C(I) of the Exchange's Listed Company Manual (the “Manual”) on a six-month pilot program basis. The amendment will enable the Exchange to adjust the earnings of companies for purposes of its pre-tax earnings standard by excluding gains or losses recognized in connection with the extinguishment of debt prior to its maturity. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nyse.com* ), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the earnings standard of section 102.01C(I) of the Manual on a six-month pilot program basis (the “Pilot Program”). The amendment will enable the Exchange to adjust the earnings of companies for purposes of its pre-tax earnings standard by excluding gains or losses recognized in connection with the extinguishment of debt prior to its maturity. The adjustment will relate only to gains or losses incurred in the three-year period under examination for purposes of the earnings standard. Prior to the promulgation of Statement of Financial Accounting Standards No. 145 (“SFAS No. 145”) in 2002, Financial Accounting Standards Board Statement No. 4 (“FASB No. 4”) required that gains and losses from the extinguishment of debt prior to its maturity that were included in the determination of net income be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. SFAS No. 145 rescinded FASB No. 4 and, as a result, gains or losses in connection with the extinguishment of debt prior to its maturity are now generally included in the calculation of operating earnings under generally accepted accounting principles (“GAAP”). As a result, some companies that would not otherwise be qualified to list may qualify as a result of the inclusion in pre-tax income of gains from the extinguishment of debt prior to its maturity. In addition, some prospective listed companies whose operating earnings would have met the requirements of the Exchange's pre-tax earnings test prior to 2002 are now not qualified to list as they are required to include losses from the extinguishment of debt prior to its maturity in pre-tax income. In the Exchange's experience, these gains and losses are primarily non-cash in nature, and, generally, represent the accelerated accrual of original issue discount, while the losses generally represent the remaining unamortized portion of costs incurred at the time of initial borrowing. The Exchange believes that it is appropriate to return to its pre-2002 approach of excluding gains and losses from debt extinguishment from pre-tax earnings as calculated for purposes of its earnings standard. The purpose of the earnings standard is to determine the suitability for listing of companies on a forward-looking basis in light of a sustained demonstration of strong earnings. As such, the Exchange does not believe that it is relevant to include in pre-tax earnings gains and losses from the extinguishment of debt prior to its maturity that are principally non-recurring in nature. Additionally, the Exchange notes that the analyst community also routinely exclude these gains and losses from their analyses in making recommendations as to the desirability of investing in companies' publicly-traded equity securities. The Exchange believes that adjusting company earnings for gains and losses from the extinguishment of debt prior to its maturity is consistent with the adjustments that are currently permitted under section 102.01C for a number of other nonrecurring charges to earnings that are included in net income as recorded under GAAP, such as the exclusion of impairment charges on long-lived assets, the exclusion of gains and losses on sales of a subsidiary's or investee's stock and the exclusion of in-process purchased research and development charges. The Exchange also believes that this adjustment is reasonable given the purpose of the earnings standard, which is to determine the suitability for listing of companies on a forward-looking basis. 2. Statutory Basis The basis under the Exchange Act for this proposed rule change is the requirement under Section 6(b)(5) 6 that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange 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 Because the proposed rule change:

(i)Does not significantly affect the protection of investors or the public interest;

(ii)does not impose any significant burden on competition; and

(iii)does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act 7 and Rule 19b-4(f)(6) thereunder. 8 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) under the Act, the Exchange is required to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the five-day pre-filing requirement. A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act 9 normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) 10 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay. The Commission hereby grants the request. 11 The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed rule change is consistent with other adjustments the Exchange makes when evaluating applicants on a forward-looking, post-IPO basis under the existing earnings standard in section 102.01C(I) of the Listed Company Manual, and the proposal will take effect as a Pilot Program, allowing the Commission to evaluate the suitability of the proposal during the pilot period. 9 17 CFR 240.19b-4(f)(6). 10 17 CFR 240.19b-4(f)(6)(iii). 11 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSE-2007-71 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-2007-71. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2007-71 and should be submitted on or before August 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15546 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56200; File No. SR-NYSEArca-2007-77] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to Exchange Fees and Charges August 3, 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 27, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by NYSE Arca. On August 1, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. The Exchange has designated this proposal as one establishing or changing a due, fee or other charge imposed by the Exchange under section 19(b)(3)(A) 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend its Schedule of Fees and Charges for Exchange Services (“Schedule”) in order to revise the operative period for transactions fees that are applicable to issues that trade as part of the Penny Pilot. 5 The text of the proposed rule change is available at *http://www.nysearca.com* , at the Exchange, and at the Commission's Public Reference Room. 5 *See* Securities Exchange Act Release No. 55156 (January 23, 2007) 72 FR 4759 (February 1, 2007) (SR-NYSEArca-2006-73). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE Arca included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below. NYSE Arca has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to revise the existing NYSE Arca Schedule in conjunction with the extension of the Penny Pilot. On June 18, 2007, the Exchange filed SR-NYSEArca-2007-56, a proposal to extend the pilot program, under which the Exchange trades options on a limited number of underlying issues that are quoted in one-cent and five-cent increments (“Penny Pilot”). On July 23, 2007, the Exchange filed Amendment No. 1, which replaced the original proposal in its entirety. On July 25, 2007, the Exchange filed Amendment No. 2, which made non-substantive changes to the proposal. The amended proposal, which extends the operative date of the Penny Pilot until September 27, 2007, was effective upon filing. NYSE Arca charges certain fees on transactions occurring in issues that trade as part of the Penny Pilot. The Exchange now proposes to extend the operative date for these fees until September 27, 2007, to coincide with the dates of the Penny Pilot. 2. Statutory Basis NYSE Arca believes that the proposed rule change is consistent with Section 6(b) of the Act, 6 in general, and furthers the objectives of Section 6(b)(4) of the Act, 7 in particular, in that it provides for the equitable allocation of dues, fees and other charges among its members. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition NYSE Arca does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act 8 and subparagraph (f)(2) of Rule 19b-4 thereunder 9 because it establishes or changes a due, fee or other charge 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 of appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSEArca-2007-77 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-2007-77. 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 No. SR-NYSEArca-2007-77 and should be submitted on or before August 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15552 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56198; File No. SR-Phlx-2007-45] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Approval of Proposed Rule Change To Establish New Procedures To Follow When Trading Halts on the Primary Market for the Underlying Security August 3, 2007. On June 14, 2007, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to amend Exchange Rules 1047, Trading Rotations, Halts and Suspensions concerning equity options, 1047A, Trading Rotations, Halts or Reopenings concerning index options, and OFPA G-2, Trading Rotations, Halts or Reopenings, to establish new procedures to follow when trading halts on the primary market for the underlying security. The proposed rule change was published for notice and comment in the **Federal Register** on July 3, 2007. 3 The Commission received no comments on the proposal. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55958 (June 26, 2007), 72 FR 36538. 36538. The Commission has reviewed carefully the proposed rule change and finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 4 and, in particular, the requirements of section 6(b)(5) of the Act, 5 in that the proposed rule change is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposed rule change would permit specialists to halt trading in equity options in the overlying option when trading is halted on the primary market in the underlying security, and in index options when trading on the primary market in underlying securities representing more than 10% of the current index value is halted, before receiving approval from an Options Exchange Official, provided such approval is granted within five minutes following the halt of trading in the option. Because the proposed rule change is intended to reduce the period of time following a trading halt on the primary market in the underlying security before trading the overlying option is halted, thus enabling specialists to halt trading in the overlying option more expeditiously, the Commission believes the proposed rule change is reasonably designed to allow Exchange options specialists and Registered Options Traders to better manage their market risk. 4 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f(b)(5). *It is therefore ordered,* pursuant to section 19(b)(2) of the Act 6 , that the proposed rule change (SR-Phlx-2007-45) be, and it hereby is, approved. 6 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 Florence E. Harmon, Deputy Secretary. 7 17 CFR 200.30-3(a)(12). [FR Doc. E7-15548 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P DEPARTMENT OF STATE [Public Notice: 5878] 60-Day Notice of Proposed Information Collection: Form DS-1998E, Foreign Service Officer Test Registration Form, OMB Control Number 1405-0008 ACTION: Notice of request for public comments. SUMMARY: The Department of State is seeking Office of Management and Budget

(OMB)approval for the information collection described below. The purpose of this notice is to allow 60 days for public comment in the **Federal Register** preceding submission to OMB. We are conducting this process in accordance with the Paperwork Reduction Act of 1995. • Title of Information Collection: Registration for the Foreign Service Officer Test. • OMB Control Number: 1405-0008. • Type of Request: Extension of a Currently Approved Collection. • Originating Office: Human Resources, HR/REE/BEX. • Form Number: DS-1998E. • Respondents: Registrants for the Foreign Service Officer Test. • Estimated Number of Respondents: 20,000. • Estimated Number of Responses: 20,000. • Average Hours Per Response: 3 hours. • Total Estimated Burden: 60,000 hours. • Frequency: Annually. • Obligation to Respond: Required to Obtain or Retain a Benefit. DATES: The Department will accept comments from the public up to 60 days from August 9, 2007. ADDRESSES: You may submit comments by any of the following methods: • E-mail: *blakesj@state.gov.* • Mail (paper, disk, or CD-ROM submissions): Stephen Blake, HR/REE/BEX, SA-1, 2401 E Street, NW., H-518, Washington, DC 20522. • Fax:

(202)261-8843, Attn: Stephen Blake. You must include the DS form number (if applicable), information collection title, and OMB control number in any correspondence. FOR FURTHER INFORMATION CONTACT: Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed information collection and supporting documents, to Stephen Blake, HR/REE/BEX, SA-1, 2401 E Street, NW., H-518, Washington, DC 20522, who may be reached on

(202)261-8898 or at *blakesj@state.gov.* SUPPLEMENTARY INFORMATION: We are soliciting public comments to permit the Department to: • Evaluate whether the proposed information collection is necessary for the proper performance of our functions. • Evaluate the accuracy of our estimate of the burden of the proposed collection, including the validity of the methodology and assumptions used. • Enhance the quality, utility, and clarity of the information to be collected. • Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of technology. Abstract of Proposed Collection Individuals registering for the Foreign Service Officer Test will complete a Registration Form that consists of an application form and six personal narrative questions about experience and qualifications. This includes information about their name, age, Social Security Number, contact information, ethnicity, education and work history, military experience, and their knowledge, skills and abilities they would bring to the Foreign Service. The information will be used to prepare and issue admission to the Foreign Service Officer Test, to assess registrants' qualifications for selection as a Foreign Service Officer, to provide data useful for improving future tests, and to conduct research studies based on the test results. Methodology Responses can be submitted electronically. Dated: July 16, 2007. Ruben Torres, Executive Director, HR/EX, Department of State. [FR Doc. E7-15574 Filed 8-8-07; 8:45 am] BILLING CODE 4710-15-P DEPARTMENT OF STATE Notice of Availability of the Draft Environmental Impact Statement for the Proposed TransCanada Keystone Pipeline Project August 3, 2007. AGENCY: Department of State. ACTION: Notice of Availability of the Draft Environmental Impact Statement

(EIS)for the Proposed TransCanada Keystone Pipeline Project. SUMMARY: The staff of the Department of State has prepared a draft Environmental Impact Statement

(EIS)for the Proposed TransCanada Keystone Pipeline Project. On April 19, 2006, TransCanada Keystone Pipeline, LLC (“Keystone”) filed an application for a Presidential permit for the construction, operation, and maintenance of pipeline facilities at the border of the U.S. and Canada for the transport of crude oil across the U.S.-Canada international boundary. According to the application, Keystone has requested authorization to construct and operate the border crossing facilities at the U.S.-Canadian border at Cavalier County, North Dakota, in connection with its proposed international pipeline project (the “Keystone Pipeline Project”), which is designed to transport incremental Canadian crude oil production from the Western Canadian Sedimentary Basin (“WCSB”) to existing terminals in Missouri, Illinois, and potentially Oklahoma. The Secretary of State is designated and empowered to receive all applications for Presidential permits, as referred to in Executive Order 13337, as amended, for the construction, connection, operation, or maintenance, at the borders of the United States, of facilities for the exportation or importation of petroleum, petroleum products, coal, or other fuels to or from a foreign country. any person wishing to comment on the draft EIS may do so. To ensure consideration prior to a Department of State decision on the Keystone proposal, it is important that we receive your comments by no later than September 24, 2007. SUPPLEMENTARY INFORMATION: The draft EIS was prepared to satisfy the requirements of the National Environmental Policy Act

(NEPA)and to evaluate the potential environmental impacts of the proposed pipeline project. The document also evaluates alternatives to the proposal, including system alternatives and pipeline route alternatives. The Federal cooperating agencies for the development of this EIS are: U.S. Department of Energy; U.S. Army Corp. of Engineers; U.S. Fish and Wildlife Service; U.S. Department of Agriculture—Farm Service Agency, Natural Resources Conservation Service, and Rural Utility Service; U.S. Environmental Protection Agency; and the Advisory Council of Historic Preservation. Cooperating agencies either have jurisdiction by law or special expertise with respect to the environmental impacts assessed in connection with the proposal and are involved in the Department's analysis of those environmental impacts. The draft EIS addresses the potential environmental effects of the construction and operation of the United States portion of the Keystone Pipeline Project. The Keystone Project initially would have nominal transport capacity of 435,000 barrels per day

(bpd)of crude oil from the oil supply hub near Hardisty, Alberta to an existing terminal and refinery at Wood River, Illinois, and on to an existing terminal at Patoka, Illinois. According to Keystone, additional pumping capacity could be added to increase the average throughput to 591,000 bpd, if warranted by future shipper demand and market conditions. Two pipeline extensions are proposed by Keystone and would be built, if deemed feasible by Keystone, based on shipper demand. The extensions would provide for transporting crude oil from terminals in Ft. Saskatchewan, Alberta to existing facilities in Cushing, Oklahoma. With these extensions, the pipeline would interconnect with existing crude oil pipelines that supply U.S. Gulf Coast refinery markets. TransCanada announced on July 3, 2007, that the proposed Keystone Oil Pipeline project had secured 155,000 bpd of additional firm shipper contracts from Hardisty, Alberta, to Cushing, Oklahoma, with a contract duration averaging 16 years. These commitments were obtained through the successful completion of a binding Open Season held to support an expansion of the proposed pipeline to 590,000 bpd and an extension of the proposed pipeline to Cushing, Oklahoma. According to TransCanada, it has now secured long term contracts for the Keystone project for a total of 495,000 bpd with average contract duration of 18 years. In total, the Keystone Project would consist of the Mainline Project (approximately 1,845 miles of pipeline, including about 767 miles in Canada and 1,078 miles in the United States) and the Cushing Extension (293.5 miles of pipeline in the United States). Including the Cushing Extension, the total length of pipeline in the United States would be 1,371.5 miles. In Canada, the Keystone Project would involve the purchase of an existing 537-mile, 34-inch-diameter pipeline currently owned by TransCanada Limited, a related TransCanada entity, and conversion of that pipeline to crude oil service; construction of a new 230-mile pipeline extension from Hardisty to the existing 537-mile pipeline, and construction of a pipeline extension from the existing pipeline to the U.S./Canada border. On February 12, 2007, the Canadian National Energy Board

(NEB)approved the transfer at net book value of a portion of TransCanada's Canadian Mainline natural gas transmission facilities to TransCanada Keystone Pipeline GP Ltd. Appropriate regulatory authorities in Canada are conducting an independent environmental review process for the proposed Canadian facilities. The Canadian NEB began public hearings addressing the Canadian portion of the Keystone Pipeline in June 2007. In the United States, the Mainline Project would comprise a 1,023-mile segment of 30-inch-diameter pipe from the Canadian border to Wood River, Illinois and an approximately 56-mile segment of 24-inch-diameter pipe between Wood River and Patoka, Illinois. The Cushing Extension would consist of 293.5 miles of 36-inch-diameter pipe extending from Steele City, Nebraska, to Cushing, Oklahoma. Keystone has advised the Department of State that construction of the Cushing Extension could occur, if warranted by future shipper demand and market conditions. The draft EIS prepared by the Department of State describes and evaluates the U.S. portion of the proposed Keystone Project, including both the Mainline Project and Cushing Extension, and the additional facilities required to increase throughput capacity to 591,000 bpd. Keystone intends to construct the 30- and 36-inch-diameter pipelines within a 110-foot-wide corridor, consisting of a temporary 60-foot-wide construction right-of-way

(ROW)and a 50-foot-wide permanent ROW. In Illinois, the 24-inch-diameter pipeline segment would be constructed within a 95-foot-wide corridor, consisting of a temporary 45-foot-wide construction ROW and a 50-foot-wide permanent ROW. The Keystone Project would require construction of pump stations, pigging (cleaning) facilities, delivery facilities, and densitometer sites (for detection of crude oil batch interfaces). Mainline valves

(MLVs)would be placed along the pipeline at locations necessary to maintain adequate flow through the pipeline. Keystone has advised the State Department that valves would be installed and located as dictated by the hydraulic characteristics of the pipeline and as required by federal regulations, with the intent to provide for public safety and environmental protection as part of pipeline integrity management practices. Densitometer sites for detection of crude oil batch interfaces would be located at Steele City (at the junction of the Mainline Project and Cushing Extension), as well as at Wood River and Patoka, Illinois, and Ponca City and Cushing, Oklahoma, where delivery metering and power facilities also would be located. According to Keystone, electrical transmission lines and associated substation upgrades required for Keystone Project would be constructed by local providers, who would be responsible for obtaining any necessary Federal, State, and local approvals or authorizations. Construction and operation of these facilities are considered connected actions under NEPA and therefore are evaluated within this draft EIS. U.S. States and counties that could possibly be affected by construction of the proposed pipeline, including the proposed Cushing extension, are: • North Dakota: Pembina, Cavalier, Walsh, Nelson, Steele, Barnes, Ransom, Dickey, and Sargent; • South Dakota: Marshall, Brown, Day, Clark, Beadle, Kingsbury, Miner, Hanson, McCook, Hutchinson, and Yankton; • Nebraska: Cedar, Wayne, Stanton, Platte, Colfax, Butler, Seward, Saline, Jefferson, and Gage; • Kansas: Marshall, Nemaha, Brown, Washington, Clay, Dickinson, Marion, Butler, Cowley, and Doniphan; • Missouri: Buchanan, Clinton, Caldwell, Carroll, Chariton, Randolph, Audrain, Montgomery, Lincoln, and St. Charles; • Illinois: Madison, Bond, Fayette, Marion, and Clinton; and • Oklahoma (under a possible future extension): Kay, Noble, and Payne. *Comment Procedures and Public Meetings:* Any person wishing to comment on the draft EIS may do so. To ensure consideration prior to a Department of State decision on the proposal, it is important that we receive your comments by no later than September 24, 2007. Options for submitting comments on the Draft EIS are as follows: • By mail to: Elizabeth Orlando, Keystone Project Manager, U.S. Department of State, OES/ENV Room 2657, Washington, DC 20520. Please note that Department of State mail can be delayed due to security screening. • Fax to:

(202)647-5947, attention Betsy Orlando. • E-mail to: *keystoneEIS@state.gov.* • Comment over the internet via the Keystone EIS Web site: *http://www.keystonepipeline.state.gov.* Comments received will be included in the public docket without change and may be made available on-line at *http://www.keystonepipeline.state.gov,* including any personal information provided, unless the commenter indicates that the comment includes information claimed to be Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI, or otherwise protected, through e-mail. If you send by e-mail, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, we recommend that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If we cannot read your comment because of technical difficulties and cannot contact you for clarification, we may not be able to consider your comment. Electronic comments should avoid the use of any special characters, any form of encryption, and be free of any defects or viruses. In addition to or in lieu of sending written comments, the Department of State invites you to attend the public meetings in the project area to receive comments on the draft EIS. The public meetings will be conducted in a workshop style. A court reporter will be present and will accept comments for the record. Dates and locations for the public meetings are: • Tuesday, September 4, 2007, 7 to 9 p.m., Carrolton, Missouri, Rupe community Building (Behind Fire Station, park on north side of building, do not block fire station), 710 Harvest Hills Road, Carrollton. • Wednesday, September 5, 2007, 7 to 9 p.m., St. Charles, Missouri, Days Inn Meeting Room, 2781 Veterans Memorial Parkway (off I-70 South Service Road), St. Charles. • Thursday, September 6, 2007, 7 to 9 p.m., Collinsville, Illinois, Gateway Center Marquette Room, One Gateway Drive (Highway 157 & Eastport Plaza Drive), Collinsville. • Tuesday, September 11, 2007, 7 to 9 p.m., Yankton, South Dakota, Minerva Convention Centre at the Best Western Kelly Inn, 1607 East Highway 50, Yankton. • Tuesday, September 11, 2007, 7 to 9 p.m., Michigan, North Dakota, Michigan Civic Center, 113 Broadway N., Michigan. • Wednesday, September 12, 2007, 7 to 9 p.m., Stanton, Nebraska, VFW Meeting Hall, 1106 Veteran's Avenue, Stanton. • Wednesday, September 12, 2007, 7 to 9 p.m., Lisbon, North Dakota, Commons Room, Lisbon High School, 502 Ash Street, Lisbon. • Thursday, September 13, 7 to 9 p.m., Seward, Nebraska, Seward Civic Center Auditorium, 616 Bradford Street, Seward. • Thursday, September 13, 2007, 7 to 9 p.m., Clark, South Dakota, Clark Community Center, 120 N. Commercial Street, Clark. • Monday, September 17, 2007, 7 to 9 p.m., Seneca, Kansas, Nemaha Community Center, 1500 Community Drive, Seneca. • Tuesday, September 18, 2007, 7 to 9 p.m., Senior Citizens Center, Abilene, Kansas, 100 N. Elm, Abilene. • Wednesday, September 19, 2007, 7 to 9 p.m., El Dorado, Kansas, El Dorado Civic Center Main Meeting Room, 201 E. Central, El Dorado. • Thursday, September 20, 2007, 7 to 9 p.m., Ponca City, Oklahoma, Econo Lodge Meeting Room, 212 S. 14th Street, Ponca City. After comments are reviewed, any significant new issues are investigated, and modifications are made to the draft EIS, a final EIS will be published and distributed by the Department of State. The final EIS will contain the Department's response to timely comments received on the draft EIS. Copies of the draft EIS have been mailed to interested Federal, State and local agencies; public interest groups; individuals and affected landowners who requested a copy of the draft EIS or who provided comments during the scoping process; libraries; newspapers; and other stakeholders. FOR FURTHER INFORMATION CONTACT: The TransCanada Keystone Pipeline application for a Presidential Permit, including associated maps and drawings; the draft EIS; a list of libraries where the draft EIS may be viewed; and other project information is available for viewing and download at the project Web site: *http//www.keystonepipeline.state.gov.* For information on the proposed project or the draft EIS, contact Elizabeth Orlando, OES/ENV Room 2657, U.S. Department of State, Washington, DC 20520, or by telephone

(202)647-4284, or by fax at

(202)647-5947. David Brown, Director, Bureau of Oceans and International Environmental and Scientific Affairs/Office of Environmental Policy, U.S. Department of State. [FR Doc. 07-3872 Filed 8-8-07; 8:45 am]

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