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BILLING CODE 7710-12-M SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56219; File No. SR-Amex-2007-78] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 520 in Order To Clarify Reporting Requirements August 8, 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 August 2, 2007, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by Amex.
The Exchange has filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 520 (Options and Selling Agreements) in order to clarify reporting requirements.
The text of the proposed rule change is available at Amex, the Commission's Public Reference Room, and *http://www.amex.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, Amex 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.
Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to clarify the reporting requirements of Rule 520. The proposal seeks to amend Rule 520 to make clear that it does not apply to standardized options and corporate stock options. 5 5 The Commission notes that revised Rule 520 requires each member and member organization to report to the Exchange such information as may be required with respect to any substantial option relating to listed securities, or securities admitted to unlisted trading privileges on the Exchange, acquired over-the-counter, in which such member, member organization, or allied member therein is directly or indirectly interested or of which such member, member organization, or allied member has knowledge by reason of transactions executed by or through such member or organization.
Rule 520 is designed to facilitate the Exchange's surveillance for and enforcement of rules against manipulation in connection with private or over-the-counter options. Because standardized options and corporate stock options are already subject to similar reporting requirements, via a prospectus or a registration statement, the Exchange believes it is redundant and needlessly burdensome to also require each member and member organization to submit reports to the Exchange under Rule 520 for standardized options and corporate stock options.
The Exchange submits that the proposed amendment to Rule 520 will provide additional transparency and clarity to the Rule. Furthermore, the Exchange believes that the proposed amendment to Rule 520 will enable Amex standards to be more consistent with those of the New York Stock Exchange LLC (“NYSE”) 6 and the Philadelphia Stock Exchange, Inc. (“Phlx”), 7 and therefore facilitate uniform application of the reporting requirements. 6 *See* NYSE Rule 424. 7 *See* Phlx Rule 784. 2.
Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act, 8 in general, and furthers the objectives of Section 6(b)(5) of the Act, 9 in particular, in that it is designed to 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. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others 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 forgoing rule change does not:
(1)Significantly affect the protection of investors or the public interest;
(2)impose any significant burden on competition; and
(3)become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b-4(f)(6) thereunder. 11 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). A proposed rule change filed under 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 12 However, Rule 19b-4(f)(6)(iii) 13 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 believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal raises no new regulatory issues and is consistent with similar rules of the NYSE and Phlx. For this reason, the Commission designates the proposed rule change to be operative upon filing with the Commission. 14 12 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)(iii) requires that a self-regulatory organization submit to 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 requested the Commission to waive this five-day pre-filing notice requirement. The Commission hereby grants this request. 13 *Id* . 14 For the purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of such proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Amex-2007-78 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2007-78. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2007-78 and should be submitted on or before September 5, 2007. 15 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15934 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56223; File No. SR-Amex-2007-60] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to the Listing and Trading of Shares of Eight Funds of the ProShares Trust Based on International Equity Indexes August 8, 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 15, 2007, the American Stock Exchange LLC (“Amex” 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 (“Exchange Notice”). On July 27, 2007, Amex submitted Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade the shares (“Shares”) of eight funds of the ProShares Trust (“Trust”) 3 based on four international equity indexes. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and *http://www.amex.com.* 3 The Trust is registered as a business trust under the Delaware Corporate Code. 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 Amex Rules 1000A-AEMI and 1001A—1005A provide standards for the listing of Index Fund Shares, which are securities issued by an open-end management investment company for exchange trading. These securities are registered under the Investment Company Act of 1940 (“1940 Act”), as well as under the Act. Index Fund Shares are defined in Amex Rule 1000A-AEMI(b)(1) generally as securities based on a portfolio of stocks or fixed income securities that seek to provide investment results that correspond generally to the price and yield of a specified foreign or domestic stock index or fixed income securities index. Amex Rule 1000A-AEMI(b)(2) permits the Exchange to list and trade Index Fund Shares that seek to provide investment results that exceed the performance of an underlying securities index by a specified multiple or that seek to provide investment results that correspond to a specified multiple of the inverse or opposite of the index's performance. 4 4 *See* Amex Rule 1000A—AEMI(b)(2)(iii) and Commentary .02 thereto (providing that the listing and trading of Index Fund Shares under paragraph (b)(2) thereof cannot be approved by the Exchange pursuant to Rule 19b-4(e) under the Act (17 CFR 240.19b-4(e)). The Exchange proposes to list under Amex Rule 1000A-AEMI the Shares of eight new funds of the Trust that are designated as Short Funds (the “Short Funds”) and UltraShort Funds (the “UltraShort Funds,” and together with the Short Funds, collectively referred to as the “Funds”). 5 Each of the Funds will have a distinct investment objective by attempting, on a daily basis, to correspond to a specified multiple of the inverse performance of a particular equity securities index as described below. The Funds will be based on the following benchmark indexes:
(1)MSCI Emerging Markets Index;
(2)MSCI Japan Index;
(3)MSCI EAFE Index; and
(4)FTSE/Xinhua 25 Index (each individually an “Underlying Index,” and all indexes collectively the “Underlying Indexes”). 6 5 A list of the proposed Funds is set forth in Exhibit A to the Exchange Notice. The Commission has approved the listing and trading of certain Short Funds and UltraShort Funds based on a variety of underlying indexes. *See* Securities Exchange Act Release Nos. 55117 (January 17, 2007), 72 FR 3442 (January 25, 2007) (SR-Amex-2006-101) (approving the listing and trading of shares of funds of the Trust based on certain underlying indexes); 54040 (June 23, 2006), 71 FR 37629 (June 30, 2006) (SR-Amex-2006-41) (approving the listing and trading of shares of funds of the Trust based on certain underlying indexes); and 52553 (October 3, 2005), 70 FR 59100 (October 11, 2005) (SR-Amex-2004-62) (approving the listing and trading of shares of funds of the xtraShares Trust based on certain underlying indexes). 6 The Statement of Additional Information (“SAI”) for the Funds discloses that each Fund reserves the right to substitute a different Underlying Index. Substitutions can occur if an Underlying Index becomes unavailable, no longer serves the investment needs of shareholders, the Fund experiences difficulty in achieving investment results that correspond to the applicable Underlying Index, or for any other reason determined in good faith by the Board (as defined herein). In such instance, the substitute index would attempt to measure the same general market as the then current Underlying Index. Consistent with applicable law, shareholders would be notified (either directly or through their respective intermediary) if a Fund's Underlying Index is replaced. In such case, the continued listing standards under Amex Rule 1002A would apply. *See* Amex Rule 1002A(b)(i)(B) (providing that the Exchange will consider the suspension of trading in, or removal from listing of, a series of Index Fund Shares if, among other circumstances, the Underlying Index or portfolio is replaced with a new index or portfolio, subject to certain exceptions). Specifically, the Exchange proposes to list and trade Shares of the Short Funds that seek daily investment results, before fees and expenses, that correspond to the inverse or opposite of the daily performance (−100%) of the Underlying Indexes. If each of these Short Funds is successful in meeting its objective, the net asset value (“NAV”) of the Shares of each Short Fund should increase approximately as much, on a percentage basis, as the respective Underlying Index loses when the prices of the securities in the Underlying Index decline on a given day, or should decrease approximately as much as the respective Underlying Index gains when the prices of the securities in the Underlying Index rise on a given day, before fees and expenses. The Exchange also proposes to list and trade Shares of the UltraShort Funds that seek daily investment results, before fees and expenses, that correspond to twice the inverse or opposite (−200%) of the daily performance of the Underlying Indexes. If each of these UltraShort Funds is successful in meeting its objective, the NAV of the Shares of each UltraShort Fund should increase approximately twice as much, on a percentage basis, as the respective Underlying Index loses when the prices of the securities in the Underlying Index decline on a given day, or should decrease approximately twice as much as the respective Underlying Index gains when the prices of the securities in the Underlying Index rise on a given day, before fees and expenses. ProShare Advisors LLC is the investment advisor (the “Advisor”) to each Fund. The Advisor is registered under the Investment Advisers Act of 1940. 7 While the Advisor will manage each Fund, the Trust's Board of Trustees (the “Board”) will have overall responsibility for the Funds’ operations. The composition of the Board is, and will be, in compliance with the requirements of Section 10 of the 1940 Act. 8 SEI Investments Distribution Company (the “Distributor”), a broker-dealer registered under the Act, will act as the distributor and principal underwriter of the Shares. JPMorgan Chase Bank, N.A. will act as the index receipt agent (the “Index Receipt Agent”) for which it will receive fees. The Index Receipt Agent will be responsible for the processing, clearance, and settlement of purchase and redemption orders through the facilities of the Depository Trust Company (“DTC”) and the National Securities Clearing Corporation (“NSCC”) on behalf of the Trust. 9 The Index Receipt Agent will also be responsible for the coordination and transmission of files and purchase and redemption orders between the Distributor and the NSCC. 7 The Trust, Advisor, and Distributor (“Applicants”) have filed with the Commission an application to amend the order under the 1940 Act (the “Application”) for the purpose of exempting the Funds of the Trust from various provisions of the 1940 Act. *See* Investment Company Act Release No. 27609 (December 22, 2006), 72 FR 162 (January 3, 2007) (File No. 812-13329) (providing notification of an application for an order under Section 6(c) of the 1940 Act for an exemption from Sections 2(a)(32), 5(a)(1), 22(d), and 24(d) of the 1940 Act and Rule 22c-1 under the 1940 Act, and under Sections 6(c) and 17(b) of the Act for an exemption from Sections 17(a)(1) and (a)(2) of the 1940 Act). 8 *See* 15 U.S.C. 80a-10 (setting forth certain restrictions and requirements with respect to affiliations or interest of directors, officers, and employees of registered investment companies). 9 E-mail from Nyieri Nazarian, Assistant General Counsel, Amex, to Edward Cho, Special Counsel, Division of Market Regulation, Commission, dated July 30, 2007 (clarifying the responsibilities of the Index Receipt Agent) (“Amex Confirmation”). Shares of the Funds issued by the Trust will be a class of exchange-traded securities that represent an interest in the portfolio of a particular Fund. The Shares will be registered in book-entry form only, and the Trust will not issue individual share certificates. DTC or its nominee will be the record or registered owner of all outstanding Shares. Beneficial ownership of Shares will be shown on the records of DTC or DTC participants. Underlying Indexes While the Exchange proposes to list and trade the Shares of the Funds pursuant to Section 19(b)(1) of the Act, the Exchange represents that the Underlying Index components comply with the generic listing standards set forth in Commentary .02 to Amex Rule 1000A-AEMI. *MSCI Emerging Markets Index.* The MSCI Emerging Markets Index is a free float-adjusted, market capitalization index that is designed to measure equity market performance in the global emerging markets. MSCI ( *http://www.msci.com* ) administers this Underlying Index exclusively, the component securities of which must meet objective criteria for inclusion. The MSCI Emerging Markets Index aims to capture 85% of the publicly available total market capitalization in each emerging market included in such Underlying Index. The MSCI Emerging Markets Index is rebalanced quarterly, and its value is calculated in U.S. dollars on a real-time basis and disseminated every 60 seconds from 8 p.m. to 5 p.m. Eastern Time (“ET”) the following day. As of June 2007, this Underlying Index consisted of 698 components, and the three largest stocks by weight were Samsung Electronics Co. Ltd., Anglo American Plc, and Taiwan Semiconductor Manufacturing Company Ltd. 10 The MSCI Emerging Markets Index consists of the following 25 emerging market country indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. The Commission has previously approved the listing and trading of an exchange-traded fund based on the MSCI Emerging Markets Index. 11 10 Amex Confirmation (confirming the name of Taiwan Semiconductor Manufacturing Company Ltd.). 11 *See* Securities Exchange Act Release No. 44900 (October 25, 2001), 66 FR 55712 (November 2, 2001) (SR-Amex-2001-45) (approving the listing and trading of shares of funds of iShares, Inc. based on certain foreign stock indexes, including the MSCI Emerging Markets
(Free)Index), as corrected by Securities Exchange Act Release No. 44990 (October 25, 2001), 66 FR 56869 (November 13, 2001) (SR-Amex-2001-45) (correcting the Release Number from 44900 to 44990). *MSCI Japan Index.* The MSCI Japan Index seeks to measure the performance of the Japanese equity market. The MCSI Japan Index is a capitalization-weighted index whose component securities are adjusted for available float and must meet objective criteria for inclusion in the Underlying Index. The MSCI Japan Index aims to capture 85% of the publicly available total market capitalization in Japan. The MSCI Japan Index is rebalanced quarterly, and its value is calculated in U.S. dollars on a real-time basis and disseminated every 60 seconds from 8 p.m. to 2 a.m. ET. 12 As of May 31, 2007, this Underlying Index, which is comprised of stocks traded primarily on the Tokyo Stock Exchange, consisted of 321 components, and the three largest stocks by weight were Toyota Motor Corp., Sony Corp., and NTT DoCoMo Inc. The calculation method weights stocks in the Underlying Index by their beginning-of-period market capitalization. Share prices are “swept clean” daily and adjusted for any rights issues, stock dividends, or splits. This Underlying Index is calculated in local currency and in U.S. dollars, without dividends and with gross dividends reinvested. Prices used to calculate the MSCI Japan Index are the official closing prices on the Tokyo Stock Exchange and other Japanese exchanges on which the equity securities comprising this Underlying Index are listed and primarily traded. 13 To calculate the applicable foreign currency exchange rate, MSCI uses WM/Reuters Closing Spot Rates. Under exceptional circumstances, MSCI may elect to use an alternative exchange rate for any country if the WM/Reuters Closing Spot Rate is believed not to be representative for the given currency on a particular day. 12 Commentary .02(b)(ii) to Amex Rule 1000A-AEMI provides that if an Underlying Index value does not change during some or all of the period when trading is occurring on the Exchange (for example, for indexes of non-U.S. component stocks because of time zone differences or holidays in the countries where such indexes' component stocks trade), then the last official calculated Underlying Index value must remain available throughout Exchange trading hours. As a result, the Exchange states that, for such an Underlying Index, the value that will be disseminated during Amex trading hours would be static. 13 Amex Confirmation (noting that the official closing prices used to calculate the MSCI Japan Index value would be taken from the Tokyo Stock Exchange and other Japanese exchanges on which certain equity securities comprising the MSCI Japan Index primarily trade). The MSCI Japan Index is calculated by MSCI for each trading day in the Japanese foreign exchange market based on official closing prices in such exchange market. For each trading day, MSCI publicly disseminates this Underlying Index value for the previous day's close. The MSCI Japan Index is reported periodically in major financial publications and also is available through vendors of financial information. The Commission has previously approved the listing and trading of an exchange-traded fund based on the MSCI Japan Index. 14 14 *See* Securities Exchange Act Release No. 36947 (March 8, 1996), 61 FR 10606 (March 14, 1996) (SR-Amex-95-43) (approving the listing and trading of Index Fund Shares based on the MSCI Japan Index, among other indexes). The Exchange represents that shares of the iShares MSCI Japan Index Fund
(EWJ)are currently traded on the Exchange. *MSCI EAFE Index.* The MSCI EAFE Index is a free float-adjusted, market capitalization index that is designed to measure equity market performance in the developed markets of Europe, Australasia, and the Far East. The MSCI EAFE Index is a capitalization-weighted index whose component securities are adjusted for available float and must meet objective criteria for inclusion in the Underlying Index. The MSCI EAFE Index aims to capture 85% of the publicly available total market capitalization in each developed market included in the MSCI EAFE Index. The MSCI EAFE Index is rebalanced quarterly, and its value is calculated in U.S. dollars on a real-time basis and disseminated every 60 seconds from 10 p.m. to 12:30 p.m. ET. 15 As of June 2007, this Underlying Index consisted of 1021 components, and the three largest stocks by weight were BP Plc, Glaxosmithkline Plc, and Novartis Ag. The MSCI EAFE Index consists of the following 21 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The Commission has previously approved the listing and trading on the Amex of an exchange-traded fund based on the MSCI EAFE Index. 16 15 *See supra* note 12. The Exchange states that between the start of trading on Amex to 12:30 p.m. ET, the MSCI EAFE Index value will be updated and disseminated every 60 seconds; however, from 12:30 p.m. ET to the close of Amex trading at 4:15 p.m. ET, the Exchange represents that only the last official calculated value will be available. 16 *See* Securities Exchange Act Release No. 44700 (August 14, 2001), 66 FR 43927 (August 21, 2001) (SR-Amex-2001-34) (approving the listing and trading of shares of a fund based on the MSCI EAFE Index, among other indexes). The Exchange states that the shares of the iShares MSCI EAFE Index Fund
(EFA)are currently traded on the Exchange. *FTSE/Xinhua China 25 Index.* The FTSE/Xinhua China 25 Index consists of 25 of the largest and most liquid Chinese stocks (Red Chip and H shares) 17 listed and trading on HKSE. The component securities of the FTSE/Xinhua China 25 Index are weighted based on the free-float adjusted total market value of the shares so that securities with higher total market values generally have a higher representation in this Underlying Index. The component securities are screened for liquidity, and weightings are capped to avoid over-concentration in any one stock. The inception date of this Underlying Index was March 2001. The FTSE/Xinhua China 25 Index is rule-based and is monitored by a governing committee that is responsible for conducting a quarterly review of the constituent securities of the Underlying Index and for making changes to the Underlying Index in accordance with this Underlying Index's procedures. 18 The FTSE/Xinhua China 25 Index is rebalanced quarterly, and its value is calculated in U.S. dollars on a real-time basis and disseminated every 60 seconds from 9:15 p.m. to 4 a.m. ET. 19 The Commission has previously approved the listing and trading of an exchange-traded fund based on the FTSE/Xinhua China 25 Index. 20 17 The Exchange states that “H shares” are securities of companies incorporated in mainland China and nominated by the Chinese government for listing and trading on the Hong Kong Stock Exchange (“HKSE”). They are quoted and traded in Hong Kong dollars (“HKD”). The only Chinese investors permitted to trade H shares are those who are approved by the Chinese government; however there are no such restrictions on international investors. “Red Chips” are securities of companies incorporated in Hong Kong that trade on HKSE and are quoted in HKD. The constituents are substantially owned, directly or indirectly, by Chinese state-owned enterprises. The only Chinese investors permitted to trade Red Chips are those who are approved by the Chinese government; however, there are no such restrictions on international investors. 18 Amex Confirmation (confirming that the governing committee is responsible for such duties). 19 *See supra* note 12. 20 *See* Securities Exchange Act Release No. 50505 (October 8, 2004), 69 FR 61280 (October 15, 2004) (SR-NYSE-2004-55) (approving the listing and trading of shares of the iShares FTSE/Xinhua China 25 Index Fund). The Exchange states that the shares of the iShares FTSE/Xinhua China 25 Index Fund
(FXI)are currently traded on the Exchange. *See* Securities Exchange Act Release No. 50800 (December 6, 2004), 69 FR 72228 (December 13, 2004) (SR-Amex-2004-85) (approving the trading of shares of the iShares FTSE/Xinhua China 25 Index Fund pursuant to unlisted trading privileges). Investment Objective of the Funds The Short Funds will seek daily investment results, before fees and expenses, of the inverse or opposite (−100%) of the applicable Underlying Index, and the UltraShort Funds will seek daily investment results, before fees and expenses, of twice the inverse or opposite (−200%) of the daily performance of the applicable Underlying Index. Each of these Funds will not invest directly in the component securities of the relevant Underlying Index, but instead will create short exposure to such Underlying Index. Each Fund will rely on establishing positions in certain financial instruments 21 that provide, on a daily basis, the inverse or opposite of, or twice the inverse or opposite of, as the case may be, the performance of the relevant Underlying Index. Normally, 100% of the value of the portfolios of each Fund will be devoted to Financial Instruments and certain money market instruments. 22 21 The financial instruments to be held by any of the Funds may include stock index futures contracts, options on futures contracts, options on securities and indices, equity caps, collars and floors, as well as swap agreements, forward contracts, repurchase agreements, and reverse repurchase agreements (the “Financial Instruments”). 22 Money market instruments include
(1)U.S. government securities and
(2)repurchase agreements that
(a)Are held by the Funds and
(b)will be eligible investments in accordance with Rule 2a-7 under the 1940 Act (17 CFR 270.2a-7) (the “Money Market Instruments”). While the Advisor will attempt to minimize any “tracking error” between the investment results of a particular Fund and the performance (and specified multiple thereof) or the inverse performance (and specified multiple thereof) of its Underlying Index, certain factors may tend to cause the investment results of a Fund to vary from such relevant Underlying Index or specified multiple thereof. 23 The Funds are expected to be highly inversely correlated to each applicable Underlying Index and investment objective (−0.85 or greater). 24 In each case, the Funds are expected to have a daily tracking error of less than 5% (500 basis points) relative to the specified multiple or inverse multiple of the performance of the relevant Underlying Index. 23 The Exchange states that several factors may cause a Fund to vary from the relevant Underlying Index and investment objective including:
(1)A Fund's expenses, including brokerage fees (which may be increased by high portfolio turnover) and the cost of the investment techniques employed by that Fund;
(2)less than all of the securities in the benchmark Underlying Index being held by a Fund and securities not included in the benchmark Underlying Index being held by a Fund;
(3)an imperfect correlation between the performance of instruments held by a Fund, such as futures contracts, and the performance of the underlying securities in the cash market;
(4)bid-ask spreads (the effect of which may be increased by portfolio turnover);
(5)holding instruments traded in a market that has become illiquid or disrupted;
(6)a Fund's Share prices being rounded to the nearest cent;
(7)changes to the benchmark Underlying Index that are not disseminated in advance;
(8)the need to conform a Fund's portfolio holdings to comply with investment restrictions or policies or regulatory or tax law requirements; and
(9)early and unanticipated closings of the markets on which the holdings of a Fund trade, resulting in the inability of the Fund to execute intended portfolio transactions. 24 Correlation is the strength of the relationship between
(1)The change in a Fund's NAV and
(2)the change in the benchmark Underlying Index (investment objective). The statistical measure of correlation is known as the “correlation coefficient.” A correlation coefficient of +1 indicates a perfect positive correlation, while a value of −1 indicates a perfect negative (inverse) correlation. A value of zero would mean that there is no correlation between the two variables. The Portfolio Investment Methodology The Advisor will seek to establish an investment exposure in each portfolio corresponding to each Fund's investment objective based on its “Portfolio Investment Methodology,” as described below. The Exchange states that the Portfolio Investment Methodology is a mathematical model based on well-established principles of finance that are widely used by investment practitioners, including conventional index fund managers. As set forth in the Application, the Portfolio Investment Methodology was designed to determine for each Fund the portfolio investments needed to achieve its stated investment objectives. The Portfolio Investment Methodology takes into account a variety of specified criteria and data, the most important of which are:
(1)Net assets (taking into account creations and redemptions) in each Fund's portfolio at the end of each trading day;
(2)the amount of required exposure to the Underlying Index; and
(3)the positions in Financial Instruments and/or Money Market Instruments at the beginning of each trading day. The Advisor will then mathematically determine the end-of-day positions to establish the required amount of exposure to the Underlying Index (the “Solution”), which will consist of equity securities, Financial Instruments, and/or Money Market Instruments. The difference between the start-of-day positions and the required end-of-day positions is the actual amount of Financial Instruments and/or Money Market Instruments that must be bought or sold for the day. The Solution represents the required exposure and, when necessary, is converted into an order or orders to be filled that same day. Generally, portfolio trades effected pursuant to the Solution are reflected in the NAV on the first business day (T+1) after the date the relevant trade is made. Therefore, the NAV calculated for a Fund on a given day should reflect the trades executed pursuant to the prior day's Solution. For example, trades pursuant to the Solution calculated on a Monday afternoon are executed on behalf of the Fund in question on that day. These trades will then be reflected in the NAV for that Fund that is calculated as of 4 p.m. ET on Tuesday. The timeline for the Portfolio Investment Methodology is as follows. Authorized Participants (“APs” or “Authorized Participants”) 25 have a 3 p.m. ET cut-off for orders submitted by telephone, facsimile, and other electronic means of communication and a 4 p.m. ET cut-off for orders received via mail. 26 Orders are received by the Distributor and relayed to the Advisor within ten minutes. The Advisor will know by 3:10 p.m. ET the number of creation/redemption orders by APs for that day. Orders are then placed at approximately 3:40 p.m. ET as market-on-close orders. At 4 p.m. ET, the Advisor will again look at the exposure to make sure that the orders placed are consistent with the Solution, and, as described above, the Advisor will execute any other transactions in Financial Instruments to assure that the Fund's exposure is consistent with the Solution. 25 An Authorized Participant is:
(1)Either
(a)a broker-dealer or other participant in the continuous net settlement system of the NSCC, or
(b)a DTC participant; and
(2)a party to a participant agreement with the Distributor. 26 The Exchange states that AP orders by mail are exceedingly rare. Description of Investment Techniques In attempting to achieve its individual investment objectives, a Fund may invest its assets in Financial Instruments and Money Market Instruments. The Funds generally will not invest in equity securities, but rather will hold only Financial Instruments and Money Market Instruments. To the extent applicable, each Fund will comply with the requirements of the 1940 Act with respect to “cover” for Financial Instruments and, thus, may hold a significant portion of its assets in liquid instruments in segregated accounts. Each Fund may engage in transactions in futures contracts on designated contract markets where such contracts trade and will only purchase and sell futures contracts traded on a U.S. futures exchange or board of trade. Each Fund will comply with the requirements of Rule 4.5 of the regulations promulgated by the Commodity Futures Trading Commission (“CFTC”). 27 27 The Exchange states that CFTC Rule 4.5 provides an exclusion for investment companies registered under the 1940 Act from the definition of the term “commodity pool operator” upon the filing of a notice of eligibility with the National Futures Association. Each Fund may enter into swap agreements and/or forward contracts for the purposes of attempting to gain exposure to its corresponding Underlying Index without actually transacting such securities. The Exchange states that the counterparties to the swap agreements and/or forward contracts will be major broker-dealers and banks. The creditworthiness of each potential counterparty is assessed by the Advisor's credit committee pursuant to guidelines approved by the Board. Existing counterparties are reviewed periodically by the Board. Each Fund may also enter into repurchase and reverse repurchase agreements with terms of less than one year and will only enter into such agreements with
(1)Members of the Federal Reserve System,
(2)primary dealers in U.S. government securities, or
(3)major broker-dealers. Each Fund may also invest in Money Market Instruments, in pursuit of its investment objectives, as “cover” for Financial Instruments, as described above, or to earn interest. The Trust will adopt certain fundamental policies consistent with the 1940 Act, and each Fund will be classified as “non-diversified” under the 1940 Act. Each Fund, however, intends to maintain the required level of diversification and otherwise conduct its operations so as to qualify as a “regulated investment company” or “RIC” for purposes of the Internal Revenue Code to relieve the Trust and the Funds of any liability for Federal income tax to the extent that its earnings are distributed to shareholders. 28 28 *See* Exchange Notice n.15 (providing a description of the Internal Revenue Code requirements pertaining to RICs). The Exchange Notice is available at Amex's Web site ( *http://www.amex.com* ). Availability of Information About the Shares and Underlying Indexes The Trust's Internet Web site ( *http://www.proshares.com* ), which is and will be publicly accessible at no charge, will contain the following information for each Fund's Shares:
(a)The prior business day's closing NAV, the reported closing price, and a calculation of the premium or discount of such price in relation to the closing NAV;
(b)data for a period covering at least the four previous calendar quarters (or the life of a Fund, if shorter) indicating how frequently each Fund's Shares traded at a premium or discount to NAV based on the daily closing price and the closing NAV, and the magnitude of such premiums and discounts;
(c)its prospectus and/or product description; and
(d)other quantitative information, such as daily trading volume. The prospectus and/or product description for each Fund will inform investors that the Trust's Web site has information about the premiums and discounts at which the Fund's Shares have traded. 29 29 The Exchange states that the Application requests relief from Section 24(d) of the 1940 Act (15 U.S.C. 80a-24(d)), which would permit dealers to sell Shares in the secondary market unaccompanied by a statutory prospectus when prospectus delivery is not required by the Securities Act of 1933. Additionally, if a product description is being provided in lieu of a prospectus, Commentary .06 of Amex Rule 1000A-AEMI requires that Amex members and member organizations provide to all purchasers of a series of Index Fund Shares a written description of the terms and characteristics of such securities, in a form prepared by the open-end management investment company issuing such securities, not later than the time of confirmation of the first transaction in such series is delivered to such purchaser. Furthermore, any sales material will reference the availability of such circular and the prospectus. Amex will disseminate for each Fund on a daily basis by means of the Consolidated Tape Association (“CT”) and CQ High Speed Lines information with respect to an Indicative Intra-Day Value ( “IIV”) (as defined and discussed herein), recent NAV, number of Shares outstanding, and the estimated cash amount and total cash amount per Creation Unit (as defined herein). The Exchange will make available on its Web site at *http://www.amex.com* daily trading volume, the closing prices, the NAV, and the final dividend amounts to be paid for each Fund. Each Fund's total portfolio composition will be disclosed on the Web site of the Trust or another relevant Web site as determined by the Trust and/or the Exchange. Web site disclosure of portfolio holdings will be made daily and will include, as applicable, the specific types of Financial Instruments and characteristics of such Financial Instruments and the cash equivalents and amount of cash held in the portfolio of each Fund. 30 This Web site disclosure of the portfolio composition of each Fund and the disclosure by the Advisor of the “IIV File” (as described herein) and the portfolio composition file or “PCF” (as described herein) will occur at the same time. 31 Therefore, the same portfolio information (including accrued expenses and dividends) will be provided on the public Web site, as well as in the IIV File and PCF provided to Authorized Participants. The format of the public Web site disclosure and the IIV File and PCF will differ because the public Web site will list all portfolio holdings, while the IIV File and PCF will similarly provide the portfolio holdings, but in a format appropriate for Authorized Participants, *i.e.* , the exact components of a Creation Unit. 32 Accordingly, each investor will have access to the current portfolio composition of each Fund through the Trust's Internet Web site and/or at the Exchange's Web site. 30 Amex Confirmation (confirming the information that will be disclosed on the Trust's Web site). 31 *Id.* (confirming that the portfolio information contained in the Trust's public Web site will be available at the same time the IIV File and PCF are disclosed by the Advisor). 32 The composition will be used to calculate the NAV later that day. Beneficial owners of Shares (the “Beneficial Owners”) will receive all of the statements, notices, and reports required under the 1940 Act and other applicable laws. They will receive, for example, annual and semi-annual Fund reports, written statements accompanying dividend payments, proxy statements, annual notifications detailing the tax status of Fund distributions, and Form 1099-DIVs. Some of these documents will be provided to Beneficial Owners by their brokers, while others will be provided by the Fund through the brokers. The daily closing value and the percentage change in the daily closing value for each Underlying Index will be publicly available on various Internet Web sites, and data regarding each Underlying Index will be available from the respective Underlying Index provider. Several independent data vendors also package and disseminate Underlying Index data in various value-added formats (including vendors displaying both securities and Underlying Index levels and vendors displaying Underlying Index levels only). The value of each Underlying Index will be updated intra-day on a real-time basis as its individual component securities change in price. These intra-day values of each Underlying Index will be disseminated at least every 60 seconds throughout the trading day 33 by Amex or another organization authorized by the relevant Underlying Index provider. 33 *See supra* notes 12 and 15 and accompanying text. Creation and Redemption of Shares Each Fund will issue and redeem Shares only in aggregations of at least 75,000 (each aggregation a “Creation Unit”). Purchasers of Creation Units will be able to separate the Creation Units into individual Shares. Once the number of Shares in a Creation Unit is determined, it will not change thereafter (except in the event of a stock split or similar revaluation). The initial value of a Share for each Fund is expected to be in the range of $50-$250. Creation Unit aggregations of the Funds will be purchased at NAV, plus a transaction fee. A purchaser will make a cash payment by 12 p.m. ET on the third business day following the date on which the request was made (T+3) or earlier. Purchasers of the Shares in Creation Unit aggregations must satisfy certain creditworthiness criteria established by the Advisor and approved by the Board, as provided in the participation agreement between the Trust and Authorized Participants. Creation Unit aggregations of the Shares will be redeemable for an all-cash payment equal to the NAV, less a transaction fee. The Trust will create a PCF for each Fund, which will be transmitted to NSCC before the open of business the next business day. The information in the PCF will be available to all participants in the NSCC system. Because the NSCC's system for the receipt and dissemination to its participants of the PCF is not currently capable of processing information with respect to Financial Instruments, the Advisor has developed an “IIV File” to disclose the Funds' holdings of Financial Instruments. 34 The IIV File will contain for each Fund information sufficient by itself or in connection with the PCF and other available information for market participants to calculate a Fund's IIV and effectively arbitrage such Fund. 34 The Trust or the Advisor will post the IIV File to a password-protected Internet Web site before the opening of business on each business day, and all Authorized Participants and the Exchange will have access to a password and the Web site containing the IIV File. The Funds, however, will disclose each business day to the public identical information, but in a format appropriate to public investors, at the same time the Funds disclose the IIV File and PCF, as applicable, to industry participants. For example, the following information would be provided in the IIV File for a Fund holding Financial Instruments, such as swaps and futures contracts:
(A)The notional value of the swaps held by such Fund (together with an indication of the Underlying Index on which such swap is based and whether the Fund's position is long or short);
(B)the most recent valuation of the swaps held by the Fund;
(C)the notional value of any futures contracts (together with an indication of the Underlying Index on which such contract is based, whether the Fund's position is long or short, and the contract's expiration date) held by the Fund;
(D)the number of futures contracts held by the Fund (together with an indication of the Underlying Index on which such contract is based, whether the Fund's position is long or short, and the contract's expiration date);
(E)the most recent valuation of the futures contracts held by the Fund;
(F)the total assets and total shares outstanding of each Fund; and
(G)a “net other assets” figure reflecting expenses and income of the Fund to be accrued during and through the following business day and accumulated gains or losses on the Fund's Financial Instruments through the end of the business day immediately preceding the publication of the IIV File. To the extent that any Fund holds cash or cash equivalents about which information is not available in a PCF, information regarding such Fund's cash and cash equivalent positions will be disclosed in the IIV File for such Fund. The information in the IIV File will be sufficient for participants in the NSCC system to calculate the IIV for the Funds during the following business day. The Shares of the Funds will be purchased and redeemed entirely for cash. The use of an all-cash payment for the purchase and redemption of Creation Unit aggregations of the Shares is due to the limited transferability of Financial Instruments. The IIV File published before the open of business on a business day will permit NSCC participants to calculate (by means of calculating the IIV) the amount of cash required to create a Creation Unit and the amount of cash that will be paid upon redemption of a Creation Unit, for each Fund for that business day. All Authorized Participants who are NSCC participants and the Exchange will have access to the Web site containing the IIV File. The IIV File will reflect trades made on behalf of a Fund and the creation/redemption orders for that business day. Accordingly, by approximately 7 p.m. ET, Authorized Participants will know the composition of a Fund's portfolio for the next trading day. The Exchange believes that Shares will not trade at a material discount or premium to the underlying securities held by a Fund based on potential arbitrage opportunities. The arbitrage process, which provides the opportunity to profit from differences in prices of the same or similar securities, increases the efficiency of the markets and serves to prevent potentially manipulative efforts. If the price of a Share deviates enough from the Creation Unit, on a per share basis, to create a material discount or premium, an arbitrage opportunity is created allowing the arbitrageur to either buy Shares at a discount, immediately cancel them in exchange for the Creation Unit, and sell the underlying securities in the cash market at a profit, or sell Shares short at a premium and buy the Creation Unit in exchange for the Shares to deliver against the short position. In both instances, the arbitrageur locks in a profit, and the markets move back into line. 35 35 In their Application, the Applicants stated that they do not believe that all-cash payments for creations/redemptions will affect arbitrage efficiency. This is because the Applicants believe it makes little difference to an arbitrageur whether Creation Unit aggregations are purchased in exchange for a basket of securities or cash. The important function of the arbitrageur is to bid the Share price of any Fund up or down until it converges with the NAV. Applicants note that this can occur regardless of whether the arbitrageur is allowed to create in cash or with a basket of securities. In either case, the arbitrageur can effectively hedge a position in a Fund in a variety of ways, including the use of market-on-close contracts to buy or sell the Financial Instruments. Dividends and Distributions Dividends, if any, from net investment income will be declared and paid at least annually by each Fund in the same manner as by other open-end investment companies. Each Fund may pay dividends on a semi-annual or more frequent basis. Distributions of realized securities gains, if any, generally will be declared and paid once a year. Dividends and other distributions on the Shares of each Fund will be distributed, on a *pro rata* basis to Beneficial Owners of such Shares. Dividend payments will be made through DTC and DTC participants to Beneficial Owners then of record with proceeds received from each Fund. The Trust will not make the DTC book-entry Dividend Reinvestment Service (the “Dividend Reinvestment Service”) available for use by Beneficial Owners for reinvestment of their cash proceeds, but certain individual brokers may make a Dividend Reinvestment Service available to Beneficial Owners. The SAI will inform investors of this fact and direct interested investors to contact such investor's broker to ascertain the availability and a description of such a service through such broker. The SAI will also caution interested Beneficial Owners that they should note that each broker may require investors to adhere to specific procedures and timetables in order to participate in the service, and such investors should ascertain from their broker such necessary details. Shares acquired pursuant to such service will be held by the Beneficial Owners in the same manner and subject to the same terms and conditions as those for original ownership of Shares. Brokerage commissions, charges, and other costs, if any, incurred in purchasing Shares in the secondary market with the cash from the distributions generally will be an expense borne by the individual Beneficial Owners participating in reinvestment through such service. Dissemination of Indicative Intra-Day Value
(IIV)In order to provide updated information relating to each Fund for use by investors, professionals, and persons wishing to create or redeem Shares, the Exchange will disseminate through the facilities of the CT
(1)Continuously throughout the trading day, the market value of a Share, and
(2)at least every 15 seconds throughout Amex's trading day, a calculation of the IIV, 36 as calculated by the Exchange (the “IIV Calculator”). The Exchange states that comparing these two figures helps an investor to determine whether, and to what extent, the Shares may be selling at a premium or a discount to NAV. 36 The IIV is also referred to by other issuers as an “Estimated NAV,” “Underlying Trading Value,” “Indicative Optimized Portfolio Value (IOPV),” and “Intraday Indicative Value” in various places such as the prospectus and marketing materials for different exchange-traded funds. The IIV is designed to provide investors with a reference value that can be used in connection with other related market information. The IIV does not necessarily reflect the precise composition of the current portfolio held by each Fund at a particular point in time. Therefore, the IIV on a per-Share basis disseminated during Amex trading hours should not be viewed as a real-time update of the NAV of a particular Fund, which is calculated only once a day. While the IIV that will be disseminated by Amex is expected to be close to the most recently calculated Fund NAV on a per-Share basis, it is possible that the value of the portfolio held by a Fund may diverge from the IIV during any trading day. In such case, the IIV will not precisely reflect the value of the Fund portfolio. The IIV Calculator will disseminate the IIV throughout the trading day for each Fund by:
(1)Calculating the mark-to-market gains or losses from the Fund's total return equity swap exposure based on the percentage change to the Underlying Index and the previous day's notional values of the swap contracts, if any, held by such Fund (which previous day's notional value will be provided by the Trust);
(2)calculating the mark-to-market gains or losses from futures, options, and other Financial Instrument positions by taking the difference between the current value of those positions held by the Fund, if any (as provided by the Trust), and the previous day's value of such positions;
(3)adding the values from
(1)and
(2)above to an estimated cash amount provided by the Trust (which cash amount will include the swap costs) to arrive at a value; and
(4)dividing that value calculated in
(3)above by the total number of Shares outstanding (as provided by the Trust) to obtain current IIV. Criteria for Initial and Continued Listing The Shares are subject to the criteria for initial and continued listing of Index Fund Shares under Amex Rule 1002A. A minimum of two Creation Units (at least 150,000 Shares) will be required to be outstanding at the start of trading. This minimum number of Shares required to be outstanding at the start of trading will be comparable to requirements that have been applied to previously listed series of Index Fund Shares. The Exchange believes that the proposed minimum number of Shares outstanding at the start of trading is sufficient to provide market liquidity. The Exchange, pursuant to Amex Rule 1002A(a)(ii), will obtain a representation from the Trust (for each Fund), prior to listing, that the NAV per share for each Fund will be calculated daily and made available to all market participants at the same time. The Exchange represents that the Trust is required to comply with Rule 10A-3 under the Act 37 for the initial and continued listing of the Shares. 37 17 CFR 240.10A-3 (setting forth listing standards relating to audit committees). Amex Trading Rules and Trading Halts The Shares are equity securities subject to Amex rules governing the trading of equity securities. 38 In addition, Amex Rule 154-AEMI(c)(ii) 39 and Commentary .04 to Amex Rule 190 40 apply to Index Fund Shares listed on the Exchange, including the Shares. 38 Amex Confirmation (clarifying Amex trading rules applicable to the Shares). 39 Amex Rule 154-AEMI(c)(ii) provides that stop and stop limit orders to buy or sell a security (other than an option, which is covered by Amex Rule 950(f) and Amex Rule 950-ANTE(f) and Commentary thereto), the price of which is derivatively priced based upon another security or index of securities, may be elected by a quotation. The Exchange has designated Index Fund Shares, including the Shares, as eligible for this treatment. 40 Commentary .04 states that nothing in Amex Rule 190(a) should be construed to restrict a specialist registered in a security issued by an investment company from purchasing and redeeming the listed security or securities that can be subdivided or converted into the listed security from the issuer as appropriate to facilitate the maintenance of a fair and orderly market. In addition to other factors that may be relevant, the Exchange may consider factors such as those set forth in Amex Rule 918C(b) in exercising its discretion to halt or suspend trading in Index Fund Shares. These factors include, but are not limited to,
(1)The extent to which trading is not occurring in securities comprising an Underlying Index and/or the Financial Instruments of a Fund, or
(2)whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In the case of Financial Instruments held by a Fund, the Exchange represents that a notification procedure will be implemented so that timely notice from the Advisor is received by the Exchange when a particular Financial Instrument is in default or shortly to be in default. Notification from the Advisor will be made by phone, facsimile, or e-mail. The Exchange would then determine on a case-by-case basis whether a default of a particular Financial Instrument justifies a trading halt of the Shares. Trading in Shares of the Funds will also be halted if the circuit breaker parameters under Amex Rule 117 have been reached. Amex Rule 1002A(b)(ii) sets forth the trading halt parameters with respect to Index Fund Shares. If the IIV or the Underlying Index value applicable to that series of Index Fund Shares is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the IIV or the Underlying Index value occurs. If the interruption to the dissemination of the IIV or the Underlying Index value persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. Information Circular The Exchange, in an Information Circular to Exchange members and member organizations, prior to the commencement of trading, will inform members and member organizations regarding the application of Commentary .06 of Amex Rule 1000A-AEMI to the Funds. The Information Circular will further inform members and member organizations of the prospectus and/or product description delivery requirements that apply to the Funds. 41 41 The Exchange states that the any product description used in reliance on Section 24(d) of the 1940 Act (15 U.S.C. 80a-24(d)) will comply with all representations and conditions set forth in the Application. *See supra* note 29. The Information Circular will also provide guidance with regard to member firm compliance responsibilities when effecting transactions in the Shares and highlighting the special risks and characteristics of the Funds and Shares as well as applicable Exchange rules. In particular, the Information Circular will set forth the requirements relating to Commentary .05 to Amex Rule 411 (Duty to Know and Approve Customers). Specifically, the Information Circular will remind members of their obligations in recommending transactions in the Shares so that members have a reasonable basis to believe that
(1)The recommendation is suitable for a customer given reasonable inquiry concerning the customer's investment objectives, financial situation, needs, and any other information known by such member, and
(2)that the customer can evaluate the special characteristics, and is able to bear the financial risks, of such investment. In connection with the suitability obligation, the Information Circular will also provide that members make reasonable efforts to obtain the following information:
(a)The customer's financial status;
(b)the customer's tax status;
(c)the customer's investment objectives; and
(d)such other information used or considered to be reasonable by such member or registered representative in making recommendations to the customer. In addition, the Information Circular will disclose that the procedures for purchases and redemptions of Shares in Creation Units are described in each Fund's prospectus and SAI, and that Shares are not individually redeemable, but are redeemable only in Creation Unit aggregations or multiples thereof. Surveillance The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Shares. Specifically, Amex will rely on its existing surveillance procedures governing Index Fund Shares. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act, 42 in general, and furthers the objectives of Section 6(b)(5), 43 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, and, in general, to protect investors and the public interest. 42 15 U.S.C. 78f(b). 43 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes the proposed rule change will impose no 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 states that 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 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 Amex 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. The Commission is considering granting accelerated approval of the proposed rule change at the end of a 15-day comment period. 44 44 In the Exchange Notice, Amex requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of the notice of the filing thereof. 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-Amex-2007-60 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2007-60. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2007-60 and should be submitted on or before August 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 45 45 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15936 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56226; File No. SR-BSE-2007-35] Self-Regulatory Organizations; Boston Stock Exchange, Inc; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Market Opening Procedures of the Rules of the Boston Options Exchange August 8, 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 August 3, 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 and II below, which Items have been substantially prepared by the Exchange. The Exchange filed the proposal as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder. 4 The Commission is publishing this notice to solicit comments on the proposed rule from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The BSE is proposing to amend Chapter V, Section 9(e) of the rules of the Boston Options Exchange (“BOX”) to establish a permanent market opening procedure and to also define the relationship between the opening of an underlying stock in its primary market and the opening of the option on BOX during such times when the underlying stock's primary market has not opened. The text of the proposed rule change is available on the BSE's Web site at *http://www.bostonoptions.com* , at BSE's principle office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. 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 February 4, 2004, the Commission approved the market opening guidelines, as set forth in the BOX Rules, on a pilot basis through August 6, 2004 5 and has since extended the Pilot Program through August 6, 2007. 6 The purpose of this rule filing is to make these market opening guidelines permanent. The Exchange proposes to make its market opening guidelines permanent since they have successfully opened the market since BOX's inception. 7 5 *See* Securities Exchange Act Release No. 49192 (February 4, 2004), 69 FR 7051 (February 12, 2004) (SR-BSE-2004-05). 6 *See* Securities Exchange Act Release Nos. 50163 (August 6, 2004) 69 FR 50230 (August 13, 2004) (SR-BSE-2004-28); 52166 (July 29, 2005), 70 FR 44957 (August 4, 2005) (SR-BSE-2005-34); 54507 (September 26, 2006) 71 FR 58020 (October 2, 2006) (SR-BSE-2006-36); and 54467 (September 18, 2006) 71 FR 55530 (September 22, 2006) (SR-BSE-2006-37). 7 The BOX market first opened on February 6, 2004. In addition, the purpose of this rule filing is also to define the relationship between the opening of the underlying stock in its primary market and the opening of the option on BOX during such times when the underlying stock's primary market has not opened. 8 The BSE seeks to establish a process that allows for BOX to have the proper flexibility to open its market in an option in the morning when all other option Exchanges are open for trading and BOX rules currently do not allow for the opening of said options. 8 The proposed rule will deem an underlying security to have opened on the primary market when the primary market has reported a transaction in the underlying security, or disseminated opening quotations for the underlying security and not given an indication of a delayed opening, whichever occurs first. In establishing this process, the BSE seeks to delegate to the Exchange the authority to decide whether BOX should open the market in an option when the underlying stock has not opened in the primary market, and all other Exchanges are trading the option. The Exchange presently has no express authority within the BOX Rules to authorize said opening of the market. The BSE seeks to establish this process to allow BOX to have the same authority as other Exchanges, 9 to eliminate a competitive disadvantage and to provide additional liquidity and competitive quotes into the marketplace. Specifically, the Exchange will delay opening an option until the underlying security has opened unless the Exchange determines that the interests of a fair and orderly market are best served by opening trading in the option. 9 *See* ISE Rules 701(b)(2) and 701(b)(3). 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b) in general, 10 and Section 6(b)(5) of the Act, 11 in particular, that an exchange have rules that are designed to prevent fraudulent and manipulative practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. In particular, the proposed rule change will define the relationship between the opening of the stock in its primary market and the opening of the option on BOX during outages which will provide for a quick, efficient, fair and orderly market opening process. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition 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 rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 12 and subparagraph (f)(6) of Rule 19b-4 13 thereunder because it does not:
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition;
(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate; and the Exchange has given the Commission written notice of its intention to file the proposed rule change at least five business days prior to filing. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 12 15 U.S.C. 78s(b)(3)(A)(iii). 13 17 CFR 240.19b-4(f)(6). Under Rule 19b-4(f)(6) of the Act, 14 the proposal does not become operative for 30 days after the date of its filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative date, so that the Exchange may have a market opening procedure which commences immediately. The Commission believes that the proposed rule change does not raise any new regulatory issues and, consistent with the protection of investors and the public interest, has determined to waive the 30-day operative date, so that the proposal may become operative upon filing. 15 14 *Id.* 15 For purposes only of waiving the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 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-2007-35 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-BSE-2007-35. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 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-2007-35 and should be submitted on or before September 5, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15933 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56227; File No. SR-CBOE-2007-83] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Amend CBOE Rules Relating to the Appointment Cost for Options on the Nasdaq-100 Index Tracking Stock August 8, 2008. 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 17, 2007, the Chicago Board Options Exchange, Incorporated ( “Exchange” or “CBOE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange filed the proposal as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder. 4 The Exchange submitted Amendment No. 1 to the proposed rule change on August 7, 2007. 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)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend its rules relating to the appointment cost for options on the Nasdaq-100 Index Tracking Stock. The text of the proposed rule change is available on CBOE's Web site ( *http://www.cboe.org/Legal* ), at the CBOE'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 parts 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 rule change is to amend CBOE Rule 8.3 and Rule 8.4 in connection with CBOE's determination to change the appointment cost for options on the Nasdaq-100 Index Tracking Stock (QQQQ). Presently, QQQQ options are classified as a Tier A+ option class and have an appointment cost of .25. CBOE proposes to remove QQQQ options from Tier A+ and, as a result, lower its appointment cost. As a Hybrid 2.0 Class, QQQQ options will fall within the appointment cost structure set forth in Rule 8.3(c)(i) and Rule 8.4(d), and based on its trading volume, be included in Tier A with an appointment cost of .10. CBOE notes that it re-evaluated the appointment cost for QQQQ options and determined to lower it in order to lower the cost of access to CBOE's marketplace in this option class. 2. Statutory Basis Accordingly, CBOE believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of section 6(b) of the Act. 5 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 6 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. 5 15 U.S.C. 78(f)(b). 6 15 U.S.C. 78(f)(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither received nor solicited written comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule does not
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition; and
(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, provided that the Exchange has given the Commission written notice of its intent to file 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, 7 the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b-4(f)(6) thereunder. 9 7 The Exchange has fulfilled this requirement. 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b-4(f)(6). Under Rule 19b-4(f)(6) of the Act, 10 the proposal does not become operative for 30 days after the date of its filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative date, so that the proposal may take effect upon filing. The Exchange believes that the proposed rule change does not raise any new regulatory issues and promotes competition by reducing the access costs of trading in QQQQ options. The Commission agrees and, consistent with the protection of investors and the public interest, has determined to waive the 30-day operative date so that the proposal may become operative upon filing. 11 10 *Id.* 11 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2007-83 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-2007-83. 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 CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2007-83 and should be submitted on or before September 5, 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. E7-15901 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56225; File No. SR-ISE-2007-32] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving Proposed Rule Change as Modified by Amendment No. 1 Thereto To Remove Certain Rules From Its Rulebook August 8, 2007. On May 9, 2007, the International Securities Exchange, LLC (the “Exchange” or the “ISE”), 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 remove certain ISE rules. On June 8, 2007, ISE filed Amendment No. 1 to the proposed rule change. The proposed rule change was published for comment in the **Federal Register** on June 27, 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. 55936 (June 21, 2007), 72 FR 35276 (“Notice”). The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered securities exchange. 4 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 5 which requires, among other things, that the Exchange's rules be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. 4 In approving this proposal, the Commission 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). The ISE proposes to remove Rule 403 (Nominal Employment), Rule 605 (Other Affiliations of Registered Persons), and Rule 615 (Addressing of Communications to Customers). The Exchange believes that the concern addressed by Rule 403, which prohibits members from obtaining business by employing a person in a nominal position, is adequately addressed in existing Rule 406, which limits gratuities. 6 The Exchange also believes that Rule 605, which effectively prohibits registered persons of its members from engaging in outside business activities unless approved by the Exchange or the member's designated examining authority, is no longer necessary given significant market structure changes. 7 Lastly, the Exchange believes that Rule 615 is unnecessary as ISE members are also subject to ISE Rules 600 and 2114, which effectively require ISE members that do a public business to be registered with FINRA, and the Exchange believes that the FINRA rules pertaining to the customer communication policies for its members conducting a public business should sufficiently address the topic covered by Rule 615. The Commission therefore believes it is consistent with the Act for the Exchange to delete these rules. 6 Rule 406 prohibits a member from giving any compensation or gratuity in any one year in excess of $50.00 to any employee of the Exchange or in excess of $100.00 to any employee of any other member or of any non-member broker, dealer, bank or institution, without the prior consent of the employer and of the Exchange. 7 The Exchange also notes that rules of the Financial Industry Regulatory Authority Inc. (“FINRA”)(f/k/a the National Association of Securities Dealers, Inc.) governing its members' dealing with the public do not have a comparable provision. *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 8 that the proposed rule change (File No. SR-ISE-2007-32), as modified by Amendment No. 1, be, and hereby is, approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15902 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56228; File No. SR-NASDAQ-2007-056] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment No. 2 Thereto, To Modify Pricing for Nasdaq Members Using the Nasdaq Market Center August 8, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on June 1, 2007, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by Nasdaq. On July 27, 2007, Nasdaq filed Amendment No. 1. On August 6, 2007, Nasdaq withdrew Amendment No. 1 and filed Amendment No. 2, which replaced the text of the original filing in its entirety. The Commission is publishing this notice to solicit comment on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to modify pricing for the Nasdaq Market Center. Nasdaq will make the proposed rule change effective retroactively as of February 12, 2007. The text of the proposed rule change appears below. Proposed new language is italicized and proposed deletions are in brackets. 3 3 Changes are marked to the rule text that appears in the electronic Nasdaq Manual found at *http://nasdaq.complinet.com.* 7013. Consolidated Quotation Service and Exchange-Listed Securities Transaction Credit
(a)No change.
(b)Nasdaq members that trade securities listed on [the NYSE (“Tape A”) and] Amex (“Tape B”) through Nasdaq may receive from Nasdaq transaction credits based on the number of transactions attributed to them. A transaction is attributed to a member if the transaction is executed through the Nasdaq Market Center, and the member acts as liquidity provider ( *i.e.* , the member sells in response to a buy order or buys in response to a sell order). A Nasdaq member may earn credits from [one or both] *a* pool[s] maintained by Nasdaq[, each pool] representing 50% of the revenue paid by the Consolidated Tape Association to Nasdaq for [each of Tape A and] Tape B transactions after deducting the amount that Nasdaq pays to the Consolidated Tape Association for capacity usage. A Nasdaq member may earn credits from the pool[s] according to the member's pro rata share of transactions attributed to Nasdaq members in [each of Tape A and] Tape B for each calendar quarter. Liquidity providers executing transactions in Tape B securities through the Nasdaq Market Center will receive credits with respect to such transactions on an estimated monthly basis[; all other credits under this rule will be paid on a quarterly basis]. 7014. [Nasdaq Market Center for Non-Nasdaq Securities] *Reserved.* [The charges to be paid by members using the Nasdaq Market Center for trading non-Nasdaq exchange-listed securities through the Nasdaq Market Center shall consist of a fixed service charge of $200 per member per month, transaction charges as provided in Nasdaq Rule 7018 and equipment-related charges as provided elsewhere in the Rule 7000 Series.] II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of, and basis for, the proposed rule change. The text of these statements may be examined at the places specified in Item III below, and is set forth in Sections A, B, and C below. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq proposes two retroactive changes to its fee schedule to address transition issues arising from its commencing operations as a national securities exchange for trading non-Nasdaq securities on February 12, 2007. First, Nasdaq proposes to eliminate a monthly fixed fee for trading non-Nasdaq securities through the Nasdaq Market Center, as provided in Rule 7014. That rule states that members trading such securities will pay a fixed service charge of $200 per member per month, transaction charges as provided in Nasdaq Rule 7018, and equipment-related charges as provided elsewhere in the Rule 7000 Series. Prior to February 12, 2007, Nasdaq's parent corporation, The Nasdaq Stock Market, Inc. (“Nasdaq Inc.”), operated multiple platforms for trading non-Nasdaq securities, and charged a $200 monthly service fee under NASD rules. On February 12, 2007, Nasdaq began to trade non-Nasdaq securities as an exchange on a single platform, but Nasdaq Inc. continued to operate a separate platform for trading non-Nasdaq securities under NASD rules until March 5, 2007. Accordingly, the charge under NASD rules remained in place until March 5, 2007. Because trading all securities on a single platform governed by a common set of trading rules reduces Nasdaq's costs, and because Nasdaq's pricing now makes few distinctions between the trading of Nasdaq-listed and non-Nasdaq securities, Nasdaq believes that it is appropriate to eliminate the $200 monthly service charge. Nasdaq seeks to make the change retroactive to February 12, 2007, the date when Nasdaq began trading these securities as an exchange. Making the change retroactive to February 12, 2007 will also ensure that members are not charged duplicative fees (a fee under NASD rules and a fee under Nasdaq rules) for the period from February 12, 2007 to March 5, 2007. The rule's reference to equipment related charges is now obsolete, since trading through Nasdaq is no longer reliant on equipment provided by Nasdaq for use on the premises of its market participants. Finally, although transaction charges under Rule 7018 are applicable, Nasdaq believes that it is unnecessary to cross-reference them in a separate rule. Accordingly, the rule is being deleted in its entirety. Second, Nasdaq proposes to correct an oversight with regard to the text of Rule 7013 that arose when Nasdaq began to operate as an exchange for trading non-Nasdaq securities on February 12, 2007. Prior to that time, and until March 5, 2007, Nasdaq Inc. shared market data revenue with NASD members trading non-Nasdaq stocks pursuant to former NASD Rule 7010(c)(2). For the period from February 1, 2006 through March 5, 2007, the text of that rule read as follows: NASD members that trade securities listed on the NYSE (“Tape A”) and Amex (“Tape B”) in over-the-counter transactions may receive from the NASD transaction credits based on the number of transactions attributed to them. A transaction is attributed to a member if
(i)For Tape B securities, the transaction is executed through CAES, ITS, or Nasdaq's Brut or Inet Facilities, and the member acts as liquidity provider ( *i.e.* , the member sells in response to a buy order or buys in response to a sell order) or
(ii)for Tape A and Tape B securities, the transaction is not executed through CAES, ITS, or Nasdaq's Brut or Inet Facilities, and the member is identified as the executing party in a trade report submitted to the NASD that the NASD submits to the Consolidated Tape Association. An NASD member may earn credits from one or both pools maintained by the NASD, each pool representing 50% of the revenue paid by the Consolidated Tape Association to the NASD for each of Tape A and Tape B transactions after deducting the amount that the NASD pays to the Consolidated Tape Association for capacity usage. An NASD member may earn credits from the pools according to the member's pro rata share of all over-the-counter transactions attributed to NASD members in each of Tape A and Tape B for each calendar quarter. The rule text reflected the fact that Nasdaq Inc. provided both electronic transaction execution systems similar to those currently provided by Nasdaq, and over-the-counter trade reporting services similar to those now provided by the NASD/NASDAQ Trade Reporting Facility (“TRF”) and TRFs operated by other exchanges. For both Tape A and Tape B securities, the rule provided for sharing of revenues associated with over-the-counter trade reports, 4 but the rule provided for sharing of revenues associated with electronic system trades for Tape B securities only. 5 The rule was amended effective February 1, 2006 to eliminate sharing of revenues associated with electronic system trades for Tape A securities. 6 4 “[F]or Tape A and Tape B securities, the transaction is not executed through CAES, ITS, or Nasdaq's Brut or Inet Facilities. * * *.” ITS/CAES, Brut and Inet were electronic trading systems operated by Nasdaq Inc. 5 “[F]or Tape B securities, the transaction is executed through CAES, ITS, or Nasdaq's Brut or Inet Facilities. * * *” 6 Securities Exchange Act Release No. 53256 (February 8, 2006), 71 FR 8020 (February 15, 2006) (SR-NASD-2006-013). Following transition to exchange operation on February 12, 2007, Nasdaq intended to maintain the status quo with respect to revenue sharing. Thus, NASD Rule 7001B, which applies to the NASD/NASDAQ TRF, continues to provide for sharing of revenues associated with over-the-counter trade reports, on terms comparable to those provided under former NASD Rule 7010(c)(2). By contrast, the text of Nasdaq Rule 7013, which was originally adopted through Nasdaq's Form 1 application for registration as a national securities exchange, 7 was not amended to reflect the elimination of Tape A sharing prior to the time when Nasdaq began to trade non-Nasdaq securities as an exchange on February 12, 2007. The proposed rule change will rectify this oversight, and thereby allow Nasdaq to maintain the status quo with respect to market data revenue sharing, as had been Nasdaq's intent. Nasdaq has not distributed any Tape A revenues for system trades. 7 Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131). 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 8 in general, and with Section 6(b)(4) of the Act, 9 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which Nasdaq operates or controls. Nasdaq believes that the change will eliminate an unnecessary charge with respect to trading of non-Nasdaq securities and thereby make Nasdaq's fees for trading these securities more reasonable. Nasdaq further believes that the change with respect to revenue sharing will allow Nasdaq to maintain the status quo with respect to Tape A revenue sharing that had existed prior to Nasdaq beginning to operate as a national securities exchange for trading non-Nasdaq securities. 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq 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 self-regulatory organization consents, the Commission will: A. By order approve such proposed rule change, as amended; or B. Institute proceedings to determine whether the proposed rule change, as amended, should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2007-056 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-NASDAQ-2007-056. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2007-056 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. E7-15965 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56224; File No. SR-NYSEArca-2007-76] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To List and Trade Shares of the streetTRACKS® Gold Trust August 8, 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. (the “Exchange”), through its wholly owned subsidiary, NYSE Arca Equities, Inc. (“NYSE Arca Equities”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. On August 7, 2007, the Exchange submitted Amendment No. 1 to the proposal rule change. This order provides notice of the proposed rule change and approves the proposed rule change, as amended, on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade shares (“Shares”) of the streetTRACKS® Gold Trust (“Trust”) 3 pursuant to NYSE Arca Equities Rule 5.2(j)(5). The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and *http://www.nyse.com.* 3 streetTRACKS® is a registered service mark of State Street Corporation, an affiliate of State Street Global Markets, LLC, the marketing agent of the Trust. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Pursuant to NYSE Arca Equities Rule 5.2(j)(5), which permits the trading of Equity Gold Shares 4 either by listing or pursuant to unlisted trading privileges (“UTP”), the Exchange proposes to list and trade the Shares. The Shares are currently listed on the New York Stock Exchange LLC (“NYSE”), 5 and the Exchange currently trades the Shares pursuant to UTP. 6 The Exchange represents that the Shares satisfy the requirements of NYSE Arca Equities Rule 5.2(j)(5) and thereby qualify for listing on the Exchange. 4 As defined in NYSE Arca Equities Rule 5.2(j)(5)(A), Equity Gold Shares represent units of fractional undivided beneficial interests in and ownership of an Equity Gold Trust. The Exchange states that, while Equity Gold Shares are not technically Investment Company Units (“ICUs”) and, thus, are not covered by NYSE Arca Equities Rule 5.2(j)(3), all other rules that reference ICUs also apply to Equity Gold Shares. In addition, the provisions set forth in NYSE Arca Equities Rule 8.201(g)-(i), as further discussed herein, apply to Equity Gold Shares. *See* NYSE Arca Equities Rule 5.2(j)(5). 5 *See* Securities Exchange Act Release Nos. 50603 (October 28, 2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (approving the listing and trading of the Shares) (“NYSE Order”) and 49849 (June 10, 2004), 69 FR 33984 (June 17, 2004) (SR-NYSE-2004-22) (providing notice of NYSE's proposal to list and trade the Shares) (“NYSE Notice,” and together with the NYSE Order, collectively, the “NYSE Proposal”). 6 *See* Securities Exchange Act Release No. 51245 (February 23, 2005), 70 FR 10731 (March 4, 2005) (SR-PCX-2004-117) (approving the adoption of NYSE Arca Equities Rule 5.2(j)(5) and the trading of the Shares pursuant to UTP) (“NYSEArca UTP Order”). *See also* Securities Exchange Act Release No. 53261 (February 9, 2006), 71 FR 8328 (February 16, 2006) (SR-PCX-2006-02) (expanding the trading hours of the Shares from 9:30 a.m. to 4:15 p.m. Eastern Time (“ET”) to 4 a.m. to 8 a.m. ET) (“NYSEArca Trading Hour Proposal”). The Shares represent units of fractional undivided beneficial interests in and ownership of the Trust, the sole assets of which are gold bullion and, from time to time, cash. The value of each Share, which corresponds to a fixed amount of gold, 7 fluctuates with the spot price of gold. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold, less the Trust's expenses. The Trust is not actively managed and does not engage in any activities designed to profit from, or to ameliorate losses caused by, changes in the price of gold. The Trust is neither an investment company registered under the Investment Company Act of 1940 nor a commodity pool for purposes of the Commodity Exchange Act. 8 World Gold Trust Services, LLC, a wholly owned limited liability company of the World Gold Council, 9 is the sponsor of the Trust (“Sponsor”). 10 In addition, The Bank of New York is the trustee of the Trust (“Trustee”), HSBC Bank USA, N.A. is the custodian of the Trust (“Custodian”), and State Street Global Markets LLC is the marketing agent of the Trust (“Marketing Agent”). 7 Initially, each Share corresponded to one-tenth of a troy ounce of gold. The Exchange states that over time, the amount of gold associated with each Share decreases as the Trust incurs and pays maintenance fees and other expenses. 8 In addition, the Exchange states that the Trust does not trade in gold futures contracts. The Trust takes delivery of physical gold that complies with certain gold delivery rules. Because the Trust does not trade in gold futures contracts on any futures exchange, the Trust is not regulated as a commodity pool and is not operated by a commodity pool operator. 9 The World Gold Council is a not-for-profit association registered under laws of Switzerland. 10 The Exchange states that the Shares are not obligations of, and are not guaranteed by, the Sponsor or any of its respective subsidiaries or affiliates. A detailed discussion of the gold market (including the London Bullion Market, over-the-counter gold market, and gold futures exchanges); gold market regulation; management, structure, fees, and expenses of the Trust; the process for creations and redemptions of the Shares; and the liquidity of the Shares, among others, can be found in the NYSE Proposal, NYSEArca UTP Order, and the Registration Statement (as defined herein). 11 11 The Sponsor, on behalf of the Trust, filed Post-Effective Amendment No. 1 to Form S-3 on May 11, 2007 (Registration No. 333-139016). In connection with the initial issuance of the Shares, the Sponsor, on behalf of the Trust, filed Post-Effective Amendment No. 3 to Form S-1 on August 23, 2005 (Registration No. 333-105202). Such filings are collectively referred to herein as the “Registration Statement.” *See* E-mail from Andrew Stevens, Assistant General Counsel, NYSE Euronext, to Edward Cho, Special Counsel, Division of Market Regulation, Commission, dated August 1, 2007 (confirming the disclosure of additional information on the Trust and the Shares) (“NYSEArca Confirmation I”). Trust Expenses and Management Fees Generally, the assets of the Trust ( *e.g.* , gold bullion) are sold to pay Trust expenses and management fees. These expenses and fees will reduce the value of a Share as gold bullion is sold to pay such costs. Ordinary operating expenses of the Trust include:
(1)Fees paid to the Sponsor;
(2)fees paid to the Trustee;
(3)fees paid to the Custodian;
(4)fees paid to the Marketing Agent; and
(5)various Trust administration fees, including printing and mailing costs, legal and audit fees, registration fees, and listing fees. The Trust's estimated ordinary operating expenses are accrued daily and reflected in the net asset value (“NAV”) of the Trust. Creation and Redemption of Shares The Trust will create Shares on a continuous basis only in aggregations of 100,000 Shares (each such aggregation, a “Basket”). Authorized Participants 12 are the only persons that may place orders to create and redeem Baskets. Authorized Participants purchasing Baskets will be able to separate a Basket into individual Shares for resale. 12 An Authorized Participant is
(1)A broker-dealer registered under the Act, or
(2)is exempt from being, or otherwise is not required to be, regulated as a broker-dealer under the Act, and in either case is qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Certain Authorized Participants will be regulated under federal and state banking laws and regulations. *See* NYSE Order, 69 FR at 64616. Authorized Participants purchasing a Basket must make an in-kind deposit of gold (“Gold Deposit”), together with, if applicable, a specified cash payment (“Cash Deposit”, 13 and together with the Gold Deposit, collectively, the “Creation Basket Deposit”). In the ordinary course of the Trust's operations, a Cash Deposit will not be required for the creation of Baskets. Similarly, the Trust will redeem Shares only in Baskets, principally in exchange for gold and, if applicable, a cash payment (“Cash Redemption Amount” 14 and together with the gold, collectively, the “Redemption Distribution”). The Shares are only redeemable in Basket aggregations. 13 The amount of any required Cash Deposit will be determined as follows:
(1)The fees, expenses, and liabilities of the Trust will be subtracted from any cash held or received by the Trust as of the date an Authorized Participant places an order to purchase one or more Baskets (“Purchase Order”); and
(2)the remaining amount will be divided by the number of Baskets outstanding and then multiplied by the number of Baskets being created pursuant to the Purchase Order. If the resulting amount is positive, that amount will be the required Cash Deposit. If the resulting amount is negative, the amount of the required Gold Deposit will be reduced by a number of fine ounces of gold equal in value to that resulting amount, determined by reference to the price of gold used in calculating the NAV of the Trust on the Purchase Order date. Fractions of an ounce of gold of less than 0.001 of an ounce included in the Gold Deposit amount will be disregarded. 14 The Cash Redemption Amount is equal to the excess (if any) of all assets of the Trust other than gold, less all estimated accrued but unpaid fees, expenses, and other liabilities, divided by the number of Baskets outstanding, and multiplied by the number of Baskets included in the Authorized Participant's order to redeem one or more Baskets (“Redemption Order”). The Trustee will distribute any positive Cash Redemption Amount through the Depository Trust Company (“DTC”) to the account of the Authorized Participant at DTC. If the Cash Redemption Amount is negative, the credit to the Authorized Participant's unallocated account will be reduced by the number of fine ounces of gold equal in value to that resulting amount, determined by reference to the price of gold used in calculating the NAV of the Trust on the Redemption Order date. Fractions of a fine ounce of gold included in the Redemption Distribution of less than 0.001 of an ounce will be disregarded. Redemption Distributions will be subject to the deduction of any applicable tax or other governmental charges due. The total amount of gold and any cash required for the creation or redemption of each Basket will be in the same proportion to the total assets of the Trust (net of accrued and unpaid fees, expenses, and other liabilities) on the date the Purchase Order is properly received, as the number of Shares to be created in respect of the Creation Basket Deposit bears to the total number of Shares outstanding on the date the Purchase Order is received. The Trust will impose transaction fees in connection with creation and redemption transactions. Availability of Information on Underlying Gold Holdings and the Shares Quotations and last-sale price information for the Shares are disseminated over the Consolidated Tape. 15 Gold price and market information are also available on public Web sites and through professional and subscription services. In most instances, real-time information is only available for a fee, and information available free of charge is subject to delay (typically, 20 minutes). 15 *See* NYSEArca Confirmation I (clarifying the information to be disseminated over the Consolidated Tape). Investors may obtain on a 24-hour basis gold pricing information based on the spot price for a troy ounce of gold from various financial information service providers, such as Reuters and Bloomberg. Reuters and Bloomberg provide at no charge on their Web sites delayed information regarding the spot price of gold and last sale prices of gold futures, as well as information about news and developments in the gold market. Reuters and Bloomberg also offer a professional service to subscribers for a fee that provides information on gold prices directly from market participants. An organization named EBS provides an electronic trading platform to institutions such as bullion banks and dealers for the trading of spot gold, as well as a feed of live streaming prices to Reuters and Moneyline Telerate subscribers. Complete real-time data for gold futures and options prices traded on COMEX, a division of the New York Mercantile Exchange, Inc. (“NYMEX”), is available by subscription from Reuters and Bloomberg. NYMEX also provides delayed futures and options information on current and past trading sessions and market news free of charge on its Web site. There are a variety of other public Web sites providing information on gold, ranging from those specializing in precious metals to sites maintained by major newspapers. Many of these Web sites offer price quotations drawn from other published sources, and as the information is supplied free of charge, such quotations are generally subject to time delays. 16 Current gold spot prices are also generally available with bid/ask spreads from gold bullion dealers. 16 There may be incremental differences in the gold spot price among the various information service sources. While the Exchange believes the differences in the gold spot price may be relevant to those entities engaging in arbitrage or in the active daily trading of gold or gold-based products, the Exchange believes such differences are likely of less concern to individual investors intending to hold the Shares as part of a long-term investment strategy. In addition, the Trust's Web site ( *http://www.streettracksgoldshares.com* ) provides at no charge continuously updated bids and offers indicative of the spot price of gold. 17 The Exchange provides a link to the Trust's Web site on its Web site at *http://www.nyse.com* . The Trust Web site also provides a calculation of the Indicative Intra-day Value or “IIV” of a Share, as calculated by multiplying the indicative spot price of gold by the quantity of gold backing each Share. The indicative spot price and IIV per Share are provided on an essentially real-time basis. 18 The Trust Web site also provides the NAV of the Trust, as calculated each business day by the Sponsor. 19 17 The Trust Web site's gold spot price will be provided by The Bullion Desk ( *http://www.thebulliondesk.com* ). The Bullion Desk is not affiliated with the Trust, Sponsor, Marketing Agent, Custodian, or the Exchange. The Exchange has been informed that the gold spot price is indicative only, constructed using a variety of sources to compile a spot price that is intended to represent a theoretical quote that might be obtained from a market maker from time to time. 18 The Trust's Web site, to which the Exchange's Web site will link, disseminates an indicative spot price of gold and the IIV and indicates that these values are subject to an average delay of five to ten seconds. The Exchange states that the updated indicative spot price of gold and IIV per Share are disseminated during all three of the Exchange's trading sessions (Opening, Core Trading, and Late Trading Sessions). *See* NYSEArca Equities Rule 7.34 (Trading Sessions); *see also* NYSEArca Trading Hour Proposal, *supra* note 6; e-mail from Timothy J. Malinowski, Director, NYSE Euronext, to Edward Cho, Special Counsel, Division of Market Regulation, Commission, dated August 2, 2007 (confirming that the indicative price of gold and the IIV will be calculated and disseminated during the Opening, Core Trading, and Late Trading Sessions) (“NYSEArca Confirmation II”). 19 The Exchange represents that it would obtain a representation from the Trust, prior to listing, that the NAV per Share would be calculated daily and made available to all market participants at the same. In addition, the Web site for the Trust contains the following information, on a per-Share basis:
(1)IIV as of the close of the prior business day;
(2)the mid-point of the bid-ask price in relation to such IIV (“Bid/Ask Price”); 20
(3)a calculation of the premium or discount of such price against such IIV; and
(4)data in chart format displaying the frequency distribution of discounts and premiums of the Bid/Ask Price against the IIV, within appropriate ranges, for each of the four previous calendar quarters. The Web site for the Trust also provides the Trust's prospectus, as well as the two most recent reports to stockholders. Finally, the Trust Web site provides the last sale price of the Shares as traded in the United States, subject to a 20-minute delay. 21 20 The Bid-Ask Price is determined using the highest bid and lowest offer on the Consolidated Tape as of the time of calculation of the closing IIV. *See* NYSEArca Confirmation II. 21 The last sale price of the Shares in the secondary market is available on a real-time basis for a fee from major market data vendors. *See* NYSEArca Confirmation I. Criteria for Initial and Continued Listing The Shares are subject to the criteria for initial and continued listing of ICUs under NYSE Arca Equities Rules 5.2(j)(3) and 5.5(g)(2). 22 As indicated above, the Shares are currently trading on the Exchange pursuant to UTP and satisfy the requirements of NYSE Arca Equities Rule 5.2(j)(5) for listing on the Exchange. A minimum of 100,000 Shares would be required to be outstanding when the Shares are listed. This minimum number of Shares required to be outstanding is comparable to requirements that have been applied to previously listed series of exchange-traded funds. The Exchange believes that the proposed minimum number of Shares outstanding at the start of trading is sufficient to provide market liquidity. The Exchange represents the Trust is required to comply with Rule 10A-3 under the Act 23 for the initial and continued listing of the Shares. 22 *See supra* note 4. NYSEArca Equities Rule 5.5(g)(2) provides for the continued listing standards for ICUs. 23 17 CFR 240.10A-3 (providing requirements for listing standards relating to audit committees). Trading Rules and Halts The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. The trading hours for the Shares on the Exchange are the same as those set forth in NYSE Arca Equities Rule 7.34 (Opening, Core Trading, and Late Trading Sessions, 4 a.m. to 8 p.m. ET). 24 24 The Exchange states that, while the Shares would trade on the Exchange until 8 p.m. ET, liquidity in the over-the-counter market for gold generally decreases after 1:30 p.m. ET when daily trading at COMEX and other world gold trading centers ends. Trading spreads and the resulting premium or discount on the Shares may widen as a result of reduced liquidity in the over-the-counter gold market. The Exchange does not believe that the Shares would trade at a material discount or premium to the value of the underlying gold held by the Trust because of arbitrage opportunities. *See supra* note 18. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. The factors may include
(1)The extent to which trading is not occurring in gold, or
(2)whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in the Shares could be halted pursuant to the Exchange's “circuit breaker” rule 25 or by the halt or suspension of trading of the underlying gold. 25 *See* NYSE Arca Equities Rule 7.12 (Trading Halts Due to Extraordinary Market Volatility). In addition, NYSE Arca Equities Rule 5.5(g)(2)(b) provides that, if the IIV or the value of the underlying gold is not being calculated or widely disseminated as required, the Exchange may halt trading during the day in which the interruption to the calculation or wide dissemination of the IIV or the value of the underlying gold occurs. If the interruption to the calculation or wide dissemination of the IIV or the value of the underlying gold persists past the trading day in which it occurred, the Exchange would halt trading no later than the beginning of the trading day following the interruption. Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative securities products to monitor trading in the Shares. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules. The Exchange's current trading surveillance focuses on detecting when securities trade outside their normal patterns. When such situations are detected, surveillance analysis follows and investigations are opened, as appropriate, to review the behavior of all relevant parties for all relevant trading violations. The Exchange may obtain information via the Intermarket Surveillance Group (“ISG”) from other exchanges who are members or affiliate members of ISG. In addition, the Exchange has in place an Information Sharing Agreement with NYMEX for the purpose of providing information in connection with trading in or related to COMEX gold futures contracts. Further, the Exchange notes that the Shares are subject to NYSE Arca Equities Rules 8.201(g)-(i), which set forth certain restrictions on ETP Holders 26 to facilitate surveillance and the Exchange has a general policy prohibiting the distribution of material, non-public information by its employees. 26 An ETP Holder is a registered broker or dealer that has been issued an Equity Trading Permit
(ETP)by NYSE Arca Equities. Information Bulletin Prior to the commencement of trading, the Exchange would inform its ETP Holders in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin would include the following:
(1)A description of the Shares;
(2)the procedures for purchases and redemptions of Shares (and that Shares are not individually redeemable);
(3)a discussion of NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares;
(4)how information regarding the IIV is disseminated;
(5)the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and
(6)trading information. In addition, the Bulletin would explain that:
(a)The Trust is subject to various fees and expenses described in the Registration Statement;
(b)the number of ounces of gold required to be purchased or to be delivered upon redemption would gradually decrease over time because the Shares comprising would represent a decreasing amount of gold due to the sale of the Trust's gold to pay Trust expenses; 27
(c)there is no regulated source of last-sale information regarding physical gold;
(d)the Commission has no jurisdiction over the trading of gold as a physical commodity;
(e)the Commodity Futures Trading Commission has regulatory jurisdiction over the trading of gold futures contracts and options on gold futures contracts; and
(f)the NAV for the Shares would be calculated as of the earlier of the London PM fix 28 for such day or 12:00 p.m. ET each day that the Exchange is open for trading. The Bulletin would also discuss the exemptive, no-action, and/or interpretive relief granted by the Commission from Section 11(d)(1) of the Act 29 and certain rules under the Act. 30 27 *See supra* note 7. 28 *See* NYSE Notice, 69 FR at 33986 (providing a detailed discussion and explanation of the London PM fix). 29 15 U.S.C. 78k(d)(1). 30 *See, e.g.* , Letter from James A. Brigagliano, Assistant Director, Division of Market Regulation, Commission, to Kathleen M. Moriarty, Esq., Carter, Ledyard & Milburn, dated November 17, 2004; Letter from Brian A. Bussey, Assistant Chief Counsel, Division of Market Regulation, Commission, to Ms. Kathleen M. Moriarty, Esq., Carter, Ledyard & Milburn, dated December 12, 2005. 2. Statutory Basis The proposal is consistent with Section 6(b) of the Act, 31 in general, and Section 6(b)(5) of the Act, 32 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 31 15 U.S.C. 78f(b). 32 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. 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-2007-76 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-2007-76. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2007-76 and should be submitted on or before September 5, 2007. IV. Commission's Findings and Order Granting Accelerated Approval of the Proposed Rule Change 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. 33 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 34 which requires that an exchange have rules designed, among other things, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission notes that it previously approved the original listing and trading of the Shares on NYSE, and the instant proposal is substantively identical to the NYSE Proposal. 35 33 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 34 15 U.S.C. 78f(b)(5). 35 *See supra* note 5. The Commission further believes that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act, 36 which sets forth Congress' finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Quotations and last-sale information for the Shares are disseminated over the Consolidated Tape. In addition, the Trust's Web site, to which the Exchange provides a link on its own Web site, disseminates the updated indicative spot price of gold and the IIV on a per-Share basis at least every 15 seconds during all of the Exchange's trading sessions. The Web site for the Trust also provides the daily NAV, the Bid-Ask Price, data related to the premium or discount of the Bid-Ask Price against the NAV, the prospectus, and recent reports to holders. Investors may obtain on a 24-hour basis gold pricing information based on the spot price for a troy ounce of gold from various financial information service providers, such as Reuters and Bloomberg. Complete real-time data for gold futures and options prices traded on COMEX is available by subscription, and NYMEX also provides delayed futures and options information on current and past trading sessions and market news free of charge on its Web site. There are a variety of other public Web sites providing information on gold, ranging from those specializing in precious metals to sites maintained by major newspapers. Current gold spot prices are also generally available with bid/ask spreads from gold bullion dealers. 36 15 U.S.C. 78k-1(a)(1)(C)(iii). Furthermore, the Commission believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately. The Commission notes that the Exchange will obtain a representation from the Trust, prior to listing, that the NAV per Share would be calculated daily and made available to all market participants at the same time. 37 In addition, NYSE Arca Equities Rule 8.201(g) prohibits an ETP Holder acting as a registered Market Maker (as defined in NYSE Arca Equities Rule 1.1(u)) in the Shares from being affiliated with a Market Maker in physical gold, gold futures, options on gold futures, or any other gold derivatives, unless adequate information barriers are in place, as provided in NYSE Arca Equities Rule 7.26 (Limitations on Dealings). Finally, NYSE Arca Equities Rule 8.201(i) prohibits an ETP Holder acting as a registered Market Maker in the Shares from using any material nonpublic information received from any person associated with an ETP Holder or employee of such person regarding trading by such person or employee in physical gold, gold futures contracts, options on gold futures, or any other gold derivatives (including the Shares). 37 *See supra* note 19. The Commission also believes that the Exchange's trading halt rules are reasonably designed to prevent trading in the Shares when transparency is impaired. NYSE Arca Equities Rule 5.5(g)(2)(b) provides that, when the Exchange is the listing market, if the IIV or the value of the underlying gold 38 is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the IIV or the value of the underlying gold occurs. If the interruption to the dissemination of the IIV or the value of the underlying gold persists past the trading day in which it occurred, the Exchange will halt trading. NYSE Arca Equities Rule 5.5(g)(2)(a) also provides that the Exchange may seek to delist the Shares in the event the value of the underlying gold is no longer calculated or available as required. 38 The Exchange represents that, for purposes of complying with the continued listing standards under NYSE Arca Equities Rule 5.5(g)(2), which apply to the Shares, the Exchange deems the value of the underlying gold to be analogous to the value of the index or portfolio, as such value is referenced in NYSE Arca Equities Rule 5.5(g)(2). *See* NYSEArca Confirmation II (confirming the analogy between the value of the underlying gold and the value of the index, as referenced in NYSE Arca Equities Rule 5.5(g)(2), for purposes of the instant proposal). The Commission further believes that the trading rules and procedures to which the Shares will be subject pursuant to this proposal are consistent with the Act. The Exchange has represented that any securities listed pursuant to this proposal will be deemed equity securities, and subject to existing Exchange rules governing the trading of equity securities. In support of this proposal, the Exchange has made the following representations:
(1)The Exchange's surveillance procedures are adequate to address any concerns associated with the trading of the Shares.
(2)The Exchange would inform its members in an Information Bulletin of the special characteristics and risks associated with trading the Shares, including suitability recommendation requirements.
(3)The Exchange would require its members to deliver a prospectus to investors purchasing Shares prior to or concurrently with confirmation of a transaction in such Shares and will note this prospectus delivery requirement in the Information Bulletin. This approval order is based on the Exchange's representations. The Commission finds good cause for approving this proposal before the thirtieth day after the publication of notice thereof in the **Federal Register** . As noted above, the Commission previously approved the original listing and trading of the Shares on NYSE and the trading of the Shares pursuant to UTP on the Exchange. 39 The Commission presently is not aware of any regulatory issue that should cause it to revisit those findings or would preclude the listing and trading of the Shares on the Exchange. Accelerating approval of this proposed rule change would allow the Shares to be listed on the Exchange without undue delay and continuously traded without interruption, to the benefit of investors. 39 *See supra* notes 5 and 6. V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 40 that the proposed rule change (SR-NYSEArca-2007-76), as modified by Amendment No. 1 thereto, be, and it hereby is, approved on an accelerated basis. 40 15 U.S.C. 78s(b)(2). 41 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 41 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15937 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56221; File No. SR-Phlx-2007-48] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Adopt a Monthly Fee for Stock Execution Clerks That Handle Stand-Alone Equity Orders August 8, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on June 28, 2007, the Philadelphia Stock Exchange, Inc. (“Phlx” 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 Phlx. On August 7, 2007, Phlx amended the proposed rule change. 3 The Exchange filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act 4 and Rule 19b-4(f)(2) 5 thereunder, as establishing or changing a due, fee, or other charge applicable to a member, which renders the proposed rule change effective upon filing with the Commission. 6 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 *See* Amendment No. 1. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). 6 For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on August 7, 2007, the date the Exchange filed Amendment No. 1. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Phlx proposes to adopt a monthly fee of $500.00 for stock execution clerks that handle stand-alone equity orders, such as to hedge traders' options positions. Those stock execution clerks who are assessed the $500.00 monthly fee will no longer pay the $25.00 Trading Floor Personnel Registration Fee, as the $500.00 monthly fee will encompass the $25.00 Trading Floor Personnel Registration Fee. The text of the proposed rule change is available at *http://www.phlx.com,* the Phlx, and the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose A stock execution clerk is currently defined in Exchange Rule 1090 as any clerk other than a specialist clerk on the Exchange trading floor who functions as an intermediary in a transaction
(i)Consummated on the Exchange;
(ii)entered verbally for execution other than on the Exchange; or
(iii)entered into a third party system designed to execute transactions other than on the Exchange. 7 All stock execution clerks must register as such with the Exchange. 8 7 *See* Exchange Rule 1090, Commentary .01(a). 8 *See* Exchange Rule 620(b). Generally, “stock execution” refers to the service used by options traders to hedge their options trades with the underlying stock. Although stock execution today is often done electronically, stock execution clerks provide a service to Exchange members on the options floor by accepting orders for the purchase and sale of securities underlying options transactions. Once such orders are accepted, the stock execution clerk forwards such orders to the appropriate marketplace for execution. The transactions executed are typically hedging transactions in underlying stocks for Exchange specialists and Registered Options Traders. The transaction may be contingent on an options transaction 9 or may stand independently (“stand-alone equity orders”). 9 A contingency order is a limit or market order to buy or sell that is contingent upon a condition being satisfied while the order is at the post. For certain options contingency orders, the contingency involves buying or selling the underlying security (generally called “stock” in this proposal). *See* Exchange Rule 1066(c). The purpose of this proposal is to assess fees commensurate with the activities of stock execution clerks that handle stand-alone equity orders ( *i.e.* orders that are not contingent on an options transaction). For those stock execution clerks that handle orders that are contingent on an options transaction, *i.e.* orders that are packaged with an options trade, the Exchange currently assesses charges associated with those contingency orders, such as options floor brokerage assessment and option transaction charges. The Exchange, however, does not assess fees in connection with stand-alone equity orders, which may be handled by a variety of intermediaries and which may be executed on different equity markets. The Exchange believes it is appropriate to charge a fee for stock execution clerks performing this function on the options floor because such clerks and such businesses generally are not subject to fees for doing business from the Exchange's options floor. 2. Statutory Basis The Exchange believes that its proposal to amend its schedule of fees is consistent with 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 an equitable allocation of reasonable fees and other charges among Exchange members. The Exchange believes that it is equitable and reasonable to charge a fee for stock execution clerks that handle stand-alone equity orders because such clerks are generally not subject to Exchange fees for doing business from the Exchange's options floor. The Exchange believes that the $500.00 monthly fee, which encompasses the $25.00 Trading Floor Personnel Registration Fee, is a reasonable amount to charge stock execution clerks for the ability to perform this service on the options floor. In addition, the monies received as a result of the $500 monthly fee should help raise revenue for the Exchange. 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 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 A written comment was received by the Exchange. 12 12 A written comment in the form of an e-mail message from Larry Johnson at Wedbush Morgan Securities was sent to Kevin Kennedy (an Exchange employee) on May 29, 2007. In the e-mail message, Mr. Johnson stated, in part, that the $500 fee was “in no way an impediment for us.” This written comment was received in connection with various discussions between Exchange staff and Wedbush, which related in part to what types of activity (including stock execution business) would be allowed on the Exchange's options floor due to the fact that the Exchange was closing its physical equity trading floor and migrating to XLE, the Exchange's new equity trading system. The Exchange was addressing this issue, in general, in order to notify former equity floor members who may have been considering establishing some form of operation on the Exchange's options trading floor and possibly connecting to XLE. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective upon filing with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act 13 and Rule 19b-4(f)(2) thereunder, 14 in that the proposed rule change establishes or changes a member due, fee, or other charge imposed by the self-regulatory organization. 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-Phlx-2007-48 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Phlx-2007-48. 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 Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2007-48 and should be submitted on or before September 5, 2007. 15 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-15935 Filed 8-14-07; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION Reporting and Recordkeeping Requirements Under OMB Review AGENCY: Small Business Administration. ACTION: Notice of reporting requirements submitted for OMB review. SUMMARY: Under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35), agencies are required to submit proposed reporting and recordkeeping requirements to OMB for review and approval, and to publish a notice in the **Federal Register** notifying the public that the agency has made such a submission. DATES: Submit comments on or before September 14, 2007. If you intend to comment but cannot prepare comments promptly, please advise the OMB Reviewer and the Agency Clearance Officer before the deadline. *Copies:* Request for clearance (OMB 83-1), supporting statement, and other documents submitted to OMB for review may be obtained from the Agency Clearance Officer. ADDRESSES: Address all comments concerning this notice to: *Agency Clearance Officer,* Jacqueline White, Small Business Administration, 409 3rd Street, SW., 5th Floor, Washington, DC 20416; and *OMB Reviewer,* Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503. FOR FURTHER INFORMATION CONTACT: Jacqueline White, Agency Clearance Officer,
(202)205-7044. SUPPLEMENTARY INFORMATION: *Title:* Entrepreneurial Development Management Information System (EDMIS) Counseling Information form & Management Training Report. *No's:* 641 & 888. *Frequency:* On Occasion. *Description of Respondents:* New established and prospective small business. *Responses:* 481,925. *Annual Burden:* 137,390. Jacqueline White, Chief, Administrative Information Branch. [FR Doc. E7-15970 Filed 8-14-07; 8:45 am] BILLING CODE 8025-01-P SMALL BUSINESS ADMINISTRATION Notice of Action Subject to Intergovernmental Review Under Executive Order 12372 AGENCY: U.S. Small Business Administration. ACTION: Notice of action subject to intergovernmental review. SUMMARY: The Small Business Administration
(SBA)is notifying the public that it intends to grant the pending applications of 39 existing Small Business Development Centers (SBDCs) for refunding on January 1, 2008 subject to the availability of funds. Seventeen states do not participate in the EO 12372 process therefore, their addresses are not included. A short description of the SBDC program follows in the supplementary information below. The SBA is publishing this notice at least 90 days before the expected refunding date. The SBDCs and their mailing addresses are listed below in the address section. A copy of this notice also is being furnished to the respective State single points of contact designated under the Executive Order. Each SBDC application must be consistent with any area-wide small business assistance plan adopted by a State-authorized agency. DATES: A State single point of contact and other interested State or local entities may submit written comments regarding an SBDC refunding within 30 days from the date of publication of this notice to the SBDC. ADDRESSES: Addresses of Relevant SBDC State Directors Mr. Greg Panichello, State Director, Salt Lake Community College, 9750 South 300 West, Sandy, UT 84070,
(801)957-3493. Mr. Herbert Thweatt, Director, American Samoa Community College, P.O. Box 2609, Pago Pago, American Samoa 96799, 011-684-699-4830. Mr. John Lenti, State Director, University of South Carolina, 1710 College Street, Columbia, SC 29208,
(803)777-4907. Ms. Kelly Manning, State Director, Office of Business Development, 1625 Broadway, Suite 1710, Denver, CO 80202,
(303)892-3864. Mr. Henry Turner, Executive Director, Howard University, 2600 6th St., NW., Room 125, Washington, DC 20059,
(202)806-1550. Mr. Jerry Cartwright, State Director, University of West Florida, 401 East Chase Street, Suite 100, Pensacola, FL 32502,
(850)473-7800. Mr. Allan Adams, State Director, University of Georgia, 1180 East Broad Street, Athens, GA 30602,
(706)542-6762. Mr. Darryl Mleynek, State Director, University of Hawaii/Hilo, 308 Kamehameha Avenue, Suite 201, Hilo, HI 96720,
(808)974-7515. Mr. Sam Males, State Director, University of Nevada/Reno, College of Business Administration, Room 411, Reno, NV 89557-0100,
(775)784-1717. Mr. Jeffrey Heinzmann, State Director, Economic Development Council, One North Capitol, Suite 900, Indianapolis, IN 46204,
(317)234-2086. Mr. John Massaua, State Director, University of Southern Maine, 96 Falmouth Street, Portland, ME 04103,
(207)780-4420. Mr. Brett Rogers, State Director, Washington State University, 534 East Trent Avenue, Spokane, WA 99210-1495,
(509)358-7765. Ms. Bon Wikenheiser, State Director, University of North Dakota, 1600 East Century Avenue, Suite 2, Bismarck, ND 58502,
(701)328-5375. Mr. Casey Jeszenka, SBDC Director, University of Guam, P.O. Box 5061—U.O.G. Station, Mangilao, GU 96923,
(671)735-2590. Mr. John Hemmingstad, State Director, University of South Dakota, 414 East Clark Street, Patterson Hall, Vermillion, SD 57069,
(605)677-6256. Ms. Debra Malewicki, State Director, University of Wisconsin, 432 North Lake Street, Room 423, Madison, WI 53706,
(608)263-8860. Mr. Dan Ripke, Regional Director, California State University, Chico, 400 West First Street, Chico, CA 95929,
(530)898-4598. Ms. Kristin Johnson, Regional Director, Humboldt State University, Office of Economic & Community Dev., 1 Harpst Street, 2006A, Siemens Hall, Arcata, CA 95521,
(707)445-9720 x317. Ms. Vi Pham, Regional Director, California State University, Fullerton, 800 North State College Blvd., Fullerton, CA 92834,
(714)278-2719. Ms. Debbie Trujillo, Regional Director, Southwestern Community College District, 900 Otey Lakes Road, Chula Vista, CA 91910,
(619)482-6388. Mr. Lyle Wright, Regional Director, University of California, Merced, 550 East Shaw, Suite 105A, Fresno, CA 93710,
(209)288-4368. Ms. Sheneui Sloan, Acting Regional Director, Long Beach Community College, 3950 Paramount Blvd., Suite 101, Lakewood, CA 90712,
(562)938-5004. FOR FURTHER INFORMATION CONTACT: Antonio Doss, Associate Administrator for SBDCs, U.S. Small Business Administration, 409 Third Street, SW., Sixth Floor, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Description of the SBDC Program A partnership exists between SBA and an SBDC. SBDCs offer training, counseling and other business development assistance to small businesses. Each SBDC provides services under a negotiated Cooperative Agreement with the SBA. SBDCs operate on the basis of a state plan to provide assistance within a state or geographic area. The initial plan must have the written approval of the Governor. Non-Federal funds must match Federal funds. An SBDC must operate according to law, the Cooperative Agreement, SBA's regulations, the annual Program Announcement, and program guidance. Program Objectives The SBDC program uses Federal funds to leverage the resources of states, academic institutions and the private sector to:
(a)Strengthen the small business community;
(b)increase economic growth;
(c)assist more small businesses; and
(d)broaden the delivery system to more small businesses. SBDC Program Organization The lead SBDC operates a statewide or regional network of SBDC service centers. An SBDC must have a full-time Director. SBDCs must use at least 80 percent of the Federal funds to provide services to small businesses. SBDCs use volunteers and other low cost resources as much as possible. SBDC Services An SBDC must have a full range of business development and technical assistance services in its area of operations, depending upon local needs, SBA priorities and SBDC program objectives. Services include training and counseling to existing and prospective small business owners in management, marketing, finance, operations, planning, taxes, and any other general or technical area of assistance that supports small business growth. The SBA district office and the SBDC must agree upon the specific mix of services. They should give particular attention to SBA's priority and special emphasis groups, including veterans, women, exporters, the disabled, and minorities. SBDC Program Requirements An SBDC must meet programmatic and financial requirements imposed by statute, regulations or its Cooperative Agreement. The SBDC must:
(a)Locate service centers so that they are as accessible as possible to small businesses;
(b)open all service centers at least 40 hours per week, or during the normal business hours of its state or academic Host Organization, throughout the year;
(c)develop working relationships with financial institutions, the investment community, professional associations, private consultants and small business groups; and
(d)maintain lists of private consultants at each service center. Dated: July 30, 2007. Antonio Doss, Associate Administrator, for Small Business Development Centers. [FR Doc. E7-15972 Filed 8-14-07; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF STATE [Public Notice 5891] Culturally Significant Objects Imported for Exhibition Determinations: “Baksy Krater” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.;* 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Baksy Krater”, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to a loan agreement with the foreign owner or custodian. I also determine that the exhibition or display of the exhibit objects, which will include their conservation and reconstruction, at The J. Paul Getty Museum at the Getty Villa, Malibu, California, from on or about August 29, 2007, until on or about July 30, 2009, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Wolodymyr Sulzynsky, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: August 7, 2007. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-16021 Filed 8-14-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5890] Culturally Significant Objects Imported for Exhibition Determinations: “Gabriel de Saint-Aubin (1724-1780)” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Gabriel de Saint-Aubin (1724-1780)”, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at The Frick Collection, New York, New York, from on or about October 30, 2007, until on or about January 27, 2008, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Paul Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone:
(202)453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: August 8, 2007. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-16025 Filed 8-14-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5889] Culturally Significant Objects Imported for Exhibition Determinations: “Legacy: Spain and the United States in the Age of Revolution, 1763-1848” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.;* 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Legacy: Spain and the United States in the Age of Revolution, 1763-1848”, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at the National Portrait Gallery, Smithsonian Institution, Washington, DC, from on or about September 27, 2007, until on or about February 10, 2008, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Wolodymyr Sulzynsky, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: August 6, 2007. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-16051 Filed 8-14-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5892] Culturally Significant Objects Imported for Exhibition Determinations: “Tapestry in the Baroque: Threads of Splendor” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “Tapestry in the Baroque: Threads of Splendor”, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at The Metropolitan Museum of Art, New York, New York, from on or about October 15, 2007, until on or about January 6, 2008, and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Wolodymyr Sulzynsky, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/453-8050). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: August 7, 2007. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-16045 Filed 8-14-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5893] Determination Pursuant to Section 1(b) of Executive Order 13224 Relating to the Designation of the Fatah al-Islam Acting under the authority of section 1(b) of Executive Order 13224 of September 23, 2001, as amended by Executive Order 13286 of July 2, 2002, and Executive Order 13284 of January 23, 2003, and in consultation with the Secretary of the Treasury and the Attorney General, I hereby determine that the organization known as Fatah al-Islam has committed, or poses a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States. Consistent with the determination in section 10 of Executive Order 13224 that “prior notice to persons determined to be subject to the Order who might have a constitutional presence in the United States would render ineffectual the blocking and other measures authorized in the Order because of the ability to transfer funds instantaneously,” I determine that no prior notice needs to be provided to any person subject to this determination who might have a constitutional presence in the United States, because to do so would render ineffectual the measures authorized in the Order. This notice shall be published in the **Federal Register** . Dated: August 9, 2007. Condoleezza Rice, Secretary of State, Department of State. [FR Doc. E7-16086 Filed 8-14-07; 8:45 am] BILLING CODE 4710-10-P TENNESSEE VALLEY AUTHORITY Completion and Operation of Watts Bar Nuclear Plant Unit 2, Rhea County, TN AGENCY: Tennessee Valley Authority (TVA). ACTION: Issuance of record of decision. SUMMARY: This notice is provided in accordance with the Council on Environmental Quality's regulations (40 CFR parts 1500 to 1508) and TVA's procedures implementing the National Environmental Policy Act. On August 1, 2007, the TVA Board of Directors decided to adopt the preferred alternative identified in TVA's Final Supplemental Environmental Impact Statement (FSEIS), Completion and Operation of Watts Bar Nuclear Plant Unit 2, Rhea County, Tennessee. A Notice of Availability of the FSEIS was published in the **Federal Register** on June 23, 2007. Under the selected alternative, TVA has decided to meet the need for additional baseload capacity on the TVA system and maximize the use of existing assets by completing and operating Watts Bar Nuclear Plant
(WBN)Unit 2. The unit would be completed as originally designed incorporating additional modifications made to its sister unit, WBN Unit 1, which has been operating since 1996. No expansion of the existing site footprint would be required to complete construction of Unit 2. TVA has prepared the FSEIS to update the extensive environmental record pertinent to the proposed action. In addition to the FSEIS, TVA conducted a detailed scoping, estimating, and planning
(DSEP)study. TVA used information from the DSEP and the FSEIS to make the decision to complete construction and to operate Unit 2. FOR FURTHER INFORMATION CONTACT: Bruce L. Yeager, NEPA Policy Program Manager, Environmental Stewardship and Policy, Tennessee Valley Authority, 400 West Summit Hill Drive, WT 11B, Knoxville, Tennessee 37902-1499; telephone
(865)632-8051 or e-mail *blyeager@tva.gov.* SUPPLEMENTARY INFORMATION: The FSEIS for completion and operation of WBN Unit 2 supplements the original 1972 TVA EIS titled “Final Environmental Statement, Watts Bar Nuclear Plant Units 1 and 2” and the “Final Statement Related to the Operation of Watts Bar Nuclear Plant Units 1 and 2, Supplement No. 1,” (NRC 1995b), which TVA adopted on July 10, 1995. Where pertinent, the FSEIS incorporates by reference, utilizes, tiers from, and updates information from the substantial previous environmental record prepared for actions related to the construction and operation of WBN, including updating the need for power analysis. Alternatives Considered In the 1972 Final Environmental Statement
(FES)for Watts Bar Units 1 and 2, TVA considered a number of alternatives to constructing and operating WBN, including the No Action alternative. TVA is proposing to complete WBN Unit 2 as originally designed except for modifications consistent with those made to Unit 1. Consistent with applicable regulations, the FSEIS also tiers off of Energy Vision 2020—An Integrated Resource Management Plan
(IRP)and Final Environmental Impact Statement (“IRP” EIS) (TVA 1995); the Final Environmental Impact Statement for the Production of Tritium in a Commercial Light Water reactor (DOE 1999); and the Reservoir Operations Study Final Programmatic Environmental Impact Statement (TVA 2004), and incorporates by reference the balance of the environmental record pertinent to WBN. The IRP EIS analyzed a substantial number of energy resource alternatives, including energy efficiency improvements and demand side management. Environmental Consequences The environmental consequences of constructing and operating WBN were addressed comprehensively in the 1972 FES for WBN Units 1 and 2. Subsequent environmental reviews by TVA and the NRC have updated that analysis. By 1996 when the construction of Unit 1 was complete, most of the construction effects had already occurred. Unit 2 would use structures that already exist and most of the work required to complete Unit 2 would occur inside of those buildings. Disturbances proposed for the construction of new support facilities would be within the current plant footprint. TVA would use standard construction best management practices to control minor construction impacts to air and water from dust, sedimentation, and noise. Where needed, the FSEIS further updated information and analyses in the following areas: Surface water; groundwater; aquatic ecology; threatened and endangered species; wetlands; natural areas; cultural resources; socioeconomic, environmental justice and land use impacts; floodplains and flood risk; seismic effects; climatology and meteorology; nuclear plant safety and security; radiological effects; radioactive waste; spent fuel storage; transportation of radioactive materials, and decommissioning. The analyses conducted for the FSEIS indicate that no significant impacts would be expected as a result of completing and operating WBN Unit 2. The oversight of permitting agencies, such as the Tennessee Department of Environment and Conservation, will help further safeguard the environment from unacceptable environmental impacts. No effects to federally-listed species would occur. The analysis acknowledges that there will be both beneficial and adverse impacts to local community services from completing Unit 2, largely associated with the effects on social services during the construction process. These findings are primarily a result of the fact that:
(1)WBN Unit 1 is already an existing facility operating under an NRC license;
(2)WBN Unit 2 is substantially complete;
(3)the environmental footprint of the proposed action is confined to that of the existing plant (primarily within existing structures of the plant); and
(4)the proposed addition of WBN Unit 2 results in relatively minor changes to ongoing operations of WBN that have the potential for environmental effects. Decision On August 1, 2007, the TVA Board of Directors decided to adopt the preferred alternative to complete and operate WBN Unit 2. This decision took into account environmental considerations together with economic and technical aspects of the project. Proceeding with completion and operation of WBN Unit 2 is the best decision for TVA and the Tennessee Valley in terms of power supply, power price, generation mix, return on investment, use of existing assets, and avoidance of environmental impacts. This decision has the three-fold benefits of assuring future power supplies without the environmental effects resulting from operation of fossil fuel generating plants (including increased emissions), avoiding the even larger capital outlays associated with totally new construction, and avoiding the environmental impacts resulting from siting and construction of new power generating facilities elsewhere. The FSEIS concluded that WBN Unit 2 can be completed and operated without significant, adverse impacts on the environment. Environmentally Preferred Alternative On May 31, 2007, the TVA Board endorsed enhanced reliance on renewable energy resources, demand side management (energy conservation), and energy efficiency to help meet the growing demand for electricity from the TVA system. These energy resource options were evaluated in TVA's IRP EIS. TVA is implementing a number of these resource options and expects to rely more heavily on such options in the future. Energy conservation and improved energy efficiency typically would have lesser environmental impacts than completing and operating a nuclear plant. They would not, however, offset the near-term need for more baseload generation that would be met by completing and operating WBN Unit 2. Accordingly, TVA has concluded that the preferred alternative is also the environmentally preferable alternative. This alternative has the benefits of assuring future power supplies without relying upon fossil fuel generation and its associated environmental impacts, and avoiding the greater environmental impacts resulting from siting and construction of new power generating facilities elsewhere. Environmental Commitments In the FSEIS, TVA has identified two measures that would be implemented during construction of WBN Unit 2 to address potential socio-economic impacts. TVA will designate certain counties as impacted by the construction process so that they would become eligible for a supplemental allocation from TVA's tax equivalent payments under Tennessee law. These funds could be used by counties and local governmental to address impacts on local services and infrastructure. A part of the DSEP, TVA conducted a labor study of the potential construction workforce. TVA will also provide information from this study to officials in the impacted counties. This information should help with local planning to better accommodate the anticipated temporary population growth. Dated: August 3, 2007. William R. McCollum, Jr., Chief Operating Officer. [FR Doc. E7-15955 Filed 8-14-07; 8:45 am] BILLING CODE 8120-08-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Advisory Circular 33.63-1, Turbine Engine Vibration AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of issuance of advisory circular. SUMMARY: This notice announces the issuance of Advisory Circular
(AC)33.63-1, Turbine Engine Vibration. This advisory circular
(AC)provides guidance and acceptable methods, but not the only methods, that may be used to demonstrate compliance with the vibration requirements of § 33.63 of Title 14 of the Code of Federal Regulations (14 CFR part 33). DATES: The Engine and Propeller Directorate issued AC 33.63-1 on July 25, 2007. FOR FURTHER INFORMATION CONTACT: The Federal Aviation Administration, Attn: Dorina Mihail, Engine and Propeller Standards Staff, ANE-110, 12 New England Executive Park, Burlington, MA 01803-5299; telephone:
(781)238-7153; fax:
(781)238-7199; e-mail: *dorina.mihail@faa.gov* . We have filed in the docket all substantive comments received, and a report summarizing them. If you wish to review the docket in person, you may go to the above address between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. If you wish to contact the above individual directly, you can use the above telephone number or e-mail address provided. *How to obtain copies:* A paper copy of AC 33.63-1 may be obtained by writing to the U.S. Department of Transportation, Subsequent Distribution Office, DOT Warehouse, SVC-121.23, Ardmore East Business Center, 3341 Q 75th Ave., Landover, MD 20785, telephone 301-322-5377, or by faxing your request to the warehouse at 301-386-5394. The AC will also be available on the Internet at *http://www.faa.gov/regulations_policies* (then click on “Advisory Circulars”). (Authority: 49 U.S.C. 106(g), 40113, 44701-44702, 44704.) Issued in Burlington, Massachusetts on July 25, 2007. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. 07-3964 Filed 8-14-07; 8:45 am]
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U.S. Code
- Registration, responsibilities, and oversight of self-regulatory organizations§ 78s
- National securities exchanges§ 78f
- Definitions and application§ 78c
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- Immunity from seizure under judicial process of cultural objects imported for temporary exhibition or display§ 2459
- Purposes§ 6501
- Federal Aviation Administration§ 106
public-private-law
7 references not yet in our index
- 17 CFR 240.19
- 17 CFR 270.2
- 17 CFR 240.10
- 15 USC 78(f)(b)
- 15 USC 78(f)(b)(5)
- 79 Stat. 985
- 14 CFR 33
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Cite17 CFR 240.19
Cite17 CFR 270.2
Cite17 CFR 240.10
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