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Code · REGISTER · 2007-11-06 · NUCLEAR REGULATORY COMMISSION · Notices

Notices. Notice

41,952 words·~191 min read·/register/2007/11/06/07-5518

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

BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Biweekly Notice; Applications and Amendments to Facility Operating Licenses Involving No Significant Hazards Considerations Background Pursuant to section 189a.
(2)of the Atomic Energy Act of 1954, as amended (the Act), the U.S. Nuclear Regulatory Commission (the Commission or NRC staff) is publishing this regular biweekly notice. The Act requires the Commission publish notice of any amendments issued, or proposed to be issued and grants the Commission the authority to issue and make immediately effective any amendment to an operating license upon a determination by the Commission that such amendment involves no significant hazards consideration, notwithstanding the pendency before the Commission of a request for a hearing from any person. This biweekly notice includes all notices of amendments issued, or proposed to be issued from October 11, 2007, to October 24, 2007. The last biweekly notice was published on October 23, 2007 (72 FR 60032). Notice of Consideration of Issuance of Amendments to Facility Operating Licenses, Proposed No Significant Hazards Consideration Determination, and Opportunity for a Hearing The Commission has made a proposed determination that the following amendment requests involve no significant hazards consideration. Under the Commission's regulations in 10 CFR 50.92, this means that operation of the facility in accordance with the proposed amendment would not
(1)involve a significant increase in the probability or consequences of an accident previously evaluated; or
(2)create the possibility of a new or different kind of accident from any accident previously evaluated; or
(3)involve a significant reduction in a margin of safety. The basis for this proposed determination for each amendment request is shown below. The Commission is seeking public comments on this proposed determination. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination. Within 60 days after the date of publication of this notice, the licensee may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request for a hearing and a petition for leave to intervene. Normally, the Commission will not issue the amendment until the expiration of 60 days after the date of publication of this notice. The Commission may issue the license amendment before expiration of the 60-day period provided that its final determination is that the amendment involves no significant hazards consideration. In addition, the Commission may issue the amendment prior to the expiration of the 30-day comment period should circumstances change during the 30-day comment period such that failure to act in a timely way would result, for example in derating or shutdown of the facility. Should the Commission take action prior to the expiration of either the comment period or the notice period, it will publish in the **Federal Register** a notice of issuance. Should the Commission make a final No Significant Hazards Consideration Determination, any hearing will take place after issuance. The Commission expects that the need to take this action will occur very infrequently. Written comments may be submitted by mail to the Chief, Rulemaking, Directives and Editing Branch, Division of Administrative Services, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and should cite the publication date and page number of this **Federal Register** notice. Written comments may also be delivered to Room 6D44, Two White Flint North, 11545 Rockville Pike, Rockville, Maryland, from 7:30 a.m. to 4:15 p.m. Federal workdays. Copies of written comments received may be examined at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area O1F21, 11555 Rockville Pike (first floor), Rockville, Maryland. The filing of requests for a hearing and petitions for leave to intervene is discussed below. Within 60 days after the date of publication of this notice, person(s) may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request via electronic submission through the NRC E-Filing system for a hearing and a petition for leave to intervene. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings” in 10 CFR Part 2. Interested person(s) should consult a current copy of 10 CFR 2.309, which is available at the Commission's PDR, located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/doc-collections/cfr/.* If a request for a hearing or petition for leave to intervene is filed within 60 days, the Commission or a presiding officer designated by the Commission or by the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel, will rule on the request and/or petition; and the Secretary or the Chief Administrative Judge of the Atomic Safety and Licensing Board will issue a notice of a hearing or an appropriate order. As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements:
(1)The name, address, and telephone number of the requestor or petitioner;
(2)the nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding;
(3)the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and 4) the possible effect of any decision or order which may be entered in the proceeding on the requestor's/petitioner's interest. The petition must also set forth the specific contentions which the petitioner/requestor seeks to have litigated at the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner/requestor shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner/requestor intends to rely in proving the contention at the hearing. The petitioner/requestor must also provide references to those specific sources and documents of which the petitioner is aware and on which the petitioner/requestor intends to rely to establish those facts or expert opinion. The petition must include sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if proven, would entitle the petitioner/requestor to relief. A petitioner/requestor who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party. Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing. If a hearing is requested, and the Commission has not made a final determination on the issue of no significant hazards consideration, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to decide when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing held would take place after issuance of the amendment. If the final determination is that the amendment request involves a significant hazards consideration, any hearing held would take place before the issuance of any amendment. A request for hearing or a petition for leave to intervene must be filed in accordance with the NRC E-Filing rule, which the NRC promulgated in August 28, 2007, (72 FR 49139). The E-Filing process requires participants to submit and serve documents over the internet or in some cases to mail copies on electronic storage media. Participants may not submit paper copies of their filings unless they seek a waiver in accordance with the procedures described below. To comply with the procedural requirements of E-Filing, at least five
(5)days prior to the filing deadline, the petitioner/ requestor must contact the Office of the Secretary by e-mail at *HEARINGDOCKET@NRC.GOV,* or by calling
(301)415-1677, to request
(1)a digital ID certificate, which allows the participant (or its counsel or representative) to digitally sign documents and access the E-Submittal server for any proceeding in which it is participating; and/or
(2)creation of an electronic docket for the proceeding (even in instances in which the petitioner/requestor (or its counsel or representative) already holds an NRC-issued digital ID certificate). Each petitioner/ requestor will need to download the Workplace Forms Viewer TM to access the Electronic Information Exchange (EIE), a component of the E-Filing system. The Workplace Forms Viewer TM is free and is available at *http://www.nrc.gov/site-help/e-submittals/install-viewer.html.* Information about applying for a digital ID certificate is available on NRC's public Web site at *http://www.nrc.gov/site-help/e-submittals/apply-certificates.html.* Once a petitioner/requestor has obtained a digital ID certificate, had a docket created, and downloaded the EIE viewer, it can then submit a request for hearing or petition for leave to intervene. Submissions should be in Portable Document Format
(PDF)in accordance with NRC guidance available on the NRC public Web site at *http://www.nrc.gov/site-help/e-submittals.html.* A filing is considered complete at the time the filer submits its documents through EIE. To be timely, an electronic filing must be submitted to the EIE system no later than 11:59 p.m. Eastern Time on the due date. Upon receipt of a transmission, the E-Filing system time-stamps the document and sends the submitter an e-mail notice confirming receipt of the document. The EIE system also distributes an e-mail notice that provides access to the document to the NRC Office of the General Counsel and any others who have advised the Office of the Secretary that they wish to participate in the proceeding, so that the filer need not serve the documents on those participants separately. Therefore, applicants and other participants (or their counsel or representative) must apply for and receive a digital ID certificate before a hearing request/petition to intervene is filed so that they can obtain access to the document via the E-Filing system. A person filing electronically may seek assistance through the “Contact Us” link located on the NRC Web site at *http://www.nrc.gov/site-help/e-submittals.html* or by calling the NRC technical help line, which is available between 8:30 a.m. and 4:15 p.m., Eastern Time, Monday through Friday. The help line number is
(800)397-4209 or locally,
(301)415-4737. Participants who believe that they have a good cause for not submitting documents electronically must file a motion, in accordance with 10 CFR 2.302(g), with their initial paper filing requesting authorization to continue to submit documents in paper format. Such filings must be submitted by:
(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, *Attention:* Rulemaking and Adjudications Staff; or
(2)courier, express mail, or expedited delivery service to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville, Pike, Rockville, Maryland, 20852, *Attention:* Rulemaking and Adjudications Staff. Participants filing a document in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. Non-timely requests and/or petitions and contentions will not be entertained absent a determination by the Commission, the presiding officer, or the Atomic Safety and Licensing Board that the petition and/or request should be granted and/or the contentions should be admitted, based on a balancing of the factors specified in 10 CFR 2.309(c)(1)(i)-(viii). To be timely, filings must be submitted no later than 11:59 p.m. Eastern Time on the due date. Documents submitted in adjudicatory proceedings will appear in NRC's electronic hearing docket which is available to the public at *http://ehd.nrc.gov/EHD_Proceeding/home.asp* , unless excluded pursuant to an order of the Commission, an Atomic Safety and Licensing Board, or a Presiding Officer. Participants are requested not to include personal privacy information, such as social security numbers, home addresses, or home phone numbers in their filings. With respect to copyrighted works, except for limited excerpts that serve the purpose of the adjudicatory filings and would constitute a Fair Use application, Participants are requested not to include copyrighted materials in their submission. Non-timely requests and/or petitions and contentions will not be entertained absent a determination by the Commission or the presiding officer of the Atomic Safety and Licensing Board that the petition, request and/or the contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(a)(1)(i)-(viii). For further details with respect to this amendment action, see the application for amendment which is available for public inspection at the Commission's PDR, located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the ADAMS Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams.html.* If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the PDR Reference staff at 1
(800)397-4209,
(301)415-4737 or by e-mail to *pdr@nrc.gov.* Detroit Edison Company, Docket No. 50-341, Fermi 2, Monroe County, Michigan Date of amendment request: July 12, 2007, as supplemented by letter dated September 21, 2007. *Description of amendment request:* The proposed amendment would revise Surveillance Requirement
(SR)3.3.3.1.2 in Technical Specification
(TS)3.3.3.1, “Post Accident Monitoring Instrumentation.” Specifically, the proposed amendment would delete the note which excludes radiation detectors from calibration requirements. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. The proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. Primary Containment Radiation Monitors are part of the post accident monitoring instrumentation. Deleting the note excluding radiation detectors from the channel calibration requirement in TS 3.3.3.1 surveillance requirement does not adversely affect any of the parameters in accident analyses. Revising the detectors calibration requirement does not affect the probability or consequences of previously evaluated accidents. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. The proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated. Deleting the note excluding the radiation detectors from channel calibration requirement in SR 3.3.3.1.2 restores the calibration of the primary containment high range radiation monitors to the requirements in NUREG-0737 [,”Clarification of TMI Action Plan Requirements”], Table II.F.1-3. The revision of the primary containment high range radiation monitor calibration provides an improved assurance of the accuracy and function of the monitor during and following an accident. These monitors provide indication of high-range radiation and are primarily used by emergency response personnel for evaluating protective action recommendations. These monitors are provided for indication only and do not initiate any automatic action. Removing the exclusion of radiation detectors from the channel calibration requirement in SR 3.3.3.1.2 cannot create a new or different kind of accident from previously evaluated accidents. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated. 3. The proposed change does not involve a significant reduction in the margin of safety. This proposed license amendment involves a change in the channel calibration surveillance of primary containment high range radiation monitor in TS 3.3.3.1. The surveillance frequency is unchanged. The change in the high range radiation monitor channel calibration only removes the exclusion of the detectors from SR 3.3.3.1.2. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* David G. Pettinari, Legal Department, 688 WCB, Detroit Edison Company, 2000 2nd Avenue, Detroit, Michigan 48226-1279. *NRC Acting Branch Chief:* Travis L. Tate. Entergy Nuclear Operations, Inc., Docket No. 50-255, Palisades Plant, Van Buren County, Michigan *Date of amendment request:* August 21, 2007. *Description of amendment request:* The proposed amendment would modify technical specification
(TS)requirements related to control room envelope
(CRE)habitability in TS 3.7.10, “Control Room Ventilation Filtration,” and TS Section 5.5, “Administrative Controls—Programs and Manuals.” The NRC staff issued a notice of opportunity for comment in the **Federal Register** on October 17, 2006 (71 FR 61075), on possible amendments in accordance with TSTF-448-A, Revision 3, to revise the plant specific TS to strengthen requirements regarding CRE habitability by changing the action and surveillance requirements for the CRE emergency ventilation system, and by adding a new TS administrative controls program on CRE habitability. The NRC staff subsequently issued a notice of availability of the models for referencing in license amendment applications in the **Federal Register** on January 17, 2007 (72 FR 2022). The licensee affirmed the applicability of the following no significant hazards determination in its application dated August 21, 2007. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: Criterion 1—The Proposed Change Does Not Involve a Significant Increase in the Probability or Consequences of an Accident Previously Evaluated The proposed change does not adversely affect accident initiators or precursors nor alter the design assumptions, conditions, or configuration of the facility. The proposed change does not alter or prevent the ability of structures, systems, and components to perform their intended function to mitigate the consequences of an initiating event within the assumed acceptance limits. The proposed change revises the TS for the CRE emergency ventilation system, which is a mitigation system designed to minimize unfiltered air leakage into the CRE and to filter the CRE atmosphere to protect the CRE occupants in the event of accidents previously analyzed. An important part of the CRE emergency ventilation system is the CRE boundary. The CRE emergency ventilation system is not an initiator or precursor to any accident previously evaluated. Therefore, the probability of any accident previously evaluated is not increased. Performing tests to verify the operability of the CRE boundary and implementing a program to assess and maintain CRE habitability ensure that the CRE emergency ventilation system is capable of adequately mitigating radiological consequences to CRE occupants during accident conditions, and that the CRE emergency ventilation system will perform as assumed in the consequence analyses of design[-]basis accidents. Thus, the consequences of any accident previously evaluated are not increased. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. Criterion 2—The Proposed Change Does Not Create the Possibility of a New or Different Kind of Accident From Any Accident Previously Evaluated The proposed change does not impact the accident analysis. The proposed change does not alter the required mitigation capability of the CRE emergency ventilation system, or its functioning during accident conditions as assumed in the licensing basis analyses of design[-]basis accident radiological consequences to CRE occupants. No new or different accidents result from performing the new surveillance or following the new program. The proposed change does not involve a physical alteration of the plant (i.e., no new or different type of equipment will be I installed) or a significant change in the methods governing normal plant operation. The proposed change does not alter any safety analysis assumptions and is consistent with current plant operating practice. Therefore, this change does not create the possibility of a new or different kind of accident from any accident previously evaluated. Criterion 3—The Proposed Change Does Not Involve a Significant Reduction in the Margin of Safety The proposed change does not alter the manner in which safety limits, limiting safety system settings or limiting conditions for operation are determined. The proposed change does not affect safety analysis acceptance criteria. The proposed change will not result in plant operation in a configuration outside the design basis for an unacceptable period of time without compensatory measures. The proposed change does not adversely affect systems that respond to safely shut down the plant and to maintain the plant in a safe shutdown condition. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* Mr. William Dennis, Assistant General Counsel, Entergy Nuclear Operations, Inc., 440 Hamilton Ave., White Plains, NY 10601. *NRC Acting Branch Chief:* Travis L. Tate. Entergy Operations, Inc., Docket No. 50-368, Arkansas Nuclear One, Unit No. 2, Pope County, Arkansas *Date of amendment request:* October 5, 2007. *Description of amendment request:* The proposed amendment changes the containment sump buffering agent in Technical Specification
(TS)3.6.2.2, “Trisodium Phosphate (TSP),” from TSP to sodium tetraborate (NaTB). *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated? Response: No. There are no changes to the design or operation of the plant that could affect system, component, or accident functions as a result of replacing trisodium phosphate
(TSP)with sodium tetraborate (NaTB). Buffering agents are used to minimize the potential consequences of an accident and do not represent an accident initiator. Utilizing NaTB as a buffering agent ensures the post-loss-of-coolant accident
(LOCA)containment sump mixture will have an equilibrium pH ≥ 7.0. Replacing TSP with NaTB, which achieves comparable pH buffering results, will maintain the iodine retention and corrosion inhibition required by the safety analyses. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated? Response: No. No new accident scenarios, failure mechanisms, or single failures are introduced as a result of the proposed change. Structures, systems, and components previously required for mitigation of an event remain capable of fulfilling their intended design function with this change to the TS. The proposed change has no new adverse effects on safety-related systems or components and does not challenge the performance or integrity of safety-related systems. The replacement buffering agent has been evaluated and no new accident scenarios or single failures are introduced. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any previously evaluated. 3. Does the proposed change involve a significant reduction in a margin of safety? Response: No. The safety analyses assume a post-LOCA equilibrium pH ≥ 7.0 to minimize iodine re-evolution and to minimize corrosion of components within containment. Changing the containment sump buffering agent requirement from TSP to NaTB and revising the required volume of NaTB continues to ensure a containment sump equilibrium pH ≥ 7.0. The margin for pH control is not altered by the proposed changes. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* Terence A. Burke, Associate General Council—Nuclear Entergy Services, Inc., 1340 Echelon Parkway, Jackson, Mississippi 39213. *NRC Branch Chief:* Thomas G. Hiltz. *FPL Energy Seabrook, LLC, Docket No. 50-443, Seabrook Station, Unit No. 1, Rockingham County, New Hampshire* *Date of amendment request:* July 17, 2007. *Description of amendment request:* The proposed amendment would revise the Seabrook Station, Unit No. 1 Technical Specifications
(TSs)related to control room envelope
(CRE)habitability consistent with Technical Specification Task Force
(TSTF)change traveler TSTF-448, Revision 3, “Control Room Habitability.” The NRC staff issued a notice of availability of a model safety evaluation, a model no significant hazards consideration
(NSHC)determination, and a model license amendment request in the **Federal Register** on January 17, 2007 (72 FR 2022). In its application dated July 17, 2007, the licensee affirmed the applicability of the model NSHC determination, which is presented below. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), an analysis of the issue of no significant hazards consideration, is presented below: 1. The proposed changes do not involve a significant increase in the probability or consequences of an accident previously evaluated. The proposed change does not adversely affect accident initiators or precursors nor alter the design assumptions, conditions, or configuration of the facility. The proposed change does not alter or prevent the ability of structures, systems, and components
(SSCs)to perform their intended function to mitigate the consequences of an initiating event within the assumed acceptance limits. The proposed change revises the TS for the CRE emergency ventilation system, which is a mitigation system designed to minimize unfiltered air leakage into the CRE and to filter the CRE atmosphere to protect the CRE occupants in the event of accidents previously analyzed. An important part of the CRE emergency ventilation system is the CRE boundary. The CRE emergency ventilation system is not an initiator or precursor to any accident previously evaluated. Therefore, the probability of any accident previously evaluated is not increased. Performing tests to verify the operability of the CRE boundary and implementing a program to assess and maintain CRE habitability ensure that the CRE emergency ventilation system is capable of adequately mitigating radiological consequences to CRE occupants during accident conditions, and that the CRE emergency ventilation system will perform as assumed in the consequence analyses of design basis accidents. Thus, the consequences of any accident previously evaluated are not increased. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. The proposed changes do not create the possibility of a new or different kind of accident from any accident previously evaluated. The proposed change does not impact the accident analysis. The proposed change does not alter the required mitigation capability of the CRE emergency ventilation system, or its functioning during accident conditions as assumed in the licensing basis analyses of design basis accident radiological consequences to CRE occupants. No new or different accidents result from performing the new surveillance or following the new program. The proposed change does not involve a physical alteration of the plant (i.e., no new or different type of equipment will be installed) or a significant change in the methods governing normal plant operation. The proposed change does not alter any safety analysis assumptions and is consistent with current plant operating practice. Therefore, this change does not create the possibility of a new or different kind of accident from any accident previously evaluated. 3. The proposed changes do not involve a significant reduction in the margin of safety. The proposed change does not alter the manner in which safety limits, limiting safety system settings or limiting conditions for operation are determined. The proposed change does not affect safety analysis acceptance criteria. The proposed change will not result in plant operation in a configuration outside the design basis for an unacceptable period of time without compensatory measures. The proposed change does not adversely affect systems that respond to safely shutdown the plant and to maintain the plant in a safe shutdown condition. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* M.S. Ross, Florida Power & Light Company, P.O. Box 14000, Juno Beach, FL 33408-0420. *NRC Branch Chief:* Harold K. Chernoff. Nuclear Management Company, LLC, Docket No. 50-263, Monticello Nuclear Generating Plant (MNGP), Wright County, Minnesota *Date of amendment request:* September 17, 2007. *Description of amendment request:* The proposed amendment would revise the MNGP Technical Specifications
(TS)by adding an Action Statement to the Limiting Condition for Operation
(LCO)for Specification 3.7.5, “Control Room Ventilation System.” The new Action Statement will allow a finite time (72 hours) to restore one control room ventilation subsystem to operable status when both ventilation subsystems are inoperable, provided the control room temperature is verified to be less than 90 degrees once every 4 hours. The proposed amendment is consistent with the NRC's approved Technical Specification Task Force
(TSTF)Improved Standard Technical Specifications Change Traveler, TSTF-477, Revision 3 (March 26, 2007; 72 FR 14143). *Basis for proposed no significant hazards consideration determination:* As required by Title 10 of the *Code of Federal Regulations* (10 CFR) Part 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration
(NSHC)by referencing the NRC staff's model NSHC analysis published on December 18, 2006 (71 FR 75774). The NRC staff's model NSHC analysis is reproduced below: Criterion 1—The Proposed Change Does Not Involve a Significant Increase in the Probability or Consequences of an Accident Previously Evaluated The proposed change is described in Technical Specification Task Force
(TSTF)Standard TS Change Traveler TSTF-477[; it] adds an action statement for two inoperable control room subsystems. The proposed change does not involve a physical alteration of the plant (no new or different type of equipment will be installed). The proposed changes add an action statement for two inoperable control room subsystems. The equipment qualification temperature of the control room equipment is not affected. Future changes to the Bases or licensee-controlled document will be evaluated pursuant to the requirements of 10 CFR 50.59, “Changes, test and experiments,” to ensure that such changes do not result in more than a minimal increase in the probability or consequences of an accident previously evaluated. The proposed changes do not adversely affect accident initiators or precursors nor alter the design assumptions, conditions, and configuration of the facility or the manner in which the plant is operated and maintained. The proposed changes do not adversely affect the ability of structures, systems and components
(SSCs)to perform their intended safety function to mitigate the consequences of an initiating event within the assumed acceptance limits. The proposed changes do not affect the source term, containment isolation, or radiological consequences of any accident previously evaluated. Further, the proposed changes do not increase the types and the amounts of radioactive effluent that may be released, nor significantly increase individual or cumulative occupation/public radiation exposures. Therefore, the changes do not involve a significant increase in the probability or consequences of any accident previously evaluated. Criterion 2—The Proposed Change Does Not Create the Possibility of a New or Different Kind of Accident From Any Previously Evaluated The proposed changes add an action statement for two inoperable control room subsystems. The changes do not involve a physical altering of the plant (i.e., no new or different type of equipment will be installed) or a change in methods governing normal pant operation. The requirements in the TS continue to require maintaining the control room temperature within the design limits. Therefore, the changes do not create the possibility of a new or different kind of accident from any previously evaluated. Criterion 3—The Proposed Change Does Not Involve a Significant Reduction in the Margin of Safety The proposed changes add an action statement for two inoperable control room subsystems. Instituting the proposed changes will continue to maintain the control room temperature within design limits. Changes to the Bases or licensee controlled document are performed in accordance with 10 CFR 50.59. This approach provides an effective level of regulatory control and ensures that the control room temperature will be maintained within design limits. The proposed changes maintain sufficient controls to preserve the current margins of safety. Based upon the reasoning above, the NRC staff concludes that the amendment request involves no significant hazards consideration. The NRC staff has reviewed the licensee's referenced analysis, and has found that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the proposed amendment involves no significant hazards consideration. *Attorney for licensee:* Jonathan Rogoff, Esquire, Vice President, Counsel & Secretary, Nuclear Management Company, LLC, 700 First Street, Hudson, WI 54016. *NRC Acting Branch Chief:* Travis L. Tate. Omaha Public Power District, Docket No. 50-285, Fort Calhoun Station, Unit No. 1, Washington County, Nebraska *Date of amendment request:* September 21, 2007. *Description of amendment request:* The proposed amendment will revise the Technical Specifications
(TS)safety limit
(SL)requirements related to the use of a non-cycle specific peak linear heat rate
(PLHR)SL of 22 kilowatts per foot (kW/ft) to fuel centerline melt. The proposed change is consistent with the Technical Specification Task Force
(TSTF)445-A, Revision 1. Because these Limiting Safety System Setting
(LSSS)values appear in the Fort Calhoun Station, Unit 1 (FCS), TS Bases section of TS 1.3, “Limiting Safety System Settings, Reactor Protective System,” TS 1.0, “Safety Limits and Limiting Safety System Settings,” will be revised to more clearly align with the Combustion Engineering
(CE)Standard Technical Specifications
(STS)2.0 in content. Therefore, TS Section 1.1, “Safety Limits—Reactor Core,” will be revised to incorporate the TSTF-445-A, Revision 1, peak fuel centerline temperature
(PFCT)criteria, and TS 1.2, “Safety Limits—Reactor Coolant System Pressure,” will be revised to incorporate the SL violation action which is currently delineated in administrative control TS 5.7.1. TS Section 1.3 will be relocated to the currently unused TS Section 2.13 to be more consistent with the content of the CE STS (i.e., the LSSS will be located in the Limiting Conditions for Operation
(LCO)section of the FCS TS which is similar to the LCO/Surveillance Requirements Section 3.0 of the STS). As noted above, the administrative control in TS 5.7.1, “Safety Limit Violation,” will be relocated to TS Section 2.13. Also, administrative control TS 5.9.5, “Core Operating Limits Report (COLR),” item a., will be revised to add TS 2.13, “RPS Limiting Safety System Settings,” Table 2-11, Items 6, 8, and 9, to the list of items that shall be documented in the COLR. The TS table of contents
(TOC)will be updated to reflect the deletion and subsequent renumbering of TS 1.3 and Table 1-1 to TS 2.13 and Table 2-11, respectively. In addition, the TOC will be updated to delineate the new TS subsections 1.1.1 and 1.1.2, provide the revised titles for TS 1.0, 1.1, 1.2, and 2.13, and to reflect TS 5.7.1 as “Not used.” *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed amendment involve a significant increase in the probability or consequences of an accident previously evaluated? Response: No. The proposed change does not require any physical change to any plant systems, structures, or components nor does it require any change in systems or plant operations. The proposed change does not require any change in safety analysis methods or results. The change to establish the PFCT as the safety limit is consistent with the FCS licensing basis for ensuring that the fuel design limits are met. Operations and analysis will continue to be in compliance with NRC regulations. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Does the proposed amendment create the possibility of a new or different kind of accident from any accident previously evaluated? Response: No. The accident analyses indicate that the peak linear heat rate may exceed the present Limiting Safety System Setpoint of 22 kW/ft during the Control Element Assembly
(CEA)Drop, Excess Load, and Loss of Feedwater Heating events. The analyses for these [anticipated operational occurrences] indicate that the PFCT is not significantly challenged or exceeded. The existing analyses remain unchanged and do not affect any accident initiators that would create a new accident. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any previously evaluated. 3. Does the proposed amendment involve a significant reduction in a margin of safety? Response: No. The proposed change does not require any change in accident analysis methods or results. Therefore, by changing the SL from PLHR to peak fuel centerline melt temperature, the margin, as established in the current licensing basis, remains unchanged. The proposed administrative change relocates descriptive information from one section of the TS to another TS section, thereby maintaining the information in the FCS TS, which has no effect on safety margins. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* James R. Curtiss, Esq., Winston & Strawn, 1700 K Street, NW., Washington, DC 20006-3817. *NRC Branch Chief:* Thomas G. Hiltz. Southern Nuclear Operating Company, Inc., Georgia Power Company, Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, City of Dalton, Georgia, Docket Nos. 50-321 and 50-366, Edwin I. Hatch Nuclear Plant, Units 1 and 2, Appling County, Georgia *Date of amendment request:* October 3, 2007. *Description of amendment request:* The Edwin I. Hatch Nuclear Plant, Units 1 and 2, requests adoption of an approved change to the Standard Technical Specifications
(STSs)for Boiling Water Reactor
(BWR)plants (NUREG-1433 and NUREG-1434) and plant-specific technical specifications (TSs), to allow the use of the improved banked position withdrawal sequence
(BPWS)during shutdowns in accordance with NEDO-33091-A, Revision 2, ”Improved BPWS Control Rod Insertion Process,” dated July 2004. The changes are consistent with NRC-approved Industry/Technical Specification Task Force
(TSTF)Standard Technical Specification Change Traveler, TSTF-476, Revision 1. The Nuclear Regulatory Commission
(NRC)staff published a notice of availability of a model safety evaluation and model no significant hazards consideration
(NSHC)determination for referencing in license amendment applications in the **Federal Register** on May 23, 2007, (72 FR 29004) as apart of the consolidated line-term improvement process (CLIIP), and a correction on May 30, 2007, (72 FR 30043). The licensee affirmed the applicability of the model NSHC determination in its application dated October 3, 2007. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), an analysis of the issue of no significant hazards consideration is presented below: Criterion 1—The Proposed Change Does Not Involve a Significant Increase in the Probability or Consequences of an Accident Previously Evaluated The proposed changes modify the TS to allow the use of the improved banked position withdrawal sequence
(BPWS)during shutdowns if the conditions of NEDO-33091-A, Revision 2, ”Improved BPWS Control Rod Insertion Process,” July 2004, have been satisfied. The staff finds that the licensee's justifications to support the specific TS changes are consistent with the approved topical report and TSTF-476, Revision 1. Since the change only involves changes in control rod sequencing, the probability of an accident previously evaluated is not significantly increased, if at all. The consequences of an accident after adopting TSTF-476 are no different than the consequences of an accident prior to adopting TSTF-476. Therefore, the consequences of an accident previously evaluated are not significantly affected by this change. Therefore, this change does not involve a significant increase in the probability or consequences of an accident previously evaluated. Criterion 2—The Proposed Change Does Not Create the Possibility of a New or Different Kind of Accident from any Previously Evaluated The proposed change will not introduce new failure modes or effects and will not, in the absence of other unrelated failures, lead to an accident whose consequences exceed the consequences of accidents previously evaluated. The control rod drop accident
(CRDA)is the design basis accident for the subject TS changes. This change does not create the possibility of a new or different kind of accident from an accident previously evaluated. Criterion 3—The Proposed Change Does Not Involve a Significant Reduction in the Margin of Safety The proposed change, TSTF-476, Revision 1, incorporates the improved BPWS, previously approved in NEDO-33091-A, into the improved TS. The control rod drop accident
(CRDA)is the design basis accident for the subject TS changes. In order to minimize the impact of a CRDA, the BPWS process was developed to minimize control rod reactivity worth for BWR plants. The proposed improved BPWS further simplifies the control rod insertion process, and in order to evaluate it, the staff followed the guidelines of Standard Review Plan Section 15.4.9, and referred to General Design Criterion 28 of Appendix A to 10 CFR part 50 as its regulatory requirement. The TSTF stated the improved BPWS provides the following benefits:
(1)Allows the plant to reach the all-rods-in condition prior to significant reactor cool down, which reduces the potential for re-criticality as the reactor cools down;
(2)reduces the potential for an operator reactivity control error by reducing the total number of control rod manipulations;
(3)minimizes the need for manual scrams during plant shutdowns, resulting in less wear on control rod drive
(CRD)system components and CRD mechanisms; and
(4)eliminates unnecessary control rod manipulations at low power, resulting in less wear on reactor manual control and CRD system components. The addition of procedural requirements and verifications specified in NEDO-33091-A, along with the proper use of the BPWS will prevent a control rod drop accident
(CRDA)from occurring while power is below the low power setpoint (LPSP). The net change to the margin of safety is insignificant. Therefore, this change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* Ernest L. Blake, Jr., Esquire, Shaw, Pittman, Potts and Trowbridge, 2300 N Street, NW., Washington, DC 20037. *NRC Branch Chief:* Evangelos C. Marinos. Southern Nuclear Operating Company, Inc., Georgia Power Company, Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, City of Dalton, Georgia, Docket Nos. 50-321 and 50-366, Edwin I. Hatch Nuclear Plant, Units 1 and 2, Appling County, Georgia *Date of amendment request:* October 5, 2007. *Description of amendment request:* The proposed amendments would add a 72-hour Completion Time
(CT)for an inoperable swing diesel generator. Currently, the Technical Specifications
(TSs)provide a 14-day CT which may be used provided that planned maintenance on certain plant components is restricted prior to entering, and for the duration of, the 14-day CT. The 72-hour CT and the 14-day CT are explicitly addressed in the TS Limiting Condition for Operation
(LCO)for four of the five emergency diesel generators. In addition, the 14-day CT is explicitly addressed in the TS LCO for the fifth diesel generator, the swing diesel generator. Further, the existing 14-day CT and the proposed 72-hour CT are currently described in the TS Bases for LCO 3.8.1. This proposed change will provide an explicit reference to the 72-hour CT in the actual TS for the swing diesel. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated? The proposed change will explicitly add, to the Technical Specifications (TS), a 72 hour CT for the swing diesel generator in addition to the 14 day CT already listed. The 72 hour CT is currently imposed on the swing DG until it can be verified that planned maintenance restrictions are in place. Mention of the planned restrictions is also being added to the specifications for the dedicated DGs for consistency. This TS change does not propose any physical changes to systems or components that are important to safety, including those systems that are designed to prevent previously evaluated accidents, or to mitigate the consequences of those accidents. Additionally, this proposed TS change does not change any safety analyses for LOCA/LOSP [loss-of-coolant accident/loss- of-offsite power] with respect to diesel generator availability or capabilities. This change does not request an increase to the diesel generator out of service CT, in fact, it acts to enforce a 72 hour CT for the swing diesel. Consequently, this TS change does not significantly increase the probability or consequences of a previously evaluated accident. 2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated? This proposed TS change explicitly adds a 72 hour CT to the swing diesel generator “Completion Time” column of LCO 3.8.1, and adds mention of the planned maintenance restrictions to the same column for the dedicated DGs as well. These TS changes will reflect the current practices of the operating staff with respect to the handling of inoperable diesel generators. No requests are being made to increase the CTs for the diesel generators; instead, the more restrictive 72 hour CT for the swing diesel is being explicitly added to the TS, which currently only includes the 14 day CT. No changes are being made to the operations, maintenance, or testing of plant equipment. No new modes of operation are proposed and therefore, no new failure modes are introduced. Consequently, the proposed change does not create the possibility of a new or different kind of accident from any previously evaluated. 3. Does the proposed change involve a significant reduction in the margin of safety? This TS change will include a more restrictive 72 hour CT for the swing diesel generator in addition to the 14 day CT currently listed in the TS. The 72 hour CT will reflect that planned maintenance restrictions must be in place before using the 14 day CT on the swing DG. For consistency, mention of the maintenance restrictions is being added to the CT for the dedicated DGs as well. These changes are more restrictive than what is currently included in the TS. Accordingly, the changes do not involve a significant reduction in the margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* Ernest L. Blake, Jr., Esquire, Shaw, Pittman, Potts and Trowbridge, 2300 N Street, NW., Washington, DC 20037. *NRC Branch Chief:* Evangelos C. Marinos. Notice of Issuance of Amendments to Facility Operating Licenses During the period since publication of the last biweekly notice, the Commission has issued the following amendments. The Commission has determined for each of these amendments that the application complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR Chapter I, which are set forth in the license amendment. Notice of Consideration of Issuance of Amendment to Facility Operating License, Proposed No Significant Hazards Consideration Determination, and Opportunity for A Hearing in connection with these actions was published in the **Federal Register** as indicated. Unless otherwise indicated, the Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments. If the Commission has prepared an environmental assessment under the special circumstances provision in 10 CFR 51.22(b) and has made a determination based on that assessment, it is so indicated. For further details with respect to the action see
(1)the applications for amendment,
(2)the amendment, and
(3)the Commission's related letter, Safety Evaluation and/or Environmental Assessment as indicated. All of these items are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the Agencywide Documents Access and Management Systems (ADAMS) Public Electronic Reading Room on the internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams.html* . If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the PDR Reference staff at 1
(800)397-4209,
(301)415-4737 or by e-mail to *pdr@nrc.gov* . AmerGen Energy Company, LLC, Docket No. 50-289, Three Mile Island Nuclear Station, Unit 1 (TMI-1), Dauphin County, Pennsylvania *Date of application for amendment:* March 22, 2007, as supplemented by letter dated July 25, 2007. *Brief description of amendment:* The amendment consists of changes to various technical specifications
(TSs)related to the variable low reactor coolant system pressure-temperature core protection safety limit, which is being changed to accommodate the introduction of AREVA NP's Mark-B-HTP fuel design in the TMI-1 cycle 17 reload (fall 2007). *Date of issuance:* October 15, 2007. *Effective date:* As of the date of issuance and shall be implemented within 30 days. *Amendment No.* 262. *Facility Operating License No. DPR-50.* Amendment revised the license and the TSs. *Date of initial notice in* Federal Register : April 24, 2007 (72 FR 20377). The supplement dated July 25, 2007, provided additional information that clarified the application, did not expand the scope of the application as originally noticed and did not change the NRC staff's original proposed no significant hazards determination. The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated October 15, 2007. No significant hazards consideration comments received: No. Entergy Operations, Inc., System Energy Resources, Inc., South Mississippi Electric Power Association, and Entergy Mississippi, Inc., Docket No. 50-416, Grand Gulf Nuclear Station, Unit 1, Claiborne County, Mississippi *Date of application for amendment:* November 1, 2006, as supplemented by letters dated November 22, 2006, April 4, May 7, August 16, and September 21, 2007. *Brief description of amendment:* The change revised the Grand Gulf Nuclear Station, Unit 1, Technical Specification Surveillance Requirement 3.3.1.1.7 for the surveillance interval of the local power range monitor calibrations from 1000 megawatt-days per ton (MWD/T) (approximately every 36 days) to 2000 MWD/T (approximately every 72 days). *Date of issuance:* October 24, 2007. *Effective date:* As of the date of issuance and shall be implemented within 60 days of issuance. *Amendment No:* 177. *Facility Operating License No. NPF-29:* The amendment revises the Facility Operating License and Technical Specifications. *Date of initial notice in* Federal Register : December 5, 2006 (71 FR 70559). The supplements dated November 22, 2006, April 4, May 7, August 16, and September 21, 2007, provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the staff's original proposed no significant hazards consideration determination as published in the **Federal Register** . The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated October 24, 2007. No significant hazards consideration comments received: No. Exelon Generation Company, LLC, Docket Nos. 50-373 and 50-374, LaSalle County Station (LSCS), Units 1 and 2, LaSalle County, Illinois *Date of application for amendments:* November 17, 2006. *Brief description of amendments:* The proposed amendment would modify the technical specifications
(TS)to replace references to Section XI of the American Society of Mechanical Engineers Boiler and Pressure Vessel Code (ASME Code) with a reference to the ASME Code of Operation and Maintenance of Nuclear Power Plants in TS 5.5.7, “Inservice Testing Program.” These changes are consistent with the implementation of the LSCS, Units 1 and 2, for the third 10-year IST program. *Date of issuance:* October 12, 2007. *Effective date:* As of the date of issuance and shall be implemented within 30 days. *Amendment Nos.:* 185/172. *Facility Operating License Nos. NPF-11 and NPF-18:* The amendments revised the Technical Specifications and License. *Date of initial notice in* Federal Register: April 10, 2007 (72 FR 17948). The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated October 12, 2007. No significant hazards consideration comments received: No. Florida Power and Light Company, et. al., Docket Nos. 50-335 and 50-389, St. Lucie Plant, Unit Nos. 1 and 2, St. Lucie County, Florida *Date of application for amendments:* October 19, 2006. *Brief description of amendments:* The amendments revise various technical specifications
(TSs)to address requirements that should have been changed as part of amendments previously approved by the NRC, as well as to correct some typographical errors. *Date of Issuance:* October 22, 2007. *Effective Date:* As of the date of issuance and shall be implemented within 60 days. *Amendment Nos.:* 202 and 149. *Renewed Facility Operating License Nos. DPR-67 and NPF-16:* Amendments revised TSs. *Date of initial notice in* Federal Register : January 3, 2007 (72 FR 00153). The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated October 22, 2007. No significant hazards consideration comments received: No. FirstEnergy Nuclear Operating Company, *et. al.,* Docket No. 50-346, Davis-Besse Nuclear Power Station, Unit No. 1, Ottawa County, Ohio *Date of application for amendment:* February 12, 2007. *Brief description of amendment:* This amendment revised Technical Specification 3/4.9.4, “Containment Penetrations,” to allow containment penetrations that provide direct access from the containment atmosphere to the outside to be open during refueling activities if appropriate administrative controls are established. *Date of issuance:* October 17, 2007. *Effective date:* As of the date of issuance and shall be implemented within 60 days. *Amendment No.:* 277. *Facility Operating License No. NPF-3:* Amendment revised the Technical Specifications and License. *Date of initial notice in* Federal Register : April 10, 2007 (72 FR 17949). The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated October 17, 2007. No significant hazards consideration comments received: No. FPL Energy Point Beach, LLC, Docket Nos. 50-266 and 50-301, Point Beach Nuclear Plant, Units 1 and 2, Town of Two Creeks, Manitowoc County, Wisconsin *Date of application for amendments:* December 14, 2006, as supplemented by letter dated June 13, 2007. *Brief description of amendments:* The amendments revised Technical Specification 5.6.5 (Reactor Coolant System
(RCS)Pressure and Temperature Limits Report( to add the FERRET Code as an approved methodology for determining RCS pressure and temperature limits. *Date of issuance:* October 18, 2007. *Effective date:* As of the date of issuance and shall be implemented within 45 days. *Amendment Nos.:* 229 and 234. *Renewed Facility Operating License Nos. DPR-24 and DPR-27:* Amendments revised the Technical Specifications/License. *Date of initial notice in* Federal Register: January 16, 2007 (72 FR 1780). The June 13, 2007, supplement, contained clarifying information and did not change the staff(s initial proposed finding of no significant hazards consideration. The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated October 18, 2007. No significant hazards consideration comments received: No. Indiana Michigan Power Company, Docket Nos. 50-315, Donald C. Cook Nuclear Plant, Units 1 and 2 (DCCNP-1 and DCCNP-2), Berrien County, Michigan *Date of application for amendments:* June 27, 2007, as supplemented on September 21, 2007. *Brief description of amendments:* The amendments made changes to Sections 3.3.3, “Post Accident Monitoring Instrumentation,” 3.5, “Emergency Core Cooling Systems,” and 3.6.14, sbull I11“Containment Recirculation Drains,” of the DCCNP-1 and DCCNP-2 Technical Specifications to reflect resolution of issues raised by Generic Letter
(GL)2004-02, “Potential Impact of Debris Blockage on Emergency Recirculation during Design Basis Accidents at Pressurized-Water Reactors.” *Date of issuance:* October 18, 2007. *Effective date:* As of the date of issuance, and shall be implemented prior to entry into Mode 4 following the DCCNP-1 spring 2008 refueling outage, and prior to entry into Mode 4 following the DCCNP-2 fall 2007 refueling outage. *Amendment No.:* 282 and 299. *Facility Operating License Nos. DPR-58 and DPR-74:* Amendments revise the Technical Specifications. *Date of initial notice in* Federal Register: July 31, 2007 (72 FR 41786). The supplemental letter contained clarifying information, did not change the initial no significant hazards consideration determination, and did not expand the scope of the original **Federal Register** notice. The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated October 18, 2007. No significant hazards consideration comments received: No. PSEG Nuclear LLC, Docket No. 50-354, Hope Creek Generating Station, Salem County, New Jersey *Date of application for amendment:* July 26, 2007. *Brief description of amendment:* The amendment removes values for turbine first stage pressure associated with P bypass from the Technical Specifications (TSs). P bypass is the reactor power level below which the turbine stop valve closure and the turbine control valve fast closure reactor protection system trip functions and the end-of-cycle recirculation pump trip are bypassed automatically. *Date of issuance:* October 16, 2007. *Effective date:* As of the date of issuance, to be implemented within 60 days. *Amendment No.:* 172. *Facility Operating License No. NPF-57:* The amendment revised the TSs and the License. *Date of initial notice in* Federal Register: August 14, 2007 (72 FR 45460). The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated October 16, 2007. No significant hazards consideration comments received: No. Virginia Electric and Power Company, et. al., Docket Nos. 50-280 and 50-281, Surry Power Station, Units 1 and 2, Surry County, Virginia *Date of application for amendments:* October 3, 2006, as supplemented on March 28 and June 19, 2007. *Brief Description of amendments:* These amendments revised the Technical Specification Surveillance Requirements
(SRs)to:
(1)Change the required frequency of containment sump inspections, and
(2)replace specific terminology associated with the existing sump screen design with generic terminology applicable to both the existing design and the replacement strainer being installed in response to the Nuclear Regulatory Commission's Generic Letter 2004-02, “Potential Impact of Debris Blockage on Emergency Recirculation during Design Basis Accidents at Pressurized-Water Reactors.” *Date of issuance:* October 15, 2007. *Effective date:* As of date of issuance and shall be implemented at the completion of Unit 1 fall 2007 refueling outage. *Amendment Nos.:* 255, 254. *Renewed Facility Operating License Nos. DPR-32 and DPR-37:* Amendments changed the licenses and the technical specifications. *Date of initial notice in* Federal Register: November 7, 2006 (71 FR 65146). The supplements dated March 28 and June 19, 2007, provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the staffs' original proposed no significant hazards consideration determination. The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated October 15, 2007. No significant hazards consideration comments received: No. Notice of Issuance of Amendments to Facility Operating Licenses and Final Determination of No Significant Hazards Consideration and Opportunity for a Hearing (Exigent Public Announcement or Emergency Circumstances) During the period since publication of the last biweekly notice, the Commission has issued the following amendments. The Commission has determined for each of these amendments that the application for the amendment complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR Chapter I, which are set forth in the license amendment. Because of exigent or emergency circumstances associated with the date the amendment was needed, there was not time for the Commission to publish, for public comment before issuance, its usual Notice of Consideration of Issuance of Amendment, Proposed No Significant Hazards Consideration Determination, and Opportunity for a Hearing. For exigent circumstances, the Commission has either issued a **Federal Register** notice providing opportunity for public comment or has used local media to provide notice to the public in the area surrounding a licensee's facility of the licensee's application and of the Commission's proposed determination of no significant hazards consideration. The Commission has provided a reasonable opportunity for the public to comment, using its best efforts to make available to the public means of communication for the public to respond quickly, and in the case of telephone comments, the comments have been recorded or transcribed as appropriate and the licensee has been informed of the public comments. In circumstances where failure to act in a timely way would have resulted, for example, in derating or shutdown of a nuclear power plant or in prevention of either resumption of operation or of increase in power output up to the plant's licensed power level, the Commission may not have had an opportunity to provide for public comment on its no significant hazards consideration determination. In such case, the license amendment has been issued without opportunity for comment. If there has been some time for public comment but less than 30 days, the Commission may provide an opportunity for public comment. If comments have been requested, it is so stated. In either event, the State has been consulted by telephone whenever possible. Under its regulations, the Commission may issue and make an amendment immediately effective, notwithstanding the pendency before it of a request for a hearing from any person, in advance of the holding and completion of any required hearing, where it has determined that no significant hazards consideration is involved. The Commission has applied the standards of 10 CFR 50.92 and has made a final determination that the amendment involves no significant hazards consideration. The basis for this determination is contained in the documents related to this action. Accordingly, the amendments have been issued and made effective as indicated. Unless otherwise indicated, the Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments. If the Commission has prepared an environmental assessment under the special circumstances provision in 10 CFR 51.12(b) and has made a determination based on that assessment, it is so indicated. For further details with respect to the action see
(1)the application for amendment,
(2)the amendment to Facility Operating License, and
(3)the Commission's related letter, Safety Evaluation and/or Environmental Assessment, as indicated. All of these items are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams.html.* If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the PDR Reference staff at 1
(800)397-4209,
(301)415-4737 or by e-mail to *pdr@nrc.gov.* The Commission is also offering an opportunity for a hearing with respect to the issuance of the amendment. Within 60 days after the date of publication of this notice, person(s) may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request via electronic submission through the NRC E-Filing system for a hearing and a petition for leave to intervene. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings” in 10 CFR part 2. Interested person(s) should consult a current copy of 10 CFR 2.309, which is available at the Commission's PDR, located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland, and electronically on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/doc-collections/cfr/* . If there are problems in accessing the document, contact the PDR Reference staff at 1
(800)397-4209,
(301)415-4737, or by e-mail to *pdr@nrc.gov* . If a request for a hearing or petition for leave to intervene is filed by the above date, the Commission or a presiding officer designated by the Commission or by the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel, will rule on the request and/or petition; and the Secretary or the Chief Administrative Judge of the Atomic Safety and Licensing Board will issue a notice of a hearing or an appropriate order. As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements:
(1)The name, address, and telephone number of the requestor or petitioner;
(2)the nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding;
(3)the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and
(4)the possible effect of any decision or order which may be entered in the proceeding on the requestor's/petitioner's interest. The petition must also identify the specific contentions which the petitioner/requestor seeks to have litigated at the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner/requestor shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner intends to rely in proving the contention at the hearing. The petitioner must also provide references to those specific sources and documents of which the petitioner is aware and on which the petitioner intends to rely to establish those facts or expert opinion. The petition must include sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. 1 Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if proven, would entitle the petitioner to relief. A petitioner/requestor who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party. 1 To the extent that the applications contain attachments and supporting documents that are not publicly available because they are asserted to contain safeguards or proprietary information, petitioners desiring access to this information should contact the applicant or applicant's counsel and discuss the need for a protective order. Each contention shall be given a separate numeric or alpha designation within one of the following groups: 1. *Technical* —primarily concerns/issues relating to technical and/or health and safety matters discussed or referenced in the applications. 2. *Environmental* —primarily concerns/issues relating to matters discussed or referenced in the environmental analysis for the applications. 3. *Miscellaneous* —does not fall into one of the categories outlined above. As specified in 10 CFR 2.309, if two or more petitioners/requestors seek to co-sponsor a contention, the petitioners/requestors shall jointly designate a representative who shall have the authority to act for the petitioners/requestors with respect to that contention. If a petitioner/requestor seeks to adopt the contention of another sponsoring petitioner/requestor, the petitioner/requestor who seeks to adopt the contention must either agree that the sponsoring petitioner/requestor shall act as the representative with respect to that contention, or jointly designate with the sponsoring petitioner/requestor a representative who shall have the authority to act for the petitioners/requestors with respect to that contention. Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing. Since the Commission has made a final determination that the amendment involves no significant hazards consideration, if a hearing is requested, it will not stay the effectiveness of the amendment. Any hearing held would take place while the amendment is in effect. A request for hearing or a petition for leave to intervene must be filed in accordance with the NRC E-Filing rule, which the NRC promulgated on August 28, 2007, (72 FR 49139). The E-Filing process requires participants to submit and serve documents over the internet or in some cases to mail copies on electronic storage media. Participants may not submit paper copies of their filings unless they seek a waiver in accordance with the procedures described below. To comply with the procedural requirements of E-Filing, at least five
(5)days prior to the filing deadline, the petitioner/requestor must contact the Office of the Secretary by e-mail at *HEARINGDOCKET@NRC.GOV* , or by calling
(301)415-1677, to request
(1)a digital ID certificate, which allows the participant (or its counsel or representative) to digitally sign documents and access the E-Submittal server for any proceeding in which it is participating; and/or
(2)creation of an electronic docket for the proceeding (even in instances in which the petitioner/requestor (or its counsel or representative) already holds an NRC-issued digital ID certificate). Each petitioner/requestor will need to download the Workplace Forms Viewer TM to access the Electronic Information Exchange (EIE), a component of the E-Filing system. The Workplace Forms Viewer
(TM)is free and is available at *http://www.nrc.gov/site-help/e-submittals/install-viewer.html* . Information about applying for a digital ID certificate is available on NRC's public Web site at *http://www.nrc.gov/site-help/e-submittals/apply-certificates.html* . Once a petitioner/requestor has obtained a digital ID certificate, had a docket created, and downloaded the EIE viewer, it can then submit a request for hearing or petition for leave to intervene. Submissions should be in Portable Document Format
(PDF)in accordance with NRC guidance available on the NRC public Web site at *http://www.nrc.gov/site-help/e-submittals.html* . A filing is considered complete at the time the filer submits its documents through EIE. To be timely, an electronic filing must be submitted to the EIE system no later than 11:59 p.m. Eastern Time on the due date. Upon receipt of a transmission, the E-Filing system time-stamps the document and sends the submitter an e-mail notice confirming receipt of the document. The EIE system also distributes an e-mail notice that provides access to the document to the NRC Office of the General Counsel and any others who have advised the Office of the Secretary that they wish to participate in the proceeding, so that the filer need not serve the documents on those participants separately. Therefore, applicants and other participants (or their counsel or representative) must apply for and receive a digital ID certificate before a hearing request/petition to intervene is filed so that they can obtain access to the document via the E-Filing system. A person filing electronically may seek assistance through the “Contact Us” link located on the NRC Web site at *http://www.nrc.gov/site-help/e-submittals.html* or by calling the NRC technical help line, which is available between 8:30 a.m. and 4:15 p.m., Eastern Time, Monday through Friday. The help line number is
(800)397-4209 or locally,
(301)415-4737. Participants who believe that they have a good cause for not submitting documents electronically must file a motion, in accordance with 10 CFR 2.302(g), with their initial paper filing requesting authorization to continue to submit documents in paper format. Such filings must be submitted by:
(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff; or
(2)courier, express mail, or expedited delivery service to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland, 20852, Attention: Rulemaking and Adjudications Staff. Participants filing a document in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. Non-timely requests and/or petitions and contentions will not be entertained absent a determination by the Commission, the presiding officer, or the Atomic Safety and Licensing Board that the petition and/or request should be granted and/or the contentions should be admitted, based on a balancing of the factors specified in 10 CFR 2.309(c)(1)(i)-(viii). To be timely, filings must be submitted no later than 11:59 p.m. Eastern Time on the due date. Documents submitted in adjudicatory proceedings will appear in NRC's electronic hearing docket which is available to the public at *http://ehd.nrc.gov/EHD_Proceeding/home.asp* , unless excluded pursuant to an order of the Commission, an Atomic Safety and Licensing Board, or a Presiding Officer. Participants are requested not to include personal privacy information, such as social security numbers, home addresses, or home phone numbers in their filings. With respect to copyrighted works, except for limited excerpts that serve the purpose of the adjudicatory filings and would constitute a Fair Use application, Participants are requested not to include copyrighted materials in their submission. Non-timely requests and/or petitions and contentions will not be entertained absent a determination by the Commission or the presiding officer or the Atomic Safety and Licensing Board that the petition, request and/or the contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(a)(1)(i)-(viii). Tennessee Valley Authority, Docket Nos. 50-328, Sequoyah Nuclear Plant, Unit 2, Hamilton County, Tennessee *Date of application for amendment:* September 17, 2007. *Brief description of amendment:* The amendment revises technical specification 3.6.1.9 on a one-time basis to allow an increase in the annual limit for purging and venting containment from 1000 hours to 1400 hours during 2007. *Date of issuance:* October 11, 2007. *Effective date:* As of the date of issuance and shall be implemented within 45 days. *Amendment Nos.:* 308. *Facility Operating License Nos. DPR-79:* Amendment revised the technical specifications. *Public comments requested as to proposed no significant hazards consideration (NSHC):* Yes. 72 FR 54691, published September 26, 2007. The notice provided an opportunity to submit comments on the Commission's proposed NSHC determination. No comments have been received. The notice also provided an opportunity to request a hearing within 60 days after the date of publication of the notice, but indicated that if the Commission makes a final NSHC determination, any such hearing would take place after issuance of the amendment. The Commission's related evaluation of the amendment, finding of exigent circumstances, state consultation, and final NSHC determination are contained in a safety evaluation dated October 11, 2007. *Attorney for licensee:* General Counsel, Tennessee Valley Authority, 400 West Summit Hill Drive, ET 11A, Knoxville, Tennessee 37902. *NRC Branch Chief:* Thomas H. Boyce. Dated at Rockville, Maryland, this 25th day of October 2007. For the Nuclear Regulatory Commission. Catherine Haney, Director, Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation. [FR Doc. E7-21435 Filed 11-5-07; 8:45 am] BILLING CODE 7590-01-P OFFICE OF PERSONNEL MANAGEMENT Excepted Service AGENCY: U.S. Office of Personnel Management (OPM). ACTION: Notice. SUMMARY: This gives notice of OPM decisions granting authority to make appointments under Schedules A, B, and C in the excepted service as required by 5 CFR 6.6 and 213.103. FOR FURTHER INFORMATION CONTACT: C. Penn, Group Manager, Executive Resources Services Group, Center for Human Resources, Division for Human Capital Leadership and Merit System Accountability, 202-606-2246. SUPPLEMENTARY INFORMATION: Appearing in the listing below are the individual authorities established under Schedules A, B, and C between September 1, 2007, and September 30, 2007. Future notices will be published on the fourth Tuesday of each month, or as soon as possible thereafter. A consolidated listing of all authorities as of June 30 is published each year. Schedule A No Schedule A appointments were approved for September 2007. Schedule B No Schedule B appointments were approved for September 2007. Schedule C The following Schedule C appointments were approved during September 2007. Section 213.3303 Executive Office of the President Office of Management and Budget BOGS70020 Confidential Assistant to the Administrator, Office of Federal Procurement Policy. Effective September 11, 2007. BOGS70021 Confidential Assistant to the Controller, Office of Federal Financial Management. Effective September 18, 2007. Section 213.3304 Department of State DSGS61252 Special Assistant to the Assistant Secretary for Economic and Business Affairs. Effective September 7, 2007. DSGS61255 Staff Assistant to the Assistant Secretary for Public Affairs. Effective September 11, 2007. DSGS66856 Public Affairs Specialist to the Assistant Secretary for Public Affairs. Effective September 11, 2007. DSGS61258 Special Assistant to the Principal Deputy Assistant Secretary. Effective September 14, 2007. DSGS61257 Special Assistant to the Legal Adviser. Effective September 19, 2007. DSGS61261 Staff Assistant to the Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs. Effective September 26, 2007. DSGS61275 Special Assistant to the Under Secretary for Arms Control and Security Affairs. Effective September 26, 2007. DSGS61253 Protocol Officer (Visits) to the Chief of Protocol. Effective September 28, 2007. DSGS61254 Senior Public Affairs Officer to the Chief of Protocol. Effective September 28, 2007. Section 213.3305 Department of the Treasury DYGS00453 Media Coordinator to the Assistant Secretary (Public Affairs) and Director of Policy Planning. Effective September 7, 2007. DYGS00250 Director, Public Affairs to the Deputy Assistant Secretary (Public Affairs). Effective September 20, 2007. Section 213.3306 Department of Defense DDGS17092 Supervisory Staff Assistant to the Deputy Assistant Secretary of Defense (Near East and South Asian Affairs). Effective September 4, 2007. DDGS17100 Public Affairs Specialist to the Assistant Secretary of Defense Public Affairs. Effective September 10, 2007. DDGS17083 Confidential Assistant to the Special Assistant to the Secretary and Deputy Secretary of Defense. Effective September 14, 2007. DDGS17097 Staff Assistant to the Principal Deputy Under Secretary of Defense for Policy. Effective September 14, 2007. DDGS17101 Public Affairs Specialist to the Assistant Secretary of Defense, Public Affairs. Effective September 14, 2007. DDGS17102 Staff Assistant to the Special Assistant to the Secretary of Defense for White House Liaison. Effective September 14, 2007. DDGS17103 Public Affairs Specialist to the Assistant Secretary of Defense Public Affairs. Effective September 14, 2007. DDGS17106 Special Assistant to the Assistant Secretary of Defense (Legislative Affairs). Effective September 17, 2007. DDGS17107 Special Assistant to the Assistant Secretary of Defense (Legislative Affairs). Effective September 17, 2007. DDGS17105 Public Affairs Specialist to the Assistant Secretary of Defense, Public Affairs. Effective September 20, 2007. DDGS17104 Defense Fellow to the Special Assistant to the Secretary of Defense for White House Liaison. Effective September 24, 2007. DDGS17111 Special Assistant to the Principal Deputy Assistant Secretary of Defense (Global Security Affairs). Effective September 24, 2007. Section 213.3308 Department of the Navy DNGS02224 Confidential Assistant to the Assistant Secretary of Navy (Installations and Environment). Effective September 6, 2007. DNGS07355 Director for Strategic Initiatives to the Special Assistant to the Secretary. Effective September 26, 2007. DNGS07368 Staff Assistant to the Special Assistant to the Secretary. Effective September 26, 2007. Section 213.3310 Department of Justice DJGS00094 Counsel to the Assistant Attorney General. Effective September 6, 2007. DJGS00327 Public Affairs Specialist to the Director, Office of Public Affairs. Effective September 7, 2007. DJGS00359 Public Affairs Specialist to the Director, Office of Public Affairs. Effective September 7, 2007. DJGS00323 Counsel to the Principal Deputy Assistant Attorney General. Effective September 24, 2007. DJGS00405 Special Assistant to the Assistant Attorney General, Office of Justice Programs. Effective September 28, 2007. Section 213.3311 Department of Homeland Security DMGS00715 Executive Officer to the Deputy Administrator for National Preparedness. Effective September 7, 2007. DMGS00708 Advisor to the Assistant Secretary for Infrastructure Protection. Effective September 12, 2007. DMGS00718 Senior Advisor to the Director, Bureau of Citizenship and Immigration Services. Effective September 18, 2007. DMGS00713 Special Assistant to the Chief of Staff. Effective September 26, 2007. DMGS00716 Associate Executive Secretary for White House/Interagency Coordination and Briefing Books to the Executive Secretary. Effective September 26, 2007. Section 213.3313 Department of Agriculture DAGS00919 Special Assistant to the Administrator, Food and Nutrition Service. Effective September 14, 2007. DAGS00920 Confidential Assistant to the Administrator. Effective September 25, 2007. Section 213.3314 Department of Commerce DCGS00193 Senior Advisor to the Deputy Assistant Secretary for Industry Analysis. Effective September 7, 2007. DCGS00468 Special Assistant to the Under Secretary of Commerce for Industry and Security. Effective September 14, 2007. DCGS00473 Special Assistant to the General Counsel. Effective September 20, 2007. DCGS00553 Confidential Assistant to the Assistant Secretary for Export Enforcement. Effective September 20, 2007. DCGS00562 Policy Advisor to the Assistant to the Secretary and Director, Office of Policy and Strategic Planning. Effective September 20, 2007. DCGS00262 Special Assistant to the Deputy Assistant Secretary for Services. Effective September 28, 2007. DCGS00547 Confidential Assistant to the Deputy Under Secretary and Deputy Director of U.S. Patent and Trademark Office. Effective September 28, 2007. DCGS60637 Special Assistant to the Executive Director for Trade Promotion and Outreach. Effective September 28, 2007. Section 213.3315 Department of Labor DLGS60137 Staff Assistant to the Assistant Secretary for Public Affairs. Effective September 18, 2007. DLGS60043 Special Assistant to the Assistant Secretary for Occupational Safety and Health. Effective September 19, 2007. DLGS60170 Special Assistant to the Director, Office of Faith Based and Community Initiatives. Effective September 19, 2007. DLGS60255 Counselor to the Deputy Secretary of Labor. Effective September 19, 2007. DLGS60042 Special Assistant to the Assistant Secretary for Public Affairs. Effective September 26, 2007. Section 213.3316 Department of Health and Human Services DHGS60016 Confidential Assistant to the Director, Center for Faith Based and Community Initiatives. Effective September 7, 2007. DHGS60542 Confidential Assistant to the Administrator Centers for Medicare and Medicaid Services. Effective September 7, 2007. DHGS60627 Confidential Assistant to the Administrator, Substance Abuse and Mental Health Services. Effective September 26, 2007. Section 213.3317 Department of Education DBGS00637 Confidential Assistant to the Assistant Secretary for Legislation and Congressional Affairs. Effective September 6, 2007. DBGS00636 Confidential Assistant to the Assistant Secretary for Postsecondary Education. Effective September 7, 2007. DBGS00638 Confidential Assistant to the Chief of Staff. Effective September 7, 2007. DBGS00642 Confidential Assistant to the Assistant Deputy Secretary for Safe and Drug-Free Schools. Effective September 12, 2007. DBGS00643 Confidential Assistant to the Assistant Secretary, Office of Communications and Outreach. Effective September 12, 2007. DBGS00647 Special Assistant to the Assistant Secretary, Office of Communications and Outreach. Effective September 21, 2007. DBGS00648 Confidential Assistant to the Assistant Secretary for Civil Rights. Effective September 21, 2007. DBGS00639 Special Assistant to the Director, White House Initiative on Hispanic Education. Effective September 28, 2007. DBGS00641 Chief of Staff to the Chief Financial Officer. Effective September 28, 2007. DBGS00649 Confidential Assistant to the Director, Scheduling and Advance Staff. Effective September 28, 2007. Section 213.3318 Environmental Protection Agency EPGS0702 Special Assistant to the Administrator/Executive Assistant to the Assistant Administrator for International Activities. Effective September 12, 2007. Section 213.3323 Federal Communications Commission FCGS07224 Assistant Chief to the Chief, Office of Strategic Planning and Policy Analysis. Effective September 7, 2007. Section 213.3331 Department of Energy DEGS00612 Special Assistant to the Director, Office of Scheduling and Advance. Effective September 7, 2007. DEGS00613 Senior Advisor to the Director, Office of Scheduling and Advance. Effective September 7, 2007. DEGS00614 Trip Coordinator to the Director, Office of Scheduling and Advance. Effective September 7, 2007. DEGS00616 Special Assistant to the Assistant Secretary for Policy and International Affairs. Effective September 19, 2007. Section 213.3332 Small Business Administration SBGS00632 Speechwriter to the Associate Administrator for Communications and Public Liaison. Effective September 5, 2007. SBGS00583 Deputy Assistant Administrator for Policy and Strategic Planning to the Associate Administrator for Policy. Effective September 6, 2007. SBGS00633 Congressional Liaison to the Assistant Administrator for Congressional and Legislative Affairs. Effective September 7, 2007. SBGS00619 Senior Policy Analyst to the Assistant Administrator for Policy and Strategic Planning. Effective September 18, 2007. Section 213.3337 General Services Administration GSGS00165 Senior Advisor to the Chief of Staff. Effective September 12, 2007. GSGS00180 Confidential Assistant to the Associate Administrator for Congressional and Intergovernmental Affairs. Effective September 18, 2007. GSGS00099 Senior Advisor to the Regional Administrator, Region 3, Philadelphia, Pennsylvania. Effective September 28, 2007. Section 213.3342 Export-Import Bank EBSL45010 Senior Vice President and General Counsel to the President and Chairman. Effective September 25, 2007. Section 213.3379 Commodity Futures Trading Commission CTOT00082 Chief of Staff to the Chairperson. Effective September 18, 2007. CTOT00097 Administrative Assistant to the Commissioner. Effective September 24, 2007. Section 213.3384 Department of Housing and Urban Development DUGS60472 Deputy Assistant Secretary for Legislative Relations to the Assistant Secretary for Congressional and Intergovernmental Relations. Effective September 6, 2007. DUGS60534 Deputy Director to the Director, Center for Faith Based and Community Initiatives. Effective September 11, 2007. DUGS60596 Staff Assistant to the General Deputy Assistant Secretary for Public Affairs. Effective September 28, 2007. Section 213.3391 Office of Personnel Management PMGS00043 White House Liaison to the Chief of Staff and Director of External Affairs. Effective September 25, 2007. PMGS00070 Deputy White House Liaison to the Chief of Staff and Director of External Affairs. Effective September 25, 2007. Section 213.3394 Department of Transportation DTGS60294 Counselor to the Under Secretary of Transportation for Policy. Effective September 12, 2007. DTGS60369 Deputy Assistant Secretary for Governmental Affairs to the Assistant Secretary for Governmental Affairs. Effective September 24, 2007. Authority: 5 U.S.C. 3301 and 3302; E.O. 10577, 3 CFR 1954-1958 Comp., p. 218. U.S. Office of Personnel Management. Howard C. Weitzman, Deputy Director. [FR Doc. E7-21767 Filed 11-5-07; 8:45 am] BILLING CODE 6325-39-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549-0213. Extension: Rule 237, SEC File No. 270-465, OMB Control No. 3235-0528. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. In Canada, as in the United States, individuals can invest a portion of their earnings in tax-deferred retirement savings accounts (“Canadian retirement accounts”). In cases where these individuals move to the United States, these participants (“Canadian/U.S. Participants” or “participants”) may not be able to manage their Canadian retirement account investments. Most securities and most investment companies (“funds”) that are “qualified investments” for Canadian retirement accounts are not registered under the U.S. securities laws. Those securities, therefore, generally cannot be publicly offered and sold in the United States without violating the registration requirements of the Securities Act of 1933 (“Securities Act”). 1 As a result of these registration requirements of the U.S. securities laws, Canadian/U.S. Participants, in the past, had not been able to purchase or exchange securities for their Canadian retirement accounts as needed to meet their changing investment goals or income needs. 1 15 U.S.C. 77. In 2000, the Commission issued a rule that enabled Canadian/U.S. Participants to manage the assets in their Canadian retirement accounts by providing relief from the U.S. registration requirements for offers of securities of foreign issuers to Canadian/U.S. Participants and sales to their accounts. 2 Rule 237 under the Securities Act 3 permits securities of foreign issuers, including securities of foreign funds, to be offered to Canadian/U.S. Participants and sold to their Canadian retirement accounts without being registered under the Securities Act. 2 See Offer and Sale of Securities to Canadian Tax-Deferred Retirement Savings Account, Release Nos. 33-7860, 34-42905, IC-24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. 3 17 CFR 230.237. Rule 237 requires written offering materials for securities that are offered and sold in reliance on the rule to disclose prominently that those securities are not registered with the Commission and may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. securities laws. Rule 237 does not require any documents to be filed with the Commission. The burden under the rule associated with adding this disclosure to written offering documents is minimal and is non-recurring. The foreign issuer, underwriter or broker-dealer can redraft an existing prospectus or other written offering material to add this disclosure statement, or may draft a sticker or supplement containing this disclosure to be added to existing offering materials. In either case, based on discussions with representatives of the Canadian fund industry, the staff estimates that it would take an average of 10 minutes per document to draft the requisite disclosure statement. The Commission understands that there are approximately 3,500 Canadian issuers other than funds that may rely on rule 237 to make an initial public offering of their securities to Canadian/U.S. Participants. The staff estimates that in any given year approximately 35 (or 1 percent) of those issuers are likely to rely on rule 237 to make a public offering of their securities to participants, and that each of those 35 issuers, on average, distributes 3 different written offering documents concerning those securities, for a total of 105 offering documents. The staff therefore estimates that during each year that rule 237 is in effect, approximately 35 respondents 4 would be required to make 105 responses by adding the new disclosure statements to approximately 105 written offering documents. Thus, the staff estimates that the total annual burden associated with the rule 237 disclosure requirement would be approximately 17.5 hours (105 offering documents x 10 minutes per document). The total annual cost of burden hours is estimated to be $5,110.00 (17.5 hours x $292 5 per hour of attorney time). 4 This estimate of respondents also assumes that all respondents are foreign issuers. The number of respondents may be greater if foreign underwriters or broker-dealers draft a sticker or supplement to add the required disclosure to an existing offering document. 5 The Commission's estimate concerning the wage rate for attorney time is based on salary information for the securities industry compiled by the Securities Industry Association. $292 per hour figure for an attorney is from the SIA Report on Management & Professional Earnings in the Securities Industry 2006, modified to account for an 1800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead. In addition, issuers from foreign countries other than Canada could rely on rule 237 to offer securities to Canadian/U.S. Participants and sell securities to their accounts without becoming subject to the registration requirements of the Securities Act. Because Canadian law strictly limits the amount of foreign investments that may be held in a Canadian retirement account, however, the staff believes that the number of issuers from other countries that relies on rule 237, and that therefore is required to comply with the offering document disclosure requirements, is negligible. These burden hour estimates are based upon the Commission staff's experience and discussions with the fund industry. The estimates of average burden hours are made solely for the purposes of the Paperwork Reduction Act. These estimates are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Written comments are invited on:
(a)Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has practical utility;
(b)the accuracy of the Commission's estimate of the burdens of the collection of information;
(c)ways to enhance the quality, utility, and clarity of the information collected; and
(d)ways to minimize the burdens of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA, 22312; or send an e-mail to: *PRA_Mailbox@sec.gov* . Dated: October 31, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21737 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549-0213. *Extension:* Rule 7d-2, SEC File No. 270-465, OMB Control No. 3235-0528. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. In Canada, as in the United States, individuals can invest a portion of their earnings in tax-deferred retirement savings accounts (“Canadian retirement accounts”). In cases where these individuals move to the United States, these participants (“Canadian/U.S. Participants” or “participants”) may not be able to manage their Canadian retirement account investments. Most securities and most investment companies (“funds”) that are “qualified investments” for Canadian retirement accounts are not registered under the U.S. securities laws. Those securities, therefore, generally cannot be publicly offered and sold in the United States without violating the registration requirements of the Securities Act of 1933 (“Securities Act”) 1 and, in the case of securities of an unregistered fund, the Investment Company Act of 1940 (“Investment Company Act”). 2 As a result of these registration requirements of the U.S. securities laws, Canadian/U.S. Participants, in the past, had not been able to purchase or exchange securities for their Canadian retirement accounts as needed to meet their changing investment goals or income needs. 1 15 U.S.C. 77. 2 15 U.S.C. 80a. In 2000, the Commission issued two rules that enabled Canadian/U.S. Participants to manage the assets in their Canadian retirement accounts by providing relief from the U.S. registration requirements for offers of securities of foreign issuers to Canadian/U.S. Participants and sales to their accounts. 3 Rule 237 under the Securities Act 4 permits securities of foreign issuers, including securities of foreign funds, to be offered to Canadian/U.S. Participants and sold to their Canadian retirement accounts without being registered under the Securities Act. Rule 7d-2 under the Investment Company Act 5 permits foreign funds to offer securities to Canadian/U.S. Participants and sell securities to their Canadian retirement accounts without registering as investment companies under the Investment Company Act. 3 See Offer and Sale of Securities to Canadian Tax-Deferred Retirement Savings Account, Release Nos. 33-7860, 34-42905, IC-24491 (June 7, 2000) [65 FR 37672 (June 15, 2000)]. 4 17 CFR 230.237. 5 17 CFR 270.7d-2. Rule 7d-2 requires written offering documents for securities offered or sold in reliance on the rule to disclose prominently that the securities are not registered with the Commission and may not be offered or sold in the United States unless registered or exempt from registration under the U.S. securities laws, and also to disclose prominently that the fund that issued the securities is not registered with the Commission. The burden under the rule associated with adding this disclosure to written offering documents is minimal and is non-recurring. The foreign issuer, underwriter or broker-dealer can redraft an existing prospectus or other written offering material to add this disclosure statement, or may draft a sticker or supplement containing this disclosure to be added to existing offering materials. In either case, based on discussions with representatives of the Canadian fund industry, the staff estimates that it would take an average of 10 minutes per document to draft the requisite disclosure statement. The staff estimates that there are approximately 1,994 publicly offered Canadian funds that potentially would rely on the rule to offer securities to participants and sell securities to their Canadian retirement accounts without registering under the Investment Company Act. Most of these funds have already relied upon the rule and have made the one time change to their offering documents required to rely on the rule. The staff estimates that approximately 100 (5 percent) additional Canadian funds may newly rely on the rule each year to offer securities to Canadian/U.S. Participants and sell securities to their Canadian retirement accounts, thus incurring the paperwork burden required under the rule. The staff estimates that each of those funds, on average, distributes 3 different written offering documents concerning those securities, for a total of 300 offering documents. The staff therefore estimates that approximately 100 respondents would make 300 responses by adding the new disclosure statement to approximately 300 written offering documents. The staff therefore estimates that the annual burden associated with the rule 7d-2 disclosure requirement would be approximately 50 hours (300 offering documents × 10 minutes per document). The total annual cost of these burden hours is estimated to be $14,600.00 (50 hours × $292.00 per hour of attorney time). 6 6 The Commission's estimate concerning the wage rate for attorney time is based on salary information for the securities industry compiled by the Securities Industry Association. $292 per hour figure for an attorney is from the SIA Report on Management & Professional Earnings in the Securities Industry 2006, modified to account for an 1800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead. These burden hour estimates are based upon the Commission staff's experience and discussions with the fund industry. The estimates of average burden hours are made solely for the purposes of the Paperwork Reduction Act. These estimates are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. Written comments are invited on:
(a)Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has practical utility;
(b)the accuracy of the Commission's estimate of the burdens of the collection of information;
(c)ways to enhance the quality, utility, and clarity of the information collected; and
(d)ways to minimize the burdens of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, VA, 22312; or send an e-mail to: *PRA_Mailbox@sec.gov* . Dated: October 31, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21738 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549-0213. *Extension:* Rule 204-2, SEC File No. 270-215, OMB Control No. 3235-0278. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget (“OMB”) for extension and approval. The title for the collection of information is “Rule 204-2” (17 CFR 275.204-2) under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1). Rule 204-2 sets forth the requirements for maintaining and preserving specified books and records. The collection of information under rule 204-2 is necessary for the Commission staff to use in its examination and oversight program. The respondents to the collection of information are investment advisers registered with us. The Commission staff estimates that the total reporting and recordkeeping burden of the collection of information for each respondent is approximately 181.1541 hours. Written comments are invited on:
(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(b)the accuracy of the agency's estimate of the burden of the collection of information;
(c)ways to enhance the quality, utility, and clarity of the information collected; and
(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, c\o Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-mail to: *PRA_Mailbox@sec.gov* . Dated: October 30, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21763 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 20840; 812-13376] MyShares Trust, et al.; Notice of Application October 31, 2007. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 24(d) of the Act and rule 22c-1 under the 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 Act. SUMMARY: Applicants request an order that would permit:
(a)Series of open-end management investment companies, to issue shares (“Shares”) that can be redeemed only in large aggregations (“Creation Units”);
(b)secondary market transactions in Shares to occur at negotiated prices on a national securities exchange as defined in section 2(a)(26) of the Act (each an “Exchange”);
(c)dealers to sell Shares to purchasers in the secondary market unaccompanied by a prospectus, when prospectus delivery is not required by the Securities Act of 1933 (“Securities Act”);
(d)certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units. *Applicants:* MyShares Trust (the “Trust”); MyShares, LLC (the “Advisor”); and Foreside Fund Services, LLC (the “Distributor”). *Filing Dates:* The application was filed on April 9, 2007, and amended on September 6, 2007 and October 31, 2007. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice. *Hearing or Notification of Hearing:* An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 26, 2007, and should be accompanied by proof of service on applicants, in the form of an affidavit, or for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090; Applicants, MyShares Trust and MyShares, LLC, c/o MyShares, LLC, 210 Summit Avenue, Suite C11, Montvale, NJ 07645, and Foreside Fund Services, LLC, Two Portland Square, Portland, ME 04101. FOR FURTHER INFORMATION CONTACT: Barbara T. Heussler, Senior Counsel at
(202)551-6990, or Julia Kim Gilmer, Branch Chief, at
(202)551-6871 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the Public Reference Desk, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-0102, telephone
(202)551-5850. Applicants' Representations 1. The Trust is registered as an open-end management investment company under the Act and organized as a Delaware statutory trust. The Trust will initially offer four series (“Initial Funds”). 1 The Trust may offer additional investment companies in the future as well as additional series of any existing open-end investment company registered under the Act (“Future Funds”). 2 1 The Initial Funds are: MyShares ISE Homebuilders Index Fund; MyShares ISE SINdex Fund; MyShares ISE-CCM Homeland Security Index Fund; and MyShares ISE-REVERE Wal-Mart Suppliers Index Fund. 2 References to “Fund(s)” include the Initial Funds and the Future Funds. All existing entities that intend to rely on the requested order have been named as applicants. Any other existing or future entity that subsequently relies on the order will comply with the terms and conditions of the application. Any Future Fund will be advised by the Advisor or an entity controlled by or under common control with the Advisor. 2. The Advisor is registered as an “investment adviser” under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and will serve as the investment adviser to each of the Initial Funds. The Advisor intends to enter into sub-advisory agreements with Northern Bank and Trust Company (“Initial Sub-Advisor”), to act as sub-advisor to the Initial Funds and may in the future enter into additional agreements with one or more sub-advisors with respect to Future Funds (all such sub-advisors collectively referred to as “Sub-Advisor”). The Initial Sub-Advisor for the Initial Funds is registered under the Advisers Act; any future Sub-Advisor to a Fund will be registered under the Advisers Act. The Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934 (“Exchange Act”), and will act as distributor and underwriter of the Creation Units of Shares. The Distributor is not affiliated with the Advisor or the Initial Sub-Advisor. 3. Each Fund will hold certain equity securities (“Portfolio Securities”) selected to correspond generally to the price and yield performance, before fees and expenses, of a specified equity securities index (an “Underlying Index”). Certain of the Underlying Indices are composed of equity securities of domestic issuers and non-domestic issuers meeting the requirements for trading in U.S. markets (“Domestic Indices”). Other Underlying Indices may be composed of foreign equity securities (“Foreign Indices”). Funds which track Domestic Indices are referred to as “Domestic Funds” and Funds which track Foreign Indices are referred to as “Foreign Funds.” No entity that creates, compiles, sponsors or maintains an Underlying Index (“Index Provider”) is or will be an affiliated person, as defined in section 2(a)(3) of the Act, or an affiliated person of an affiliated person, of the Trust or a Fund, of the Advisor, of any Sub-Advisor to or promoter of a Fund, or of the Distributor. 4. The investment objective of each Fund will be to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of its Underlying Index. Intra-day values of the Underlying Index will be disseminated every 15 seconds throughout the trading day. A Fund will utilize either a “replication strategy” or “representative sampling” which will be disclosed with regard to each Fund in its prospectus. 3 A Fund using a “replication strategy” generally will invest in all of the Component Securities in its Underlying Index in the same approximate proportions as in the Underlying Index. In certain circumstances, such as when there are practical difficulties or substantial costs involved in holding every security in an Underlying Index or when a Component Security is illiquid, a Fund may use a “representative sampling” strategy pursuant to which it will invest in some, but not all of the relevant Component Securities. 4 Applicants anticipate that a Fund that utilizing a “representative sampling” strategy will not track the price and yield performance of its Underlying Index with the same degree of accuracy as an investment vehicle that invests in every Component Security of the Underlying Index in the same weighting as the Underlying Index. Applicants expect that each Fund will have a tracking error relative to the performance of its Underlying Index of less than 5 percent. 3 Applicants represent that a Fund will normally invest at least 90% of its total assets in the component securities that comprise its Underlying Index (“Component Securities”) or, in the case of Foreign Funds, Component Securities and depositary receipts representing such securities. “Depositary Receipts” will typically be American Depositary Receipts, but may include Global Depositary Receipts and Euro Depositary Receipts. Each Fund also may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in stocks not included in its Underlying Index, but which the Advisor or Sub-Advisor believes will help the Fund track its Underlying Index. 4 Under the “representative sampling” strategy, the Advisor or Sub-Advisor will seek to construct a Fund's portfolio so that its investment characteristics (based on market capitalization and industry weightings), fundamental characteristics (such as return variability, earnings valuation and yield) and liquidity measures perform like those of the Underlying Index. 5. Creation Units are expected to range between 15,000 to 200,000 Shares as will be clearly stated in the relevant Fund's prospectus (“Prospectus”). Applicants expect that the initial price of a Creation Unit will fall in the range of $1,000,000 to $10,000,000. All orders to purchase Creation Units must be placed with the Distributor by or through a party that has entered into an agreement with the Distributor (“Authorized Participant”). An Authorized Participant must be either:
(a)A broker-dealer or other participant in the continuous net settlement system of the National Securities Clearing Corporation (“NSCC”), a clearing agency registered with the Commission; or
(b)a participant in the Depository Trust Company (“DTC”, and such participant, “DTC Participant”). Shares of each Fund generally will be sold in Creation Units in exchange for an in-kind deposit by the purchaser of a portfolio of securities designated by the Advisor or Sub-Advisor to correspond generally to the price and yield performance of the relevant Underlying Index (the “Deposit Securities”), together with the deposit of a specified cash payment (“Balancing Amount”). 5 The Balancing Amount is an amount equal to the difference between
(a)the net asset value (“NAV”) (per Creation Unit) of the Fund and
(b)the total aggregate market value (per Creation Unit) of the Deposit Securities. 6 Each Fund reserves the right to permit, under certain circumstances, a purchaser of Creation Units to substitute cash in lieu of depositing some or all of the requisite Deposit Securities. An investor purchasing or redeeming a Creation Unit from a Fund will be charged a fee (“Transaction Fee”) to prevent the dilution of the interests of the remaining shareholders resulting from costs in connection with the purchase of Creation Units. 7 The maximum Transaction Fees relevant to each Fund will be fully disclosed in the Fund's Prospectus, and the method for calculating the Transaction Fees will be disclosed in each Fund's Prospectus or statement of additional information (“SAI”). Orders to purchase Creation Units will be placed with the Distributor who will be responsible for transmitting the orders to the Funds. The Distributor also will be responsible for delivering the Fund's Prospectus to those persons purchasing Creation Units, and for maintaining records of both the orders placed with it and the confirmations of acceptance furnished by it. In addition, the Distributor will maintain a record of the instructions given to the Fund to implement the delivery of Shares. 5 The deposit of the requisite Deposit Securities and the Balancing Amount are collectively referred to as a “Portfolio Deposit.” 6 Each Fund will sell and redeem Creation Units only on a “Business Day” which is defined as any day that the New York Stock Exchange, the Exchange, the Fund and the Custodian are open for business and includes any day that a Fund is required to be open under section 22(e) of the Act. In addition to the list of names and amount of each security constituting the current Deposit Securities, it is intended that, on each Business Day, the Balancing Amount effective as of the previous Business Day, per outstanding Share, will be made available. Any Exchange on which Shares are listed will disseminate, every 15 seconds, during its regular trading hours, through the facilities of the Consolidated Tape Association, an amount per Share representing the sum of the estimated Balancing Amount plus the current value of the Deposit Securities, on a per Share basis. 7 Where a Fund permits a purchaser to substitute cash in lieu of depositing a portion of the requisite Deposit Securities, the purchaser may be assessed a higher Transaction Fee to cover the cost of purchasing such Deposit Securities, including brokerage costs, and part or all of the spread between the expected bid and the offer side of the market relating to such Deposit Securities. 6. Purchasers of Shares in Creation Units may hold such Shares or may sell such Shares into the secondary market. Shares will be listed and traded on an Exchange. If the American Stock Exchange LLC or the New York Stock Exchange LLC is the listing Exchange, it is expected that one or more member firms of such Exchange will be designated to act as a specialist and maintain a market on the Exchange for Shares trading on the Exchange (“Specialist”). If NYSE Arca, Inc. or NYSE Arca Marketplace, LLC (collectively, “NYSE Arca”) is the listing Exchange, it is expected that one or more of the market makers that are members of NYSE Arca (“Arca Market Makers”) will register to make a market in Shares listed on NYSE Arca. If The NASDAQ Stock Market, Inc. (“NASDAQ”) is the listing Exchange, one or more member firms of NASDAQ will act as a market maker (“NASDAQ Market Maker”) and maintain a market on NASDAQ for Shares trading on NASDAQ. 8 Prices of Shares trading on an Exchange will be based on the current bid/offer market. Shares sold in the secondary market will be subject to customary brokerage commissions and charges. 8 If Shares are listed on the NASDAQ, no particular NASDAQ Market Maker will be contractually obligated to make a market in Shares, although NASDAQ's listing requirements stipulate that at least two NASDAQ Market Makers must be registered in Shares to maintain the listing. Applicants state that registered Arca Market Makers and NASDAQ Market Makers (collectively, “Market Makers”) are required to make a continuous, two-sided market at all times or be subject to regulatory sanctions. 7. Applicants expect that purchasers of Creation Units will include institutional investors and arbitrageurs (which could include institutional investors). A Specialist, or Market Makers, in providing a fair and orderly secondary market for the Shares, also may purchase Creation Units for use in its market-making activities. Applicants expect that secondary market purchasers of Shares will include both institutional investors and retail investors. 9 Applicants expect that the price at which Shares trade will be disciplined by arbitrage opportunities created by the option continually to purchase or redeem Creation Units at their NAV, which should ensure that Shares will not trade at a material discount or premium in relation to their NAV. 9 Shares will be registered in book-entry form only. DTC or its nominee will be the registered owner of all outstanding Shares. DTC or DTC Participants will maintain records reflecting beneficial owners of Shares. 8. Shares will not be individually redeemable, and owners of Shares may acquire those Shares from the Fund, or tender such Shares for redemption to the Fund, in Creation Units only. To redeem, an investor will have to accumulate enough Shares to constitute a Creation Unit. Redemption orders must be placed by or through an Authorized Participant. An investor redeeming a Creation Unit generally will receive
(a)Portfolio Securities designated to be delivered for Creation Unit redemptions (“Fund Securities”) on the date that the request for redemption is submitted, which may not be identical to the Deposit Securities required to purchase Creation Units on that date, 10 and
(b)a “Cash Redemption Payment,” consisting of an amount calculated in the same manner as the Balancing Amount, although the actual amount of the Cash Redemption Payment may differ from the Balancing Amount if the Fund Securities are not identical to the Deposit Securities on that day. An investor may receive the cash equivalent of a Fund Security in certain circumstances, such as if the investor is constrained from effecting transactions in the security by regulation or policy. 10 As a general matter, the Deposit Securities and Fund Securities will correspond *pro rata* to the Portfolio Securities held by each Fund, but Fund Securities received on redemption may not always be identical to Deposit Securities deposited in connection with the purchase of Creation Units for the same day. The Funds will comply with the federal securities laws in accepting Deposit Securities and satisfying redemptions with Fund Securities, including that the Deposit Securities and Fund Securities are sold in transactions that would be exempt from registration under the Securities Act. 9. No Fund will be marketed or otherwise held out as a traditional open-end investment company or a mutual fund. Instead, each Fund will be marketed as an “ETF,” an “investment company,” a “fund,” or a “trust.” All marketing materials that describe the features or method of obtaining, buying or selling Creation Units, or Shares traded on the Exchange, or refer to redeemability, will prominently disclose that Shares are not individually redeemable and that the owners of Shares may acquire those Shares from the Fund, or tender such Shares for redemption to the Fund in Creation Units only. The same approach will be followed in the SAI, shareholder reports and investor educational materials issued or circulated in connection with the Shares. The Funds will provide copies of their annual and semi-annual shareholder reports to DTC Participants for distribution to shareholders. Applicants' Legal Analysis 1. Applicants request an order under section 6(c) of the Act for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 24(d) of the Act and rule 22c-1 under the Act; and under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act. 2. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction, or any class of persons, securities or transactions, from any provision of the Act, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Sections 5(a)(1) and 2(a)(32) of the Act 3. Section 5(a)(1) of the Act defines an “open-end company” as a management investment company that is offering for sale or has outstanding any redeemable security of which it is the issuer. Section 2(a)(32) of the Act defines a redeemable security as any security, other than short-term paper, under the terms of which the holder, upon its presentation to the issuer, is entitled to receive approximately his proportionate share of the issuer's current net assets, or the cash equivalent. Because Shares will not be individually redeemable, applicants request an order that would permit each Fund to register as an open-end management investment company and issue Shares that are redeemable in Creation Units only. Applicants state that investors may purchase Shares in Creation Units and redeem Creation Units from each Fund. Applicants further state that because the market price of Shares will be disciplined by arbitrage opportunities, investors should be able to sell Shares in the secondary market at prices that do not vary substantially from their NAV. Section 22(d) of the Act and Rule 22c-1 Under the Act 4. Section 22(d) of the Act, among other things, prohibits a dealer from selling a redeemable security, which is currently being offered to the public by or through a principal underwriter, except at a current public offering price described in the prospectus. Rule 22c-1 under the Act generally requires that a dealer selling, redeeming or repurchasing a redeemable security do so only at a price based on its NAV. Applicants state that secondary market trading in Shares will take place at negotiated prices, not at a current offering price described in a Fund's Prospectus, and not at a price based on NAV. Thus, purchases and sales of Shares in the secondary market will not comply with section 22(d) of the Act and rule 22c-1 under the Act. Applicants request an exemption under section 6(c) from these provisions. 5. Applicants assert that the concerns sought to be addressed by section 22(d) of the Act and rule 22c-1 under the Act with respect to pricing are equally satisfied by the proposed method of pricing Shares. Applicants maintain that while there is little legislative history regarding section 22(d), its provisions, as well as those of rule 22c-1, appear to have been designed to
(a)prevent dilution caused by certain riskless-trading schemes by principal underwriters and contract dealers,
(b)prevent unjust discrimination or preferential treatment among buyers, and
(c)ensure an orderly distribution of investment company shares by eliminating price competition from dealers offering shares at less than the published sales price and repurchasing shares at more than the published redemption price. 6. Applicants believe that none of these purposes will be thwarted by permitting Shares to trade in the secondary market at negotiated prices. Applicants state that
(a)secondary market trading in Shares does not involve the Funds as parties and cannot result in dilution of an investment in Shares, and
(b)to the extent different prices exist during a given trading day, or from day to day, such variances occur as a result of third-party market forces, such as supply and demand. Therefore, applicants assert that secondary market transactions in Shares will not lead to discrimination or preferential treatment among purchasers. Finally, applicants contend that the proposed distribution system will be orderly because competitive forces will ensure that the difference between the market price of Shares and their NAV remains narrow. Section 24(d) of the Act 7. Section 24(d) of the Act provides, in relevant part, that the prospectus delivery exemption provided to dealer transactions by section 4(3) of the Securities Act does not apply to any transaction in a redeemable security issued by an open-end investment company. Applicants seek relief from section 24(d) to permit dealers selling Shares to rely on the prospectus delivery exemption provided by section 4(3) of the Securities Act. 11 11 Applicants state that they are not seeking relief from the prospectus delivery requirement for non-secondary market transactions, such as transactions in which an investor purchases Shares from the Funds or an underwriter. Applicants further state that each Fund's Prospectus will caution broker-dealers and others that some activities on their part, depending on the circumstances, may result in their being deemed statutory underwriters and subject them to the prospectus delivery and liability provisions of the Securities Act. For example, a broker-dealer firm and/or its client may be deemed a statutory underwriter if it purchases Creation Units from a Fund, breaks them down into the constituent Shares, and sells those Shares directly to customers, or if it chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for Shares. Each Fund's Prospectus will state that whether a person is an underwriter depends upon all of the facts and circumstances pertaining to that person's activities. Each Fund's Prospectus will caution dealers who are not “underwriters” but are participating in a distribution (as contrasted to ordinary secondary market trading transactions), and thus dealing with Shares that are part of an “unsold allotment” within the meaning of section 4(3)(C) of the Securities Act, that they would be unable to take advantage of the prospectus delivery exemption provided by section 4(3) of the Securities Act. 8. Applicants state that Shares are bought and sold in the secondary market in the same manner as closed-end fund shares. Applicants note that transactions in closed-end fund shares are not subject to section 24(d), and thus closed-end fund shares are sold in the secondary market without a prospectus. Applicants contend that Shares likewise merit a reduction in the unnecessary compliance costs and regulatory burdens resulting from the imposition of the prospectus delivery obligations in the secondary market. Because Shares will be listed on an Exchange, prospective investors will have access to information about the product over and above what is normally available about an open-end security. Applicants state that information regarding market price and volume will be continually available on a real time basis throughout the day on brokers' computer screens and other electronic services. The previous day's price and volume information will be published daily in the financial section of newspapers. In addition, a website will be maintained that will include each Fund's Prospectus and SAI, the relevant Underlying Index for each Fund, and additional quantitative information that is updated on a daily basis, including the mid-point of the bid-ask spread at the time of the calculation of NAV (“Bid/Ask Price”), 12 the NAV for each Fund, and information about the premiums and discounts at which the Fund Shares have traded. 12 The Bid-Ask Price per Fund Share of a Fund is determined using the highest bid and the lowest offer on the Exchange on which the Fund Shares are listed. 9. Applicants will arrange for broker-dealers selling Shares in the secondary market to provide purchasers with a product description (“Product Description”) that describes, in plain English, the relevant Fund and the Shares it issues. Applicants state that a Product Description is not intended to substitute for a full Prospectus. Applicants state that the Product Description will be tailored to meet the information needs of investors purchasing Shares in the secondary market. Section 17(a)(1) and
(2)of the Act 10. Section 17(a) of the Act generally prohibits an affiliated person of a registered investment company, or an affiliated person of such a person (“second-tier affiliate”) from selling any security to or purchasing any security from the company. Section 2(a)(3) of the Act defines “affiliated person” to include any person directly or indirectly owning, controlling or holding with power to vote 5% or more of the outstanding voting securities of the other person, any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with the power to vote by the other person, and any person directly or indirectly controlling, controlled by or under common control with the other person. Section 2(a)(9) of the Act provides that a control relationship will be presumed where one person owns more than 25% of another person's voting securities. The Funds may be deemed to be controlled by the Advisor or an entity controlling, controlled by or under common control with the Advisor and hence affiliated persons of each other. In addition, the Funds may be deemed to be under common control with any other registered investment company (or series thereof) advised by the Advisor or an entity controlling, controlled by or under common control with the Advisor (an “Affiliated Fund”). Applicants state that if Creation Units of all of the Funds or of one or more particular Funds are held by twenty or fewer investors, including a Specialist or Market Maker, some or all of such investors will be 5% owners of the Fund, and one or more investors may hold in excess of 25% of the Fund. Such investors would be deemed to be affiliated persons of the Fund. 11. Applicants request an exemption from section 17(a) of the Act pursuant to sections 17(b) and 6(c) of the Act to permit persons that are affiliated persons or second-tier affiliates of the Funds solely by virtue of:
(a)Holding 5% or more, or in excess of 25%, of the outstanding Shares of one or more Funds;
(b)having an affiliation with a person with an ownership interest described in (a); or
(c)holding 5% or more, or more than 25%, of the Shares of one or more Affiliated Funds, to effectuate in-kind purchases and redemptions. 12. Section 17(b) of the Act authorizes the Commission to exempt a proposed transaction from section 17(a) of the Act if evidence establishes that the terms of the transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person concerned, and the proposed transaction is consistent with the policy of each registered investment company concerned and the general provisions of the Act. 13. Applicants assert that no useful purpose would be served by prohibiting these types of affiliated persons from purchasing or redeeming Creation Units through “in-kind” transactions. The deposit procedures for both in-kind purchases and in-kind redemptions of Creation Units will be the same for all purchases and redemptions. Deposit Securities and Fund Securities will be valued in the same manner as Portfolio Securities. Therefore, applicants state that in-kind purchases and redemptions will afford no opportunity for the affiliated persons of a Fund, or the affiliated persons of such affiliated persons, to effect a transaction detrimental to other holders of Shares. Applicants also believe that in-kind purchases and redemptions will not result in self-dealing or overreaching of the Fund. Applicants' Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Each Fund's Prospectus and Product Description will clearly disclose that, for purposes of the Act, Shares are issued by the Fund, which is a registered investment company, and that the acquisition of Shares by investment companies is subject to the restrictions of section 12(d)(1) of the Act. 2. As long as the Funds operate in reliance on the requested order, the Shares will be listed on an Exchange. 3. Neither the Trust nor any Fund will be advertised or marketed as an open-end investment company or a mutual fund. Each Fund's Prospectus will prominently disclose that Shares are not individually redeemable shares and will disclose that the owners of Shares may acquire those Shares from the Fund and tender those Shares for redemption to the Fund in Creation Units only. Any advertising material that describes the purchase or sale of Creation Units or refers to redeemability will prominently disclose that Shares are not individually redeemable, and that owners of Shares may acquire those Shares from the Fund and tender those Shares for redemption to the Fund in Creation Units only. 4. The website maintained for each Fund, which will be publicly accessible at no charge, will contain the following information, on a per Share basis, for each Fund:
(a)the prior Business Day's NAV and the Bid/Ask Price, and a calculation of the premium or discount of the Bid/Ask Price at the time of calculation of the NAV against such NAV; and
(b)data in chart format displaying the frequency distribution of discounts and premiums of the daily Bid/Ask Price against the NAV, within appropriate ranges, for each of the four previous calendar quarters. In addition, the Product Description for each Fund will state that the website for the Fund has information about the premiums and discounts at which Shares have traded. 5. The Prospectus and annual report for each Fund also will include:
(a)The information listed in condition 4(b),
(i)in the case of the Fund's Prospectus, for the most recently completed year (and the most recently completed quarter or quarters, as applicable) and
(ii)in the case of the annual report, for the immediately preceding five years, as applicable; and
(b)the following data, calculated on a per Share basis for one, five and ten year periods (or life of the Fund):
(i)The cumulative total return and the average annual total return based on NAV and Bid/Ask Price, and
(ii)the cumulative total return of the relevant Underlying Index. 6. Before a Fund may rely on the order, the Commission will have approved, pursuant to rule 19b-4 under the Exchange Act, an Exchange rule requiring Exchange members and member organizations effecting transactions in Shares to deliver a Product Description to purchasers of Shares. For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21739 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 28039; 812-13416] Rafferty Asset Management, et al.; Notice of Application October 30, 2007. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of an application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (the “Act”) for exemption from sections 12(d)(1)(A) and
(B)of the Act and under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act. Summary of the Application: The order would permit certain management investment companies and unit investment trusts registered under the Act to acquire shares of certain open-end management investment companies registered under the Act, that are outside of the same group of investment companies as the acquiring investment companies. Applicants: Rafferty Asset Management, LLC (“Rafferty” or “Adviser”), Direxion Funds (“DF”) and Direxion Insurance Trust LLC (“DIT,” together with DF, the “Trusts”). Filing Dates: The application was filed on August 10, 2007, and amended on October 26, 2007. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice. Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 26, 2007, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE,. Washington, DC 20549-1090; Applicants, 33 Whitehall Street, 10th Floor, New York, NY 10004. FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at
(202)551-6817, or Janet M. Grossnickle, Branch Chief, at
(202)551-6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the Public Reference Desk, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-0102 (telephone
(202)551-5850). Applicants' Representations 1. The Trusts are open-end management investment companies registered under the Act and are each comprised of separate series (“Funds”) that pursue distinct investment objectives and strategies. Shares of Funds of DF are sold publicly to retail investors, and shares of Funds of DIT are sold to insurance company separate accounts funding variable life and variable annuity contracts. The Adviser is registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”) and serves as investment adviser to each Fund. 1 1 The term “Adviser” includes all entities controlling, controlled by or under common control with Rafferty and its successors in interest. A successor in interest is an entity resulting from a reorganization of Rafferty into another jurisdiction or a change in the type of business organization. 2. Applicants request relief to permit registered management investment companies and their series (“Investing Companies”) and registered unit investment trusts and their series (“Investing Trusts,” and together with the Investing Companies, “Investing Funds”) that are outside of the same “group of investment companies,” within the meaning of section 12(d)(1)(G)(ii) of the Act, as the Trusts, to acquire shares of the Funds in excess of the limits in section 12(d)(1)(A) of the Act, and to permit a Fund, any principal underwriter for a Fund, and any broker or dealer registered under the Securities Exchange Act of 1934 (“Broker”) to sell shares of each Fund to an Investing Fund in excess of the limits of section 12(d)(1)(B) of the Act. Applicants request that the relief apply to:
(a)Other existing and future registered open-end management investment companies and series thereof (included in the term “Funds”) advised by the Adviser and in the same group of investment companies, within the meaning of section 12(d)(1)(G)(ii) of the Act, as the Trusts;
(b)each Investing Fund that enters into a Participation Agreement (as defined below) with a Fund to purchase shares of the Fund; and
(c)any principal underwriter to a Fund or Broker selling shares of a Fund. 2 2 All entities that currently intend to rely on the requested order are named as applicants. Any other entity that relies on the order in the future will comply with the terms and conditions of the application. An Investing Fund may rely on the requested order only to invest in the Funds and not in any other registered investment company. 3. Each Investing Company will be advised by an investment adviser within the meaning of section 2(a)(20)(A) of the Act and registered as an investment adviser under the Advisers Act (“Investing Fund Adviser”). An Investing Fund Adviser may contract with an investment adviser which meets the definition of section 2(a)(20)(B) of the Act (a “Subadviser”). Each Investing Trust will have a sponsor (“Sponsor”) and a trustee (“Trustee”). Applicants represent that to ensure that the Investing Funds comply with the terms and conditions of the requested relief from section 12(d)(1) of the Act, an Investing Fund must enter into a participation agreement between a Trust, on behalf of the relevant Funds, and the Investing Fund (“Participation Agreement”) before investing in a Fund beyond the limits imposed by section 12(d)(1)(A). The Participation Agreement will require the Investing Funds to adhere to the terms and conditions of the requested order. The Participation Agreement will include an acknowledgment from an Investing Fund that it may rely on the requested order only to invest in the Funds and not in any other registered investment company. 4. Applicants state that the Funds will offer the Investing Funds simple and efficient investment vehicles to achieve their asset allocation or diversification objectives. Applicants state that the Funds also provide high quality, professional investment program alternatives to Investing Funds that do not have sufficient assets to make comparable investments. Applicants' Legal Analysis A. Section 12(d)(1) 1. Section 12(d)(1)(A) of the Act, in relevant part, prohibits a registered investment company from acquiring shares of an investment company if the securities represent more than 3% of the total outstanding voting stock of the acquired company, more than 5% of the total assets of the acquiring company, or, together with the securities of any other investment companies, more than 10% of the total assets of the acquiring company. Section 12(d)(1)(B) of the Act prohibits a registered open-end investment company, its principal underwriter, and any Broker from selling its shares to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company's voting stock, or if the sale will cause more than 10% of the acquired company's voting stock to be owned by investment companies generally. 2. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Applicants seek an exemption under section 12(d)(1)(J) of the Act to permit Investing Funds to acquire shares of the Funds in excess of the limits in section 12(d)(1)(A) of the Act, and a Fund, any principal underwriter for a Fund and any Broker to sell shares of a Fund to an Investing Fund in excess of the limits of section 12(d)(1)(B) of the Act. 3. Applicants state that the proposed arrangement and conditions will adequately address the policy concerns underlying sections 12(d)(1)(A) and
(B)of the Act, which include concerns about undue influence by a fund of funds over underlying funds, excessive layering of fees, and overly complex fund structures. Accordingly, applicants believe that the requested exemption is consistent with the public interest and the protection of investors. 4. Applicants believe that neither the Investing Fund nor an Investing Fund Affiliate would be able to exert undue influence over the Funds. 3 To limit the control that an Investing Fund may have over a Fund, applicants propose a condition prohibiting the Investing Fund Adviser, Sponsor, and any person controlling, controlled by, or under common control with the Investing Fund Adviser or Sponsor, and any investment company or issuer that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act that is advised or sponsored by the Investing Fund Adviser or Sponsor, or any person controlling, controlled by, or under common control with the Investing Fund Adviser or Sponsor (“Investing Fund Advisory Group”) from controlling (individually or in the aggregate) a Fund within the meaning of section 2(a)(9) of the Act. The same prohibition would apply to each Subadviser, any person controlling, controlled by or under common control with the Subadviser, and any investment company or issuer that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act (or portion of such investment company or issuer) advised or sponsored by the Subadviser or any person controlling, controlled by or under common control with the Subadviser (“Subadviser Group”). Applicants propose other conditions to limit the potential for undue influence over the Funds, including that no Investing Fund or Investing Fund Affiliate (except to the extent it is acting in its capacity as an investment adviser to a Fund) will cause a Fund to purchase a security in an offering of securities during the existence of any underwriting or selling syndicate of which a principal underwriter is an Underwriting Affiliate (“Affiliated Underwriting”). An “Underwriting Affiliate” is a principal underwriter in any underwriting or selling syndicate that is an officer, director, member of an advisory board, Investing Fund Adviser, Subadviser, Sponsor, or employee of the Investing Fund, or a person of which any such officer, director, member of an advisory board, Investing Fund Adviser, Subadviser, Sponsor or employee is an affiliated person; however any person whose relationship to a Fund is covered by section 10(f) of the Act is not an Underwriting Affiliate. 3 “Investing Fund Affiliates” are the Investing Fund Adviser, Subadviser, Sponsor, promoter, and principal underwriter of the Investing Fund, and any person controlling, controlled by, or under common control with any of these entities. “Fund Affiliates” are the investment adviser(s), promoter, and principal underwriter of the Fund, and any person controlling, controlled by, or under common control with any of these entities. 5. Applicants do not believe that the proposed arrangement will involve excessive layering of fees. The board of directors or trustees of each Investing Company, including a majority of the directors or trustees who are not “interested persons” (within the meaning of section 2(a)(19) of the Act) (“Disinterested Trustees”), will find that the advisory fees charged under the advisory contract are based on services provided that will be in addition to, rather than duplicative of, the services provided under the advisory contract(s) of any Fund in which the Investing Company may invest. In addition, an Investing Fund Adviser, Sponsor, or Trustee, as applicable, will waive fees otherwise payable to it by the Investing Fund in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by a Fund under rule 12b-1 under the Act) received from a Fund by the Investing Fund Adviser, Sponsor or Trustee or an affiliated person thereof, other than any advisory fees paid to the Investing Fund Adviser, Sponsor or Trustee, or an affiliated person thereof by a Fund in connection with the investment by the Investing Fund in the Fund. Applicants also state that with respect to registered separate accounts that invest in any Investing Fund, no sales load will be charged at the Investing Fund level or at the Fund level. Other sales charges and service fees, as defined in Rule 2830 of the Conduct Rules of the National Association of Securities Dealers, Inc., (“Rule 2830”), if any, will only be charged at the Investing Fund level or at the Fund level, not both. 4 With respect to other investments in any Investing Fund, any sales charges and/or service fees charged with respect to shares of the Investing Fund will not exceed the limits applicable to a fund of funds as set forth in Rule 2830. 4 Applicants represent that each Investing Fund will represent in the Participation Agreement that no insurance company sponsoring a registered separate account funding variable insurance contracts will be permitted to invest in the Investing Fund unless the insurance company has certified to the Investing Fund that the aggregate of all fees and charges associated with each contract that invests in the Investing Fund, including fees and charges at the separate account, Investing Fund, and Fund levels, will be reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. 6. Applicants submit that the proposed arrangement will not create an overly complex fund structure. Applicants propose condition 12 to ensure that the proposed structure will not result in unnecessary complexity. Further, the Participation Agreement will require each Investing Fund that exceeds the 5% or 10% limitation in section 12(d)(1)(A)(ii) and
(iii)of the Act to disclose in its prospectus that it may invest in registered investment companies, and to disclose, in “plain English,” in its prospectus the unique characteristics of the Investing Fund investing in registered investment companies, including but not limited to the expense structure and any additional expenses of investing in registered investment companies. Each Investing Fund also will comply with the disclosure requirements set forth in Investment Company Act Release No. 27399 (June 20, 2006). 7. Applicants also note that a Fund may choose to reject any investment by an Investing Fund. The prospectus of each Fund discloses that the Fund may choose to reject a purchase order at the discretion of the Fund. B. Section 17(a) 1. Section 17(a) of the Act generally prohibits sales or purchases of securities between a registered investment company and any affiliated person of the company. Section 2(a)(3) of the Act defines an “affiliated person” of another person to include any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the other person. Applicants seek relief from section 17(a) to permit a Fund that is an affiliated person of an Investing Fund because the Investing Fund holds 5% or more of the Fund's shares to sell its shares to and redeem its shares from an Investing Fund. 5 5 Applicants acknowledge that receipt of any compensation by
(a)an affiliated person of an Investing Fund, or an affiliated person of such person, for the purchase by the Investing Fund of shares of a Fund or
(b)an affiliated person of a Fund, or an affiliated person of such person, for the sale by the Fund of its shares to an Investing Fund is subject to section 17(e) of the Act. The Participation Agreement also will include this acknowledgment. 2. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that
(a)the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned,
(b)the proposed transaction is consistent with the policies of each registered investment company involved, and
(c)the proposed transaction is consistent with the general purposes of the Act. Section 6(c) of the Act permits the Commission to exempt any person or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants submit that the proposed arrangement satisfies the standards for relief under sections 17(b) and 6(c) of the Act. 3. Applicants believe that any proposed transactions directly between Funds and the Investing Funds will be consistent with the policies of each Fund and Investing Fund. The Participation Agreement will require any Investing Fund that purchases shares from a Fund to represent that the purchase of shares from the Fund by an Investing Fund will be accomplished in compliance with the investment restrictions of the Investing Fund and will be consistent with the investment policies set forth in the Investing Fund's registration statement. 4. Applicants also state that the terms of the arrangement are fair and reasonable and do not involve overreaching. Applicants note that all shares of the Funds sold and redeemed by the Funds will be sold and redeemed at net asset value as required by rule 22c-1 under the Act, without regard to the identity of the purchasing or redeeming investor. Applicants state that the proposed arrangement will be consistent with the policies of each Investing Fund and Fund and with the general purposes of the Act. Applicants' Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. The members of the Investing Fund Advisory Group will not control (individually or in the aggregate) a Fund within the meaning of section 2(a)(9) of the Act. The members of the Subadviser Group will not control (individually or in the aggregate) a Fund within the meaning of section 2(a)(9) of the Act. If, as a result of a decrease in the outstanding voting securities of a Fund, the Investing Fund Advisory Group or the Subadviser Group, each in the aggregate, becomes a holder of more than 25% of the outstanding voting securities of a Fund, it (except for any member of the Investing Fund Advisory Group or Subadviser Group that is a separate account) will vote its shares of the Fund in the same proportion as the vote of all other holders of the Fund's shares. This condition does not apply to the Subadviser Group with respect to a Fund for which the Subadviser or a person controlling, controlled by, or under common control with the Subadviser acts as the investment adviser within the meaning of section 2(a)(20)(A) of the Act. A registered separate account will seek voting instructions from its contract holders and will vote its shares in accordance with the instructions received and will vote those shares for which no instructions were received in the same proportion as the shares for which instructions were received. An unregistered separate account will either
(a)vote its shares of the Fund in the same proportion as the vote of all other holders of the Fund's shares, or
(b)seek voting instructions from its contract holders and vote its shares in accordance with the instructions received and vote those shares for which no instructions were received in the same proportion as the shares for which instructions were received. 2. No Investing Fund or Investing Fund Affiliate will cause any existing or potential investment by the Investing Fund in shares of a Fund to influence the terms of any services or transactions between the Investing Fund or an Investing Fund Affiliate and the Fund or a Fund Affiliate. 3. The board of directors or trustees of an Investing Company, including a majority of the Disinterested Trustees, will adopt procedures reasonably designed to assure that the Investing Fund Adviser and any Subadviser are conducting the investment program of the Investing Company without taking into account any consideration received by the Investing Company or an Investing Fund Affiliate from a Fund or a Fund Affiliate in connection with any services or transactions. 4. Once an investment by an Investing Fund in the securities of a Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, the board of trustees of the Fund (“Board”), including a majority of the Disinterested Trustees, will determine that any consideration paid by the Fund to an Investing Fund or an Investing Fund Affiliate in connection with any services or transactions
(a)is fair and reasonable in relation to the nature and quality of the services and benefits received by the Fund,
(b)is within the range of consideration that the Fund would be required to pay to another unaffiliated entity in connection with the same services or transactions, and
(c)does not involve overreaching on the part of any person concerned. This condition does not apply with respect to any services or transactions between a Fund and its investment adviser(s), or any person controlling, controlled by, or under common control with such investment adviser(s). 5. No Investing Fund or Investing Fund Affiliate (except to the extent it is acting in its capacity as an investment adviser to a Fund) will cause a Fund to purchase a security in any Affiliated Underwriting. 6. The Board of a Fund, including a majority of the Disinterested Trustees, will adopt procedures reasonably designed to monitor any purchases of securities by the Fund in an Affiliated Underwriting once an investment by an Investing Fund in the securities of the Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, including any purchases made directly from an Underwriting Affiliate. The Board of the Fund will review these purchases periodically, but no less frequently than annually, to determine whether the purchases were influenced by the investment by the Investing Fund in the Fund. The Board of the Fund will consider, among other things,
(a)whether the purchases were consistent with the investment objectives and policies of the Fund,
(b)how the performance of securities purchased in an Affiliated Underwriting compares to the performance of comparable securities purchased during a comparable period of time in underwritings other than Affiliated Underwritings or to a benchmark such as a comparable market index, and
(c)whether the amount of securities purchased by the Fund in Affiliated Underwritings and the amount purchased directly from an Underwriting Affiliate have changed significantly from prior years. The Board of the Fund will take any appropriate actions based on its review, including, if appropriate, the institution of procedures designed to assure that purchases of securities in Affiliated Underwritings are in the best interests of shareholders. 7. The Fund will maintain and preserve permanently in an easily accessible place a written copy of the procedures described in the preceding condition, and any modifications to such procedures, and will maintain and preserve for a period of not less than six years from the end of the fiscal year in which any purchase in an Affiliated Underwriting occurred, the first two years in an easily accessible place, a written record of each purchase of securities in Affiliated Underwritings once an investment by an Investing Fund in the securities of the Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, setting forth from whom the securities were acquired, the identity of the underwriting syndicate's members, the terms of the purchase, and the information or materials upon which the determinations of the Board of the Fund were made. 8. Before investing in a Fund in excess of the limits in section 12(d)(1)(A) of the Act, the Investing Fund and the Fund will execute a Participation Agreement stating without limitation that their boards of directors or trustees and their investment advisers, or the Sponsor and Trustee, as applicable, understand the terms and conditions of the order and agree to fulfill their responsibilities under the order. At the time of its investment in shares of a Fund in excess of the limit in section 12(d)(1)(A)(i), an Investing Fund will notify the Fund of the investment. At such time, the Investing Fund will also transmit to the Fund a list of the names of each Investing Fund Affiliate and Underwriting Affiliate. The Investing Fund will notify the Fund of any changes to the list of the names as soon as reasonably practicable after a change occurs. The Fund and the Investing Fund will maintain and preserve a copy of the order, the Participation Agreement and the list with any updated information for the duration of the investment and for a period of not less than six years thereafter, the first two years in an easily accessible place. 9. Before approving any advisory contract under section 15 of the Act, the board of directors or trustees of each Investing Company, including a majority of the Disinterested Trustees, will find that the advisory fees charged under such advisory contract are based on services provided that will be in addition to, rather than duplicative of, the services provided under the advisory contract(s) of any Fund in which the Investing Company may invest. These findings and their basis will be recorded fully in the minute books of the appropriate Investing Company. 10. An Investing Fund Adviser, Sponsor or Trustee, as applicable, will waive fees otherwise payable to it by the Investing Fund in an amount at least equal to any compensation (including fees from any plan adopted by a Fund under rule 12b-1 under the Act) received from a Fund by the Investing Fund Adviser, Sponsor or Trustee, or an affiliated person thereof, other than any advisory fees paid to the Investing Fund Adviser, Sponsor or Trustee, or an affiliated person thereof, by a Fund in connection with the investment by the Investing Fund in the Fund. Any Subadviser will waive fees otherwise payable to the Subadviser, directly or indirectly, by the Investing Company in an amount at least equal to any compensation received from a Fund by the Subadviser, or an affiliated person thereof, other than any advisory fees paid to the Subadviser or its affiliated person by a Fund, in connection with the investment by the Investing Company in the Fund made at the direction of the Subadviser. In the event that the Subadviser waives fees, the benefit of the waiver will be passed through to the Investing Company. 11. With respect to registered separate accounts that invest in any Investing Fund, no sales load will be charged at the Investing Fund level or at the Fund level. Other sales charges and service fees, as defined in Rule 2830, if any, will only be charged at the Investing Fund level or at the Fund level, not both. With respect to other investments in an Investing Fund, any sales charges and/or service fees charged with respect to shares of the Investing Fund will not exceed the limits applicable to a fund of funds as set forth in Rule 2830. 12. No Fund will acquire securities of any investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent permitted by section 12(d)(1)(E) of the Act or exemptive relief from the Commission permitting the Fund to purchase shares of an affiliated money market fund for short-term cash management purposes. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21694 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Federal Register Citation of Previous Announcement: November 5, 2007 *Status:* Closed meeting. *Place:* 100 F Street, NE., Washington, DC. *Date and Time of previously Announced meeting:* November 8, 2007 at 2 p.m. *Change in the Meetings:* Date and Time Change. The Closed Meeting scheduled for Thursday, November 8, 2007 at 2 p.m., has been changed to Wednesday, November 7, 2007 at 2:30 p.m. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at
(202)551-5400. November 1, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21772 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56722; File No. SR-NASDAQ-2007-085] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change Amending Nasdaq's Membership Application Rules October 31, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on October 30, 2007, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change modifies Nasdaq's membership application procedures. Below is the text of the proposed rule change. Proposed new language is in *italics;* proposed deletions are in [brackets]. 1010. Membership Proceedings 1011. Definitions Unless otherwise provided, terms used in the Rule 1000 Series shall have the meaning as defined in Rule 0120. (a)-(f) No change.
(g)“material change in business operations”. The term “material change in business operations” includes, but is not limited to:
(1)removing or modifying a membership agreement restriction;
(2)market making, underwriting, or acting as a dealer for the first time; [and]
(3)adding business activities that require a higher minimum net capital under SEC Rule 15c3-1; and *(4) adding business activities that would cause a proprietary trading firm no longer to meet the definition of that term contained in this rule.* (h)-(n) No change.
(o)“Proprietary Trading Firm” *The term “proprietary trading firm” means an Applicant with the following characteristics:* *(1) the Applicant is not required by Section 15(b)(8) of the Act to become a FINRA member but is a member of another registered securities exchange not registered solely under Section 6(g) of the Act;* *(2) all funds used or proposed to be used by the Applicant for trading are the Applicant's own capital, traded through the Applicant's own accounts;* *(3) the Applicant does not, and will not have “customers,” as that term is defined in Nasdaq Rule 0120(g); and* *(4) all Principals and Representatives of the Applicant acting or to be acting in the capacity of a trader must be owners of, employees of, or contractors to the Applicant.* 1012. General Provisions
(a)No change.
(b)Lapse of Application
(1)Absent a showing of good cause, an application filed under Rule 1013 or 1017 shall lapse if an Applicant fails to:
(A)respond fully within [60] *15 business* days after service of an initial written request for information or documents under Rule 1013, [within 30 days after service of] an initial written request for information or documents under Rule 1017, [within 30 days after service of] *or* a subsequent written request for information or documents under Rule 1013 or 1017, or within such other time period agreed to by the Department and the Applicant;
(B)appear at or otherwise participate in a scheduled membership interview pursuant to Rule 1013(b) or 1017(f), *if required* ; or [(C)] file an executed membership agreement under Rule 1014(d) or [Rule] 1017(g)(4) within 25 days after service of the agreement, or within such other period agreed to by the Department and the Applicant.
(2)If an Applicant wishes to continue to seek membership or approval of a change in ownership, control, or business operations, then the Applicant shall be required to submit a new application under Rule 1013 or 1017, respectively, and any required fee. Nasdaq shall not refund any fee for a lapsed application. (c)-(d) No change.
(e)Computation of Time
(1)Calendar Day In the Rule 1010 Series, “day” means calendar day, *unless otherwise specified.*
(2)Formula In computing a period of time under the Rule 1010 Series, the day of the act, event, default, or lapse from which the period of time designated begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, Sunday, or Federal holiday, in which event the period runs until the end of the next day that is not a Saturday, Sunday, or Federal holiday. Intermediate Saturdays, Sundays, and Federal holidays shall be excluded from the computation when the period prescribed is ten days *or less or when the term “business day” is used.* (f)-(j) No change. 1013. New Member Application [and Interview]
(a)Filing of Application
(1)Where to File *; Contents* An Applicant for Nasdaq membership shall file its application with the Department in accordance with this Rule. *An Applicant shall submit an application that includes:* [(2) Contents] [The application shall include:]
(A)a copy of the Applicant's current Form BD;
(B)an original Nasdaq-approved fingerprint card for each Associated Person who will be subject to SEC Rule 17f-2 and for whom a fingerprint card has not been filed with another self-regulatory organization; [(C) Reserved] [(D)] *(C)* a check for such fee as may be required under the Nasdaq Rules; [(E)] *(D) a description of the Applicant's proposed trading activities on Nasdaq, such as the types of securities it will trade, whether it will be a market maker, an order entry firm, and/or engage in block trading activities, and the extent to which the Applicant is conducting such activities as a member of other SRO(s);* [business information that describes the Applicant's operations and that includes:] [(i)] *(E)* [a trial balance and computation of net capital, each of which has been prepared as of a date that is within 30 days before the filing date of the application] *a copy of the Applicant's most recent audited financial statements and a description of any material changes in the Applicant's financial condition since the date of the financial statements* ; [(ii) Reserved] [(iii)] *(F)* an organizational chart; [(iv)] *(G)* the intended location of the Applicant's principal place of business and all other offices, if any, whether or not such offices would be required to be registered under the Nasdaq Rules, and the names of the persons who will be in charge of each office; [(v) a list of the types of securities to be offered and sold and the types of retail or institutional customers to be solicited;] [(vi) Reserved] [(vii) Reserved] [(viii) the number of markets to be made, if any, the type and volatility of the products, and the anticipated maximum inventory positions;] [(ix) Reserved] [(x) any plan to distribute or maintain securities products in proprietary positions, and the risks, volatility, degree of liquidity, and speculative nature of the products; and] [(xi) Reserved] [(xii)] *(H)* a description of the communications and operational systems the Applicant will employ to conduct business [with customers or other members] and the plans and procedures the Applicant will employ to ensure business continuity, including: system capacity to handle the anticipated level of usage; contingency plans in the event of systems or other technological or communications problems or failures [that may impede customer usage or firm order entry or execution]; system redundancies; disaster recovery plans; *and* system security; [disclosures to be made to potential and existing customers who may use such systems; and supervisory or customer protection measures that may apply to customer use of, or access to, such systems;] [(F)] *(I)* a copy of any decision or order by a federal or state authority or self-regulatory organization taking permanent or temporary adverse action with respect to a registration or licensing determination regarding the Applicant or an Associated Person; [(G) Reserved] [(H)] *(J) a statement indicating whether the Applicant is currently, or has been in the last ten years, the subject of any investigation or disciplinary proceeding conducted by any self-regulatory organization, the foreign equivalent of a self-regulatory organization, a foreign or international securities exchange, a contract market designated pursuant to the Commodity Exchange Act or any substantially equivalent foreign statute or regulation, a futures association registered under the Commodity Exchange Act or any substantially similar foreign statute or regulation, the Commission or any other “appropriate regulatory agency” (as defined in the Act), the Commodity Futures Trading Commission, or any state financial regulatory agency regarding the Applicant's activities that* [documentation of any of the following events, unless the event] has *not* been reported to the Central Registration Depository *, together with all relevant details, including any sanctions imposed;* [:] *(K) a statement indicating whether any person listed on Schedule A of the Applicant's Form BD is currently, or has been in the last ten years, the subject of any investigation or disciplinary proceeding conducted by any self-regulatory organization, the foreign equivalent of a self-regulatory organization, a foreign or international securities exchange, a contract market designated pursuant to the Commodity Exchange Act or any substantially equivalent foreign statute or regulation, a futures association registered under the Commodity Exchange Act or any substantially similar foreign statute or regulation, the Commission or any other “appropriate regulatory agency”, the Commodity Futures Trading Commission, or any state financial regulatory agency regarding the Applicant's activities that has not been reported to the Central Registration Depository, together with all relevant details, including any sanctions imposed;* [(i) a regulatory action against or investigation of the Applicant or an Associated Person by the Commission, the Commodity Futures Trading Commission, a federal, state, or foreign regulatory agency, or a self-regulatory organization that is pending, adjudicated, or settled;] [(ii) an investment-related civil action for damages or an injunction against the Applicant or an Associated Person that is pending, adjudicated, or settled;] [(iii) an investment-related customer complaint or arbitration that is required to be reported on Form U4;] [(iv) a criminal action (other than a minor traffic violation) against the Applicant or an Associated Person that is pending, adjudicated, or that has resulted in a guilty or no contest plea; and] [(v) a copy of any document evidencing a termination for cause or a permitted resignation after investigation of an alleged violation of a federal or state securities law, a rule or regulation thereunder, a self-regulatory organization rule, or an industry standard of conduct;] [(I) a description of any remedial action, such as special training, continuing education requirements, or heightened supervision, imposed on an Associated Person by a state or federal authority or self-regulatory organization;] [(J) a written acknowledgment that heightened supervisory procedures and special educational programs may be required pursuant to NASD Notice to Members 97-19 (as incorporated by reference into Nasdaq IM-3010) for an Associated Person whose record reflects disciplinary actions or sales practice events;] [(K)] *(L)* a copy of [final or proposed contracts with banks, clearing entities, or service bureaus, and a general description of any other final or proposed contracts] *any contract or agreement with another broker-dealer, a bank, a clearing entity, a service bureau or a similar entity to provide the Applicant with services regarding the execution or clearance and settlement of transactions effected on Nasdaq* ; [(L)] *(M) if the Applicant proposes to make markets on Nasdaq, a description of the source and amount of Applicant's capital to support its market making activities on Nasdaq, and the source of any additional capital that may become necessary* [a description of the nature and source of Applicant's capital with supporting documentation, the risk to net capital presented by the Applicant's proposed business activities, and any arrangement for additional capital should a business need arise]; [(M)] *(N)* a description of the financial controls to be employed by the Applicant *with respect to Nasdaq Rule 3011;* [(N) a description of the Applicant's supervisory system and a copy of its written supervisory procedures] *(O) a copy of the Applicant's written supervisory procedures with respect to the activities identified in paragraph (a)(1)(D);* [(O) a description of the number, experience, and qualifications of supervisors and principals and the number, experience, and qualifications of persons to be supervised by such personnel] *(P) a list of the persons conducting the Applicant's market making and other trading activities, and a list of the persons responsible for such persons' supervision, together with the CRD number (if applicable) or a copy of Form U-4 for each such person;* [(P) Reserved] [(Q) Reserved] [(R)] *(Q) if not previously provided to FINRA,* a[n NASD] *FINRA* Entitlement Program Agreement and Terms of Use and an Account Administration Entitlement Form; [(S)] *(R)* a copy of the Applicant's most recent “FOCUS Report” (Form X-17A-5) filed with the SEC pursuant to SEC Rule 17a-5 (the most current Parts I, II, and III, as applicable); *(S) all examination reports and corresponding responses regarding the Applicant for the previous two years from the self-regulatory organizations of which it is a member;*
(T)an agreement to comply with the federal securities laws, the rules and regulations thereunder, the Nasdaq Rules, and all rulings, orders, directions, and decisions issued and sanctions imposed under the Nasdaq Rules;
(U)an agreement to pay such dues, assessments, and other charges in the manner and amount as from time to time shall be fixed pursuant to the Nasdaq Rules; and
(V)such other reasonable information with respect to the applicant as Nasdaq may require. Each Applicant and Nasdaq member shall ensure that its membership application with Nasdaq is kept current at all times by supplementary amendments via electronic process or such other process as Nasdaq may prescribe. Such amendments to the application shall be filed with Nasdaq not later than [30] *15 business* days after the applicant or Nasdaq member learns of the facts or circumstances giving rise to the *need for the* amendment. *The Applicant shall promptly notify the Department in writing of any material adverse change in its financial condition.* [(3)] ( *2* ) [Electronic Filings] *Uniform Registration Forms* Upon approval of the Applicant's Account Administrator Entitlement Form, the Applicant shall submit its Forms U4 for each Associated Person who is required to be registered under the Rules, any amendments to its Forms BD or U4, and any Form U5 electronically via Web CRD. [(4)] ( *3* ) Rejection of Application That Is Not Substantially Complete If the Department determines within [30] *15 business* days after the filing of an application that the application is not substantially complete, the Department may reject the application and deem it not to have been filed. In such case, within the [30] *15* day period, the Department shall serve a written notice on the Applicant of the Department's determination and the reasons therefor. Nasdaq shall refund the application fees, if any, in accordance with the provisions of the Nasdaq Rules governing such fees. If the Applicant determines to continue to seek membership, the Applicant shall submit a new application and any required fee under this Rule. [(5)] ( *4* ) [Request For] Additional Documents Or Information Within [30] *15 business* days after the filing of an application, the Department shall serve an initial request for any additional information or documents necessary to render a decision on the application. The Department may serve subsequent requests for additional information or documents at any time during the membership application process. Unless otherwise agreed by the Department and the Applicant, the Applicant shall file any additional information and documents with the Department within [60] *15 business* days after service of the Department's [initial] request [and 30 days after service of any subsequent request]. [(6)] ( *5* ) Applicants That Are Members of an Association or Another Exchange
(A)Applicants for Nasdaq membership that are also simultaneously applying for [NASD] *FINRA* membership may file one application with [the NASD] *FINRA* in compliance with the NASD Rule 1010 Series; however, Nasdaq will not take action on the application for Nasdaq membership until the applicant is an active member of [the NASD] *FINRA* .
(B)Applicants that are members of another registered national securities exchange or association must submit a complete application form containing all of the required items of information listed in Rule 1013(a)[(2)]( *1* ).
(C)An applicant that is an approved [NASD] *FINRA* member shall have the option to apply to become a Nasdaq member and to register with Nasdaq all associated persons of the firm whose registrations with the firm are approved with *FINRA* [the NASD] in categories recognized by Nasdaq rules through an expedited process by submitting a Waive-in Membership Application Form and a Nasdaq Membership Agreement.
(b)Membership Interview
(1)*Optional* [Requirement for] Interview Before the Department serves its decision on an application for new membership in Nasdaq, the Department [shall] *may* conduct a membership interview with a representative or representatives of the Applicant *if the Department determines that an interview is necessary to clarify aspects of an application.*
(2)Service of Notice At least seven days before [the] *a* membership interview, the Department shall serve on the Applicant a written notice that specifies the date and time of the interview and the representative or representatives of the Applicant who are required to participate in the interview. The Department shall serve the notice by facsimile or overnight courier. The Applicant and the Department may agree to a shorter or longer period for notice or a different method of service under this subparagraph.
(3)Time Unless the Department directs otherwise for good cause shown, *any* membership interview shall be scheduled to occur within [90] *60* days after the filing of an application or within [60] *15 business* days after the filing of all additional information or documents requested, whichever is later.
(4)Place The membership interview shall be conducted in a location specified by Nasdaq. [(5) Updated Financial Documents] [On or before the date of the membership interview, an Applicant shall file an updated trial balance and computation of net capital. The Applicant shall prepare such documents as of a date that is within 45 days before the date of the membership interview, unless the Applicant and the Department agree on a longer period. The Applicant shall promptly notify the Department in writing of any material adverse change in its financial condition that occurs before a decision constituting final action of Nasdaq is served on the Applicant.] [(6)] ( *5* ) Review of Standards for Admission During [the] *any* membership interview, the Department shall review the application and the *bases for denial of* [standards for admission to] membership with the Applicant's representative or representatives. [(7)] ( *6* ) Information From Other Sources During [the] *any* membership interview, the Department shall provide to the Applicant's representative or representatives any information or document that the Department has obtained from the Central Registration Depository or a source other than the Applicant and upon which the Department intends to base its decision under Rule 1014. If the Department *does not conduct a membership interview,* receives such information or document after the membership interview, or decides to base its decision on such information after the membership interview, the Department shall promptly serve the information or document and an explanation thereof on the Applicant. *The Applicant may submit such materials as it may deem relevant with respect to such information or document at any time prior to the service of a decision under Rule 1014.* 1014. Department Decision
(a)[Standards for Admission] *Bases for Denial of Membership* After considering the *completed* application, [the membership interview,] other information and documents provided by the Applicant, other information and documents obtained by the Department, and the public interest and the protection of investors, *the Department shall approve the application unless the Department determines that such information or documents provide a basis for denial of membership:* ( *1* ) [t] *T* he Department [shall determine whether the Applicant meets each of the following standards:] *may deny (or condition) approval of an Applicant for the same reasons that the Securities and Exchange Commission may deny or revoke a broker or dealer registration and for those reasons required or allowed under the Act;* *(2) Without limiting the generality of the foregoing, the Department may deny (or condition) approval of an Applicant when the Applicant directly or indirectly:* *(A) is unable to satisfactorily demonstrate its present capacity to adhere to all applicable Nasdaq and Commission policies, rules, and regulations, including, without limitation, those concerning record-keeping, reporting, finance, and trading procedures;* *(B) has previously violated, and there is a reasonable likelihood such Applicant will again engage in acts or practices violative of, any applicable Nasdaq or Commission policies, rules and regulations, including, without limitation, those concerning record-keeping, reporting, finance and trading procedures or those rules of other self-regulatory organizations of which such Applicant is or was a member;* *(C) has engaged, and there is a reasonable likelihood such Applicant will again engage, in acts or practices inconsistent with just and equitable principles of trade;* *(D) is not in compliance with the SEC's net capital rule (17 CFR. 240.15c3-1), or has financial difficulties involving an amount that is more than 5% of the Applicant's net worth;* *(E) has been itself, or is the successor to an entity which has been subject to any bankruptcy proceeding, receivership or arrangement for the benefit of creditors within the past three years;* *(F) has engaged in an established pattern of failure to pay just debts;* *(G) does not have such licenses and registrations as are required by governmental authorities and self-regulatory organizations; or* *(H) is unable satisfactorily to demonstrate reasonably adequate systems capacity and capability.* [(1) The application and all supporting documents are complete and accurate.] [(2) The Applicant and its Associated Persons have all licenses and registrations required by state and federal authorities and self-regulatory organizations.] [(3) The Applicant and its Associated Persons are capable of complying with the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules, including observing high standards of commercial honor and just and equitable principles of trade. In determining whether this standard is met, the Department shall take into consideration whether:] [(A) a state or federal authority or self-regulatory organization has taken permanent or temporary adverse action with respect to a registration or licensing determination regarding the Applicant or an Associated Person;] [(B) an Applicant's or Associated Person's record reflects a sales practice event, a pending arbitration, or a pending private civil action;] [(C) an Applicant or Associated Person is the subject of a pending, adjudicated, or settled regulatory action or investigation by the Commission, the Commodity Futures Trading Commission, a federal, state, or foreign regulatory agency, or a self-regulatory organization; an adjudicated, or settled investment-related private civil action for damages or an injunction; or a criminal action (other than a minor traffic violation) that is pending, adjudicated, or that has resulted in a guilty or no contest plea; or an Applicant, its control persons, principals, registered representatives, other Associated Persons, any lender of 5% or more of the Applicant's net capital, or any other member with respect to which any of these persons is or was a control person or a 5% lender of its net capital is subject to unpaid arbitration awards, other adjudicated customer awards, or unpaid arbitration settlements;] [(D) an Associated Person was terminated for cause or permitted to resign after an investigation of an alleged violation of a federal or state securities law, a rule or regulation thereunder, a self-regulatory organization rule, or industry standard of conduct;] [(E) a state or federal authority or self-regulatory organization has imposed a remedial action, such as special training, continuing education requirements, or heightened supervision, on an Associated Person; and] [(F) a state or federal authority or self-regulatory organization has provided information indicating that the Applicant or an Associated Person otherwise poses a threat to public investors.] [(4) The Applicant has established all contractual or other arrangements and business relationships with banks, clearing corporations, service bureaus, or others necessary to:] [(A) initiate the operations described in the Applicant's application, considering the nature and scope of operations and the number of personnel; and] [(B) comply with the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules.] [(5) The Applicant has or has adequate plans to obtain facilities that are sufficient to:] [(A) initiate the operations described in the Applicant's application, considering the nature and scope of operations and the number of personnel; and] [(B) comply with the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules.] [(6) The communications and operational systems that the Applicant intends to employ for the purpose of conducting business with customers and other members are adequate and provide reasonably for business continuity in each area set forth in Rule 1013(a)(2)(E)(xii);] [(7) The Applicant is capable of maintaining a level of net capital in excess of the minimum net capital requirements set forth in SEC Rule 15c3-1 adequate to support the Applicant's intended business operations on a continuing basis, based on information filed under Rule 1013. The Department may impose a reasonably determined higher net capital requirement for the initiation of operations after considering:] [(A) the amount of net capital sufficient to avoid early warning level reporting requirements, such as SEC Rule 17a-11;] [(B) the amount of capital necessary to meet expenses net of revenues for at least twelve months, based on reliable projections agreed to by the Applicant and the Department;] [(C) any planned market making activities, the number of markets to be made, the type and volatility of products, and the anticipated maximum inventory positions;] [(D) any plan to enter into other contractual commitments, such as underwritings or other securities-related activities;] [(E) any plan to distribute or maintain securities products in proprietary positions, and the risks, volatility, degree of liquidity, and speculative nature of the products; and] [(F) any other activity that the Applicant will engage in that reasonably could have a material impact on net capital within the first twelve months of business operations.] [(8) The Applicant has financial controls to ensure compliance with the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules.] [(9) The Applicant has compliance, supervisory, operational, and internal control practices and standards that are consistent with practices and standards regularly employed in the investment banking or securities business, taking into account the nature and scope of Applicant's proposed business.] [(10) The Applicant has a supervisory system, including written supervisory procedures, internal operating procedures (including operational and internal controls), and compliance procedures designed to prevent and detect, to the extent practicable, violations of the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules. In evaluating the adequacy of a supervisory system, the Department shall consider the overall nature and scope of the Applicant's intended business operations and shall consider whether:] [(A) the number, location, experience, and qualifications of supervisory personnel are adequate in light of the number, location, experience, and qualifications of persons to be supervised; the Central Registration Depository record or other disciplinary history of supervisory personnel and persons to be supervised; and the number and locations of the offices that the Applicant intends to open and the nature and scope of business to be conducted at each office;] [(B) the Applicant has identified specific Associated Persons to supervise and discharge each of the functions in the Applicant's business plan, and to supervise each of the Applicant's intended offices, whether or not such offices are required to be registered under the Nasdaq Rules;] [(C) the Applicant has identified the functions to be performed by each Associated Person and has adopted procedures to assure the registration with Nasdaq and applicable states of all persons whose functions are subject to such registration requirements;] [(D) each Associated Person identified in the business plan to discharge a supervisory function has at least one year of direct experience or two years of related experience in the subject area to be supervised;] [(E) the Applicant will solicit retail or institutional business;] [(F) the Applicant will recommend securities to customers;] [(G) the location or part-time status of a supervisor or principal will affect such person's ability to be an effective supervisor;] [(H) the Applicant should be required to place one or more Associated Persons under heightened supervision pursuant to NASD Notice to Members 97-19 (as incorporated by reference into Nasdaq IM-3010);] [(I) any remedial action, such as special training or continuing education requirements or heightened supervision, has been imposed on an Associated Person by a state or federal authority or self-regulatory organization; and] [(J) any other condition that will have a material impact on the Applicant's ability to detect and prevent violations of the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules.] [(11) The Applicant has a recordkeeping system that enables Applicant to comply with federal, state, and self-regulatory organization recordkeeping requirements and a staff that is sufficient in qualifications and number to prepare and preserve required records.] [(12) The Applicant has completed a training needs assessment and has a written training plan that complies with the continuing education requirements imposed by the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules.] [(13) Nasdaq does not possess any information indicating that the Applicant may circumvent, evade, or otherwise avoid compliance with the federal securities laws, the rules and regulations thereunder, or the Nasdaq Rules.] [(14) The application and all supporting documents otherwise are consistent with the federal securities laws, the rules and regulations thereunder, and the Nasdaq Rules.] [(15)] *(3)* *The Department will not approve an Applicant unless* [T]the Applicant is a member of another registered securities exchange or association that is not registered solely under Section 6(g) or Section 15A(k) of the Securities Exchange Act of 1934. An Applicant that will transact business with the public must be a member of [the NASD] *FINRA* .
(b)Granting or Denying Application
(1)[In reviewing an application for membership, the Department shall consider whether the Applicant and its Associated Persons meet each of the standards in paragraph (a). Where the Department determines that the Applicant or its Associated Persons are the subject of any of the events set forth in Rule 1014(a)(3)(A) and
(C)through (E), a presumption exists that the application should be denied. The Applicant may overcome the presumption by demonstrating that it can meet each of the standards in paragraph (a), notwithstanding the existence of any of the events set forth in Rule 1014(a)(3)(A) and
(C)through (E).] [(2) If the Department determines that the Applicant meets each of the standards in paragraph (a), the Department shall grant the application for membership.] [(3)] *Unless* [If] the Department determines that *there is a basis for denying (or conditioning) approval of* the [Applicant] *application under* [does not meet one or more of] the [standards] *bases for denial* in paragraph
(a)[in whole or in part], the Department shall *approve the application for membership. If the Department does not approve the application, the Department shall* :
(A)grant the application subject to one or more restrictions reasonably designed to address a specific financial, operational, supervisory, disciplinary, investor protection, or other regulatory concern [based on the standards for admission in Rule 1014(a)]; or
(B)deny the application.
(c)Decision
(1)Time The Department shall serve a written decision on the membership application within [30] *15 business* days after the conclusion of the membership interview ( *if any* ) or after the filing of [additional] *all required* information or documents, whichever is later.
(2)Content If the Department denies the application *or grants the application subject to restrictions,* the decision shall explain in detail the reason for denial *or restriction,* referencing the applicable [standard or standards] *bases* in paragraph (a). [If the Department grants the application subject to restrictions, the decision shall explain in detail the reason for each restriction, referencing the applicable standard or standards in paragraph
(a)upon which the restriction is based and identify the specific financial, operational, supervisory, disciplinary, investor protection, or other regulatory concern that the restriction is designed to address and the manner in which the restriction is reasonably designed to address the concern.]
(3)Failure to Serve Decision If the Department fails to serve a decision within [180] *90* days after the filing of an application *(or 120 days if the Department has opted to conduct a membership interview)* or such later date as the Department and the Applicant have agreed in writing, the Applicant may file a written request with the Nasdaq Board requesting that the Nasdaq Board direct the Department to serve a decision. Within seven days after the filing of such a request, the Nasdaq Board shall direct the Department to serve its written decision immediately or to show good cause for an extension of time. If the Department shows good cause for an extension of time, the Nasdaq Board may extend the [180] *90* -day *(or 120-day)* time limit by not more than [90] *45* days. (d)-(g) No change. 1015. Review by Nasdaq Review Council
(a)Initiation of Review by Applicant Within 25 days after service of a decision under Rule 1014 or 1017, an Applicant may file a written request for review with the Nasdaq Review Council. A request for review shall state with specificity why the Applicant believes that the Department's decision is inconsistent with the [membership standards] *bases for denial* set forth in Rule 1014, or otherwise should be set aside, and state whether a hearing is requested. The Applicant simultaneously shall file by first-class mail a copy of the request with the Department. (b)-(i) No change.
(j)Decision
(1)No change.
(2)Contents The decision shall include:
(A)a description of the Department's decision, including its rationale;
(B)a description of the principal issues raised in the review;
(C)a summary of the evidence on each issue; and
(D)a statement whether the Department's decision is affirmed, modified, or reversed, and a rationale therefor that references the [applicable standards] *bases for denial* in Rule 1014. (3)-(4) No change. 1017. Application for Approval of Change in Ownership, Control, or Business Operations
(a)No change.
(b)Filing and Content of Application
(1)No change.
(2)The application shall describe in detail the change in ownership, control, or business operations and include a business plan, pro forma financials, an organizational chart, and written supervisory procedures reflecting the change.
(A)No change.
(B)If the application requests the removal or modification of a membership agreement restriction, the application also shall:
(i)present facts showing that the circumstances that gave rise to the restriction have changed; and
(ii)state with specificity why the restriction should be modified or removed in light of [the standards set forth in Rule 1014 and] the articulated rationale for the imposition of the restriction.
(C)No change.
(c)Effecting Change and Imposition of Interim Restrictions
(1)A member shall file an application for approval of a change in ownership or control at least 30 days prior to such change. A member may effect a change in ownership or control prior to the conclusion of the proceeding, but the Department may place new interim restrictions on the member [based on the standards in Rule 1014,] pending final Department action. (2)-(3) No change.
(d)Rejection Of Application That Is Not Substantially Complete If the Department determines within [30] *15 business* days after the filing of an application that the application is not substantially complete, the Department may reject the application and deem it not to have been filed. In such case, within the [30] *15* day period, the Department shall serve a written notice on the Applicant of the Department's determination and the reasons therefor. If the Applicant determines to continue to apply for approval of a change in ownership, control, or business operations, the Applicant shall submit a new application under this Rule.
(e)Request for Additional Documents and Information Within [30] *15 business* days after the filing of an application, the Department shall serve a request for any additional information or documents necessary to render a decision on the application. The Department may request additional information or documents at any time during the application process. Unless otherwise agreed to by the Department and the Applicant, the Applicant shall file such additional information or documents with the Department within [30] *15 business* days after the Department's request.
(f)Membership Interview
(1)The Department may require the Applicant to participate in a membership interview within [30] *15 business* days after the filing of the application, or if the Department requests additional information or documents, within [30] *15 business* days after the filing of the additional information or documents by the Applicant. (2)-(4) No change.
(g)Department Decision
(1)The Department shall consider the application, the membership interview, other information and documents provided by the Applicant or obtained by the Department, the public interest, and the protection of investors. [In rendering a decision on an application submitted under Rule 1017(a), the Department shall consider whether the Applicant and its Associated Persons meet each of the standards in Rule 1014(a). Where the Department determines that the Applicant or its Associated Person are the subject of any of the events set forth in Rule 1014(a)(3)(A) and
(C)through (E), a presumption exists that the application should be denied. The Applicant may overcome the presumption by demonstrating that it can meet each of the standards in Rule 1014(a), notwithstanding the existence of any of the events set forth in Rule 1014(a)(3)(A) and
(C)through (E).] *Unless the Department determines that there is a basis for denying (or conditioning) approval of the Applicant under the bases for denial in Rule 1014(a), the Department shall approve an application submitted under Rule 1017(a)* .
(A)In rendering a decision on an application for approval of a change in ownership or control, or an application for approval of a material change in business operations that does not involve modification or removal of a membership agreement restriction, the Department shall determine if *there would be a basis for denying (or conditioning) approval of* the Applicant [would continue to meet] *under* the [standards] *bases for denail* in Rule 1014(a) upon approval of the application.
(B)In rendering a decision on an application requesting the modification or removal of a membership agreement restriction, the Department shall consider whether maintenance of the restriction is appropriate in light of:
(i)[the standards set forth in Rule 1014;] [(ii)] the circumstances that gave rise to the imposition of the restriction; [(iii)]( *ii* ) the Applicant's operations since the restriction was imposed; [(iv)]( *iii* ) any change in ownership or control or supervisors and principals; and [(v)]( *iv* ) any new evidence submitted in connection with the application.
(2)The Department shall serve a written decision on the application within [30] *15 business* days after the conclusion of the membership interview or the filing of additional information or documents, whichever is later. If the Department does not require the Applicant to participate in a membership interview or request additional information or documents, the Department shall serve a written decision within [45] *20 business* days after the filing of the application under paragraph (a). The decision shall state whether the application is granted or denied in whole or in part, and shall provide a rationale for the Department's decision, referencing the applicable standard in Rule 1014.
(3)If the Department fails to serve a decision within [180] *90* days after filing of an application or such later date as the Department and the Applicant have agreed in writing, the Applicant may file a written request with the Nasdaq Board requesting that the Nasdaq Board direct the Department to issue a decision. Within seven days after the filing of such a request, the Nasdaq Board shall direct the Department to issue a written decision immediately or to show good cause for an extension of time. If the Department shows good cause for an extension of time, the Nasdaq Board may extend the time limit for issuing a decision by not more than [30] *15 business* days. *(4) Notwithstanding anything in this Rule 1017 to the contrary:* *(A) in the event that a Nasdaq member that is also a FINRA member submits an application for approval under this Rule and such member is also required to submit an application under NASD Rule 1017, the Department shall not be required to serve a written decision under this rule until 10 business days after FINRA serves a written decision; and* *(B) in the event that a proposed change in ownership, control, or business operations by a Nasdaq member requires such member to become a member of FINRA, the Department shall not be required to serve a written decision under this rule until 10 business days after the Nasdaq member becomes a FINRA member.*
(4)No change. (h)-(k) No change. 1020. Registration of Principals 1021. Registration Requirements (a)-(d) No change.
(e)Requirement of Two Registered Principals for Members
(1)A Nasdaq member, except a sole proprietorship, shall have at least two officers or partners who are registered as principals with respect to each aspect of the member's investment banking and securities business pursuant to the applicable provisions of Rule 1022; *provided, however, that a proprietary trading firm with 25 or fewer registered representatives shall only be required to have one officer or partner who is registered as a principal* . This requirement applies to persons seeking admission as members and existing members. (2)-(3) No change. 1032. Categories of Representative Registration (a)-(e) No change.
(f)Limited Representative—Equity Trader
(1)Each person associated with a member who is included within the definition of a representative as defined in Rule 1011 must register with Nasdaq as a Limited Representative—Equity Trader if, with respect to transactions in equity, preferred or convertible debt securities on Nasdaq, such person is engaged in proprietary trading, the execution of transactions on an agency basis, or the direct supervision of such activities, other than any person associated with *(A)* a member whose trading activities are conducted principally on behalf of an investment company that is registered with the Commission pursuant to the Investment Company Act of 1940 and that controls, is controlled by or is under common control, with the member, *or
(B)a proprietary trading firm* .
(2)No change. (g)-(h) No change. 1130. Reliance on Current Membership List The Nasdaq Secretary shall keep a currently accurate and complete membership roll, containing the name and address of each Nasdaq member, and the name and address of the executive representative of each Nasdaq member. In any case where a membership has been terminated, such fact shall be recorded together with the date on which the membership ceased. The membership roll of Nasdaq shall at all times be available to all members of Nasdaq, to all governmental authorities, and to the general public; *provided, however, that the names and addresses of executive representatives shall not be available to members or the general public* . For the purpose of complying with pertinent Rules, a member shall be entitled to rely on such membership roll. 1150. Executive Representative Each Nasdaq member shall appoint and certify to the Secretary of Nasdaq one “executive representative” who shall represent, vote, and act for the Nasdaq member in all the affairs of Nasdaq; provided, however, that other representatives of a Nasdaq member may also serve on the Nasdaq Board or committees of Nasdaq or otherwise take part in the affairs of Nasdaq. *If a Nasdaq member is also a member of FINRA, the Nasdaq executive representative shall be the same person appointed to serve as the FINRA executive representative.* A Nasdaq member may change its executive representative or appoint a substitute for its executive representative upon giving notice thereof to the Nasdaq Secretary via electronic process or such other process as Nasdaq may prescribe. An executive representative of a Nasdaq member or a substitute shall be a member of senior management and registered principal of the Nasdaq member. Each executive representative shall maintain an Internet electronic mail account for communication with Nasdaq and shall update firm contact information as prescribed by Nasdaq. Each member shall review and, if necessary, update its executive representative designation and contact information within 17 business days after the end of each calendar quarter. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq is proposing to amend its 1000 Series rules governing the process for applying to become a member of Nasdaq. When Nasdaq first adopted membership rules as an exchange in 2006, it based Rules 1013 and 1014, which stipulate the content of a membership application and the standards for review and approval, primarily on corresponding rules of the then National Association of Securities Dealers (“NASD”). 3 However, Nasdaq also adopted Rule 1013(a)(6)(C), which allows any FINRA member in good standing to become a Nasdaq member through an expedited waive-in application. This approach reflected the fact that
(i)the Nasdaq market had formerly been operated as a facility of NASD and virtually all Nasdaq market participants were NASD members, and
(ii)FINRA's subsidiary, NASD Regulation, is party to a regulatory services agreement with Nasdaq, under which FINRA, among other things, processes membership applications for Nasdaq. Accordingly, it was felt that maintaining similar rules would facilitate efficient review of applications by non-FINRA members, since FINRA members would become Nasdaq members through the expedited waive-in process. 3 In late July 2007, NASD changed its name to the Financial Industry Regulatory Authority (“FINRA”). Accordingly, we use the term NASD in this filing only
(i)when referring to period of time before the name change, and
(ii)with respect to rules that are still officially designated by FINRA as “NASD rules.” As a result of section 15(b)(8) of the Act 4 and the exemption therefrom provided by Rule 15b9-1 under the Act, 5 moreover, a potential Nasdaq member must also be a member of FINRA unless it
(i)carries no customer accounts, and
(ii)has annual gross income derived from purchases and sales of securities otherwise than on an exchange of which it is a member in an amount no greater than $1000. Nasdaq underscored this requirement in its own Rule 1014, which provides that an applicant for membership that will transact business with the public must be a member of FINRA. Accordingly, the only applicants for Nasdaq membership using the full membership application process have been, and logically will continue to be, proprietary trading firms that are not, and are not required to become, members of FINRA. Because the Nasdaq application process is derived directly from FINRA rules, however, it is not well suited to review of these applicants, because FINRA rules focus extensively on a member's relationship with its customers. 4 15 U.S.C. 78o(b)(8). 5 17 CFR 240.15b9-1. Nasdaq Rule 1014 also provides that an applicant for Nasdaq membership must already be a member either of FINRA or of another national securities exchange. As a result, all applicants for membership in Nasdaq already have an Examining Authority for purposes of Rule 15c3-1 under the Act 6 when they apply. Although there is nothing that would prevent Nasdaq from becoming a member's Examining Authority at a later date if the Commission so designated it, Nasdaq believes that its membership application rules should reflect the applicant's current status with respect to another self-regulatory organization (“SRO”), and therefore do not need to require the same degree of financial information about the applicant as would be the case if the applicant had not previously been a member of an SRO. 6 17 CFR 240.15c3-1. Nasdaq is not, however, proposing to reduce the regulatory scrutiny to which applicants are subject to a level below that provided by other SROs; rather, Nasdaq seeks merely to redirect the focus of the process away from procedures derived from FINRA's role as primary regulator of firms with public customers and its status as Examining Authority for a large percentage of U.S. broker-dealers. In drafting its new proposed procedures, Nasdaq has reviewed the application procedures of other exchanges—principally NYSE Arca, Inc. and the International Securities Exchange, LLC—and has adopted standards that it believes are well designed to allow an evaluation of applicant's ability to comply with Nasdaq and SEC Rules. As the framework for the new process, Nasdaq is proposing to define the term “proprietary trading firm” to mean an applicant for membership with the following characteristics:
(i)The Applicant is not required to become a FINRA member under section 15(b)(8) of the Act but is a member of another registered securities exchange not registered solely under section 6(g) of the Act;
(ii)all funds used or proposed to be used by the Applicant for trading are the Applicant's own capital, traded through the Applicant's own accounts;
(iii)the Applicant does not, and will not have “customers,” as that term is defined in Nasdaq Rule 0120(g); and
(iv)all Principals and Representatives of the Applicant acting or to be acting in the capacity of a trader must be owners of, employees of, or contractors to the Applicant. Nasdaq also proposes to amend the definition of “material change in business operations” in Rule 1011 to include “adding business activities that would cause a proprietary trading firm no longer to meet the definition of that term. * * *” As a result, if a firm became a member based on its status as a proprietary trading firm but then sought to expand its activities to include dealings with customers, the member would be required to undergo an assessment and obtain approval of this change under Rule 1017. As currently reflected in that Rule, a material change in business operations requires an application that describes in detail the change in ownership, control, or business operations and include a business plan, pro forma financials, an organizational chart, and written supervisory procedures reflecting the change. Under the new application process, an applicant would be required to submit the following information in its application: • A copy of the Applicant's current Form BD; • An original Nasdaq-approved fingerprint card for each Associated Person who will be subject to Rule 17f-2 under the Act and for whom a fingerprint card has not been filed with another SRO; • Nasdaq's application fee, as provided in Nasdaq Rule 7001; • A description of the Applicant's proposed trading activities on Nasdaq, such as the types of securities it will trade, whether it will be a market maker, an order entry firm, and/or engage in block trading activities, and the extent to which the Applicant is conducting such activities as a member of other SRO(s); • A copy of the Applicant's most recent audited financial statements and a description of any material changes in the Applicant's financial condition since the date of the financial statements; • An organizational chart; • The intended location of the Applicant's principal place of business and all other offices, if any, whether or not such offices would be required to be registered under the Nasdaq Rules, and the names of the persons who will be in charge of each office; 7 7 For most proprietary trading firms, there would be only one office. • A description of the communications and operational systems the Applicant will employ to conduct business and the plans the procedures, the Applicant will employ to ensure business continuity, including: system capacity to handle the anticipated level of usage; contingency plans in the event of systems or other technological or communications problems or failures; system redundancies; disaster recovery plans; and system security; • A copy of any decision or order by a federal or state authority or self-regulatory organization taking permanent or temporary adverse action with respect to a registration or licensing determination regarding the Applicant or an Associated Person; • A statement indicating whether the Applicant is currently, or has been in the last ten years, the subject of any investigation or disciplinary proceeding conducted by any self-regulatory organization, the foreign equivalent of a self-regulatory organization, a foreign or international securities exchange, a contract market designated pursuant to the Commodity Exchange Act or any substantially equivalent foreign statute or regulation, a futures association registered under the Commodity Exchange Act or any substantially similar foreign statute or regulation, the Commission or any other “appropriate regulatory agency” (as defined in the Act), the Commodity Futures Trading Commission, or any state financial regulatory agency regarding the Applicant's activities that has not been reported to the Central Registration Depository, together with all relevant details, including any sanctions imposed; • A statement indicating whether any person listed on Schedule A of the Applicant's Form BD 8 is currently, or has been in the last ten years, the subject of any investigation or disciplinary proceeding conducted by any self-regulatory organization, the foreign equivalent of a self-regulatory organization, a foreign or international securities exchange, a contract market designated pursuant to the Commodity Exchange Act or any substantially equivalent foreign statute or regulation, a futures association registered under the Commodity Exchange Act or any substantially similar foreign statute or regulation, the Commission or any other “appropriate regulatory agency”, the Commodity Futures Trading Commission, or any state financial regulatory agency regarding the Applicant's activities that has not been reported to the Central Registration Depository, together with all relevant details, including any sanctions imposed; 8 The direct owners and executive officers of the Applicant. • A copy of any contract or agreement with another broker-dealer, a bank, a clearing entity, a service bureau or a similar entity to provide the Applicant with services regarding the execution or clearance and settlement of transactions effected on Nasdaq; • If the Applicant proposes to make markets on Nasdaq, a description of the source and amount of Applicant's capital to support its market making activities on Nasdaq, and the source of any additional capital that may become necessary; • A description of the financial controls to be employed by the Applicant with respect to Nasdaq Rule 3011, which governs anti-money laundering controls; • A copy of the Applicant's written supervisory procedures with respect to the Applicant's proposed trading activities on Nasdaq; • A list of the persons conducting the Applicant's market making and other trading activities, and a list of the persons responsible for such persons' supervision, together with the CRD number (if applicable) or a copy of Form U-4 for each such person; • Unless previously provided to FINRA, a FINRA Entitlement Program Agreement and Terms of Use and an Account Administration Entitlement Form; 9 9 Needed for use of FINRA's CRD system. • A copy of the Applicant's most recent “FOCUS Report” (Form X-17A-5) filed with the Commission pursuant to Rule 17a-5 under the Act (the most current Parts I, II, and III, as applicable); • All examination reports and corresponding responses regarding the Applicant for the previous two years from the self-regulatory organizations of which it is a member; • An agreement to comply with the federal securities laws, the rules and regulations thereunder, the Nasdaq Rules, and all rulings, orders, directions, and decisions issued and sanctions imposed under the Nasdaq Rules; • An agreement to pay such dues, assessments, and other charges in the manner and amount as from time to time shall be fixed pursuant to the Nasdaq Rules; and • Such other reasonable information with respect to the applicant as Nasdaq may require. In addition, as currently provided by Rule 1013, an applicant is required to submit its Forms U4 for each Associated Person who is required to be registered under Nasdaq Rules and any required amendments to its Forms BD or U4. As under the current rule, Applicants must keep their application current by submitting amendments if facts and circumstances change. Without limiting the generality of this requirement, Applicants must promptly notify the Department of any material adverse change in financial condition. Nasdaq is also amending Rule 1014 to replace the specific findings that must be made prior to admission of a FINRA member with more general bases for denial of membership. Specifically, the revised rule would provide that the Nasdaq Membership Department 10 shall approve an application unless there is a basis for denying or conditioning approval. 11 The rule further provides that the Department may deny (or condition) approval of an Applicant for the same reasons that the Commission may deny or revoke a broker or dealer registration and for those reasons required or allowed under the Act. Without limiting the generality of the foregoing, the amended rule lists specific bases upon which the Department may deny (or condition) approval of an Applicant. These bases include the inability of the Applicant to satisfactorily demonstrate capacity to adhere to applicable Nasdaq and Commission policies, rules, and regulations, including, those concerning record-keeping, reporting, finance, and trading procedures. For example, an Applicant whose written supervisory procedures did not adequately describe the means by which the firm would assure compliance by its traders with applicable market rules would be denied on that basis. Similarly, past rule violations would be a basis for denial if the firm had not taken adequate steps to guard against recurring offenses. 10 The term includes FINRA staff acting on Nasdaq's behalf. 11 A similar change would be made in Rule 1017, providing that an application for a material change in business operations shall be approved unless there is a basis for denying it under the standards in Rule 1014. Other bases for denial would include factors indicative of financial difficulties, such as not being in compliance with the Commission's net capital rule; having financial difficulties involving an amount that is more than 5% of the Applicant's net worth; being subject to a current or recent bankruptcy proceeding; or engaging in an established pattern of failure to pay just debts. Finally, denial could be based on failure to have required governmental and SRO registrations, or being unable to demonstrate reasonably adequate systems capability and capacity. The revised rule will continue to provide that the Department will not approve an Applicant unless the Applicant is a member of another registered securities exchange or association that is not registered solely with respect to futures based on single stocks or narrow indexes; and that an Applicant that will transact business with the public must be a member of FINRA. The proposed rule change also makes conforming changes to provisions of Rule 1014, 1015, and 1017 that refer to the standards for admission in Rule 1014. The proposed rule change also reduces the time allotted for various aspects of review, both for initial applications and for changes of ownership, control and business operations under Rule 1017. This change reflects the fact that all applicants will be proprietary trading firms, whose operations are less complex than those of firms with customers that are required to become FINRA members, and are also members of other SROs that serve as their Examining Authority. In addition, FINRA may conduct review of Nasdaq member applications under the revised rule using personnel located in the Washington, DC area, rather than using personnel at FINRA district offices as had previously been the case; centralizing review has the potential to reduce the time needed to process applications. However, with respect to a FINRA member or a firm that is required to become a FINRA member due to a change in ownership, control, or business operations, the rule is being amended to provide that the Department is not required to take action on an application for approval under Rule 1017 until FINRA has acted on the comparable application under its rule or the firm has become a FINRA member, as applicable. Similarly, the proposed rule change would make the membership interview for the initial application process optional at the discretion of the Department, since the interview process does not exist under the rules of most SROs and is of less importance with respect to proprietary trading firms. However, the Department would retain discretion to require an interview if determined necessary to clarify aspects of an application, in which case the time allotted for completion of the application review process by the Department would be expanded accordingly. In recognition of the lower risk profile presented by a small member that does not interact with customers, Nasdaq is also amending Rule 1021 to provide that a proprietary trading firm with 25 or fewer registered representatives is required to have only one, rather than two registered principals. Similarly, Nasdaq proposes to eliminate the requirement that traders for proprietary trading firms register as equity traders under Rule 1032(f). FINRA's Series 55 exam, which is required for registration as an equity trader, continues to have a predominant focus on the over-the-counter market and the complexities of FINRA trade reporting rules applicable to it, as well as rules relating to customers. Because a proprietary trading firm is not, by definition, required to be a FINRA member, Nasdaq believes that requiring traders for these firms to register in this capacity requires them to master a body of knowledge with little relevance to their actual participation in the market. Accordingly, Nasdaq believes that it constitutes an unwarranted regulatory burden. 12 12 If a proprietary trading firm opted to become a FINRA member even though it was not required to, its traders would be required to take the Series 55 exam and register as equity traders under FINRA rules. Finally, Nasdaq proposes to amend Rules 1130 and 1150 to simplify Nasdaq and member recordkeeping with regard to executive representatives of Nasdaq members that are also FINRA members by requiring that a firm's executive representative under Nasdaq rules be the same as its executive representative under FINRA rules. In keeping with FINRA policies, moreover, Nasdaq is amending the rule to stipulate that the identity of the executive representative is non-public information. This restriction ensures that personal contact information for executive representatives is not used for improper purposes. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of section 6 of the Act, 13 in general, and with section 6(b)(5) of the Act, 14 in particular, in that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 13 15 U.S.C. 78f. 14 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the Nasdaq consents, the Commission will:
(A)By order approve such proposed rule change, or
(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2007-085 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2007-085. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2007-085 and should be submitted on or before November 27, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21740 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56726; File No. SR-NYSE-2007-96] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Rule 80A (Index Arbitrage Trading Restrictions) October 31, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on October 25, 2007, the New York Stock Exchange LLC (“NYSE” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The NYSE filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders it 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 is proposing to rescind NYSE Rule 80A (Index Arbitrage Trading Restrictions) to eliminate order entry restrictions on certain index arbitrage orders entered on the Exchange. The text of the proposed rule change is available on the NYSE's Web site ( *http://www.nyse.com* ), at the NYSE, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to rescind NYSE Rule 80A (Index Arbitrage Trading Restrictions) and thereby eliminate the “collar” provisions of the rule. Currently, NYSE Rule 80A(a) and
(b)require that, for any component stock of the S&P 500 Stock Price Index SM , whenever the NYSE Composite Index® (“NYA”) 5 advances or declines by a predetermined value from its previous day's closing value, all index arbitrage orders to buy or sell (depending on the direction of the move in the NYA) must be entered as either “buy minus” or “sell plus.” 6 The tick restrictions are imposed based upon a “two-percent value” change in the NYA from its prior day's closing value, where the “two-percent change” is two percent of the average closing value of the NYA for the last month of the previous calendar quarter, rounded down to the nearest ten points. The order entry conditions are lifted if the NYA recovers to within one percent of the previous day's closing value, and can be reimposed if the average moves away by two percent again during a trading session. 5 The trigger values were originally based on movement in the value of the Dow Jones Industrial Average, but were changed in 2005. *See* Securities Exchange Act Release No. 52328 (August 24, 2005), 70 FR 51398 (August 30, 2005) (SR-NYSE-2005-45). 6 NYSE Rule 13 defines a “buy minus” order as an order to buy a stated amount of stock provided that the price to be obtained is not higher than the last sale if the last sale was a “minus” or “zero minus” tick, and is not higher than the last sale minus the minimum fractional change in the stock if the last sale was a “plus” or “zero plus” tick. A “sell plus” order is defined as an order to sell a stated amount of a stock provided that the price to be obtained is not lower than the last sale if the last sale was a “plus” or “zero plus” tick, and is not lower than the last sale plus the minimum fractional change in the stock if the last sale was a “minus” or “zero minus” tick. NYSE Rule 80A NYSE states that NYSE Rule 80A was formulated as one of the responses to the market break of October 1987 to reduce market volatility and promote investor confidence. 7 In its initial form, the rule used a measure of a 50 point move in the Dow Jones Industrial Average SM to activate restrictions on order entry in S&P 500 stocks into Exchange systems. 8 The restrictions were triggered on relatively few occasions throughout the early 1990s (for example, only 9 times in 1993), but were increasingly invoked as volatility heightened later in the decade (366 times in 1998). The basis for the restrictions calculation was changed in 1999 from 50 points to the two percent value discussed above. 9 This had the effect of reining in the imposition of the restrictions; in fact, they were imposed only once during 2004-2005. They have been imposed 15 times so far in 2007. 7 Rule 80A was originally approved by the Commission in April 1988. *See* Securities Exchange Act Release No. 25599 (April 19, 1988), 53 FR 13371 (April 22, 1988) (SR-NYSE-88-02). 8 “Dow Jones Industrial Average” is a service mark of Dow Jones & Co., Inc. 9 *See* Securities Exchange Act Release No. 41041 (February 11, 1999), 64 FR 8424 (February 19, 1999) (SR-NYSE-98-45). The Exchange is making this change since it does not appear that the approach to market volatility envisioned by the use of these “collars” is as meaningful today as when the rule was formalized in the late 1980s. In the Exchange's view, volatility is neither restrained nor enhanced by the imposition of the collars. It is as likely that markets will reverse trends whether or not Rule 80A is invoked. In addition, NYSE Rule 80A addresses only one type of trading strategy, namely index arbitrage, whereas the number and types of strategies have increased markedly in the last 20 years and may as well contribute to the increase in or lack of volatility. Indeed, in approving the Exchange's expansion of the collars to the two percent level in 1999, the Commission stated that “[i]t may make little sense to single out index arbitrage, which ensures that markets are aligned economically, from all other types of program trading.” 10 10 *Id.* at 8246. As markets have continually and significantly evolved in the years since the original rule was adopted, similar regulatory constraints on trading have been removed. For example, earlier this year, the Commission ended price tick restrictions on short sales by removing Rule 10a-1, 11 a regulation adopted almost 70 years ago. 12 In doing so, the Commission discussed the practice of applying different price tests to trading in different securities and markets. This is true in NYSE Rule 80A as well since its tick restrictions apply only to index arbitrage orders in S&P 500 component stocks. 11 17 CFR 240.10a-1. 12 *See* Securities Exchange Act Release No. 55970 (June 28, 2007), 72 FR 36348 (July 3, 2007). For these reasons, the Exchange believes it is appropriate to remove the order entry restrictions of NYSE Rule 80A. Definitions in NYSE Rule 80A Definitions in NYSE Rule 80A.40(a) and
(b)for the terms “index arbitrage” and “program trading” are proposed to be repositioned in NYSE Rule 132B (Order Tracking Requirements) as they continue to be part of the Exchange's regulatory agenda. 13 The definition of “account of an individual investor” in NYSE Rule 80A.40(c) is proposed to be made part of NYSE Rule 92.40 as this rule currently refers to this definition in NYSE Rule 80A. 13 Earlier this year, the Exchange advised its member organizations of new reporting requirements for program trading activities, including index arbitrage activities. *See* NYSE Regulation Information Memo No. 07-52 (June 11, 2007). If the proposed relocation of the definitions of “index arbitrage” and “program trading” is approved, the Exchange will inform member organizations of these reporting obligations. Other Rule Amendments Conforming amendments to two other Exchange rules are proposed as a consequence of the proposed amendments to NYSE Rule 80A. *NYSE Rule 123C* —This rule details the procedures for “market on close”
(MOC)and “limit on close”
(LOC)order entry, publication of imbalances and closing prints. Generally, MOC or LOC orders are not cancelable after 3:40 p.m., except to correct certain errors or to comply with the order entry requirements of NYSE Rule 80A, if the two percent collars are in effect. References to the NYSE Rule 80A provisions are proposed to be removed in Rule 123C
(1)and (2). *NYSE Rule 123C(7)* —This rule establishes procedures for exceptions to NYSE Rule 80A's entry restrictions for MOC index arbitrage orders on so-called “expiration days”, *i.e.* , the day when expiring stock and index option and futures products' pricing is established, usually the third Friday of the month. It is proposed that this section be rescinded entirely. *NYSE Rule 476A* —This rule establishes procedures to enable the Exchange to impose appropriate sanctions for less serious violations of Exchange rules. References to violations of NYSE Rule 80A contained in the list of rules subject to these procedures are proposed to be deleted. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) of the Act 14 that an exchange have rules that are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 14 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing 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 on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 15 and Rule 19b-4(f)(6) thereunder. 16 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b-4(f)(6). NYSE has requested that the Commission waive the 30-day operative delay. 17 The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because rescission of NYSE Rule 80A would remove restrictions on index arbitrage, the appropriateness of which the Commission has previously questioned. 18 For this reason, the Commission designates the proposed rule change to be effective and operative upon filing with the Commission. 19 17 17 CFR 240.19b-4(f)(6)(iii). Rule 19b-4(f)(6) also requires the self-regulatory organization to give the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the five-day pre-filing requirement. 18 *See* Securities Exchange Act Release No. 41041, *supra* note 18, at 8426. There, the Commission also noted that it “may make little sense to single out index arbitrage, which ensures that markets are aligned economically, from all other types of program trading. Indeed, the restrictions on index arbitrage may tend to disconnect the securities and futures markets and impose unnecessary costs on market participants.” *Id.* 19 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-YSE-2007-96 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2007-96. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2007-96 and should be submitted on or before November 27, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 20 20 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-21773 Filed 11-5-07; 8:45 am] BILLING CODE 8011-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 11081 and # 11082] Connecticut Disaster # CT-00009 AGENCY: U.S. Small Business Administration. ACTION: Notice. SUMMARY: This is a notice of an Administrative declaration of a disaster for the State of Connecticut dated 10/25/2007. *Incident:* Severe Storms and Flooding. *Incident Period:* 10/11/2007. *Effective Date:* 10/25/2007. *Physical Loan Application Deadline Date:* 12/24/2007. *Economic Injury
(EIDL)Loan Application Deadline Date:* 07/25/2008. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Fairfield. Contiguous Counties: Connecticut: Litchfield, New Haven. New York: Dutchess, Putnam, Westchester. The Interest Rates are: Percent Homeowners With Credit Available Elsewhere 6.250 Homeowners Without Credit Available Elsewhere 3.125 Businesses With Credit Available Elsewhere 8.000 Businesses and Small Agricultural Cooperatives Without Credit Available Elsewhere 4.000 Other (Including Non-Profit Organizations) With Credit Available Elsewhere 5.250 Businesses and Non-Profit Organizations Without Credit Available Elsewhere 4.000 The number assigned to this disaster for physical damage is 11081 6 and for economic injury is 11082 0. The States which received an EIDL Declaration # are Connecticut, New York. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Steven C. Preston, Administrator. [FR Doc. E7-21818 Filed 11-5-07; 8:45 am] BILLING CODE 8025-01-P SOCIAL SECURITY ADMINISTRATION [Docket No. SSA-2007-0086] Social Security Claims Data Exchange Announcement AGENCY: Social Security Administration. ACTION: Notice of Invitation to Social Security Benefits Service Providers for Web Service Beta Test. SUMMARY: The Social Security Administration
(SSA)is pleased to announce that, in 2008; the agency will develop and implement a Beta test of a web service which will allow the submission of Initial-level claims, including Disability applications and Adult Disability Reports, from companies who assist the public with filing for benefits. In 2008, SSA plans to develop the web service to initially collect data on the Internet Social Security Benefit Application and Disability Report. Note that when a third party submits an application, SSA must contact the claimant before it is considered valid. In the initial phase, organizations will be able to submit claims data in bulk and receive a confirmation of receipt of the submitted data. In subsequent phases, the systems interface will also include the ability for organizations to check on the status of previously submitted claims information. SSA would like to extend an invitation to companies who assist individuals with their Social Security benefit applications, to participate in this web service claims data exchange Beta test. The Beta test is structured to use the “consolidator” model, where the participating company serves as a conduit to receive claims data from their client base and electronically transfer the data to SSA. After the initial disability claims data collection effort in 2008 is evaluated, SSA will add functional capabilities in future years to collect data on electronic appeal forms and integrated claims applications. This multi-year initiative will provide a comprehensive systems interface for companies to send claims data (including Title II Retirement and Spouse application data, disability data, and medical evidence) to SSA on behalf of their clients. The envisioned long-range solution beyond 2008 is a web service that will facilitate the collection of data through the entire life-cycle of Internet applications, including Title II and Title XVI initial claims and appeals. DATES: Companies which are interested in participating in this web service beta test and meet the criteria should send an e-mail to *Claims.Data.Transfer@ssa.gov* by November 8, 2007. Upon receipt of your e-mail we will invite you to a teleconference that is planned for November 15, 2007 to discuss any questions that you may have. Please note that prior to the teleconference all companies will be expected to sign a participation agreement attesting that the selection criteria is met. Reference *Web Service Beta Test* in the subject field of your e-mail and include the following information: Contact name, mailing address, phone and facsimile numbers, and e-mail address. FOR FURTHER INFORMATION CONTACT: Tammy Joyner, 410-966-2838. SUPPLEMENTARY INFORMATION: Basic Functionality SSA is interested in expanding the relationship with businesses by allowing the submission of claims-related data to SSA for multiple applicants using standardized data exchange protocols. SSA would like to leverage the data that businesses may already have in their records, without requiring the labor-intensive process of keying information into a web interface one claim at a time. Technical Information The Social Security Benefits Data Web Service will be a J2EE application which uses Simple Object Access Protocol
(SOAP)and Web Services Description Language
(WSDL)specifications. The secure offering adheres to Version 1.0 of the Web Services-Interoperability Organization (WS-I) Basic Profile. SOAP message integrity will be ensured by following Web Services Security Version 1.0 standards. Because of this approach to standardization, Third Party Bulk Claims Providers can program in their environment of choice (e.g., Java, Visual Studio, .NET, and Perl) to invoke the service and feel confident that their claims data submissions will not be compromised upon delivery to SSA. The Web Service will be integrated into SSA's existing Secure Web Services Architecture which requires the WS-Security Username Token Profile and Digital Signature standards. The claims data Web service will accept XML file format as input, and these files may be optionally compressed. Files may be attached to the message using the SOAP Message Transmission Optimization Mechanism, or they may be transmitted inline as base64 encoded data. Throughout 2008, SSA will be finalizing this Social Security Benefits Data Web Service offering and allowing businesses to participate in planned Beta tests. The WSDL which is required to invoke the service will be made available to the public next year with a developer's guide to follow shortly thereafter. The participating businesses will need to register with SSA to obtain a Secure Web Service Integrated Registration Services
(IRES)PIN/password and are prepared to support the Beta test period. Tentative key dates for the Social Security Benefits Data Web Service are: Design and Development (November 2007-July 2008). Validation and Integration (July 2008-December 2008). Beta Implementation of Internet Social Security Benefit Application data (September 2008). Beta Implementation of Internet Disability Report data (December 2008). Businesses must meet the following criteria in order to participate in this Beta Test: 1. Companies must have the current capability to write their own claims software, user guide and documentation. 2. Companies must have the current capability to electronically submit Initial-level disability claims to SSA for processing or provide the ability for their customers to equally do so. 3. Companies must have the ability to modify their claims submission environment in time to participate in testing with SSA beginning July 2008. Participating organizations must also adhere to SSA's policies, procedures and laws relative, but not limited to: Disclaimers, liability, security, integrity, privacy, entitlement factors, and benefit eligibility. The sole intention is to provide a facilitating web service to meet client demands. SSA retains the right to deny electronic delivery of claims data without confirmation of a valid electronic receipt. SSA reserves the right to deny and/or terminate testing and/or any agreements. This is not a request for proposal and the Government does not intend to pay for information submitted. Nothing in this announcement or a contractor's subsequent participation in this Web service beta test shall be construed as obligating the Government to incur any participating company's costs in developing the web service. Dated: October 31, 2007. Michael J. Astrue, Commissioner of Social Security. [FR Doc. E7-21844 Filed 11-5-07; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Environmental Impact Statement: Clark County, NV AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of Intent. SUMMARY: The FHWA is issuing this notice to advise the public that an environmental impact statement will be prepared for the proposed Sheep Mountain Parkway Multimodal Transportation Project, which includes highway, transit, and non-motorized trail components, in Clark County, Nevada. FOR FURTHER INFORMATION CONTACT: Mr. Abdelmoez A. Abdalla, Environmental Program Manager, Federal Highway Administration, 705 N. Plaza Street, Suite 220, Carson City, NV 89701, Telephone:
(775)687-1231, e-mail: *abdelmoez.abdalla@fhwa.dot.gov.* or Mr. Daryl James, Chief, Environmental Service Division, Nevada Department of Transportation (NDOT), 1263 S. Stewart Street, Carson City, Nevada 89712, Telephone:
(775)888-7686, e-mail: *djames@.dot.state.nv.us.* SUPPLEMENTARY INFORMATION: The FHWA, in cooperation with the Nevada Department of Transportation, the Regional Transportation Commission of Southern Nevada (RTC), and City of Las Vegas, will prepare an environmental impact statement
(EIS)on a proposed multimodal transportation project in Clark County, Nevada. The FHWA will serve as the Lead Federal Agency while the NDOT will serve as Joint Lead Agency. The new 2005 SAFETEA-LU environmental review process will be followed. The proposed action is to preserve a right of way corridor, identify an alignment, and develop a facility type for the “Sheep Mountain Parkway” in and near northern portions of the City of Las Vegas and the City of North Las Vegas. The purpose of the proposed project is to accommodate travel demand resulting from existing and planned development in the northern Las Vegas Valley by considering multimodal transportation facilities. The proposed project will include new transportation facilities to provide a link between the Clark County 215 beltway, US 95, and I-15 (approximately 25 miles), as well as the arterial network in the northern Las Vegas Valley. The project will also connect to planned regional fixed guideway transit corridors on Rancho Road and North 5th Street. The EIS will consider various improvement alternatives as well as a no action alternative. A feasibility study was conducted to assess multiple alignments and facility configuration options. Other alternatives will be considered as part of the public and environmental review process for this National Environmental Policy Act
(NEPA)document. Public and agency scoping meetings are planned and will be held during the project development process. Letters describing the proposed project and soliciting comments will be sent to appropriate federal, state, and local agencies having special interest or expertise, as well as private organizations and citizens who have previously expressed or are known to have interest in the proposed project. In addition, public meetings will be held during the project development process and a public hearing will be held for the draft EIS. Public notices will be given announcing the time and place of the public meetings and the hearing. The draft EIS will be available for public and agency review and comment prior to the public hearing. To ensure that the full ranges of issues related to this proposed action are addressed and significant issues are identified, comments and suggestions are invited from interested parties. Comments or questions concerning this proposed action and the EIS should be directed to the FHWA or NDOT at the addresses provided above. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program.) Authority: 42 U.S.C. § 4321 *et seq.,* 49 CFR 1.48(d)(17), and 40 CFR 1501.7 Issued on: October 30, 2007. Susan Klekar, Division Administrator, FHWA, Nevada Division. [FR Doc. 07-5518 Filed 11-5-07; 8:45 am]
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Traces to 21 documents
12 references not yet in our index
  • 10 CFR 2
  • 10 CFR 50
  • 5 CFR 6.6
  • 3 CFR 1954
  • 44 USC 3501-3520
  • 15 USC 80a
  • 17 CFR 270.7
  • 17 CFR 240.19
  • 17 CFR 240.15
  • 17 CFR 240.10
  • 49 CFR 1.48(d)(17)
  • 40 CFR 1501.7
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Cite10 CFR 2
Cite10 CFR 50
Cite5 CFR 6.6
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