Notices. Notice of meeting
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BILLING CODE 7533-01-M NUCLEAR REGULATORY COMMISSION Advisory Committee on the Medical Uses of Isotopes: Meeting Notice AGENCY: U.S. Nuclear Regulatory Commission. ACTION: Notice of meeting. SUMMARY: The U.S. Nuclear Regulatory Commission will convene a teleconference meeting of the Advisory Committee on the Medical Uses of Isotopes (ACMUI) on December 12, 2007 to review and vote on an upcoming issue with regards to the medical use of byproduct material. A copy of the agenda for the meeting will be available at *http://www.nrc.gov/reading-rm/doc-collections/acmui/agenda* or by contacting Ms.
Ashley M. Tull using the information below. DATES: The teleconference meeting will be held on Wednesday, December 12, 2007, from 12 p.m. to 12:30 p.m. Eastern Standard Time. *Public Participation:* Any member of the public who wishes to participate in the teleconference discussion should contact Ms. Tull using the contact information below. *Contact Information:* Ashley M. Tull, e-mail: *amt1@nrc.gov* , telephone:
(918)488-0552 or
(301)415-5294. Conduct of the Meeting Leon S. Malmud, M.D., will chair the meeting. Dr. Malmud will conduct the meeting in a manner that will facilitate the orderly conduct of business. The following procedures apply to public participation in the meeting: 1. Persons who wish to provide a written statement should submit an electronic copy to Ms. Tull at the contact information listed above. All submittals must be received by December 7, 2007, and must pertain to the topic on the agenda for the meeting. 2. Questions and comments from members of the public will be permitted during the meeting, at the discretion of the Chairman. 3. The transcript and written comments will be available for inspection on NRC's Web site ( *http://www.nrc.gov* ) and at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD 20852-2738, telephone
(800)397-4209, on or about February 12, 2008. Minutes of the meeting will be available on or about January 30, 2008. This meeting will be held in accordance with the Atomic Energy Act of 1954, as amended (primarily Section 161a); the Federal Advisory Committee Act (5 U.S.C. App); and the Commission's regulations in Title 10, *U.S. Code of Federal Regulations, Part 7* . Dated: November 19, 2007. Andrew L. Bates, Advisory Committee Management Officer. [FR Doc. E7-22948 Filed 11-23-07; 8:45 am] BILLING CODE 7590-01-P PENSION BENEFIT GUARANTY CORPORATION Proposed Submission of Information Collections for OMB Review; Comment Request; Multiemployer Plan Regulations AGENCY: Pension Benefit Guaranty Corporation. ACTION: Notice of intention to request extension of OMB approval. SUMMARY: The Pension Benefit Guaranty Corporation
(PBGC)intends to request that the Office of Management and Budget
(OMB)extend approval, under the Paperwork Reduction Act, of collections of information in PBGC's regulations on multiemployer plans under the Employee Retirement Income Security Act of 1974 (ERISA). This notice informs the public of PBGC's intent and solicits public comment on the collections of information. DATES: Comments must be submitted by January 25, 2008. ADDRESSES: Comments may be submitted by any of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the Web site instructions for submitting comments. • *E-mail: paperwork.comments@pbgc.gov.* • *Fax:* 202-326-4224. • *Mail or Hand Delivery:* Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026. Comments received will be posted to *http:www.pbgc.gov.* Copies of the collection of information may also be obtained without charge by writing to the Disclosure Division of the Office of the General Counsel of PBGC at the above address or by visiting the Disclosure Division or calling 202-326-4040 during normal business hours. (TTY and TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4040.) PBGC's regulations on multiemployer plans may be accessed on PBGC's Web site at *http://www.pbgc.gov.* FOR FURTHER INFORMATION CONTACT: Donald McCabe, Attorney, or Catherine B. Klion, Manager, Regulatory and Policy Division, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026, 202-326-4024. (For TTY and TDD, call 800-877-8339 and request connection to 202-326-4024). SUPPLEMENTARY INFORMATION: An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has approved and issued control numbers for the collections of information, described below, in PBGC's regulations relating to multiemployer plans (OMB approvals expire March 31, 2008). PBGC intends to request that OMB extend its approval of these collections of information for three years. PBGC is soliciting public comments to— • Evaluate whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; • Evaluate the accuracy of the agency's estimate of the burden of the proposed collections of information, including the validity of the methodologies and assumptions used; • Enhance the quality, utility, and clarity of the information to be collected; and • Minimize the burden of the collections of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. Comments should identify the specific part number(s) of the regulation(s) they relate to. The collections of information for which PBGC intends to request extension of OMB approval are as follows: 1. Termination of Multiemployer Plans (29 CFR Part 4041A) (OMB Control Number 1212-0020) Section 4041A(f)(2) of ERISA authorizes PBGC to prescribe reporting requirements for and other “rules and standards for the administration of” terminated multiemployer plans. Section 4041A(c) and (f)(1) of ERISA prohibit the payment by a mass-withdrawal-terminated plan of lump sums greater than $1,750 or of nonvested plan benefits unless authorized by PBGC. The regulation requires the plan sponsor of a terminated plan to submit a notice of termination to PBGC. It also requires the plan sponsor of a mass-withdrawal-terminated plan that is closing out to give notices to participants regarding the election of alternative forms of benefit distribution and, if the plan is not closing out, to obtain PBGC approval to pay lump sums greater than $1,750 or to pay nonvested plan benefits. PBGC uses the information in a notice of termination to assess the likelihood that PBGC financial assistance will be needed. Plan participants and beneficiaries use the information on alternative forms of benefit to make personal financial decisions. PBGC uses the information in an application for approval to pay lump sums greater than $1,750 or to pay nonvested plan benefits to determine whether such payments should be permitted. PBGC estimates that plan sponsors each year
(1)submit notices of termination for 10 plans,
(2)distribute election notices to participants in 5 of those plans, and
(3)submit requests to pay benefits or benefit forms not otherwise permitted for 1 of those plans. The estimated annual burden of the collection of information is 19.2 hours and $16,363. 2. Extension of Special Withdrawal Liability Rules (29 CFR Part 4203) (OMB Control Number 1212-0023) Sections 4203(f) and 4208(e)(3) of ERISA allow PBGC to permit a multiemployer plan to adopt special rules for determining whether a withdrawal from the plan has occurred, subject to PBGC approval. The regulation specifies the information that a plan that adopts special rules must submit to PBGC about the rules, the plan, and the industry in which the plan operates. PBGC uses the information to determine whether the rules are appropriate for the industry in which the plan functions and do not pose a significant risk to the insurance system. PBGC estimates that at most 1 plan sponsor submits a request each year under this regulation. The estimated annual burden of the collection of information is 1 hour and $5,600. 3. Variances for Sale of Assets (29 CFR Part 4204) (OMB Control Number 1212-0021) If an employer's covered operations or contribution obligation under a plan ceases, the employer must generally pay withdrawal liability to the plan. Section 4204 of ERISA provides an exception, under certain conditions, where the cessation results from a sale of assets. Among other things, the buyer must furnish a bond or escrow, and the sale contract must provide for secondary liability of the seller. The regulation establishes general variances (rules for avoiding the bond/escrow and sale-contract requirements) and authorizes plans to determine whether the variances apply in particular cases. It also allows buyers and sellers to request individual variances from PBGC. Plans and PBGC use the information to determine whether employers qualify for variances. PBGC estimates that each year, 11 employers submit, and 11 plans respond to, variance requests under the regulation, and 2 employers submit variance requests to PBGC. The estimated annual burden of the collection of information is 2.75 hours and $6,213. 4. Reduction or Waiver of Complete Withdrawal Liability (29 CFR Part 4207) (OMB Control Number 1212-0044) Section 4207 of ERISA allows PBGC to provide for abatement of an employer's complete withdrawal liability, and for plan adoption of alternative abatement rules, where appropriate. Under the regulation, an employer applies to a plan for an abatement determination, providing information the plan needs to determine whether withdrawal liability should be abated, and the plan notifies the employer of its determination. The employer may, pending plan action, furnish a bond or escrow instead of making withdrawal liability payments, and must notify the plan if it does so. When the plan then makes its determination, it must so notify the bonding or escrow agent. The regulation also permits plans to adopt their own abatement rules and request PBGC approval. PBGC uses the information in such a request to determine whether the amendment should be approved. PBGC estimates that each year, 100 employers submit, and 100 plans respond to, applications for abatement of complete withdrawal liability, and 1 plan sponsor requests approval of plan abatement rules from PBGC. The estimated annual burden of the collection of information is 25.5 hours and $35,000. 5. Reduction or Waiver of Partial Withdrawal Liability (29 CFR Part 4208) (OMB Control Number 1212-0039) Section 4208 of ERISA provides for abatement, in certain circumstances, of an employer's partial withdrawal liability and authorizes PBGC to issue additional partial withdrawal liability abatement rules. Under the regulation, an employer applies to a plan for an abatement determination, providing information the plan needs to determine whether withdrawal liability should be abated, and the plan notifies the employer of its determination. The employer may, pending plan action, furnish a bond or escrow instead of making withdrawal liability payments, and must notify the plan if it does so. When the plan then makes its determination, it must so notify the bonding or escrow agent. The regulation also permits plans to adopt their own abatement rules and request PBGC approval. PBGC uses the information in such a request to determine whether the amendment should be approved. PBGC estimates that each year, 1,000 employers submit, and 1,000 plans respond to, applications for abatement of partial withdrawal liability and 1 plan sponsor requests approval of plan abatement rules from PBGC. The estimated annual burden of the collection of information is 250.5 hours and $350,000. 6. Allocating Unfunded Vested Benefits To Withdrawing Employers (29 CFR Part 4211) (OMB Control Number 1212-0035) Section 4211(c)(5)(A) of ERISA requires PBGC to prescribe how plans can, with PBGC approval, change the way they allocate unfunded vested benefits to withdrawing employers for purposes of calculating withdrawal liability. The regulation prescribes the information that must be submitted to PBGC by a plan seeking such approval. PBGC uses the information to determine how the amendment changes the way the plan allocates unfunded vested benefits and how it will affect the risk of loss to plan participants and PBGC. PBGC estimates that 7 plan sponsors submit approval requests each year under this regulation. The estimated annual burden of the collection of information is 14 hours. 7. Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR Part 4219) (OMB Control Number 1212-0034) Section 4219(c)(1)(D) of ERISA requires that PBGC prescribe regulations for the allocation of a plan's total unfunded vested benefits in the event of a “mass withdrawal.” ERISA section 4209(c) deals with an employer's liability for de minimis amounts if the employer withdraws in a “substantial withdrawal.” The reporting requirements in the regulation give employers notice of a mass withdrawal or substantial withdrawal and advise them of their rights and liabilities. They also provide notice to PBGC so that it can monitor the plan, and they help PBGC assess the possible impact of a withdrawal event on participants and the multiemployer plan insurance program. PBGC estimates that there is at most 1 mass withdrawal and 1 substantial withdrawal per year. The plan sponsor of a plan subject to a withdrawal covered by the regulation provides notices of the withdrawal to PBGC and to employers covered by the plan, liability assessments to the employers, and a certification to PBGC that assessments have been made. (For a mass withdrawal, there are 2 assessments and 2 certifications that deal with 2 different types of liability. For a substantial withdrawal, there is 1 assessment and 1 certification (combined with the withdrawal notice to PBGC).) The estimated annual burden of the collection of information is 4 hours and $9,095. 8. Procedures for PBGC Approval of Plan Amendments (29 CFR Part 4220) (OMB Control Number 1212-0031) Under section 4220 of ERISA, a plan may within certain limits adopt special plan rules regarding when a withdrawal from the plan occurs and how the withdrawing employer's withdrawal liability is determined. Any such special rule is effective only if, within 90 days after receiving notice and a copy of the rule, PBGC either approves or fails to disapprove the rule. The regulation provides rules for requesting PBGC's approval of an amendment. PBGC needs the required information to identify the plan, evaluate the risk of loss, if any, posed by the plan amendment, and determine whether to approve or disapprove the amendment. PBGC estimates that 3 plan sponsors submit approval requests per year under this regulation. The estimated annual burden of the collection of information is 1.5 hours. 9. Mergers and Transfers Between Multiemployer Plans (29 CFR Part 4231) (OMB Control Number 1212-0022) Section 4231(a) and
(b)of ERISA requires plans that are involved in a merger or transfer to give PBGC 120 days' notice of the transaction and provides that if PBGC determines that specified requirements are satisfied, the transaction will be deemed not to be in violation of ERISA section 406(a) or (b)(2) (dealing with prohibited transactions). This regulation sets forth the procedures for giving notice of a merger or transfer under section 4231 and for requesting a determination that a transaction complies with section 4231. PBGC uses information submitted by plan sponsors under the regulation to determine whether mergers and transfers conform to the requirements of ERISA section 4231 and the regulation. PBGC estimates that there are 35 transactions each year for which plan sponsors submit notices and approval requests under this regulation. The estimated annual burden of the collection of information is 8.75 hours and $9,756. 10. Notice of Insolvency (29 CFR Part 4245) (OMB Control Number 1212-0033) If the plan sponsor of a plan in reorganization under ERISA section 4241 determines that the plan may become insolvent, ERISA section 4245(e) requires the plan sponsor to give a “notice of insolvency” to PBGC, contributing employers, and plan participants and their unions in accordance with PBGC rules. For each insolvency year under ERISA section 4245(b)(4), ERISA section 4245(e) also requires the plan sponsor to give a “notice of insolvency benefit level” to the same parties. This regulation establishes the procedure for giving these notices. PBGC uses the information submitted to estimate cash needs for financial assistance to troubled plans. Employers and unions use the information to decide whether additional plan contributions will be made to avoid the insolvency and consequent benefit suspensions. Plan participants and beneficiaries use the information in personal financial decisions. PBGC estimates that 1 plan sponsor of an ongoing plan gives notices each year under this regulation. The estimated annual burden of the collection of information is 1 hour and $4,741. 11. Duties of Plan Sponsor Following Mass Withdrawal (29 CFR Part 4281) (OMB Control Number 1212-0032) Section 4281 of ERISA provides rules for plans that have terminated by mass withdrawal. Under section 4281, if nonforfeitable benefits exceed plan assets, the plan sponsor must amend the plan to reduce benefits. If the plan nevertheless becomes insolvent, the plan sponsor must suspend certain benefits that cannot be paid. If available resources are inadequate to pay guaranteed benefits, the plan sponsor must request financial assistance from PBGC. The regulation requires a plan sponsor to give notices of benefit reduction, notices of insolvency and annual updates, and notices of insolvency benefit level to PBGC and to participants and beneficiaries and, if necessary, to apply to PBGC for financial assistance. PBGC uses the information it receives to make determinations required by ERISA, to identify and estimate the cash needed for financial assistance to terminated plans, and to verify the appropriateness of financial assistance payments. Plan participants and beneficiaries use the information to make personal financial decisions. PBGC estimates that plan sponsors of terminated plans each year give benefit reduction notices for 2 plans and give notices of insolvency benefit level and annual updates, and submit requests for financial assistance, for 28 plans. Of those 28 plans, PBGC estimates that plan sponsors each year give notices of insolvency for 4 plans. The estimated annual burden of the collection of information is one hour and $701,574. Issued in Washington, DC, this 20th day of November, 2007. John H. Hanley, Director, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation. [FR Doc. E7-22956 Filed 11-23-07; 8:45 am] BILLING CODE 7709-01-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 203-2 and Form ADV-W; SEC File No. 270-40; OMB Control No. 3235-0313. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) the Securities and Exchange Commission (“Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. The title for the collection of information is “Rule 203-2 (17 CFR 275.203-2) and Form ADV-W (17 CFR 279.2) under the Investment Advisers Act of 1940 (15 U.S.C. 80b).” Rule 203-2 under the Investment Advisers Act of 1940 establishes procedures for an investment adviser to withdraw its registration with the Commission. Rule 203-2 requires every person withdrawing from investment adviser registration with the Commission to file Form ADV-W electronically on the Investment Adviser Registration Depository (“IARD”). The purpose of the information collection is to notify the Commission and the public when an investment adviser withdraws its pending or approved SEC registration. Typically, an investment adviser files a Form ADV-W when it ceases doing business or when it is ineligible to remain registered with the Commission. The respondents to the collection of information are all investment advisers that are registered with the Commission or have applications pending for registration. The Commission has estimated that compliance with the requirement to complete Form ADV-W imposes a total burden of approximately 0.75 hours (45 minutes) for an adviser filing for full withdrawal and approximately 0.25 hours (15 minutes) for an adviser filing for partial withdrawal. Based on historical filings, the Commission estimates that there are approximately 500 respondents annually filing for full withdrawal and approximately 500 respondents annually filing for partial withdrawal. Based on these estimates, the total estimated annual burden would be 500 hours ((500 respondents × .75 hours) + (500 respondents × .25 hours)). Rule 203-2 and Form ADV-W do not require recordkeeping or records retention. The collection of information requirements under the rule and form are mandatory. The information collected pursuant to the rule and Form ADV-W are filings with the Commission. These filings are not kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. Written comments are invited on:
(a)Whether the documentation 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 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: November 13, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22927 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meetings Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94-409, that the Securities and Exchange Commission will hold the following meetings during the week of November 26, 2007: An Open Meeting will be held on Wednesday, November 28, 2007 at 10 a.m., in Room L-002, the Auditorium, and a Closed Meeting will be held on Thursday, November 29, 2007 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters may also be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(5), (7), (9)(B), and
(10)and 17 CFR 200.402(a)(5), (7), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Commissioner Casey, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matters of the Open Meeting scheduled for Wednesday, November 28, 2007 will be: 1. The Commission will consider whether to adopt amendments to Rule 14a-8(i)(8) under the Securities Exchange Act of 1934, to clarify its longstanding interpretation of that rule. 2. The Commission will consider whether to adopt amendments to the proxy rules under the Securities Exchange Act of 1934 to facilitate the use of electronic shareholder forums. The subject matter of the Closed Meeting scheduled for Thursday, November 29, 2007 will be: Formal orders of investigation; Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings of an enforcement nature; Adjudicatory matters; and Other matters related to enforcement actions. 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 20, 2007. Nancy M. Morris, Secretary. [FR Doc. E7-22999 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56811; File No. SR-Amex-2007-118] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Revising the AEMI Rules To Eliminate the Post-Opening Pair-Off of Marketable Orders Held in a Message Queue November 19, 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 November 13, 2007, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared substantially by the Amex. The Amex has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(5) thereunder 4 as one that effects a change in an existing order-entry or trading system, which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(5). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Amex proposes to adopt changes to the rules governing the Exchange's new hybrid market trading platform for equity products and exchange-traded funds, designated as AEMISM (“AEMI”), to eliminate the existing post-opening pair-off of marketable orders that are held in a Message Queue 5 during the main pair-off at an opening or reopening. 5 *See* Rule 1A-AEMI for a description of a Message Queue. The proposed rule change is available at the Amex's principal office, the Commission's Public Reference Room, and the Amex's Web site at *http://www.amex.com.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Amex included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Amex recently adopted new Commentary .06 to Rule 126-AEMI, “Precedence of Bids and Offers,” which provides that AEMI will function at all times in a manner that assures compliance with the Exchange's priority and parity rules. 6 The Amex adopted Commentary .06 to comply with an undertaking in Section III.F.1 of the settlement order in a recent administrative proceeding. 7 In the September Proposal, the Exchange noted that there were two exceptions to its compliance with the requirements of Commentary .06 that the Exchange had recently become aware of and was working to correct in the near future. 8 6 *See* Securities Exchange Act Release No. 56495 (September 21, 2007), 72 FR 55262 (September 28, 2007) (notice of filing and immediate effectiveness of File No. SR-Amex-2007-105) (“September Proposal”). 7 *See* In the Matter of American Stock Exchange LLC, Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions, a Censure, and a Cease-and-Desist Order Pursuant to Sections 19(h)(1) and 21C of the Securities Exchange Act of 1934, Securities Exchange Act Release No. 55507 (March 22, 2007) (Administrative Proceeding File No. 3-12594). 8 *See* September Proposal, *supra* note 6, at note 7. The Exchange has subsequently changed its trading system to eliminate the first exception mentioned above. The purpose of this proposal is to resolve the second exception to Rule 126-AEMI, Commentary .06 mentioned above by amending Amex Rules 108-AEMI, “Priority and Parity at Openings and Reopenings,” and 128A-AEMI, “Automatic Execution,” to eliminate the existing post-opening pair-off of marketable orders that are briefly held in a Message Queue during the main pair-off at an opening or reopening. System issues associated with this post-opening pair-off, which takes place at the time the Message Queue is terminated, can, under certain circumstances, result in the violation of the Exchange's priority and parity rules. The Amex is filing this proposal simultaneously with the implementation of the related changes to the AEMI system eliminating the post-opening pair-off. As provided in the proposed rule language, the orders from the Message Queue following the opening pair-off will be treated in the same manner as incoming orders during the regular session, including the generation of intermarket sweep orders as required, and they will enter the AEMI Book in the same time sequence in which they entered the Message Queue. 9 9 The Exchange also proposes to make a conforming change to the definition of “Message Queue” in Rule 1A-AEMI to clarify that queued messages that enter the AEMI Book do so in the aforementioned time sequence under the current functioning of the AEMI system. The Exchange asserts that the proposal to effect the foregoing changes to the AEMI trading system does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and does not have the effect of limiting the access to or availability of the system. The Exchange believes that the proposed rule changes are non-controversial and that the related changes to the AEMI system will benefit investors by eliminating an existing system function that could potentially result in a violation of the Exchange's rules. The Amex believes that the changes also should have the additional benefit of simplifying the Amex's market structure and making its pricing more transparent. 2. Statutory Basis The proposed rule change is designed to be consistent with Section 6(b) of the Act, 10 in general, and furthers the objectives of Section 6(b)(5) of the Act, 11 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change will impose no burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the Amex has designated the proposed rule change as effecting a change in an existing order-entry or trading system of the Amex that does not:
(1)Significantly affect the protection of investors or the public interest;
(2)impose any significant burden on competition; and
(3)have the effect of limiting the access to or availability of the system, the foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 12 and Rule 19b-4(f)(5) thereunder. 13 12 15 U.S.C. 78s(b)(3)(A)(iii). 13 17 CFR 240.19b-4(f)(5). 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 the 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 at *http://www.sec.gov/rules/sro.shtml;* or • Send an e-mail to *rulecomments@sec.gov.* Please include File No. SR-Amex 2007-118 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-Amex 2007-118. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site at *http://www.sec.gov/rules/sro.shtml.* Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-Amex 2007-118 and should be submitted on or before December 17, 2007. 14 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 14 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22891 Filed 11-21-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56802; File No. SR-Amex-2007-53] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change, and Amendment Nos. 1 and 2 Thereto, Relating to the Listing and Trading of the GreenHaven Continuous Commodity Index Fund November 16, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on May 29, 2007, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On July 31, 2007, Amex filed Amendment No. 1 to the proposed rule change, and on November 16, 2007, Amex filed Amendment No. 2 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes, pursuant to Commentary .07 to Amex Rule 1202, to list and trade shares of the GreenHaven Continuous Commodity Index Fund (the “Fund”). The text of the proposed rule change is available at the Commission's Public Reference Room, at the Exchange, and at *http://www.amex.com* . II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 Pursuant to Commentary .07 to Amex Rule 1202, the Exchange may approve for listing and trading trust issued receipts (“TIRs”) investing in shares or securities (the “Investment Shares”) that hold investments in any combination of securities, futures contracts, options on futures contracts, swaps, forward contracts, commodities or portfolios of investments. Amex proposes to list for trading the shares of the Fund (the “Shares”), which represent beneficial ownership interests in the Master Fund's net assets, consisting solely of the common units of beneficial interest (“Master Fund Units”) of the GreenHaven Continuous Commodity Index Tracking Master Fund (the “Master Fund”). The investment objective of the Fund and the Master Fund is to reflect the performance of the Continuous Commodity Total Return Index (the “Index” or “CCI-TR”), 3 over time, less the expenses of the operations of the Fund and the Master Fund. The Fund will pursue its investment objective by investing substantially all of its assets in the Master Fund. The Master Fund will pursue its investment objective by investing in a portfolio of exchange-traded futures, each a “Commodity Futures Contract,” on the commodities comprising the Index (“the Index Commodities”). The Master Fund will also hold cash and United States Treasury securities for deposit with the Master Fund's Commodity Broker as margin and other high credit quality short-term fixed income securities. The Master Fund's portfolio is managed to reflect the performance of the Index over time. 3 Reuters America LLC (“Reuters”) is the owner, publisher, and custodian of CCI-TR which represents a total return version of the original Commodity Research Bureau
(CRB)Index. The Index is widely viewed as a broad measure of overall commodity price trends because of the diverse nature of the Index's constituent commodities. The Index is calculated to produce an unweighted geometric mean of the individual commodity price relatives, *i.e.* , a ratio of the current price to the base year average price. The base year for the CCI-TR is 1982, with a starting value of 100. The Master Fund will not be “actively managed,” but instead seeks to track the performance of the CCI-TR. To maintain the correspondence between the composition and weightings of the Index Commodities comprising the Index, the Managing Owner may adjust the portfolio on a daily basis to conform to periodic changes in the identity and/or relative weighting of the Index Commodities. The Managing Owner will also make adjustments and changes to the portfolio in the case of significant changes to the Index. The Managing Owner is registered as a commodity pool operator (“CPO”) and commodity trading advisor (“CTA”) with the Commodity Futures Trading Commission (“CFTC”) and is a member of the National Futures Association (“NFA”). The Exchange submits that Commentary .07 to Amex Rule 1202 accommodates the listing and trading of the Shares. a. Introduction In January of 2006, the Commission approved Commentary .07 to Rule 1202, which expanded the ability of the Exchange to list and trade TIRs based on a portfolio of underlying investments that may not be “securities.” 4 In the instant proposal, the Exchange proposes to list and trade the Shares pursuant to such Rule. 4 *See* Securities Exchange Act Release No. 53105 (January 11, 2006), 71 FR 3129 (January 19, 2006) (SR-Amex-2005-59). Under Commentary .07(c) to Amex Rule 1202, the Exchange may list and trade TIRs investing in Investment Shares 5 such as the Shares. The Shares will conform to the initial and continued listing criteria under Commentary .07(d) to Amex Rule 1202. The Fund was formed as a separate series of a Delaware statutory trust pursuant to a Certificate of Trust and a Declaration of Trust and Trust Agreement among, CSC Trust Company of Delaware, as trustee, and the Managing Owner and the Limited Owner, as the holders of the Shares. 6 5 Commentary .07(b)(1) to Amex Rule 1202 defines “Investment Shares” as a security
(a)that is issued by a trust, partnership, commodity pool or other similar entity that invests in any combination of futures contracts, options on futures contracts, forward contracts, commodities, swaps or high credit quality short-term fixed income securities or other securities; and
(b)issued and redeemed daily at net asset value in amounts correlating to the number of receipts created and redeemed in a specified aggregate minimum number. 6 The Trust and the Funds will not be subject to registration and regulation under the Investment Company Act of 1940 (the “1940 Act”). The Exchange notes that the Commission has permitted the listing and trading on Amex of products linked to the performance of underlying currencies and commodities. 7 7 *See, e.g.* , Securities Exchange Act Release Nos. 55632 (April 13, 2007), 72 FR 19987 (April 20, 2007) (SR-Amex-2006-112) (approving the listing and trading of the United States Natural Gas Fund, LP); 53582 (March 31, 2006), 71 FR 17510 (April 6, 2006) (SR-Amex 2005-127) (approving the listing and trading of the United States Oil Fund, LP); 53521 (March 20, 2006), 71 FR 14967 (March 24, 2006) (SR-Amex 2005-72) (approving the listing and trading of the iShares Silver Trust); and 53105 (January 11, 2006), 71 FR 3129 (January 19, 2006) (SR-Amex 2006-53) (approving the listing and trading of the DB Commodity Index Tracking Fund); 53059 (January 5, 2006), 71 FR 2072 (January 12, 2006) (SR-Amex 2005-128) (approving the listing and trading of the Euro Currency Trust); 51058 (January 19, 2005), 70 FR 3749 (January 26, 2005) (SR-Amex 2004-38) (approving the listing and trading of the iShares COMEX Gold Trust); and 51446 (March 29, 2005), 70 FR 17272 (April 5, 2005) (SR-2005-32) (approving the listing and trading of streetTRACKS Gold Shares). *See also* Securities Exchange Act Release Nos. 55029 (December 29, 2006), 72 FR 806 (January 8, 2007) (SR-Amex 2006-76) (approving the listing and trading of the DB Multi-Sector Commodity Trust); 54450 (September 14, 2006), 71 FR 55230 (September 21, 2006) (SR-Amex 2006-44) (approving the listing and trading of shares of the DB Currency Index Value Fund); and 55292 (February 14, 2007), 72 FR 8406 (February 26, 2007) (SR-Amex 2006-86) (approving the listing and trading of shares on DB U.S. Dollar Index Bullish Fund and the PowerShares DB U.S. Dollar Index Bearish Fund). b. Description of the Index The CCI-TR, consisting of 17 commodity futures prices, offers investors a broad benchmark for the performance of the commodity sector. The 17 commodities are currently: Corn, wheat, soybeans, live cattle, lean hogs, gold, silver, copper, cocoa, coffee, sugar #11, cotton, orange juice, platinum, crude oil, heating oil, and natural gas. The Index is intended to provide a representation of broad trends in overall commodity prices, and was originally calculated to produce a ratio of the current price to the base year average price. The Index takes into account the economics of rolling listed Commodity Futures Contracts forward to avoid delivery and maintain exposure to Commodity Futures Contracts with the liquidity characteristics of being exchange traded. The Index is generally viewed as a broad measure of overall commodity price trends. As the Commodity Futures Contracts near expiration, they are replaced by contracts that have a later expiration. For example, a contract purchased and held in November 2006 may specify January 2007 expiration. As that contract nears expiration, it may be replaced by selling the January 2007 contract and purchasing the contract expiring in March 2007. This process is referred to as “rolling.” Historically, the prices of crude oil and heating oil have frequently been higher for contracts with shorter-term expirations than for contracts with longer-term expirations, which is referred to as “backwardation.” In these circumstances, absent other factors, the sale of the January 2007 contract would take place at a price that is higher than the price at which the March 2007 contract is purchased, thereby creating a gain in connection with rolling. While crude oil and heating oil have historically exhibited consistent periods of backwardation, backwardation will likely not exist in these markets at all times. Conversely, gold, corn, soybeans and wheat historically exhibit “contango” markets rather than backwardation, where the prices of contracts are higher in the distant delivery months than in the nearer delivery months due to the costs of long-term storage of a physical commodity prior to delivery or other factors. Although gold, corn, soybeans and wheat have historically exhibited consistent periods of contango, it is not likely this will exist in these markets at all times. The Index generally averages all futures prices six months forward, up to a maximum of five delivery months per commodity. A minimum of two delivery months, however, must be used to calculate the current price if the second contract is outside the six-month window. Commodity Futures Contracts in the delivery period are excluded from the calculation. Although each of the 17 commodities is equally weighted, the Index uses an average of the prices of the 17 commodities and an average of those commodities across time within each commodity. Each commodity is averaged across time (six-month period) and then these 17 component figures are averaged together. The continuous rebalancing provided by this methodology means the Index constantly decreases exposure to commodity markets gaining in value and increases exposure to those markets declining in value to the diverse nature of its constituent commodities. The following table reflects the index weights, of each Index commodity: Index commodity Index weight (percent) WTI Crude Oil 5.88 Heating Oil 5.88 Natural Gas 5.88 Corn 5.88 Wheat 5.88 Soybeans 5.88 Live Cattle 5.88 Lean Hogs 5.88 Sugar 5.88 Cotton 5.88 Coffee 5.88 Cocoa 5.88 Orange Juice 5.88 Gold 5.88 Silver 5.88 Platinum 5.88 Copper 5.88 Calculating Total Return. The calculation of this index is comprised of the daily changes in the CCI spot index, the roll yield that is implied by rolling selected commodity futures contracts forward to the next defined commodity contract on specific dates (Roll Dates), and the 90 day T-Bill yield for a single day. The CCI-TR is calculated using the following three variables: • The CCI cash index and its daily return; The CCI is a geometric average of the 17 commodities multiplied by a constant factor. CCI = [Geometric Average (PRICES)/30.7766] × 0.8486 × 100. • The second Friday in January, February, April, June, August, and November are the roll dates for the CCI-TR. On these dates, two sets of prices are considered; one from the expiring month contract and another from the next contract month window. The ratio of the two index values is the roll ratio. Each index value in the subsequent contract month, is multiplied by the value of the ratio. The roll ratio is determined on the roll date and then is multiplied to each of the index values for that contract month. The index treated by multiplying the CCI with the roll ratio is called the CCI—Roll Return Index or CCI Continuous Contract Index. Roll Ratio = Index Value (nearby month)/Index value (deferred Month), on the date. • The CCI-TR had a starting value of 100 on January 1st 1982. This index is compounded daily by multiplying the previous day value with change in CCI Index on that day and 90 days T-Bill yield for a single day. On Mondays, the T-Bill yield for 3 days is used because of the interest earned by the collateral over the weekend. CCI-TR = 100 × (1+ Continuous Daily Return + T-Bill return for one day), beginning January 1, 1982. Continuous Daily return = [CCI Continuous Contract Index/CCI Continuous Contract Index t-1]. T-Bill return for one day = {[1/(1−(91/360) × T-Bill Rate t-1)]−(l/91)}−1. c. Commodity Futures Contracts The prices of the Commodity Futures Contracts are volatile with fluctuations expected to affect the value of the Shares. Commodity Futures Contracts to be held by the Master Fund will be traded solely on U.S. futures exchanges. The Commodity Futures Contracts to be entered into by the Master Fund are listed and traded on organized and regulated exchanges based on the various commodities comprising the Index described above. Index commodity Exchange Time traded WTI Crude Oil Heating Oil New York Mercantile Exchange (“NYMEX”) 9 a.m.-2:30 p.m. In addition, NYMEX ACCESS ®, an electronic trading system, is open for price discovery on the Benchmark Futures Contract each Monday through Thursday at 3:15 p.m. ET through the following morning at 9:50 a.m. E.T., and on Friday from 3:15 p.m. to 5:15 p.m. and from 7 p.m. Sunday night until Monday morning 9:50 a.m. ET. Natural Gas Corn Chicago Board of Trade (“CBOT”) 9:30 a.m.-1:15 p.m. Electronic trading is from 6:30 p.m.-6 a.m. and 9:30 a.m.-1:15 p.m. Wheat CBOT 9:30 a.m.-1:15 p.m. Electronic trading is from 6:32 p.m.-6 a.m. and 9:30 a.m.-1:15 p.m. Soybeans CBOT 9:30 a.m.-1:15 p.m. Electronic trading is from 6:31 p.m.-6 a.m. and 9:30 a.m.-1:15 p.m. Live Cattle Chicago Mercantile Exchange (“CME”) 9:05-1 p.m. Lean Hogs CME 9:10-1 p.m. Sugar No. 11 New York Board of Trade (“NYBOT”) 8:10 a.m. to 12:30 p.m.; pre-open commences at 8 a.m.; closing period commences at 11:58 a.m. Electronic trading has a pre-opening trading session from 8 p.m. of prior day until 1:30 a.m. and then 1:30 a.m. through 3:15 p.m. Cotton NYBOT 10:30 a.m. to 2:15 p.m.; pre-open commences at 10:20 a.m.; closing period commences at 2:14 p.m. Electronic trading has a pre-opening trading session from 8 p.m. of prior day until 1:30 a.m. and then 1:30 a.m. through 3:15 p.m. Coffee NYBOT 8:30 a.m. to 12:30 p.m.; pre-open commences at 8:20 a.m.; closing period commences at 12:28 p.m. Electronic trading has a pre-opening trading session from 8 p.m. of prior day until 1:30 a.m. and then 1:30 a.m. through 3:15 p.m. Cocoa NYBOT 8 a.m.—11:50 a.m. Pre-Open commences at 7:50 a.m.; closing period commences at 11:45 a.m. Electronic trading has a pre-opening trading session from 8 p.m. of prior day until 1:30 a.m. and then 1:30 a.m. through 3:15 p.m. Orange Juice NYBOT 10 a.m. to 1:30 p.m.; pre-open commences at 9:50 a.m.; pre-close commences at 1:15 p.m.; closing period commences at 1:29 p.m. Electronic trading has a pre-opening trading session from 6:45 a.m. until 7 a.m. and then 7 a.m. through 3:15 p.m. Gold NYMEX 8:20 p.m.-1:30 p.m. Silver NYMEX 8:25 a.m.-1:25 p.m. Platinum NYMEX 8:20 a.m.-1:05 p.m. Copper NYMEX 8:10 a.m.-1 p.m. d. Structure of the Funds *Fund and Master Fund* . The Fund and Master Fund are statutory trusts formed pursuant to the Delaware Statutory Trust Act and will issue units of beneficial interest or shares that represent units of fractional undivided beneficial interest in and ownership of the respective Fund, or Master Fund. Unless terminated earlier, the Fund and Master Fund are of a perpetual duration. The investment objective of the Fund, through its investment in the Master Fund, is to reflect the performance of the Index, over time, less the expenses of the Fund and the Master Fund's overall operations. The Fund will pursue its investment objective by investing substantially all of its assets in the Master Fund in a master-feeder structure. The Fund will hold no investment assets other than Master Fund Units. The Master Fund will be wholly-owned by the Fund and the Managing Owner. Each Share issued by the Fund will correlate with a Master Fund Unit issued by the Master Fund and held by the Fund. 8 8 *See infra* at note 9. The Master Fund will invest in a portfolio of Commodity Futures Contracts on the Index Commodities. In addition, the Master Funds will also hold cash and U.S. Treasury securities for deposit with futures commission merchants (“FCM”) as margin and other high credit quality short-term fixed income securities. *Trustee* . CSC Trust Company of Delaware (the “Trustee”) is the sole trustee of the Fund and the Master Fund. The Trustee delegated to the Managing Owner certain of the power and authority to manage the business and affairs of the Fund and the Master Fund and has duties and liabilities to the Fund and the Master Fund. *Managing Owner* . GreenHaven Commodity Services LLC, a Delaware limited liability company, will serve as Managing Owner of the Fund and the Master Fund. The Managing Owner will serve as the commodity pool operator and commodity trading advisor of the Fund and the Master Fund. The Managing Owner is registered as a commodity pool operator and commodity trading advisor with the Commodity Futures Trading Commission, or the CFTC, and with the National Futures Association, or the NFA. As a registered commodity pool operator and commodity trading advisor, with respect to both the Fund and the Master Fund, the Managing Owner is required to comply with various regulatory requirements under the Commodity Exchange Act and the rules and regulations of the CFTC and the NFA, including investor protection requirements, antifraud prohibitions, disclosure requirements, and reporting and recordkeeping requirements. *Commodity Broker or Clearing Broker.* Fimat (the “Commodity Broker” or the “Clearing Broker”) will execute and clear the Master Fund's Commodity Futures Contract transactions and will perform certain administrative services for the Master Fund. The Commodity Broker is registered with the CFTC as a FCM and is a member of the NFA in such capacity. *Administrator.* The Bank of New York is the administrator for all of the Funds and the Master Funds (the “Administrator”). The Administrator will perform or supervise the performance of services necessary for the operation and administration of the Fund and the Master Fund. These services include, but are not limited to, receiving and processing orders from Authorized Participants (as defined below) to create and redeem Baskets, accounting, net asset value (“NAV”) 9 calculations and other fund administrative services. 9 For the Master Fund, the NAV is the total assets of the Master Fund less total liabilities of the Master Fund, determined on the basis of generally accepted accounting principles. NAV per Master Fund Unit is calculated by dividing by the number of outstanding units of the Master Fund. The NAV per Share will be the same because of the one-to-one correlation between the Shares and the Master Fund Units. *Distributor.* ALPS Distributor, Inc., is the distributor for both the Fund and the Master Fund (the “Distributor”). The Distributor will assist the Managing Owner and the Administrator with certain functions and duties relating to the creation and redemption of Baskets, including receiving and processing orders from Authorized Participants to create and redeem Baskets, coordinating the processing of such orders and related functions and duties. The Distributor shall also review and file marketing materials with the Financial Industry Regulatory Authority, field investor calls, distribute prospectuses and consult with the Managing Owner and its affiliates in connection with marketing and sales strategies. e. Product Description *Creation and Redemption of Shares.* Issuances of the Shares will be made only in one or more blocks of 50,000 Shares, each a Basket (the “Basket” or “Basket Aggregation”). The Fund will issue and redeem the Shares on a continuous basis, by or through participants that have entered into participant agreements (each, an “Authorized Participant”) 10 with the Managing Owner at the NAV per Share next determined after an order to purchase the Shares is received in proper form. Following issuance, the Shares will be traded on the Exchange similar to other equity securities. The Shares will be registered in book entry form through DTC. 10 An “Authorized Participant” is a person, who at the time of submitting to the trustee an order to create or redeem one or more Baskets,
(i)is a registered broker-dealer,
(ii)is a Depository Trust Company (“DTC”) participant (such as a bank, broker, dealer and trust company) or is an Indirect Participant (i.e., someone who maintains either directly or indirectly, a custodial relationship with a DTC participant) and
(iii)has in effect a valid participant agreement, which sets forth the procedures for the creation and redemption of Baskets of Shares and for the delivery of cash required for such creations or redemptions. Baskets will be issued in exchange for a cash amount equal to the NAV per Share times 50,000 Shares (the “Basket Amount”). The Basket Amount will be determined on each business day by the Administrator. Authorized Participants that wish to purchase a Basket must transfer the Basket Amount to the Administrator (the “Cash Deposit Amount”). Authorized Participants that wish to redeem a Basket will receive cash in exchange for each Basket surrendered in an amount equal to the NAV per Basket (the “Cash Redemption Amount”). The Commodity Broker will be the custodian for the Master Fund and responsible for safekeeping the Master Fund's assets. All purchase orders must be placed by 10 a.m., New York time. The Basket will be issued at noon on the business day (T+1) immediately following the purchase order date at the Basket Amount as of the later of the closing time on the Exchange or the last to close futures exchange on which the Master Fund's assets are traded. 11 The Basket Amount necessary for the creation of a Basket will change from day to day. On each day that the Exchange is open for regular trading, the Administrator will adjust the Cash Deposit Amount as appropriate to reflect the prior day's NAV per Share (as described below) and accrued expenses. The Administrator will determine the Cash Deposit Amount for a given business day by multiplying the NAV per Share by the number of Shares in each Basket (50,000). 11 The Master Fund is permitted to invest its assets in those futures contracts traded on futures exchanges that either have a comprehensive surveillance sharing agreement with the Exchange or are either SRO members or affiliate members of the Intermarket Surveillance Group (“ISG”). Likewise, all redemption orders must be placed by 10 a.m., New York time. The Shares will not be individually redeemable but will only be redeemable in Baskets. To redeem, an Authorized Participant will be required to accumulate enough Shares to constitute a Basket ( *i.e.* , 50,000 shares). Upon the surrender of the Shares, the Administrator will deliver to the redeeming Authorized Participant the Cash Redemption Amount. The Authorized Participant is required to pay a transaction fee to the Fund of $500 per order to create or redeem Baskets. On each business day, the Administrator will make available immediately prior to the opening of trading on Amex via the facilities of the CTA, the most recent Basket Amount for the creation of a Basket. The Exchange will disseminate at least every 15 seconds throughout the trading day, via the CTA, an amount representing on a per Share basis, the current value of the Basket Amount. It is anticipated that the deposit of the Cash Deposit Amount in exchange for a Basket will be made primarily by institutional investors, arbitrageurs, and the Exchange specialist. Baskets are then separable upon issuance into identical Shares that will be listed and traded on the Exchange. 12 The Shares are expected to be traded on the Exchange by professionals, as well as institutional and retail investors. Thus, the Shares may be acquired in two ways:
(1)Through a deposit of the Cash Deposit Amount with the Administrator during normal business hours by Authorized Participants; or
(2)through a purchase on the Exchange by investors. 12 The Shares are separate and distinct from the shares of the Master Funds consisting primarily of Commodity Futures Contracts on the Index Commodities. The Exchange expects that the number of outstanding Shares will increase and decrease as a result of creations and redemptions of Baskets. *Net Asset Value.* Shortly after 4:00 p.m. ET each business day, the Administrator will determine the NAV for the Fund, utilizing the current settlement value of each Commodity Futures Contract held by the Master Fund. At or about 4 p.m. ET each business day, the Administrator will determine the Basket Amounts for orders placed by Authorized Participants that day. Thus, although Authorized Participants may place valid orders to purchase Shares throughout the trading day until 10 a.m. ET, the actual Basket Amounts are determined at 4 p.m. ET or shortly thereafter. Shortly after 4 p.m. ET each business day, the Administrator, Amex and Managing Owner will disseminate the NAV per Share and the Basket Amount (for orders placed during the day). The Basket Amount and the NAV per Share are communicated by the Administrator to all Authorized Participants via facsimile or electronic mail message and the NAV per Share will be available on the Managing Owner's Web site at *http://www.Greenhavenllc.com.* 13 Amex will also disclose the NAV per Share and Basket Amount on its Web site. 13 If the NAV per Share is not disseminated to all market participants at the same time, the Exchange will halt trading in the Shares of a Fund. In calculating the NAV per Share the Administrator will value all Commodity Futures Contracts based on that day's settlement price. However, if a futures contract on a trading day cannot be liquidated due to the operation of daily limits or other rules of an exchange upon which such futures contract is traded, the settlement price on the most recent trading day on which such Commodity Futures contract could have been liquidated will be used in determining the Fund's NAV per Share. Accordingly, the Administrator will typically use that day's futures settlement price for determining NAV per Share. When calculating NAV per Share, the Administrator will value the Commodity Futures Contracts held by the Master Fund on the basis of their then current market value. The Exchange believes that the Shares will not trade at a material discount or premium to the Commodities Futures Contracts held by the Fund based on potential arbitrage opportunities. The arbitrage process, in this case, provides an opportunity to profit from the differences in prices of the same or similar securities or futures contracts, increases the efficiency of the markets, and serves to prevent potentially manipulative efforts. If the price of a Share deviates enough from the Indicative Fund Value (discussed below) on a per Share basis to create a material discount or premium, an arbitrage opportunity is created, allowing the arbitrageur to either buy Shares at a discount and immediately short the component future contracts of the CCI-TR Index or sell Shares short at a premium and buy the component futures contracts of the CCI-TR Index. Due to the fact that the Shares can be created and redeemed only in Basket Aggregations at NAV, the Exchange submits that arbitrage opportunities should provide a mechanism to mitigate the effect of any premiums or discounts that may exist from time to time. f. Dissemination of the Index and Underlying Contract Information Reuters America LLC is the owner, publisher and custodian of CCI-TR, which represents a total return version of the ninth revision (as of 1995) of the original Commodity Research Bureau
(CRB)Index. Values of the underlying Index are computed by Reuters America LLC and widely disseminated every 15 seconds during the day. CCI-TR is calculated to offer investors a representation of the investable returns that an investor should expect to receive by attempting to replicate the CCI index by buying the respective commodity futures and collateralizing their investment with United States Government securities ( *i.e.* , 90-day T-Bills). The CCI-TR takes into account the economics of rolling listed commodity futures forward to avoid delivery and maintain exposure in liquid contracts. To achieve the objectives of the index, Reuters has established rules for calculation of the index. Specifically, only settlement and last-sale prices are used in the Index's calculation, bids and offers are not recognized—including limit-bid and limit-offer price quotes. Where no last-sale price exists, typically in the more deferred contract months, the previous days' settlement price is used. The Managing Owner represents that it will seek to arrange to have the Index calculated and disseminated on a daily basis through a third party if the Index Sponsor ceases to calculate and disseminate the Index. If, however, the Managing Owner is unable to arrange the calculation and dissemination of the Index, the Exchange will undertake to delist the Shares. The disseminated value of the Index will not reflect changes to the prices of the Index Commodities between the close of trading of the various Commodity Futures Contracts and the close of trading at Amex at 4:15 p.m. ET. In addition, Reuters and the Exchange on their respective Web sites will also provide any adjustments or changes to the Index. The daily settlement prices for each of the Commodity Futures Contracts held by the Master Fund are publicly available on the NYBOT, NYMEX, CME and CBOT Web sites. 14 In addition, various data vendors and news publications publish futures prices and data. The Exchange represents that futures contract quotes and last sale information for the Commodity Futures Contracts on the Index Commodities is widely disseminated through a variety of market data vendors worldwide, including Bloomberg and Reuters. In addition, the Exchange further represents that complete real-time data for such Commodity Futures Contracts is available by subscription from Reuters and Bloomberg. The various futures exchanges also provide delayed futures information on current and past trading sessions and market news free of charge on their respective Web sites. The specific contract specifications for each Commodity Futures Contract are also available from the various futures exchanges on their Web sites as well as other financial informational sources. g. Availability of Information Regarding the Shares The Web sites for the Fund and/or the Exchange, which are publicly accessible at no charge, will contain the following information:
(a)The current NAV per Share daily and the prior business day's NAV per Share and the reported closing price;
(b)the mid-point of the bid-ask price 15 in relation to the NAV per Share as of the time it is calculated (the “Bid-Ask Price”);
(c)calculation of the premium or discount of such price against the NAV per Share;
(d)data in chart form displaying the frequency distribution of discounts and premiums of the Bid-Ask Price against the NAV per Share, within appropriate ranges for each of the four previous calendar quarters;
(e)the Prospectus; and
(f)other applicable quantitative information. 14 See *http://www.nybot.com, http://www.nymex.com, http://www.cme.com,* and *http://www.cbot.com.* 15 The bid-ask price of Shares is determined using the highest bid and lowest offer as of the time of calculation of the NAV. As described above, the NAV per Share will be calculated and disseminated daily. Amex will disseminate for the Fund on a daily basis by means of CTA/CQ High Speed Lines information with respect to the corresponding Indicative Fund Value (as discussed below), recent NAVs per Share and Shares outstanding. The Exchange will also make available on its Web site daily trading volume of the Shares, closing prices of the Shares, and the NAV per Share. The closing price and settlement prices of the Commodity Futures Contracts held by the Master Fund are also readily available from the NYMEX, CBOT, CME and NYBOT, automated quotation systems, published or other public sources, or on-line information services such as Bloomberg or Reuters. In addition, the Exchange will provide a hyperlink on its Web site at *http://www.amex.com* to the CCI's Web site at *http://www.crbtrader.com.* h. Dissemination of Indicative Fund Value As noted above, the Administrator calculates and disseminates, once each trading day, the NAV per Share to market participants. The Exchange represents that it will obtain a representation (prior to listing of the Funds) from the Trust that the NAV per Share will be calculated daily and made available to all market participants at the same time. In addition, the Administrator causes to be made available on a daily basis the corresponding Cash Deposit Amounts to be deposited in connection with the issuance of the respective Shares. In addition, other investors can request such information directly from the Administrator, and such information will be provided upon request. In order to provide updated information relating to the Fund for use by investors, professionals and persons wishing to create or redeem the Shares, the Exchange will disseminate through the facilities of CTA, an updated Indicative Fund Value (the “Indicative Fund Value”) for the Fund. The respective Indicative Fund Value will be disseminated on a per Share basis at least every 15 seconds during regular Amex trading hours of 9:30 a.m. to 4:15 p.m. ET. The Indicative Fund Value will be calculated based on the cash required for creations and redemptions ( *i.e.* , NAV × 50,000) for the Fund adjusted to reflect the price changes of the Commodity Futures Contracts and the holdings of U.S. Treasury securities and other high credit quality short-term fixed income securities. The Indicative Fund Value will not reflect price changes to the price of an underlying commodity between the close of trading of the futures contract at the relevant futures exchange and the close of trading on Amex at 4 p.m. ET. The value of a Share may accordingly be influenced by non-concurrent trading hours between Amex and the various futures exchanges on which the futures contracts based on the Index commodities are traded. While the Shares will trade on Amex from 9 a.m. to 4 p.m. ET, the trading hours for each of the Index commodities underlying the futures contracts will vary as previously noted. While the market for futures trading for each of the Index commodities is open, the Indicative Fund Value can be expected to closely approximate the value per Share of the Basket Amount. However, during Amex trading hours when the futures contracts have ceased trading, spreads and resulting premiums or discounts may widen, and therefore, increase the difference between the price of the Shares and the NAV of the Shares. Indicative Fund Value on a per Share basis disseminated during Amex trading hours should not be viewed as a real time update of the NAV, which is calculated only once a day. The Exchange believes that dissemination of the Indicative Fund Value based on the cash amount required for a Basket Aggregation provides additional information that is not otherwise available to the public and is useful to professionals and investors in connection with the Shares trading on the Exchange or the creation or redemption of the Shares. i. Termination Events The Fund will be terminated if any of the following circumstances occur:
(1)The filing of a certificate of dissolution or revocation of the Managing Owner's charter (subject to 90-day notice period) or upon the withdrawal, removal, adjudication or admission of bankruptcy or insolvency of the Managing Owner, or an event of withdrawal, subject to exceptions;
(2)the occurrence of any event which would make unlawful the continued existence of the Trust or any Fund, as the case may be;
(3)the event of the suspension, revocation or termination of the Managing Owner's registration as a CPO, or membership as a CPO with the NFA, subject to certain conditions;
(4)the Trust or any Fund, as the case may be, becomes insolvent or bankrupt;
(5)shareholders holding Shares representing at least 75% of the Fund NAV (excluding the Shares of the Managing Owner) notify the Managing Owner that they wish to dissolve the Trust;
(6)the determination of the Managing Owner that the aggregate net assets of the Fund in relation to the operating expenses of the Fund make it unreasonable or imprudent to continue the business of the Fund, or, in the exercise of its reasonable discretion, the determination by the Managing Owner to dissolve the Trust because the aggregate net asset value of the Trust as of the close of business on any business day declines below $10 million;
(7)the Trust or any Fund becoming required to register as an investment company under the 1940 Act; or
(8)DTC is unable or unwilling to continue to perform its functions, and a compatible replacement is unavailable. If not terminated earlier, the Fund will endure perpetually. Upon termination of the Fund, holders of the Shares will surrender their Shares and receive from the Administrator, in cash, their portion of the value of the Fund. j. Criteria for Initial and Continued Listing The Fund will be subject to the criteria in Commentary .07(d) of Amex Rule 1202 for initial and continued listing of the Shares. The Fund will accept subscriptions for Shares in Baskets from Authorized Participants at $30.00 per Share ($1.5 million per Basket) during an initial offering period commencing with the initial effective date of the prospectus, and terminating no later than the 90th day following such date, unless
(i)the subscription minimum is reached before that date and the Managing Owner determines to end the initial offering period early, or
(ii)that date is extended by the Managing Owner for up to an additional 90 days. The Exchange believes that the anticipated minimum number of Shares outstanding at the start of trading is sufficient to provide adequate market liquidity and to further the objectives of the Fund. The Exchange represents that, for the initial and continued listing, the Shares must be in compliance with Section 803 of the Amex Company Guide and Rule 10A-3 under the Act. k. Original and Annual Listing Fees The Amex original listing fee applicable to the listing of the Fund is $5,000. In addition, the annual listing fee applicable under Section 141 of the Amex Company Guide will be based upon the year-end aggregate number of shares in the Fund outstanding at the end of each calendar year. l. Disclosure The Exchange, in an Information Circular (described below) distributed to Exchange members and member organizations, will inform members and member organizations, prior to commencement of trading, of the prospectus delivery requirements applicable to the Fund. The Exchange notes that investors purchasing Shares directly from the Fund (by delivery of the corresponding Cash Deposit Amounts) will receive a prospectus. Amex members purchasing Shares from the Administrator for resale to investors will deliver a prospectus to such investors. m. Purchase and Redemptions in the Basket Amount In the Information Circular (described below), members and member organizations will be informed that procedures for purchases and redemptions of Shares in the Basket Amount are described in the Prospectus and that Shares are not individually redeemable but are redeemable only in Baskets or multiples thereof. n. Trading Rules The Shares are equity securities subject to Amex Rules governing the trading of equity securities, including, among others, rules governing priority, parity and precedence of orders, specialist responsibilities and account opening and customer suitability (Rule 411). Initial equity margin requirements of 50% will apply to transactions in the Shares. Shares will trade on Amex until 4:15 p.m. ET each business day and will trade in a minimum price variation of $0.01 pursuant to Amex Rule 127-AEMI. Trading rules pertaining to odd-lot trading in Amex equities (Rule 205-AEMI) will also apply. Amex Rule 154-AEMI (c)(ii) provides that stop and stop limit orders to buy or sell a security the price of which is derivatively priced based upon another security or index of securities, may be elected by a quotation, as set forth in subparagraphs(c)(ii)(1)-(4) of Rule 154-AEMI. Amex Rule 126A-AEMI complies with Rule 611 of Regulation NMS which requires, among other things, that the Exchange adopt and enforce written policies and procedures that are reasonably designed to prevent trade through of protected quotations. 16 16 *See* Securities Exchange Act Release No. 54552 (September 29, 2006), 71 FR 59546 (October 10, 2006) (SR-Amex-2005-104). Specialist transactions of the Shares made in connection with the creation and redemption of Shares will not be subject to the prohibitions of Amex Rule 190(a). 17 The Shares will generally be subject to the Exchange's stabilization rule (Amex Rule 170), except that specialists may buy on “plus ticks” and sell on “minus ticks,” in order to bring the Shares into parity with the underlying commodity or commodities and/or futures contract price. Commentary .07(f) to Amex Rule 1202 sets forth this limited exception to Amex Rule 170. 17 *See* Commentary .05 to Amex Rule 190. The Exchange's surveillance procedures for the Shares will be similar to those used for other TIRs and exchange-traded funds and will incorporate and rely upon existing Amex surveillance procedures governing options and equities. The trading of the Shares will be subject to certain conflict of interest provisions set forth in Commentary .07(e) to Amex Rule 1202. o. Suitability The Information Circular (described below) will inform members and member organizations of the characteristics of the Fund and of applicable Exchange rules, as well as of the requirements of Amex Rule 411 (Duty to Know and Approve Customers). The Exchange notes that pursuant to Amex Rule 411, members and member organizations are required in connection with recommending transactions in the Shares to have a reasonable basis to believe that a customer is suitable for the particular investment given reasonable inquiry concerning the customer's investment objectives, financial situation, needs, and any other information known by such member. p. Information Circular Amex will distribute an information circular to its members in connection with the trading of the Shares (“Information Circular”). The Information Circular will discuss the special characteristics and risks of trading this type of security, such as currency fluctuation risk. Specifically, the Information Circular, among other things, will discuss what the Shares are, how a Basket is created and redeemed, the requirement that members and member firms deliver a prospectus to investors purchasing the Shares prior to or concurrently with the confirmation of a transaction, applicable Amex rules, dissemination information, trading information and applicable suitability rules. The Information Circular will also explain that the Fund is subject to various fees and expenses described in the Registration Statement. The Information Circular will also reference the fact that the CFTC has regulatory jurisdiction over the trading of Commodity Futures Contracts. The Information Circular will also notify members and member organizations about the procedures for purchases and redemptions of Shares in Baskets, and that Shares are not individually redeemable but are redeemable only in one or more Baskets. The Information Circular will advise members of their suitability obligations with respect to recommended transactions to customers in the Shares. The Information Circular will also discuss any relief, if granted, by the Commission or the staff from any rules under the Act. The Information Circular will disclose that the trading hours of the Shares will be from 9:30 a.m. to 4:15 p.m. ET and that the NAV for the Shares will be calculated shortly after 4 p.m. ET each trading day. Information about the Shares and the Index will be publicly available on Amex's Web site and the Fund's Web site. q. Surveillance The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Shares and to deter and detect violations of applicable rules. Specifically, the Exchange will rely on its existing surveillance procedures applicable to TIRs, Portfolio Depository Receipts and Index Fund Shares, which the Exchange states have been deemed adequate under the Act. The Exchange currently has in place comprehensive surveillance sharing agreements with ICE Futures, LME and NYMEX for the purpose of providing information in connection with trading in or related to futures contracts traded on their respective exchanges comprising the Indexes. The Exchange also notes that CBOE, CME and NYBOT are members of the Intermarket Surveillance Group (“ISG”). As a result, the Exchange asserts that market surveillance information is available from relevant futures exchanges, if necessary, due to regulatory concerns that may arise in connection with the Commodity Futures Contracts. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6 of the Act 18 in general, and furthers the objectives of section 6(b)(5) 19 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. 18 15 U.S.C. 78f(b). 19 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. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange did not receive any written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will: A. By order approve such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be disapproved. The Commission is considering granting accelerated approval of the proposed rule change at the end of a 15-day comment period. 20 20 Amex requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of the notice of the filing thereof. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-Amex-2007-53 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2007-53. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2007-53 and should be submitted on or before December 11, 2007. 21 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 21 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22909 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56804; File No. SR-Amex-2006-107] Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, to Eliminate Options Specialists' Agency Responsibilities and Establish Amex Book Clerks November 16, 2007. I. Introduction On November 14, 2006, American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”) 1 and Rule 19b-4 thereunder, 2 a proposal to eliminate the agency obligations of Exchange options specialists and establish Amex book clerks (“ABCs”). The Exchange filed Amendment No. 1 to the proposed rule change on March 29, 2007. The proposal as amended was published for comment in the **Federal Register** on April 13, 2007. 3 The Commission received no comments on the proposal. This order approves the proposed rule change, as modified by Amendment No. 1. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55583 (April 5, 2007), 72 FR 18695 (“Notice”). II. Description of the Proposal The Exchange has proposed to eliminate the obligation and ability of an Exchange options specialist to act as an agent in connection with orders in his or her assigned options classes. This proposal would permit the Exchange to designate Exchange employees or independent contractors to serve as ABCs, responsible for maintaining and operating the ANTE Central Book ( *i.e.* , the specialist's customer limit order book) and the ANTE Display Book. 4 The Exchange also seeks to amend certain Exchange rules relating to the operation of the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (“Linkage Plan”) to accommodate the implementation of pertinent ABC rules and other proposed rule changes described herein. 5 Finally, the proposed rule change would implement several other amendments to conform other Exchange rules to the proposal. The Exchange has noted that its proposal substantially mirrors changes recently adopted by the Chicago Board Options Exchange to eliminate DPM agency responsibilities and establish PAR Officials. 6 The following description summarizes certain significant effects this proposed rule change would have on existing Exchange rules. 7 4 The Exchange submits that all incoming customer orders are represented in the ANTE Central Book, and if marketable, will be automatically executed subject to a number of limited exceptions. Orders that are otherwise eligible for automatic execution may not receive an automatic execution:
(i)*Whenever* the Amex Best Bid or Offer
(ABBO)crosses the National Best Bid or Offer
(NBBO)and causes an inversion in the quote; or
(ii)whenever a better bid or offer is being disseminated by another options exchange and the order is not eligible for automatic price matching. In addition, if quotes are deemed unreliable or the Exchange is experiencing communications or systems problems, non-firm markets or delays in the dissemination of quotes by the Options Price Reporting Authority, orders will not be automatically executed. In these limited cases, incoming customer orders will be routed to the ANTE Display Book for manual handling. 5 Exchange rules governing the operation of the Linkage Plan are set forth under Amex Rules 940 through 945 and Amex Rule 941-ANTE. 6 *See* Securities Exchange Act Release No. 52798 (November 18, 2005), 70 FR 71344 (November 28, 2005) (SR-CBOE-2005-46). 7 For a complete description of the proposed rule change, *see* the Notice, *supra* note 3. Under the current rules of the Exchange, options specialists are required to execute options orders on an agency basis for those classes of options assigned to them. 8 Accordingly, all options specialists on the Amex presently act as both agent and principal for orders in their respective assigned options classes. 8 *See* Amex Rule 950-ANTE(l), incorporating Amex Rule 170 to options transactions. The Exchange has now determined that it is in the best interest of the Exchange, its members, and investors to eliminate the agency obligation of options specialists. The Exchange has proposed to amend its rules to remove an options specialist's obligation to act as an agent in its allocated securities on the Exchange. 9 The Exchange has further proposed to designate ABCs who would be responsible for handling certain orders in the same manner as they are currently handled by the options specialists. 10 The ABCs will maintain and operate the customer limit order book, 11 effect proper executions of orders that are routed to the customer limit order book, 12 display eligible limit orders, 13 undertake the obligations related to handling certain Linkage orders, 14 and act as agent for orders that, for various reasons, cannot be automatically executed and so are routed to the ANTE Display Book for manual handling. 15 9 *See* Proposed Amex Rules 950-ANTE(f) cmt. .01 and 950-ANTE(l) cmt. .01. 10 *See* Proposed Amex Rule 995-ANTE. 11 *See* Proposed Amex Rule 995-ANTE(a)(i). 12 *See* Proposed Amex Rule 995-ANTE(a)(ii). The requirement that options specialists effect proper executions would require an options specialist to use due diligence to execute customer orders at the best prices available under the rules of the Exchange. *See* Proposed Amex Rule 995-ANTE(b)(ii). 13 *See* Proposed Amex Rule 995-ANTE(b)(i). 14 *See* Proposed Amex Rule 995-ANTE(e). 15 *See* Proposed Amex Rule 995-ANTE(b)(iv); *see also supra* note 4. The Exchange has proposed to amend its rules to provide that the Exchange, via the ABCs, and not the options specialists, would be responsible for handling Linkage orders. Under the proposal, ABCs would:
(i)Use an options specialist's account to route Principal Acting as Agent (“P/A”) Orders and Satisfaction Orders to away markets based on prior instructions that must be provided by the options specialist to the ABC, 16 and
(ii)handle all Linkage orders or portions of Linkage orders received by the Exchange that are not automatically executed. 17 The ABC also would use the specialist's account to fill incoming Satisfaction Orders that result from a Trade Through 18 that the Exchange effects. 19 16 *See* Proposed Amex Rule 950-ANTE(l) cmt. .05. 17 *See* Proposed Amex Rule 995-ANTE(e). 18 *See* Amex Rule 940(b)(19). 19 *See* Proposed Amex Rule 950-ANTE(l) cmt. .05. The Exchange has proposed measures designed to ensure the independence of ABCs from Exchange members. An ABC would be required to be an Exchange employee or independent contractor, and his or her compensation would be determined and paid solely by the Exchange. In addition, the ABC would be prohibited from having an affiliation with any member that is approved to act as a specialist, registered options trader (“ROT”), remote registered options trader (“RROT”) or supplemental registered options trader (“SROT”) on the Exchange. Because the options specialists would no longer be operating the customer limit order book, the Exchange proposes to amend Rule 958A—ANTE, which defines when an options specialist's firm quote obligation attaches. Amex Rule 958A—ANTE currently provides that, in the case of an order received by the options specialist, the options specialist's firm quote obligation attaches at the time the order is received by such specialist, regardless of whether the options specialist is actually aware of the order at that time. This rule would be modified to provide that the firm quote obligation would attach, when an options specialist is the responsible broker or dealer, at the same time those obligations attach with respect to each other responsible broker or dealer—that is, when the order is announced to the trading crowd either via electronic display or by the ABC. The Exchange has proposed this clarification in light of the fact that options specialists will no longer represent orders on the customer limit order book in an agency capacity from the moment such orders are received on the book. Finally, to ensure a smooth and orderly transition of the responsibility for operating the customer limit order book and executing agency orders from options specialists to ABCs, the Exchange proposes to implement this rule change to all applicable trading posts over a 180-day period from the effective date of this rule change. During this 180-day transition period, any options specialist who continues to operate the customer limit order book would continue to be subject to the same agency obligations as currently provided under Amex Rules 950-ANTE(l) and 958A-ANTE(e), except that, upon the approval of this proposal, these obligations instead would be reflected in a Regulatory Circular. III. Discussion After careful consideration, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 20 In particular, the Commission finds that the proposal is consistent with section 6(b)(5) of the Act, 21 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 20 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 21 15 U.S.C. 78f(b)(5). With this proposal, Amex seeks to eliminate potential conflicts of interest that may currently arise for its options specialists in the handling of customer orders. Currently, Amex options specialists trade for their own accounts in order to assist in the maintenance of a fair and orderly market on the Exchange, and also act as agents for certain orders in their allocated options. Amex has proposed to eliminate an options specialist's obligation and permission to act as agent for customer orders in his or her allocated securities. 22 22 The Commission notes that Amex Rule 950-ANTE, as amended, will no longer permit an options specialist to act as an agent for customer orders. However, to the extent that an options specialist nevertheless undertakes to represent a customer's order in violation of Amex Rule 950-ANTE, the options specialist will assume all the duties and liabilities of an agent to a principal during the course of such representation. Instead, Amex has proposed that orders that currently are represented by options specialists as agent be handled by Exchange employees known as Amex Book Clerks, or ABCs. ABCs would be independent from options specialists, as Amex has proposed to prohibit affiliations between ABCs and specialists, ROTs, RROTs, and SROTs in order to ensure the ABCs are independent from Exchange members' interests. Further, the compensation of ABCs would be determined and paid exclusively by the Exchange. The Commission believes that the Amex's proposal adequately assures the independence of the ABC in a manner designed to mitigate potential conflicts of interest with the options specialist. Further, the Commission believes that eliminating an options specialist's obligation to act as agent for certain orders in its assigned classes will promote just and equitable principles of trade and protect investors and the public interest, because it will greatly reduce any potential conflicts of interest that may have previously arisen when a specialist traded for its own account while acting as agent for certain customer orders. 23 23 In addition, the Commission notes that Amex Rule 193, Affiliated Persons of Specialists, will have the effect of mitigating conflicts of interest that might arise when an affiliate of the options specialist acts as agent for a customer order in one of the specialist's assigned options classes. Amex Rule 193 provides that any approved person or member organization which is affiliated with a specialist must either:
(a)Be subject to Amex Rule 170(e), which provides that “[n]o member . . . officer, employee, or approved person who is affiliated with a specialist or specialist member organization, shall, during the period of such affiliation, purchase or sell any security in which such specialist is registered for any account in which such person or party has a direct or indirect interest”; or
(b)“establish[] and obtain[] Exchange approval of procedures restricting the flow of material, non-public corporate or market information between itself and the specialist member organization, and any member, officer, or employee associated therewith.” The Exchange represented that Rule 193 will have the effect of restricting the sharing of material, nonpublic information between the options specialist and any affiliate of the options specialist who acts as agent for a customer order. Telephone conversation between Jeffrey P. Burns, Vice President and Associate General Counsel, Amex, and Nathan Saunders, Special Counsel, Division, Commission, on November 14, 2007. Pursuant to the proposed rule change, ABCs will undertake responsibilities comparable to those currently held by options specialists with respect to customer orders. For example, an ABC must use due diligence to execute the orders placed in his or her custody at the best prices available to him or her under Exchange rules. In addition, ABCs will assume the obligations related to displaying public customer orders that improve Amex's disseminated quote by maintaining the ANTE Central Book, the Exchange's automated limit order display facility, and keeping it active. Accordingly, the Commission believes that the Exchange's proposal should ensure that customers' orders continue to be represented and handled in a timely fashion on the Exchange. The Commission therefore believes that the proposal will continue to protect customer orders while preventing fraudulent and manipulative acts and practices. The ABCs also would assume responsibilities related to Linkage orders. An ABC would use an options specialist's account to route P/A Orders and Satisfaction Orders to other participants in the Linkage Plan based on prior written instructions provided by the options specialist to the ABC. 24 The written instructions provided by the options specialist will also include direction as to how the ABC should handle responses to Linkage orders routed to other Linkage Participants that are not responded to in a timely manner. 25 The ABC will also use the options specialist's account to fill any Satisfaction Order that results from a Trade Through that is effected on the Exchange by ABCs. Finally, the ABC will handle all Linkage orders or portions of Linkage orders received by the Exchange that are not automatically executed. 24 The Commission today is also granting the Exchange a conditional exemption from the requirement in Rule 608(c) of Regulation NMS promulgated under the Act that the Exchange comply with and enforce compliance by its members with certain provisions of the Linkage Plan to facilitate the establishment of ABCs and their handling of Linkage Orders. *See* Letter from Elizabeth K. King, Associate Director, Division of Trading and Markets, Commission, to Jeffrey P. Burns, Vice President and Associate General Counsel, Amex, dated November 16, 2007. 25 Amex Rule 942(d)(3) specifically addresses the situations in which an Amex member (or, as proposed to be amended, an ABC acting as employee of the Exchange) does not receive a response to a Linkage order within 20 seconds of sending the order. The Commission believes that the proposed rules governing the handling of Linkage orders by the ABC and the use of the options specialist's accounts for routing Linkage orders is consistent with the promotion of a national market system because, among other things, it will allow P/A Orders that reflect the terms of Amex customer orders to be generated by Amex and routed to other Linkage Participant markets, which will allow a Amex customer order to receive possible execution at a price better than the price disseminated by Amex. IV. Conclusion *It is therefore ordered* , pursuant to section 19(b)(2) of the Act, 26 that the proposed rule change (File No. SR-Amex-2006-107), as modified by Amendment No. 1, be, and it hereby is, approved. 26 15 U.S.C. 78s(b)(2). 27 27 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 27 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22911 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56808; File Nos. SR-Amex-2007-117; SR-BSE-2007-44; SR-CBOE-2007-121; SR-ISE-2007-92; SR-NYSEArca-2007-109; SR-Phlx-2007-86] Self-Regulatory Organizations: American Stock Exchange LLC, Chicago Board Options Exchange, Incorporated and International Securities Exchange, LLC: Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Changes; Boston Stock Exchange, Inc.; NYSE Arca, Inc.; and Philadelphia Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Changes, as Amended, Relating to the Elimination of the Class Gate November 16, 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 November 1, 2007, September 19, 2007, October 9, 2007, October 1, 2007, October 18, 2007, and November 14, 2007, American Stock Exchange LLC (“Amex”), Boston Stock Exchange, Inc. (“BSE”), Chicago Board Options Exchange, Incorporated (“CBOE”), International Securities Exchange, LLC (“ISE”), NYSE Arca, Inc. (“NYSE Arca”), and Philadelphia Stock Exchange, Inc. (“Phlx”) (each, an “Exchange” and, collectively, the “Exchanges”), respectively, filed with the Securities and Exchange Commission (“Commission”) the proposed rule changes as described in Items I and II below, which Items have been substantially prepared by the Exchanges. On November 13, 2007, November 6, 2007, and November 16, 2007, BSE, NYSE Arca, and Phlx respectively, filed Amendment No. 1 to their proposed rule changes. On November 16, 2007, BSE filed Amendment No. 2 to its proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule changes, as amended, from interested persons and is approving the proposed rule changes, as amended, on an accelerated basis. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b-4. I. Self-Regulatory Organizations' Statement of the Terms of Substance of the Proposed Rule Changes Each Exchange proposes to eliminate a restriction on Principal Order (“P Order”) 3 access through Linkage. The text of the proposed rule changes are available at the Exchanges' Web sites, 4 the Exchanges' principal offices, and at the Commission's Public Reference Room. 3 *See* Section 2(16)(b) of the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (“Linkage Plan”). 3 On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating an intermarket options market linkage (“Linkage”) proposed by Amex, CBOE, and ISE. *See* Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, Phlx, Pacific Exchange, Inc. (n/k/a NYSE Arca), and BSE joined the Linkage Plan. *See* Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004). 4 *See http://www.amex.com, http://www.bostonstock.com, http://www.cboe.com, http://www.iseoptions.com, http://www.nyse.com,* and *http://www.phlx.com.* II. Self-Regulatory Organizations' Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes In its filing with the Commission, each Exchange included statements concerning the purpose of, and basis for, its proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchanges have prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organizations' Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes 1. Purpose The Exchanges propose to eliminate the Linkage Class Gate restriction from their respective rules. 5 These changes will conform the Exchanges' rules to changes recently approved by the Commission to section 7(a)(ii)(C) of the Linkage Plan. 6 5 *See* Amex Rule 941(c)(2); Boston Options Exchange Facility Rule, Chapter XII, Section 2(d)(ii); CBOE Rule 6.81(c)(2); ISE Rule 1901(d)(2); NYSE Arca Rule 6.93(c)(2); and Phlx Rule 1084(d)(2). 6 *See* Securities Exchange Act Release No. 56806 (November 16, 2007) (Joint Amendment No. 24 of the Linkage Plan). Each Exchange currently has a rule which provides that, once the Exchange automatically executes a P Order in a series of an Eligible Option Class, 7 it may reject any other P Orders sent in the same Eligible Option Class by the same Exchange for 15 seconds after the initial execution unless there is a price change in the receiving Exchange's disseminated offer
(bid)in the series in which there was the initial execution and such price continues to be the national best bid or offer. After the 15-second period, and until the sooner of one minute after the initial execution or a change in its disseminated offer (bid), each Exchange's rule provides that the Exchange that provided the initial execution is not obligated to automatically execute any P Orders received from the same Exchange in the same Eligible Option Class. The Exchanges proposed to eliminate the Class Gate provision from their rules, because all Exchanges have removed restrictions on non-customer access to the automatic execution systems, rendering the Class Gate restriction unnecessary. 7 *See* Section 2(8) of the Linkage Plan. 2. Statutory Basis The Exchanges believe the proposed rule changes are consistent with the Act and the rules and regulations under the Act applicable to national securities exchanges and, in particular, the requirements of section 6(b) of the Act. 8 Specifically, the Exchanges believe the proposed rule changes are consistent with the requirements of section 6(b)(5) of the Act 9 that the rules of an exchange be designed to prevent fraudulent and manipulative acts, 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. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organizations' Statement on Burden on Competition The Exchanges believe that the proposed rule changes would impose no burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organizations' Statement on Comments on the Proposed Rule Changes Received From Members, Participants or Others The Exchanges have neither solicited nor received comments on these proposals. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule changes are 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 Numbers SR-Amex-2007-117; SR-BSE-2007-44; SR-CBOE-2007-121; SR-ISE-2007-92; SR-NYSEArca-2007-109; and SR-Phlx-2007-86 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 Numbers SR-Amex-2007-117; SR-BSE-2007-44; SR-CBOE-2007-121; SR-ISE-2007-92; SR-NYSEArca-2007-109; and SR-Phlx-2007-86. These file numbers 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 submissions, all subsequent amendments, all written statements with respect to the proposed rule changes that are filed with the Commission, and all written communications relating to the proposed rule changes 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 20549-1090, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings also will be available for inspection and copying at the principal offices of the Exchanges. 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 Numbers SR-Amex-2007-117; SR-BSE-2007-44; SR-CBOE-2007-121; SR-ISE-2007-92; SR-NYSEArca-2007-109; and SR-Phlx-2007-86 and should be submitted on or before December 17, 2007. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Changes After careful consideration, the Commission finds that the proposed rule changes, as amended, are consistent with the requirements of the Act and the rules and regulations thereunder, applicable to national securities exchanges. 10 In particular, the Commission finds that the proposals are consistent with the provisions of section 6(b)(5) of the Act 11 in that they 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. 10 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 11 15 U.S.C. 78f(b)(5). The Commission recognizes that, at the time of the creation of the Linkage, certain Exchanges had restrictions on non-customer access to their automatic execution systems. The Class Gate restriction in the Exchanges' rules served to protect those Exchanges that did not limit non-customer access against being obligated to automatically execute an unlimited number of P Orders. Since the implementation of the Linkage, all Exchanges have removed restrictions on non-customer access to their automatic execution systems. All of the Exchanges, therefore, allow access to their trading platforms orders on behalf of non-member market makers. The Commission believes that the greater access to automatic execution systems has rendered the Class Gate provision unnecessary and that its elimination should facilitate a more efficient operation of the options markets. The Commission also finds good cause, consistent with section 19(b)(2) of the Act 12 for approving the proposal prior to the thirtieth day after the date of publication of the notice of the filing thereof in the **Federal Register** . Granting accelerated approval would facilitate the implementation of these changes in conjunction with Joint Amendment No. 24 to the Linkage Plan. 13 12 15 U.S.C. 78s(b)(2). 13 *See* note 6, *supra.* V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, that the proposed rule changes (SR-Amex-2007-117; SR-BSE-2007-44; SR-CBOE-2007-121; SR-ISE-2007-92; NYSEArca-2007-109; and SR-Phlx-2007-86), as amended, are hereby approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22916 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56816; File No. SR-CBOE-2007-130] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend its Rule 4.20 Regarding Anti-Money Laundering November 19, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on November 2, 2007, the Chicago Board Options Exchange, Incorporated (the “Exchange” or “CBOE”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the CBOE. On November 9, 2007, CBOE filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend CBOE Rule 4.20, codifying the Anti-Money Laundering Compliance Program (the “AML Program”), to:
(1)Establish independent testing for compliance be conducted at least annually by members with a public business, or every two years if no public business is conducted; and
(2)clarify the persons designated to implement and monitor the Anti-Money Laundering Compliance Rule. The text of the proposed rule change is provided below. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.cboe.org/Legal* ), at the Exchange's Office of the Secretary and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Financial institutions, including broker-dealers, must develop and implement AML Programs pursuant to the Bank Secrecy Act, 3 as amended by Section 352 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001 (“PATRIOT Act”). 4 Consistent with the Department of Treasury's (“Treasury”) regulation 31 CFR 103.120 under the Bank Secrecy Act, CBOE Rule 4.20 requires that each member organization and each member not associated with a member organization develop and implement a written AML program and specifies the minimum requirements for these programs. The AML program must include the development of internal policies, procedures and controls; the designation of a person to implement and monitor the day-to-day operations and internal controls of the program (commonly referred to as an “AML Officer”); ongoing training for appropriate persons; and an independent testing function for overall compliance. In order to provide interpretive clarity to the requirements under CBOE Rule 4.20 with respect to independent testing and AML Officers, as well as to clarify references to the Bank Secrecy Act, CBOE proposes the following amendments to CBOE Rule 4.20. References to Bank Secrecy Act The proposed rule change would delete references to certain sections of the Bank Secrecy Act and a reference to USA PATRIOT Act to more clearly reflect the requirements under CBOE Rule 4.20. Timeframes for Independent Testing The proposed rule change would require that independent testing of AML programs be conducted, at a minimum, on an annual (calendar-year) basis by members or member organizations, unless the member or member organization does not execute transactions for customers or otherwise hold customer accounts or act as an introducing broker with respect to customer accounts (e.g., engages solely in proprietary trading, or conducts business only with other broker-dealers), in which case such independent testing is required every two years (on a calendar-year basis). CBOE believes these timeframes are reasonable in that they require more frequent testing of AML programs designed to monitor a business with customers from the general public, which may be more susceptible to money laundering schemes than a strictly proprietary business involving transactions with other broker-dealers. Further, the one-year time frame for testing is consistent with standard industry practice in that it is similar to generally accepted guidelines for conducting tests in the context of, for instance, general audits and branch office visits. However, the proposed rule change establishes only a minimum requirement and makes clear that members should undertake more frequent testing when circumstances warrant (e.g. should the business mix of the member or member organization materially change; in the event of a merger or acquisition; in light of systemic weaknesses uncovered via testing of the AML Program; or in response to any other “red flags”). Qualification and Independence Standards for Testing The proposed rule change would further require that testing be conducted by a designated person with a working knowledge of applicable requirements under the Bank Secrecy Act and its implementing regulations. Such person need not be an employee of the member or member organization since the responsibility being delegated is essentially an auditing function and, as such, it would not be unusual or ineffective for it to be performed by an independent outside party. The proposed rule change does not preclude an employee of the member or member organization from conducting the required independent testing of the AML Program; however, the proposed “independence” standard would prohibit testing from being conducted by a person who performs the functions being tested, by the designated AML Officer or by a person who reports to either. The proposed rule change would be generally consistent with the approach taken by the NYSE and NASD, n/k/a the Financial Industry Regulatory Authority, Inc., (“FINRA”), 5 regarding independent testing of AML Programs, with variations where necessary to account for the differences in CBOE membership—in particular, differences in firm size, types of business conducted, and overall business models. It should be noted that CBOE's membership is comprised of an over-whelming majority of members who are broker-dealers that are not members of either NYSE or FINRA and who conduct business only with other broker-dealers. It should be further noted that CBOE conducts routine examinations of all capital computing members to test the adequacy of AML compliance programs with the objective of determining whether member firms' AML compliance programs are reasonably designed to achieve and monitor compliance with the requirements of the Bank Secrecy Act and applicable Treasury, Commission, and CBOE rules. Additionally, for all non-capital computing CBOE members, CBOE requires that each broker-dealer member file an annual attestation that identifies:
(1)The designated AML Compliance Officer;
(2)the broker-dealer annual training, including a list of attendees and date conducted;
(3)the independent review, including date and identification of the reviewer. The attestation also includes a statement regarding broker-dealer members maintaining written documentation of the independent review conducted. AML Officer The proposed rule change would also clarify that the AML Officer(s) must be an associated person of the member. This would not prohibit a member that is part of a diversified financial institution from designating an AML Officer that is employed by the member's parent company, sister company, or other affiliate. However, if such a person is designated as a member's AML Officer, CBOE would consider that person to be an associated person of the member with respect to those activities performed on behalf of the member. 2. Statutory Basis 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 31 U.S.C. 5311 *et seq.* 4 Pub. L. 107-56, 115 Stat. 272 (2001). 5 On July 26, 2007, the Commission approved a proposed rule change filed by NASD to amend NASD's Certificate of Incorporation to reflect its name change to Financial Industry Regulatory Authority Inc., or FINRA, in connection with the consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc. *See* Securities Exchange Act Release No. 56146 (July 26, 2007); 72 FR 42190 (Aug. 1, 2007). CBOE believes that the proposed rule change is consistent with Section 6 of the Act 6 in general and furthers the objectives of Section 6(b)(5) 7 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, to protect investors and the public interest. CBOE believes that the proposed rule change is designed to accomplish these ends by requiring members to conduct periodic tests of their AML compliance programs, preserve the independence of their testing personnel, and ensure the accuracy of their AML compliance person information. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization 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, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2007-130 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2007-130. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549-1090, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2007-130 and should be submitted on or before December 17, 2007. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22894 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56814; File No. SR-CBOE-2007-87] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change, and Amendment No. 1 Thereto, To Amend the Quoting Requirements Applicable to the Hybrid Opening System November 19, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on July 25, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On November 19, 2007, CBOE filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend its rule pertaining to the Hybrid Opening System (“HOSS”) as well as related rules pertaining to the obligations of designated primary market-makers (“DPMs”), electronic designated primary market-makers (“e-DPMs”) and lead market-makers (“LMMs”) during opening rotations. The text of the proposed rule change is available at the Exchange, on the Exchange's Web site ( *http://www.cboe.org* ), and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change, and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its HOSS procedures contained in CBOE Rule 6.2B. HOSS is the Exchange's automated system for initiating trading at the beginning of each trading day. Previously, for each option class approved for trading, HOSS had been programmed to open an option series only if the DPM or LMM, as applicable, for the particular option class submitted a quote that complies with the legal quote width requirements of paragraph (b)(iv) to CBOE Rule 8.7, *Obligations of Market-Makers.* The HOSS procedures were revised in 2005 and, currently, HOSS is programmed to open an option series as long as any market maker, 3 not just the DPM or LMM, has submitted an opening quote that complies with the legal width quote requirements of CBOE Rule 8.7(b)(iv). 4 However, even though the procedures were changed to permit HOSS to automatically open a series without a DPM's or LMM's quote, DPMs (as well as e-DPMs) or LMMs still remain obligated under CBOE rules to timely submit opening quotes. 5 The proposed rule change is designed to give some relief to DPMs, e-DPMs and LMMs from this opening quote requirement. Because HOSS is programmed to automatically open based on any market-maker's quote, the Exchange does not believe that DPMs, e-DPMs and LMMs should be viewed as violating the opening quote requirement when they inadvertently miss the opening simply because another market-maker entered a quote before the DPM, e-DPM or LMM. 3 This could include a quote from a DPM, e-DPM, LMM, Market-Maker or Remote Market-Maker. 4 *See* Securities Exchange Act Release No. 52234 (August 10, 2005), 70 FR 48214 (August 16, 2005) (SR-CBOE-2005-40). Other factors must also be satisfied for HOSS to open an options series. For example, the opening price for the series must be within an acceptable range and the opening trade cannot create a market order imbalance. *See, e.g.* , CBOE Rule 6.2B(e)(ii)-(iii). 5 Currently, DPMs, e-DPMs and LMMs are required to enter opening quotes in accordance with CBOE Rule 6.2B in 100% of the series of each appointed class; whereas, other Market-Makers and Remote Market-Makers are permitted, but not obligated, to enter opening quotes in accordance with CBOE Rule 6.2B. *See* existing CBOE Rules 6.2B, 8.15A, *Lead Market-Makers in Hybrid Classes* (subparagraph (b)(iv) of this rule has been interpreted by the Exchange to require an LMM to enter opening quotes in 100% of the series of each appointed class), 8.85, *DPM Obligations,* 8.93, *e-DPM Obligations.* In an effort to provide more flexibility to ensure that all options series are opening in a fair and orderly manner, the Exchange is proposing to modify the HOSS procedures and related opening quote obligations of DPMs, e-DPMs and LMMs to allow the parameters to be configured so that an option series will open:
(i)If at least one market maker has submitted an opening quote (which is how HOSS currently operates) or
(ii)only if a DPM or LMM, as applicable, has submitted an opening quote (which is how HOSS previously operated). Determinations on the particular configuration would be made on a class-by-class basis by the appropriate Exchange Procedure Committee and announced to the membership via Regulatory Circular. There will be no set factors for making the determinations; it will simply be the method the appropriate Exchange Procedure Committee thinks would work best to achieve a competitive, efficient and orderly opening in the particular class. The appropriate Exchange Procedure Committee might consider such things as trading in the underlying or related products, trading in the option on competing exchanges, how effectively opens have occurred in the past, liquidity and/or other factors. For example, if the Exchange desires to increase liquidity in a particular class on the open, the appropriate Exchange Procedure Committee might determine to configure HOSS so that the DPM's quote must be present to open in order to ensure that there is sufficient liquidity available. The Exchange is also proposing that, in the event HOSS is configured to open a series based on any market maker's quote, the DPM and any e-DPMs appointed to the class or, as applicable, the LMMs appointed to the class, would be obligated to ensure that a trading rotation is initiated promptly following the opening of the underlying security (or promptly after 8:30 a.m. (Central Time) in an index class) in accordance with CBOE Rule 6.2B in 100% of the series of each allocated class by entering opening quotes as necessary. In other words, if another market maker has already entered an opening quote in a particular series, it would not be necessary for the DPM and e-DPM, or LMM, to enter an opening quote for HOSS to automatically open the series. However, if no other market maker has entered an opening quote, the DPM and e-DPM, or LMM, would be responsible for ensuring that an opening quote is promptly entered so that HOSS can automatically open the series. This obligation to ensure that an opening rotation is conducted promptly in an allocated class by entering opening quotes only as necessary will be in lieu of the existing obligation, which requires DPMs, e-DPMs and LMMs to enter opening quotes in 100% of the series of each allocated class. 6 When HOSS is programmed to automatically open a series with any market maker's quote, the Exchange does not believe it is necessary for the maintenance of fair and orderly markets to always require DPMs, e-DPMs and LMMs to enter opening quotes. 7 6 *See* supra note 5. 7 Although not obligated, DPMs, e-DPMs and LMMs would still be permitted to enter opening quotes even if another market maker has already entered an opening quote. 2. Statutory Basis The Exchange states that, by allowing for more flexibility in the manner in which HOSS is programmed to conduct an opening rotation, it will enhance its ability to conduct fair and orderly openings. As such, CBOE believes this proposed rule change is consistent with section 6(b) of the Act 8 in general and furthers the objectives of section 6(b)(5) of the Act 9 in particular, which requires that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and to perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will: A. By order approve such proposed rule change, or B. Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml);* or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2007-87 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2007-87. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2007-87 and should be submitted on or before December 17, 2007. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22946 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56795; File No. SR-DTC-2007-11] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Amend its Operational Arrangements as it Applies to Structured Securities November 15, 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 September 7, 2007, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by DTC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 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 seeks approval to amend DTC's Operational Arrangements as they apply to Structured Securities. DTC's Operational Arrangements is a contractual agreement between DTC, issuers, and paying agents that outlines the procedural and operational requirements for an issue to become and remain DTC eligible. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, DTC 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. DTC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of these statements. 3 3 The Commission has modified the text of the summaries prepared by DTC.
(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed filing is to amend DTC's Operational Arrangements as it applies to Structured Securities to: extend the deadline by which paying agents of such securities must submit periodic payment rate information to DTC; effective January 1, 2008, establish an exception processing fee applied to certain Structured Securities that are unable to comply with the extended deadline; and provide that DTC track and make publicly available reports on paying agent performance as it relates to timeliness and accuracy of Structured Securities payment rate information submitted to DTC. 1. Background A Structured Security such as a collateralized mortgage obligation or asset-backed security (“ABS”) is a bond backed by a pool of underlying financial assets. The underlying assets generally consist of receivables such as mortgages, credit card receivables, or student or other bank loans for which the timing of principal payments by the underlying obligors may be variable and unpredictable. The security may also incorporate credit enhancements or other rights that affect the amount and timing of payments to investors. Communication of periodic payment rates of principal and interest (“P&I”) to the end investors in Structured Securities depends on application of stringent time frames for information reporting and significant interdependencies among servicers of the underlying assets, specifically trustees, custodians, paying agents on the securities, DTC, and the financial intermediaries that act on behalf of the investors. Given the complexity of structure and calculations of cash flow from the underlying assets through the issuer to the end investor and the interdependencies on timeliness and accuracy of performance throughout the chain of servicers and intermediaries, timely and accurate submission of payment rate information on Structured Securities may be difficult to achieve. As a result, payment rates typically are announced late on a significant number of issues, and the number of post-payable adjustments made to correct inaccurate payments due to inaccurate rates is higher than for any other security type. Furthermore, the volume of P&I payments for Structured Securities processed through DTC has grown rapidly in recent years and currently represents approximately 25% of all P&I payments processed through DTC. Incorrect and late payment rate reporting causes increased operations processing costs, inefficient cash management, and loss of income. Accordingly, DTC formed a cross-industry working group to study the severity of the problem of processing Structured Securities P&I and to analyze possible solutions. 4 In its analysis, the working group studied the payment rate reporting history of various Structured Securities, noting factors such as paying agent and type of deal structure. The working group determined that extending the date by which paying agents must submit rate information to DTC would allow a greater number of Structured Securities to meet DTC's requirements and thus be eligible for DTC services. It also concluded that there is a significant subset of Structured Securities for which the paying agent may not be able to comply even with an extended time frame for delivery of payment rate information because of features inherent in the structure of the security issue. It determined these securities should be expressly identified and handled as issues that require exception processing. Finally, it concluded that paying agent rate reporting performance on all Structured Securities should be evaluated and made publicly available to participants and other relevant parties. Accordingly, DTC proposes to implement the changes set forth below. 4 The group consisted of representative from the Securities Industry and Financial Markets Association (SIFMA), major paying agents, servicers and master servicers, underwriters, and major retail and institutional broker-dealers and custodians. 2. Proposed Amendments to Operational Arrangements DTC's “Operational Arrangements Necessary for an Issue to Become and Remain Eligible for DTC Services” (“Operational Arrangements”) governs issue eligibility for deposit at DTC and issuer and agent obligations regarding servicing of the issue thereafter. Regarding notification on issues that pay P&I periodically or that pay interest at a variable rate, the Operational Arrangements currently requires the paying agent on the security to provide payment rate information to DTC preferably five business days but no later than two business days prior to the payable date.
(i)Extending the Deadline for Reporting on Payment Detail The majority of Structured Securities cannot adhere to the current Operational Arrangements rate reporting deadline. DTC is proposing to amend the Operational Arrangements to require that the payment notification regarding Structured Securities be provided to DTC by the paying agent preferably five business days but no later than one business day prior to the payable date. In addition, DTC will extend its current processing deadline for receipt of payment rate files from 7 p.m to 11:30 p.m. The extended deadline should allow paying agents to provide rates in a timely and accurate fashion for a majority of Structured Securities issues and should permit the securities to remain eligible for DTC's services while providing DTC adequate time to process the information without delaying payment by DTC to its participants.
(ii)Securities Classifications Due to the complexity of certain Structured Securities, it is anticipated that certain issues will not be able to meet the amended Operational Arrangements requirement for timely payment rate reporting even with the extended reporting period. Therefore, DTC proposes to distinguish between “conforming” and “non-conforming” Structured Securities. Non-conforming Structured Securities will be issues for which the issuer and paying agent have concluded that the security has features that will likely preclude the paying agent from submitting rate information to DTC in conformity with the requirements of the Operational Arrangements. The conforming/non-conforming identification will be made at the time the security is made eligible at DTC. For each Structured Securities underwriting that the issuer and paying agent identified as non-conforming, the issuer and paying agent shall submit a written attestation giving the reason for non-conformance. DTC will in turn identify non-conforming Structured Securities to participants and other relevant parties and will add an indicator to the appropriate DTC systems functions to denote non-conforming securities. Paying agents shall be required to evaluate their entire portfolio of Structured Securities on deposit at DTC to identify non-conforming securities that have previously been made eligible at DTC. Although approximately 15% of Structured Security issues currently fail to have rates submitted to DTC in a timely manner, it is estimated that approximately only half of these have structural impediments to meeting the requirements. Failures in timely rate reporting in other instances are believed to be curable by improved servicing and reporting on the securities.
(iii)Exception Processing Fee Applicable to Non-Conforming Securities Securities processing inefficiencies and rate inaccuracies associated with late payment rate reporting lead to increased costs associated with non-conforming Structured Securities. In order to recoup the increased processing costs, DTC is proposing to impose, effective January 1, 2008, an exception processing fee to the managing underwriter of the non-conforming issue at the time of underwriting. No fee will be charged retroactively on issues already on deposit at DTC prior to the implementation of the fee. The exception processing fee will be calculated based upon anticipated excess costs of Structured Securities P&I processing. Based on estimates derived from 2006 costs, the fee would be approximately $4,200 per CUSIP. The fee applicable for 2008 would reflect more current costs and would be modified accordingly. The amount of the fee would be presented to DTC's Board of Directors for approval and filed with the SEC as part of DTC's annual establishment of fees, and would be modified in accordance with DTC's standard procedures for fee modification. The aggregate net amount of the exception processing fees will be allocated and rebated on a pro rata basis annually to the DTC participants for whom DTC processed Structured Securities P&I allocations. The total number of allocations would be calculated for each participant as a percentage of total annual allocations by DTC and that percentage would be applied against the total exception processing fund and rebated to each participant. The total exception processing fund would be calculated as the sum of all exception processing fees less DTC's cost to administer the program.
(iv)Evaluation and Publication of Paying Agent Performance DTC is proposing to track and evaluate paying agent performance with regard to timeliness and accuracy of payment rate reporting on Structured Securities and to make these evaluations available to DTC participants and to the public. The purpose of these evaluations is to identify poor payment and reporting performance for which a paying agent should be able, based on its attestation, to correct any underlying servicing issues associated with the payment and information flows. DTC plans to expand evaluation reports ( “Report Cards”) that are currently used to compare rate submission performance and accuracy of Structured Securities paying agents. Currently the Report Cards are only distributed among the paying agents being compared. DTC is proposing to make the Report Cards available on its Web site. The Report Card tracks and reports performance for a given month by paying agent with respect to the number of collateralized mortgage obligations and asset-backed securities announcements processed, the number of late and amended announcements, the payment dollars, late payment dollars, and the number of payments and late payments. Timeliness of payment rate notification on non-conforming Structured Securities will not be included in the proposed paying agent performance evaluation based on the paying agent's attestation that it is a non-conforming issue subject to an exception processing fee. The other factors will be included with respect to both conforming and non-conforming securities. In summary, altering the Operational Arrangements to allow paying agents additional time in which to calculate payment rates will allow more issues of Structured Securities to be eligible at DTC. Identification of issues that cannot meet the extended reporting deadlines and reporting on paying agent performance will allow the industry to anticipate processing inefficiencies associated with certain Structured Securities issues. Furthermore, imposition of an exception processing fee on Structured Securities that cannot meet the extended reporting deadlines due to deal structure will shift the expense associated with these securities to the underwriters and issuers that create the structure. DTC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 5 and the rules and regulations thereunder because the proposed changes removes impediments to and perfects the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions. 5 15 U.S.C. 78q-1.
(B)Self-Regulatory Organization's Statement on Burden on Competition DTC does not believe that the proposed rule change will have any impact or impose any burden on competition.
(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not been solicited or received. DTC will notify the Commission of any written comments received by DTC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five 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 ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will:
(A)By order approve such proposed rule change or
(B)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-DTC-2007-11 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-DTC-2007-11. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings also will be available for inspection and copying at the principal office of DTC and on DTC's Web site at *http://www.dtcc.com/downloads/legal/rule_filings/2007/dtc/2007-11.pdf* . All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-DTC-2007-11 and should be submitted on or before December 11, 2007. For the Commission by the Division of Trading and Markets, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22890 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56812; File No. SR-NYSE-2007-99] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Allow Issuers Voluntarily Delisting Index-Linked Securities To Submit to the Exchange a Letter From an Authorized Officer of the Issuer Rather Than a Board Resolution November 19, 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 31, 2007, the New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule changes 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 changes from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend section 806.02 of the Exchange's Listed Company Manual (“Manual”) to provide that index-linked notes currently listed on the Exchange and voluntarily withdrawing from listing to transfer to another national securities exchange, need not provide the Exchange with a board resolution authorizing such action but, in lieu thereof, must provide a letter signed by an authorized executive officer of the issuer setting forth the reasons for the proposed withdrawal. The Exchange is also deleting the rule text that applied prior to April 24, 2006. On that date, the revised text of section 806.02 became effective. The text of the proposed rule change is available at the Exchange, on the Exchange's Web site at *http://www.nyse.com* , 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 self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The NYSE has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend section 806.02 of the Manual to provide that index-linked notes currently listed on the Exchange and voluntarily withdrawing from listing to transfer to another national securities exchange, need not provide the Exchange with a board resolution authorizing such action but, in lieu thereof, must provide a letter signed by an authorized executive officer of the issuer setting forth the reasons for the proposed withdrawal. There are currently nine series of index-linked notes listed on the Exchange. Four of these securities were listed under section 703.19 of the Manual pursuant to individual rule filings under section 19(b)(2) of the Act. 3 The other five securities were listed under section 703.22 of the Manual, the Exchange's recently adopted generic listing standard for index-linked notes. 3 15 U.S.C. 78s(b)(2). As part of its strategic business planning, NYSE Euronext, the parent company of the Exchange, is seeking to move the listing and trading of index-linked notes from the Exchange to NYSE Arca, Inc. (“NYSE Arca”), a separate self-regulatory organization owned by NYSE Euronext. As such, the Exchange does not currently plan to list any further index-linked notes on NYSE in the future. In addition, the Exchange has asked the issuers of index-linked notes currently listed on NYSE to voluntarily transfer the listing of those securities to NYSE Arca and such issuers have agreed to do so. As this transfer will require the delisting of the securities from the Exchange and there is no basis under Exchange rules for a delisting initiated by the Exchange itself, the issuers are required to voluntarily withdraw their securities from listing pursuant to section 806.02 of the Manual. Section 806.02 requires companies voluntarily withdrawing securities from listing to provide a resolution of the board of directors of the issuer authorizing such action. Each of the issuers involved has informed the Exchange that no such board authorization is required by their constitutive documents or the laws of their jurisdictions of incorporation. As such, they would need to obtain the resolution solely to comply with section 806.02. As obtaining these resolutions would be burdensome for the issuers involved and the transfers of the securities to NYSE Arca are being effectuated at the request of the Exchange, NYSE believes it is appropriate to waive this requirement specifically for the nine affected securities. NYSE proposes a waiver of this requirement applicable only to the voluntary withdrawal from listing of index-linked notes that are being transferred to another national securities exchange. In lieu of the board resolution, the issuer will be required to provide a letter signed by an authorized executive officer setting forth the reasons for the proposed withdrawal. The Exchange believes that this narrowly tailored exception to the requirements of section 806.02 is justified because of the unique circumstance that the withdrawal from listing is occurring at the Exchange's request to further an NYSE Euronext business objective. The Exchange also proposes to amend section 806.02 to delete the rule text that applied prior to April 24, 2006. On that date, the revised text of section 806.02 became effective to comply with the requirements of Rule 12d2-2 under the Act. 4 On July 14, 2005, the Commission adopted amendments to Rule 12d2-2 under the Act. Rule 12d2-2 under the Act, as amended, required all national securities exchanges, including the Exchange, to amend their delisting rules to conform with certain requirements set forth in new Rule 12d2-2. The Exchange amended section 806.02 in light of these requirements and its new delisting procedures superseded the old procedures on April 24, 2006. As such, the old procedures have no further application and, to avoid confusion, the Exchange proposes to delete them from section 806.02 in their entirety. 4 17 CFR 240.12d2-2. 2. Statutory Basis The proposed rule change is consistent with section 6(b) of the Act, 5 in general, and furthers the objectives of section 6(b)(5) of the Act, 6 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will:
(A)By order approve such proposed rule change, or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSE-2007-99 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-2007-99. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2007-99 and should be submitted on or before December 17, 2007. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22944 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56810; File No. SR-NYSEArca-2007-117] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adding a New Order Type Known as PNP Blind November 19, 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 November 13, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. NYSE Arca has designated the proposed rule change as “non-controversial” under Section 19(b)(3)(A)(iii) 3 of the Act and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange, through its wholly owned subsidiary, NYSE Arca Equities, Inc. (“NYSE Arca Equities”), proposes to amend NYSE Arca Equities Rule 7.31 in order to add a new order type known as PNP Blind. The changes described in this rule proposal would add new Exchange Rule 7.31(mm). The text of the proposed rule change is available on the Exchange's Web site at *http://www.nyse.com,* at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE Arca 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. NYSE Arca has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In order to provide additional flexibility and increased functionality to its system and its Users, 5 the Exchange proposes to add a new variation upon an existing order type. The existing order type, the PNP Order (Post No Preference), 6 is a limit order to buy or sell that is executed in whole or in part on the Exchange, with any unexecuted portion displayed and ranked in the NYSE Arca book. The proposed corollary to this order type, PNP Blind, is a PNP order that is priced at or through the Best Protected Bid or Best Protected Offer (“PBBO”) 7 and is displayed on the NYSE Arca book at the price of the contra quote. The limit price of the PNP Blind order shall be undisplayed ( *e.g.* , blind). 5 *See* NYSE Arca Equities Rule 1.1(yy) for the definition of “User.” 6 *See* NYSE Arca Equities Rule 7.31(w). 7 Pursuant to NYSE Arca Equities Rule 1.1(dd), the term “NBBO” refers to the National best bid or offer and the term “PBBO” refers to the Best Protected Bid and the Best Protected Offer on NYSE Arca. PNP Blind orders will be priced in relation to the PBBO and orders placed on NYSE Arca cannot trade-through Protected Quotations on away markets except as allowed under NYSE Arca Equities Rule 7.37(g). PNP Blind The limit price of the PNP Blind order shall remain undisplayed while its tradable price may be adjusted in certain circumstances. Where the PBBO adjusts away from the price of the PNP Blind and the prices continue to overlap, the limit price of the PNP Blind will remain undisplayed but its tradable price shall be adjusted to the contra side of the PBBO. Similarly, in instances where the PBBO moves into the price of the PNP Blind, the limit price remains undisplayed and the tradable price is adjusted to the contra side of the PBBO. In certain circumstances, the PNP Blind order will convert to a displayed PNP limit order. Where the PBBO moves away from the price of the PNP Blind order and the prices no longer overlap, the PNP Blind will convert to a displayed PNP order and once displayed it may become the new PBBO. Once converted, the order never reverts to an undisplayed PNP Blind order. This order type is similar in nature to an existing order type, the Passive Liquidity Order (“PLO”). 8 The PLO allows Users to post undisplayed limit orders on the NYSE Arca book, which do not route to away market centers. However, the PLO is exclusive to Lead Market Makers in issues where the Exchange is the primary listings market and there is a Lead Market Maker. PNP Blind orders are available to all Users for all securities and never route to away market centers. Unlike the PLO which remains undisplayed, the PNP Blind will convert to a displayed limit order under the circumstances described above. 8 *See* NYSE Arca Equities Rule 7.3(h)(4). PNP Blind orders, therefore, will offer all Users the ability to post an undisplayed limit order priced at or through the PBBO, with a tradable price set at the contra side of the PBBO. The tradable price will adjust until such time as the PBBO either moves away from the limit price of the PNP Blind order and the prices no longer overlap, or moves into the price of the PNP Blind order, whereupon it will then convert to a displayed PNP order. The entry time of a PNP Blind order is not refreshed or updated with each adjustment to its price. 9 9 If a PNP Blind order reaches its limit price and becomes displayed, such PNP Blind order would become the only displayed order in the NYSE Arca book at that price. PNP Blind Examples The following examples demonstrate how a PNP Blind order operates. Example 1: If the price of the PNP Blind order is at or through a protected quote, the order will go blind (undisplayed) and will be placed on the book at the price of the contra quote of the PBBO. *PBBO:* 15.00 to 15.05. *PNP Blind:* Buy 1000 @ 15.10. *Result:* PNP Blind goes blind (undisplayed) and is placed on the bid side of the book at 15.05. Example 2: If the PBBO moves away from the price of the PNP Blind, but the prices continue to overlap, the PNP Blind remains undisplayed and adjusts its tradable price on the book to the new price of the contra quote of the PBBO. *PBBO:* 15.00 to 15.05. *PNP Blind:* Buy 1000 @ 15.10. *Result:* PNP B goes blind (undisplayed) and is placed on the bid side of the book at 15.05. *PBO:* Updates from 15.05 to 15.07. *Result:* PNP Blind remains blind (undisplayed) but adjusts in price to 15.07. Example 3: If the PBBO moves away from the price of the PNP Blind and the prices no longer overlap, the PNP Blind converts to a displayed PNP limit order. *PBBO:* 15.05 to 15.07. *PNP Blind:* Buy 1000 @ 15.10. *Result:* PNP B goes blind (undisplayed) and is placed on the bid side of the book at 15.07. *PBO:* Updates from 15.07 to 15.15. *Result:* PNP Blind converts to PNP limit order and displays a bid of 15.10, setting an updated PBBO of 15.10 to 15.15. Example 4: If the PBBO moves into the price of the PNP Blind, the PNP Blind will adjust its tradable price on the book to the new price of the contra quote of the PBBO or remains displayed if it never went blind or had previously converted to a PNP limit order. *PBBO:* 15.00 to 15.05. *PNP Blind:* Buy 1000 @ 15.10. *Result:* PNP Blind goes blind (undisplayed) and is placed on the bid side of the book at 15.05. *PBBO:* Updates to 15.00 to 15.03. *Result:* PNP Blind remains blind (undisplayed) and its tradeable price adjusts to 15.03. *PBBO:* 15.00 to 15.05. *PNP Blind:* Buy 1000 @ 15.03. *Result:* PNP Blind is displayed at 15.03. *Update:* PBBO resets to 15.03 to 15.05. *Result:* PNP Blind remains displayed at 15.03. Display Order Process PNP Blind orders fall within the Exchange's Display Order Process set forth in NYSE Arca Equities Rule 7.36. Accordingly, as described above, PNP Blind orders follow a strict price/time priority. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 10 in general, and furthers the objectives of Section 6(b)(5) of the Act, 11 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism for a free and open market and a national market system. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not:
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition; and
(iii)become operative for 30 days after the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and subparagraph (f)(6) of Rule 19b-4 thereunder. 13 As required under Rule 19b-4(f)(6)(iii), 14 NYSE Arca provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of the filing of the proposed rule change. 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b-4(f)(6). 14 17 CFR 240.19b-4(f)(6)(iii). A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 15 However, Rule 19b-4(f)(6)(iii) 16 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. NYSE Arca requests that the Commission waive the 30-day operative delay period for “non-controversial” proposals under Rule 19b-4(f)(6) 17 and make the proposed rule change effective and operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it would permit the Exchange to offer the PNP Blind order type without delay. Accordingly, the Commission designates the proposed rule change operative upon filing with the Commission. 18 15 *Id.* 16 *Id.* 17 *Id.* 18 For purposes only of waiving the 30-day operative delay, the Commission has considered the impact of the proposed rule on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f) At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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 the 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-NYSEArca-2007-117 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2007-117. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of NYSE Arca. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2007-117 and should be submitted on or before December 17, 2007. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 19 19 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22898 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-56800; File No. SR-OCC-2007-10] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Fees Charged to Clearing Members and Non-Clearing Members for Theoretical Profit and Loss Values November 16, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on September 18, 2007, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which items have been prepared primarily by OCC. 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). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The principal purpose of the rule change is to effect changes to the fees charged to clearing members and non-clearing members for Theoretical Profit and Loss Values. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of such statements. 2 2 The Commission has modified parts of these statements.
(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of this rule change is to:
(i)Eliminate the fee charged to clearing members for Theoretical Profit and Loss Values and provide this information at no additional cost as part of the ancillary services offered to Tier I clearing members, and
(ii)reduce the maximum fee charged to non-clearing members for such information. As a result of these changes in fees and service offerings, conforming changes are required in OCC's Schedule of Fees as well as in the Supplement to the Agreement for OCC Services: Ancillary Services. In addition, a new Supplement to the Agreement for OCC Services is being adopted to reflect that Theoretical Profit and Loss Values are now being provided to clearing members as part of OCC's ancillary service offerings. A. Background OCC currently provides a theoretical profit/loss value file (“data”) to OCC clearing members and non-clearing member broker-dealers for use in calculating
(i)risk-based haircuts in order to determine SEC net capital requirements and
(ii)margin for customer positions on a portfolio basis. Currently, the data is made available for download to OCC clearing members and non-clearing members by either
(i)mainframe to mainframe transmission,
(ii)File Transfer Protocol (“FTP”), 3 or
(iii)OCC's Theoretical Information Online (“TIO”) system. 4 Both the mainframe to mainframe transmission and the FTP processes provide for receipt of the full theoretical file while TIO also allows partial file downloads. 3 OCC charges $2,000.00 per month for clearing members and non-clearing members to access the Data via mainframe to mainframe transmission or FTP. 4 OCC currently charges a monthly fee of $0.10 per class group with a minimum monthly charge of $200.00 and a maximum monthly charge of $2,000.00 for clearing members and non-clearing members accessing the data via TIO. B. Discussion TIO once served as a practical and economical tool that allowed users to avoid downloading the entire theoretical file to access the desired information. The TIO “per class group” charge enabled clearing members and non-clearing members that needed data for a relatively small subset of all equity classes to save money by using TIO as compared to the other two means of downloading the data. However, the widespread availability of affordable broadband network services has practically eliminated the download time and other bandwidth-related concerns associated with downloading an entire file of theoretical values. Meanwhile, as more subscribers begin to use the customer margin risk arrays for customer positions margined on a portfolio basis, OCC believes the number of clearing members and non-clearing members that would benefit from having the option to download a partial file will continue to decline. 1. Elimination or Reduction of Fees In May 2007, OCC's Board of Directors authorized a plan to decommission the TIO system due to its limited value and high maintenance cost. The data will remain available to clearing members and non-clearing members as a full file through either a mainframe to mainframe transmission or FTP. 5 Effective October 1, 2007, OCC will eliminate the fee for Theoretical Profit and Loss Values charged to clearing members that receive the data via mainframe to mainframe or via FTP and will provide this information as part of the ancillary services offered to Tier I clearing members. 6 Also effective October 1, 2007, OCC will reduce the fee for non-clearing members to receive the data via mainframe to mainframe transmission or FTP to a flat rate of $1,000.00 per month. 7 OCC attached as Exhibit 5A to SR-OCC-2007-10 a Schedule of Fees as of October 1, 2007, which reflects the foregoing changes. 8 5 OCC staff will work with affected TIO subscribers to assist them in their transition to FTP or mainframe to mainframe downloads by December 31, 2007. 6 There are a total of five clearing members that subscribe to OCC's theoretical data that are not Tier I subscribers. Based upon July 2007 billing for June activity, the increased monthly cost of subscribing to Tier I ($450.00) would be more than offset for one of these clearing members by elimination of the separate charge for theoretical data ($2,000.00 per month). The other four clearing members will have a monthly billing increase of approximately $250. These four clearing members currently use TIO and on average download a minimal number of class groups per month. 7 OCC will continue to support and make the data available through TIO until December 31, 2007. Clearing members and non-clearing members that continue to receive data via TIO after October 1, 2007, will be charged the current TIO fees for the data. However, effective January 1, 2008, TIO will be decommissioned, and the data will no longer be available via TIO. As a result, the TIO fee will then be eliminated from the Schedule of Fees. 8 Exhibit 5A also contains references highlighting the phase-out approach that OCC is adopting with respect to the decommissioning of TIO and the impact to fees charged to clearing members and non-clearing members during this time period. Such notations will no longer be applicable after TIO is retired, and they will be eliminated in connection with the republication of the January, 2008 schedule of fees. 2. Conforming Changes As part of the proposed rule change, OCC is also making certain additional conforming changes to both its Schedule of Fees and its Ancillary Services Supplement, a copy of which is attached to SR-OCC-2007-10 as Exhibit 5B, to reflect recent modifications to its ancillary service descriptions. Specifically, as of April 2007, OCC no longer provides monthly core reports to clearing members via cd-rom as currently referenced in Tiers I, II, III, and IV of the Schedule of Fees and the Ancillary Services Supplement. Instead, clearing members now have access to historical core reports on-line through ENCORE Core Reports. In addition, OCC's special settlement file and adjusted position file as currently referenced in Tier 1 of the Schedule of Fees and the Ancillary Services Supplement are no longer separately produced for clearing members as this information is now made available as part of OCC's data distribution service (“DDS”). Finally, OCC has now completed its conversion of DDS subscribers to its new format as previously described in File No. SR- OCC-2006-06. 9 Therefore, the surcharge currently referenced in OCC's Schedule of Fees in connection with the DDS conversion is no longer applicable and will be removed along with each of the other above-described items. 9 Securities and Exchange Act No. 54059 (June 28, 2006), 71 FR 38962 (July 10, 2006). 3. Supplement to Agreement for OCC Services: Theoretical Profit and Loss Values Exhibit 5C to SR-OCC-2007-10 is the Supplement to the Agreement for OCC Services: Theoretical Profit and Loss Values to be entered into between OCC and clearing members subscribing to Theoretical Profit and Loss Values (“Supplement”). 10 The Supplement is structured to fit within OCC's existing framework for the Agreement for OCC Services and will replace the current form agreement between clearing members and OCC. The provisions are generally self-explanatory, and they are intended to describe the respective responsibilities of OCC and the subscribing clearing member. Section 1 describes the Theoretical Profit and Loss Values and identifies the available means of downloading the data. Sections 2 and 3 set forth the authorized scope of use of the data and related documentation. Section 4 describes the clearing member's obligations with respect to security and access codes. Section 5 describes the fees associated with the data. Section 6 sets forth the confidential nature of the data and documentation. Sections 7 through 11 set forth further responsibilities of the parties including warranties, liability, and indemnification. Section 12 describes the termination rights of the parties. Section 13 contains general terms regarding survival of certain provisions. Exhibit A to the Supplement is the form of acknowledgment to be signed by a managed clearing member. 10 Non-clearing members will also be required to execute a corresponding subscription agreement for the data. The proposed rule change is consistent with Section 17A of the Act because it involves a fee, due, or charge applicable to subscribers of information that provides for a reasonable allocation of costs. The proposed rule change is not inconsistent with the existing rules of OCC, including any other rules proposed to be amended.
(B)Self-Regulatory Organization's Statement on Burden on Competition OCC does not believe that the proposed rule change would impose any burden on competition.
(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were not and are not intended to be solicited with respect to the proposed rule change, and none have been received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change changes fees charged by OCC, it has become effective pursuant to section 19(b)(3)(A)(ii) of the Act 11 and Rule 19b-4(f)(2) 12 thereunder. At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 11 15 U.S.C. 78s(b)(3)(A)(ii). 12 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-OCC-2007-10 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-OCC-2007-10. 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 OCC. 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-OCC-2007-10 and should be submitted on or before December 17, 2007. For the Commission by the Division of Trading and Markets, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-22910 Filed 11-23-07; 8:45 am] BILLING CODE 8011-01-P SMALL BUSINESS ADMINISTRATION Senior Executive Service: Performance Review Board Members AGENCY: Small Business Administration. ACTION: Notice of members for the FY 07 Performance Review Board. SUMMARY: Section 4314(c)(4) of Title 5, U.S.C.; requires each agency to publish notification of the appointment of individuals who may serve as members of that Agency's Performance Review Board (PRB). The following individuals have been designated to serve on the FY 07 Performance Review Board for the U.S. Small Business Administration: 1. Frank R. Borchert, III, Chair, General Counsel. 2. Darryl K. Hairston, Deputy Associate Administrator for Management and Administration. 3. Grady B. Hedgespeth, Director of Financial Assistance. 4. Luz A. Hopewell, Director of International Trade. 5. Herbert L. Mitchell, Associate Administrator for Disaster Assistance. 6. Anoop Prakash, Associate Administrator for Entrepreneurial Development. 7. Sean G. Rushton, Assistant Administrator for Communication and Public Liaison. Dated: November 16, 2007. Steven C. Preston, Administrator. [FR Doc. E7-22947 Filed 11-23-07; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Seventy-Fourth Meeting: RTCA Special Committee 159: Global Positioning System
(GPS)AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of RTCA Special Committee 159 meeting. SUMMARY: The FAA is issuing this notice to advise the public of a meeting of RTCA Special Committee 159: Global Positioning System. DATES: The meeting will be held December 4-7, 2007, from 9 a.m. to 4:30 p.m. (unless stated otherwise). ADDRESSES: The meeting will be held at RTCA, Inc. 1828 L Street, NW., Suite 805, Washington, DC 20036. FOR FURTHER INFORMATION CONTACT: RTCA Secretariat, 1828 L Street, NW., Suite 805, Washington, DC 20036; telephone
(202)833-9339; fax
(202)833-9434; Web site *http://www.rtca.org.* SUPPLEMENTARY INFORMATION: Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., appendix 2), notice is hereby given for a Special Committee 159 meeting. **Note:** Specific working group sessions will be held December 4-7, 2007. The plenary agenda will include: • December 4: • All Day, Working Group 6, GPS/Interface, ARINC Room. • December 5: • All Day, Working Group 6, GPS/Interface, ARINC Room. • December 6: • All Day Working Group 6, GPS/Interface, ARINC Room. • December 7: • Opening Plenary Session (Chairman's Remarks, Introductions). • Approval of Summary of the Seventy-Third Meeting Held September 21, 2007 RTCA Paper No. 274-07/SCI59-954. • Consider for Approval—Revised DO-235A-Assessment of Radio Frequency Interface Relevant to the GNSS, RTCA Paper No. 261-07/SCI59-953. • Review/Approval—Velocity Accuracy, Figure of Merit and Associated Test Text—GRAS MOPS. • Closing Plenary Session (Assignment/Review of Future Work, Other Business, Date and Place of Next Meeting). Attendance is open to the interested public but limited to space availability. With the approval of the chairmen, members of the public may present oral statements at the meeting. Persons wishing to present statements or obtain information should contact the person listed in the FOR FURTHER INFORMATION CONTACT section. Members of the public may present a written statement to the committee at any time. Issued in Washington, DC, on November 15, 2007. Francisco Estrada C., RTCA Advisory Committee. [FR Doc. 07-5803 Filed 11-23-07; 8:45 am]
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U.S. Code
- Purposes§ 3501
- Open meetings§ 552b
- Registration, responsibilities, and oversight of self-regulatory organizations§ 78s
- National securities exchanges§ 78f
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Definitions and application§ 78c
- Declaration of purpose§ 5311
- National system for clearance and settlement of securities transactions§ 78q–1
CFR
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18 references not yet in our index
- 29 CFR 4041
- 29 CFR 4203
- 29 CFR 4204
- 29 CFR 4207
- 29 CFR 4208
- 29 CFR 4211
- 29 CFR 4219
- 29 CFR 4220
- 29 CFR 4231
- 29 CFR 4245
- 29 CFR 4281
- 15 USC 80b
- Pub. L. 94-409
- 17 CFR 240.19
- 31 CFR 103.120
- Pub. L. 107-56
- 17 CFR 240.12
- Pub. L. 92-463
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