Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20731 

8House Comm. Interstate Commerce, Report of 

the Securities and Exchange Commission on the 

Public Policy Implications of Investment Company 

Growth, H.R. Rep. No. 2337, 89th Cong. 2d Session 

337 (1966). 

reinvestment of the proceeds of 

redemption, or both.8 The section was 

designed to forestall the ability of a 

depositor to present holders of interest 

in a unit investment trust with 

situations in which a holder’s only 

choice would be to continue an 

investment in an unsuitable underlying 

security, or to elect a costly and, in 

effect, forced redemption. 

4. Applicants represent that each 

Contract and its prospectus reserves 

NLIC’s right to substitute shares of one 

portfolio for shares of another. 

5. Applicants contend that based on a 

comparison of the basic characteristics 

of the Replacement Portfolio and the 

Substituted Portfolio, the Substitution 

will provide Contract owners with 

substantially the same investment 

vehicle. 

6. Applicants believe that the 

Replacement Portfolio and the 

Substituted Portfolio have substantially 

the same investment objectives and 

principal investment strategies, thus 

making the Replacement Portfolio an 

appropriate candidate for the 

Substitution. Both the Replacement 

Portfolio and the Substituted Portfolio 

seek a high level of current income as 

is consistent with stable principal 

values and liquidity. However, while 

both the Replacement Portfolio and the 

Substituted Portfolio pursue their 

investment objective by investing in 

U.S. dollar-denominated money market 

securities of domestic issuers as well as 

repurchase agreements, only the 

Replacement Portfolio invests in 

instruments issued by foreign issuers. 

Both the Replacement Portfolio and the 

Substituted Portfolio seek to maintain a 

net asset value of $1.00 per share as well 

as liquidity. Most significantly, both the 

Replacement Portfolio and the 

Substituted Portfolio must comply with 

the diversification and risk-limiting 

conditions of Rule 2a-7 under the Act. 

Notwithstanding one difference in the 

investment strategies, both the 

Replacement Portfolio and the 

Substituted Portfolio emphasize the 

same investment objective and follow 

substantially the same investment 

strategies to pursue those objectives. 

Thus, the Applicants believe that the 

money market investment option 

available to Contract owners will not 

change in any material respect as a 

result of the Substitution. 

7. Applicants represent that the 

Replacement Portfolio entails 

substantially the same investment risks 

as does the Substituted Portfolio. In 

particular, given the diversification and 

risk-limiting conditions of Rule 2a–7 

under the Act, the Replacement 

Portfolio cannot have a materially 

different risk profile than the 

Substituted Portfolio. 

8. Applicants assert that the 

Substitution will result in a reduction in 

overall expenses of the Replacement 

Portfolio as compared to the Substituted 

Portfolio. Although the Service Class 

shares of the Replacement Portfolio are 

subject to a modest Rule 12b–1 

distribution and shareholder service 

plan expense that the Substituted 

Portfolio does not bear, the total annual 

operating expenses for the Replacement 

Portfolio have been significantly less 

than the total annual operating expenses 

for the Substituted Portfolio in recent 

years. 

9. The Applicants believe that 

Contract owners would benefit from the 

significantly larger size of the 

Replacement Portfolio and the 

somewhat higher yields that the 

Replacement Portfolio can be expected 

to provide, as contrasted with the size 

and recent yields of the Substituted 

Portfolio. 

10. Applicants represent that for three 

years from the Effective Date, NLIC and 

persons under common control with 

NLIC will not receive in the aggregate 

any direct or indirect benefits from the 

Replacement Portfolio, its investment 

adviser, or its principal underwriter (or 

their affiliates) in connection with assets 

representing contract values (at the time 

of the substitution) of the Contracts, at 

a higher rate than they had received 

from the Substituted Portfolio, its 

investment adviser, or its principal 

underwriter (or their affiliates) 

including, without limitation: Rule 12b1 fees, shareholder service fees, 

administrative fees or other service fees, 

revenue-sharing payments, or payments 

from other arrangements in connection 

with such assets. 

11. Applicants submit that the 

Substitution meets the standards set 

forth in Section 26(c) and that, if 

implemented, the Substitution would 

not raise any of the aforementioned 

concerns that Congress intended to 

address when the 1940 Act was 

amended to include this provision. 

Further, Applicants submit that the 

replacement of the Substituted Portfolio 

with the Replacement Portfolio is 

consistent with the protection of 

Contract owners and the purposes fairly 

intended by the policy and provisions of 

the 1940 Act and, thus, meets the 

standards necessary to support an order 

pursuant to Section 26(c) of the 1940 

Act. 

Conclusion 

Applicants submit that for the reasons 

summarized above the proposed 

Substitution meets the standards of 

Section 26(c) of the 1940 Act and 

request that the Commission issue an 

order of approval pursuant to Section 

26(c) of the 1940 Act. 

For the Comission, by the Division of 

Investment Management pursuant to 

delegated authority. 

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8731 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

RINO International Corporation; Order 

of Suspension of Trading 

April 11, 2011. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of RINO 

International Corporation, because the 

company has failed to disclose that: (i) 

The outside law firm and forensic 

accountants hired by the audit 

committee to investigate allegations of 

financial fraud at the company resigned 

on or about March 31, 2011, after 

reporting the results of their 

investigation to management and the 

board; (ii) the chairman of its audit 

committee resigned on March 31, 2011; 

and (iii) the company’s remaining 

independent directors have also 

resigned. Further, questions have arisen 

regarding, among other things: (i) The 

size of the company’s operations and 

number of employees; (ii) the existence 

of certain material customer contracts; 

and (iii) the existence of two separate 

and materially different sets of corporate 

books and accounts. RINO is a Nevada 

corporation with its headquarters and 

operations in the People’s Republic of 

China, which trades on OTC Link under 

the symbol ‘‘RINO.’’ 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

company. 

Therefore, it is ordered, pursuant to 

Section 12(k) of the Securities Exchange 

Act of 1934, that trading in the abovelisted company is suspended for the 

period from 9:30 a.m. EDT, April 11, 

2011, through 11:59 p.m. EDT, on April 

25, 2011. 

mstockstill on DSKH9S0YB1PROD with NOTICES

20732 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 62886 

(September 10, 2010), 75 FR 56613 (September 16, 

2010). 

4Securities Exchange Act Release No. 63490; 

(December 9, 2010), 75 FR 78299 (December 15, 

2010). 

5 15 U.S.C. 78f(b)(5). 

6 15 U.S.C. 78k–1(a)(1). 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–9060 Filed 4–11–11; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64240; File No. SR–BX– 

2011–019] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Pilot Period of Amendments to the 

Clearly Erroneous Rule 

April 7, 2011. 

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 March 31, 

2011, NASDAQ OMX BX, Inc. 

(‘‘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 prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to extend the 

pilot period of recent amendments to 

Rule 11890, concerning clearly 

erroneous transactions, so that the pilot 

will now expire on the earlier of August 

11, 2011 or the date on which a limit 

up/limit down mechanism to address 

extraordinary market volatility, if 

adopted, applies. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

brackets. 

* * * * * 

11890. Clearly Erroneous Transactions 

The provisions of paragraphs (C), 

(c)(1), (b)(i), and (b)(ii) of this Rule, as 

amended on September 10, 2010, shall 

be in effect during a pilot period set to 

end on the earlier of August 11, 2011 or 

the date on which a limit up/limit down 

mechanism to address extraordinary 

market volatility, if adopted, applies 

[April 11, 2011]. If the pilot is not either 

extended or approved permanent by the 

earlier of August 11, 2011 or the date on 

which a limit up/limit down mechanism 

to address extraordinary market 

volatility, if adopted, applies [April 11, 

2011], the prior versions of paragraphs 

(C), (c)(1), and (b) shall be in effect. 

(a)–(f) No change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On September 10, 2010, the 

Commission approved, for a pilot period 

to end December 10, 2010, a proposed 

rule change submitted by the Exchange, 

together with related rule changes of the 

BATS Exchange, Inc., Chicago Board 

Options Exchange, Incorporated, 

Chicago Stock Exchange, Inc., EDGA 

Exchange, Inc., EDGX Exchange, Inc., 

International Securities Exchange LLC, 

The NASDAQ Stock Market LLC, New 

York Stock Exchange LLC, NYSE Amex 

LLC, NYSE Arca, Inc., and National 

Stock Exchange, Inc., to amend certain 

of their respective rules to set forth 

clearer standards and curtail discretion 

with respect to breaking erroneous 

trades.3

The changes were adopted to address 

concerns that the lack of clear 

guidelines for dealing with clearly 

erroneous transactions may have added 

to the confusion and uncertainty faced 

by investors on May 6, 2010. On 

December 7, 2010, the Exchange filed an 

immediately effective filing to extend 

the existing pilot program for four 

months, so that the pilot would expire 

on April 11, 2011.4

The Exchange believes that the pilot 

program has been successful in 

providing greater transparency and 

certainty to the process of breaking 

erroneous trades. The Exchange also 

believes that a four month extension of 

the pilot is warranted so that it may 

continue to monitor the effects of the 

pilot on the markets and investors, and 

consider appropriate adjustments, as 

necessary. The Exchange notes, 

however, that the Exchanges are 

developing a ‘‘limit up/limit down’’ 

mechanism to reduce the negative 

impacts of sudden, unanticipated price 

movements in securities traded on the 

Exchanges. Under such a mechanism, 

trades in a security outside a price band 

would not be allowed, thus eliminating 

clearly erroneous transactions from 

occurring altogether. As such, the 

proposed extension may be shorter in 

duration should the Exchange adopt a 

limit up/limit down mechanism to 

address extraordinary market volatility. 

Accordingly, the Exchange is filing to 

further extend the pilot program until 

the earlier of August 11, 2011 or the 

date on which a limit up/limit down 

mechanism to address extraordinary 

market volatility, if adopted, applies. 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),5 which requires the rules of an 

exchange to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. The proposed rule 

change also is designed to support the 

principles of Section 11A(a)(1) 6 of the 

Act in that it seeks to assure fair 

competition among brokers and dealers 

and among exchange markets. The 

Exchange believes that the proposed 

rule meets these requirements in that it 

promotes transparency and uniformity 

across markets concerning decisions to 

break erroneous trades. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

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. 

mstockstill on DSKH9S0YB1PROD with NOTICES