714 Federal Register / Vol. 69, No. 3 / Tuesday, January 6, 2004 / Notices 

10Securities Exchange Act Release No. 45656 

(March 27, 2002), 67 FR 15646 (April 2, 2002) [File 

No. SR–GSCC–2002–01].

11The operational and contingency procedures 

contained in the FICC–BCC agreement provide that 

in the event FICC does not receive BCC’s file by the 

cut-off time, FICC will calculate the applicable 

cross-margining reductions assuming that BCC 

submitted a file with no positions available for 

cross-margining which may result in margin calls 

for the affected participants by both FICC and BCC. 

These margin calls would not be disruptive to 

members because the cross-margining reductions in 

the program with the BCC are not anticipated to be 

large amounts.

12FICC currently has a cross-margining 

agreement in place with BOTCC through which 

certain CBOT products are cross-margined with 

certain FICC products. Securities Exchange Act 

Release No. 45335 (January 25, 2002), 67 FR 4768 

(January 31, 2001) [File No. SR–GSCC–2001–03]. 

BOTCC recently announced that it will become the 

clearing corporation for Eurex. In the next few 

weeks, FICC will determine the status of its crossmargining arrangement with BOTCC and will 

submit a proposed rule change filing addressing 

changes to the existing agreement, if necessary.

13Securities Exchange Act Release No. 41766 

(August 19, 1999), 64 FR 46737 (August 26, 1999) 

[File No. SR–GSCC–98–04].

14 15 U.S.C. 78q–1(b)(3)(F).

15 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

of a member, only the proceeds from the 

side of the market that was offset 

pursuant to the agreement at the last 

margin cycle are considered. In the New 

FICC–CME Agreement, this approach 

will be extended to the CBOT products 

in order to provide consistency in the 

liquidation methods. 

4. Amendments 1, 2, and 3 to the FICC–

BCC Cross-Margining Agreement 

FICC is proposing to amend its crossmargining agreement with BCC with 

Amendment 3 to the agreement.10

Amendment 3 will (i) add FICC’s GCF 

Repo Treasury and non-mortgagebacked Agency products to the 

arrangement, (ii) add FICC’s nonmortgage-backed Agency offset classes e 

and f, and (iii) amend the contingency 

procedures between the clearing 

organizations (contained in Appendix I 

of the agreement) to provide that FICC 

will not wait past 12 a.m. Eastern time 

for the BCC cross-margining file in order 

to run its cross-margining system. With 

respect to (ii), FICC has determined that 

even though BCC does not currently 

clear non-mortgage-backed Agency 

futures, the parties can still crossmargin FICC’s Agency products against 

BCC’s Treasury products given that the 

agreement provides for inter-offset class 

cross-margining using the appropriate 

correlation factors. With respect to (iii), 

the operational procedures provide that 

FICC will wait until 3:00 a.m. Eastern 

time for the BCC file which is the same 

cut-off time for all of its other crossmargining partners. However, FICC has 

determined that the 3:00 a.m. Eastern 

time cut-off, which is significantly later 

than the GSD’s normal cross-margining 

processing time, should only be used for 

extreme situations where not including 

a particular file would be disruptive to 

members. Currently, this would not be 

anticipated to be the case for a BCC file 

because of BCC’s files relatively low 

historical impact.11 Therefore, FICC has 

determined that it would be more 

prudent from a risk management 

perspective to adopt a cut-off time of 

12:00 a.m. Eastern time for receipt of 

BCC files.

As part of this proposed rule change 

filing, FICC will include Amendments 1 

and 2 that were previously made with 

respect to its existing cross-margining 

agreement with BCC. The purpose of 

Amendment 1 was to update the list of 

products being cross-margined. The 

purposes of Amendment 2 were to 

remove references to the crossmargining agreement with NYCC from 

Appendix A in which the parties are 

required to list other outstanding crossmargining arrangements and to update 

the notice provision.

5. Amendments 1 and 2 to the FICC–

BOTCC Cross-Margining Agreement

As in the case of the BCC agreement, 

FICC will include as part of this 

proposed rule change filing 

Amendments 1 and 2 that were 

previously made with respect to its 

existing cross-margining arrangement 

with BOTCC.12 The purposes of 

Amendment 1 were to update the list of 

products being cross-margined, add an 

appendix setting forth operational 

contingency procedures, clarify 

procedures to be used if one clearing 

organization discovers a calculation 

error, correct cited Bankruptcy Code 

language, correct language in one of the 

participant agreements, and refine the 

timing of the effectiveness of changes to 

the cross-margining reduction. The 

purpose of Amendment 2 was to remove 

references to the cross-margining 

agreement with NYCC from Appendix 

A.

6. Removal of NYCC Cross-Margining 

Agreement From the GSD’s Rules 

FICC is removing its cross-margining 

agreement with NYCC13 from the GSD’s 

rules. That arrangement has been 

dormant for some time and the parties 

have agreed that should they determine 

to reinstitute cross-margining, they will 

enter into a new cross-margining 

agreement that will be similar to FICC’s 

other cross-margining agreements. At 

that time, FICC would file the 

appropriate proposed rule change with 

the Commission.

III. Discussion 

Section 17A(b)(3)(F) of the Act 

requires that the rules of a clearing 

agency be designed to facilitate the 

safeguarding of securities and funds 

which are in its custody or control or for 

which it is responsible and in general 

will protect investors and the public 

interest.14 The Commission finds that 

FICC’s proposed rule change is 

consistent with this requirement 

because it continues FICC’s crossmargining program which provides 

members with significant benefits, such 

as greater liquidity and more efficient 

use of collateral in a prudent manner, 

and enhances FICC’s overall risk 

management process.

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and in 

particular section 17A of the Act and 

the rules and regulations thereunder. 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act, that the 

proposed rule change (File No. SR–

FICC–2003–10) be and hereby is 

approved.

For the Commission by the Division 

of Market Regulation, pursuant to 

delegated authority.15

Jill M. Peterson, 

Assistant Secretary.

[FR Doc. 04–220 Filed 1–5–04; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–49009; File No. SR–ISE–

2003–39] 

Self-Regulatory Organizations; Notice 

of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change by the International 

Securities Exchange, Inc., Relating to 

the Extension of a Linkage Fee Pilot 

Program 

December 30, 2003. 

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 December 

18, 2003, the International Securities 

Exchange, Inc. (‘‘Exchange’’ or ‘‘ISE’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Federal Register / Vol. 69, No. 3 / Tuesday, January 6, 2004 / Notices 715

3See File No. SR–ISE–2003–30 (the ‘‘Permanent 

Fee Filing’’).

4See Securities Exchange Act Release No. 47719 

(April 23, 2003), 68 FR 22764 (April 29, 2003) (SR–

ISE–2003–11).

5The ISE charges these fees only to its Members, 

generally firms who clear P and P/A Orders for 

market makers on the other linked exchanges.

6 15 U.S.C. 78f(b)(4).

7 In approving this rule, the Commission notes 

that it has considered its impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f).

8 15 U.S.C. 78f(b).

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 and is 

approving the proposed rule change on 

an accelerated basis.

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The ISE is proposing to extend until 

July 31, 2004 the current pilot program 

regarding transaction fees charged for 

trades executed through the intermarket 

options linkage (‘‘Linkage’’). Currently 

pending before the Commission is a 

filing to make such fees permanent.3

The proposed fee schedule is 

available at the Exchange and at the 

Commission. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

ISE included statements concerning the 

purpose of, and basis for, the proposed 

rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item III below. The Exchange has 

prepared summaries, set forth in 

Sections A, B and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposed rule 

change is to extend for six months the 

pilot program establishing ISE fees for 

Principal (‘‘P’’) Orders and Principal 

Acting as Agent (‘‘P/A’’) Orders 

executed through Linkage. The fees 

currently are effective for a pilot 

program scheduled to expire on January 

30, 2004,4 and this filing would extend 

the fees through July 31, 2004. The three 

fees the ISE charges for P and P/A 

orders are: The basic execution fees for 

trading on the ISE, which range from 

$.12 to $.21 per contract/side depending 

on average daily trading volume on the 

Exchange; a $.10 surcharge per contract/

side for trading certain licensed 

products; and a $.03 comparison fee per 

contract/side (collectively ‘‘Linkage 

fees’’). These are the same fees that all 

ISE Members pay for non-customer 

transactions executed on the Exchange.5

The ISE does not charge for the 

execution of Satisfaction Orders sent 

through Linkage and is not proposing to 

charge for such orders.

In the Permanent Fee Filing, the ISE 

discusses in detail the reasoning why it 

believes it is appropriate to charge fees 

for P and P/A Orders executed through 

Linkage. In sum, market makers on 

competing exchanges can match a better 

price on the ISE; they never are 

obligated to send orders to the ISE 

through Linkage. However, if such 

market makers do seek the ISE’s 

liquidity, whether through conventional 

orders or through the use of P Orders or 

P/A Orders, the Exchange believes it is 

appropriate to charge our Members the 

same fees levied on other non-customer 

orders. The ISE appreciates that there 

has been limited experience with 

Linkage and that the Commission is 

continuing to study Linkage in general 

and the effect of fees on trades executed 

through Linkage. Thus, this filing would 

extend the status quo for ISE’s Linkage 

fees for six months while the 

Commission considers the Permanent 

Fee Filing. 

2. Statutory Basis 

The ISE believes that the basis for this 

proposed rule change is the requirement 

under Section 6(b)(4) under the Act 6

that an exchange provide for the 

equitable allocation of reasonable dues, 

fees and other charges among its 

members and other persons using its 

facilities. As discussed in more detail 

above, the ISE believes that this 

proposed rule change will equitably 

allocate fees by having all non-customer 

users of ISE transaction services pay the 

same fees. If the ISE were not to charge 

Linkage fees, the Exchange’s fees would 

not be equitable, in that ISE Members 

would be subsidizing the trading of 

their competitors, all of whom access 

the same trading services.

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Moreover, 

the ISE believes that failing to adopt the 

proposed rule change would impose a 

burden on competition by requiring ISE 

Members to subsidize the trading of 

their competitors. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Persons making written submissions 

should file six copies thereof with the 

Secretary, Securities and Exchange 

Commission, 450 Fifth Street, NW., 

Washington, DC 20549–0609. 

Comments may also be submitted 

electronically at the following e-mail 

address: rule-comments@sec.gov. All 

comment letters should refer to File No. 

SR–ISE–2003–39. 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, comments 

should be sent in hardcopy or by e-mail 

but not by both methods. 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. Copies of such filing will also be 

available for inspection and copying at 

the principal office of the Exchange. All 

submissions should be submitted by 

January 27, 2004. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder, applicable 

to a national securities exchange,7 and, 

in particular, with the requirements of 

section 6(b) of the Act 8 and the rules 

716 Federal Register / Vol. 69, No. 3 / Tuesday, January 6, 2004 / Notices 

9 15 U.S.C. 78f(b)(4).

10 15 U.S.C. 78s(b)(2).

11 Id.

12 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 48810 

(November 19, 2003), 68 FR 66518.

4 In approving the proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. 15 U.S.C. 78c(f).

5 15 U.S.C. 78o–3.

6 15 U.S.C. 78o–3(b)(6).

7 15 U.S.C. 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

1For purposes of its investigation, the ITC 

considered certain ductile iron waterworks fittings 

to consist of cast pipe or tube fittings of ductile iron 

(containing 2.5 percent carbon and over 0.02 

percent magnesium or magnesium and cerium, by 

weight) with mechanical, push-on (rubber 

and regulations thereunder. The 

Commission finds that the proposed 

rule change is consistent with section 

6(b)(4) of the Act,9 which requires that 

the rules of the Exchange provide for the 

equitable allocation or reasonable dues, 

fees, and other charges among its 

members other persons using its 

facilities. The Commission believes that 

the extension of the Linkage fee pilot 

until July 31, 2004 will give the 

Exchange and the Commission further 

opportunity to evaluate whether such 

fees are appropriate.

The Commission finds good cause, 

pursuant to section 19(b)(2) of the Act,10

for approving the proposed rule change 

prior to the thirtieth day after the date 

of publication of the notice of the filing 

thereof in the Federal Register. The 

Commission believes that granting 

accelerated approval will preserve the 

Exchange’s existing pilot program for 

Linkage fees without interruption as the 

ISE and the Commission further 

consider the appropriateness of Linkage 

fees.

V. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–ISE–2003–39) 

is hereby approved on an accelerated 

basis for a pilot period to expire on July 

31, 2004.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–216 Filed 1–5–04; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–48997; File No. SR–NASD–

2003–161] 

Self-Regulatory Organizations; Order 

Granting Approval of Proposed Rule 

Change by the National Association of 

Securities Dealers, Inc. To Establish a 

Nasdaq Official Opening Price 

December 29, 2003. 

On October 28, 2003, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’), through its subsidiary, The 

Nasdaq Stock Market, Inc. (‘‘Nasdaq’’), 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to establish a Nasdaq Official 

Opening Price that would be made 

available for wholly voluntary use by 

NASD members and the public. The 

proposed rule change was published for 

comment in the Federal Register on 

November 26, 2003.3 The Commission 

received no comments on the proposal. 

This order approves the proposed rule 

change.

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

association.4 In particular, the 

Commission believes that the proposed 

rule change is consistent with Section 

15A of the Act 5 in general, and furthers 

the objectives of Section 15A(b)(6) 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 regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and in general, to protect 

investors and the public interest. 

Specifically, the Commission believes 

that Nasdaq’s proposal may result in the 

public dissemination of information that 

more accurately reflects the trading in a 

particular security on Nasdaq at the 

open.

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and rules and 

regulations thereunder. 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act 7, that the 

proposed rule change (SR–NASD–2003–

161) is approved.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.8

Jill M. Peterson, 

Assistant Secretary.

[FR Doc. 04–224 Filed 1–5–04; 8:45 am] 

BILLING CODE 8010–01–P

DEPARTMENT OF STATE

[Public Notice 4580] 

Bureau of Educational and Cultural 

Affairs; Middle East Partnership 

Initiative (MEPI) U.S. Business 

Internship Program for Young Middle 

Eastern Women

ACTION: Correction to proposal 

submission date. 

The MEPI U.S. Business Internship 

Program for Young Middle Eastern 

Women was announced in Public 

Notice 4575 published on Monday, 

December 29, with an incorrect proposal 

submission date. The correct date 

should read, ‘‘February 17, 2004’’. All 

other program information remains the 

same.

SUPPLEMENTARY INFORMATION: Interested 

U.S. organizations should contact 

Robert Greenan at 202–619–5437 for 

additional information. 

The Middle East Partnership Initiative 

(MEPI) U.S. Business Internship 

Program for Young Middle Eastern 

Women was announced in the Federal 

Register, Volume 68, Number 248, on 

December 29, 2003.

Dated: December 30, 2003. 

C. Miller Crouch, 

Principal Deputy Assistant Secretary for 

Educational and Cultural Affairs, Department 

of State.

[FR Doc. 04–228 Filed 1–5–04; 8:45 am] 

BILLING CODE 4710–05–P

OFFICE OF THE UNITED STATES 

TRADE REPRESENTATIVE 

Notice of Proposed Measure and 

Opportunity for Public Comment 

Pursuant to Section 421 of the Trade 

Act of 1974: Certain Ductile Iron 

Waterworks Fittings From the People’s 

Republic of China

AGENCY: Office of the United States 

Trade Representative.

ACTION: Notice of proposed measure; 

request for comments. 

SUMMARY: The United States 

International Trade Commission (ITC) 

has determined, pursuant to section 

421(b)(1) of the Trade Act of 1974, as 

amended (the Trade Act) (19 U.S.C. 

2451(b)(1)), that certain ductile iron 

waterworks fittings 1 from the People’s