9828 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

applicable to each series of CDOs. OCC 

would have discretion to reduce the 

requirement to something less than 

100% if research, analysis, and 

experience suggest that a lower 

percentage is sufficient. Initially, long 

positions in CDOs will be valued at zero 

and will provide no offset against 

margin requirements on the shorts. 

Again, based on research, analysis, and 

experience, OCC may determine to give 

some value to the longs. Ultimately, 

CDOs will be incorporated into the 

STANS system and valued and will be 

margined on a risk basis. 

OCC does not propose to accept 

escrow deposits in lieu of clearing 

margin for binary options. Therefore, 

Rule 1506 states that Rule 610, which 

otherwise would permit such deposits, 

does not apply to binary options. 

7. Acceleration of Expiration Date—Rule 

1507 

This provision permits OCC to 

accelerate the expiration date of a binary 

option when the value of the underlying 

interest has become fixed (e.g., where a 

stock underlying a binary option has 

been converted by a merger into the 

right to receive a fixed amount of cash). 

If the value of the underlying interest 

does not meet the specified criterion for 

automatic exercise, it will expire 

unexercised. Otherwise, it will be 

automatically exercised. 

The proposed changes to OCC’s ByLaws and Rules are consistent with the 

purposes and requirements of Section 

17A of the Act, as amended, because 

they are designed to promote the 

prompt and accurate clearance and 

settlement of transactions in, including 

exercises of, credit default options and 

other binary options, and to foster 

cooperation and coordination with 

persons engaged in the clearance and 

settlement of such transactions, to 

remove impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 

settlement of such transactions, and, in 

general, to protect investors and the 

public interest. They accomplish these 

purposes by applying substantially the 

same rules and procedures to binary 

options and specifically CDOs as OCC 

applies to similar transactions in other 

cash-settled options. Other than as 

described in this Item II, the proposed 

rule change is not inconsistent with the 

existing rules of OCC, including 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 

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 rulecomments@sec.gov. Please include File 

Number SR–OCC–2007–01 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–2007–01. 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. The text of the proposed rule 

change is available at OCC, the 

Commission’s Public Reference Room, 

and http://www.theocc.com/ 

publications/rules/proposed_changes/ 

sr_occ_07_01.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–OCC–

2007–01 and should be submitted on or 

before March 26, 2007. 

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3773 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55358; File No. SR–Phlx–

2007–14] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Extending the Dividend, 

Merger, and Short Stock Interest 

Strategies Fee Cap Program 

February 27, 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 February 

21, 2007, the Philadelphia Stock 

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

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been substantially prepared by the 

Exchange. Phlx has designated this 

proposal as one establishing or changing 

a due, fee, or other charge imposed by 

a self-regulatory organization pursuant 

to Section 19(b)(3)(A)(ii) of the Act 3 and 

Rule 19b–4(f)(2) thereunder,4 which 


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Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9829 

5For purposes of this proposal, the Exchange 

defines a ‘‘dividend strategy’’ as transactions done 

to achieve a dividend arbitrage involving the 

purchase, sale, and exercise of in-the-money 

options of the same class, executed prior to the date 

on which the underlying stock goes ex-dividend. 

See, e.g., Securities Exchange Act Release No. 

54174 (July 19, 2006), 71 FR 42156 (July 25, 2006) 

(SR–Phlx–2006–40). 

6For purposes of this proposal, the Exchange 

defines a ‘‘merger strategy’’ as transactions done to 

achieve a merger arbitrage involving the purchase, 

sale and exercise of options of the same class and 

expiration date, executed prior to the date on which 

shareholders of record are required to elect their 

respective form of consideration, i.e., cash or stock. 

Id. 

7For purposes of this proposal, the Exchange 

defines a ‘‘short stock interest strategy’’ as 

transactions done to achieve a short stock interest 

arbitrage involving the purchase, sale and exercise 

of in-the-money options of the same class. Id. 

8See Securities Exchange Act Release Nos. 54381 

(August 29, 2006), 71 FR 52598 (September 6, 2006) 

(SR–Phlx–2006–50) and 54424 (September 11, 

2006), 71 FR 54699 (September 18, 2006) (SR–Phlx–

2006–55). 

9See Securities Exchange Act Release No. 54424 

(September 11, 2006), 71 FR 54699 (September 18, 

2006) (SR–Phlx–2006–55). 

10Currently, the Exchange rebates $0.08 per 

contract side for ROT executions and $0.07 per 

contract side for trades occurring as part of a 

dividend, merger, or short stock interest strategy. 

11For a complete list of these product symbols, 

see the Exchange’s $60,000 Firm-Related Equity 

Option and Index Option Cap Fee Schedule. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(4). 

14 15 U.S.C. 78s(b)(3)(A)(ii). 

15 17 CFR 19b–4(f)(2). 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Phlx proposes to extend for a period 

of one year, until March 1, 2008, the 

pilot programs for: (1) The $1,000 and 

$25,000 fee caps on equity option 

transaction and comparison charges on 

dividend,5 merger,6 and short stock 

interest 7 strategies; and (2) the license 

fee of $0.05 per contract side imposed 

on dividend and short stock interest 

strategies, as described below. The 

current fee caps and $0.05 per contract 

side license fee are in effect as a pilot 

program that is scheduled to expire on 

March 1, 2007.8 Other than extending 

the pilot program for an additional oneyear period until March 1, 2008, no 

other changes to the Exchange’s current 

dividend, merger and short stock 

interest strategy program, which 

includes the $0.05 per contract side 

license fee, are being proposed at this 

time. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

(http://www.phlx.com/exchange/ 

phlx_rule_fil.html), at the Exchange’s 

principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of, and basis for, 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Currently, the Exchange imposes a fee 

cap on equity option transaction and 

comparison charges on dividend, 

merger, and short stock interest 

strategies executed on the same trading 

day in the same options class. 

Specifically, Registered Options Trader 

(‘‘ROT’’) and specialist net equity option 

transaction and comparison charges are 

capped at $1,000 for dividend, merger, 

and short stock interest strategies 

executed on the same trading day in the 

same options class.9 In addition, there is 

a $25,000 per member organization fee 

cap on equity option transaction and 

comparison charges incurred in one 

month for dividend, merger, and short 

stock interest strategies combined. The 

$1,000 and $25,000 fee caps are 

implemented after any applicable 

rebates are applied to ROT and 

specialist equity option transaction and 

comparison charges occurring as part of 

a dividend, merger, or short stock 

interest strategy.10

In addition, the Exchange assesses a 

license fee of $0.05 per contract side for 

dividend and short stock interest 

strategies in connection with certain 

products that carry license fees, if 

applicable.11 The applicable license fee 

is assessed on every transaction and is 

not subject to the $1,000 or $25,000 fee 

caps described above, nor does it count 

towards reaching the $1,000 or $25,000 

fee caps. 

The Exchange represents that the 

purpose of extending the pilot program 

for the fee caps on equity option 

transaction and comparison charges on 

dividend, merger, and short stock 

interest strategies and the $0.05 per 

contract fee imposed on dividend and 

short stock interest strategies until 

March 1, 2008 is to continue to attract 

additional liquidity to the Exchange and 

to remain competitive with other 

options exchanges in connection with 

these types of options strategies. In 

addition, the Exchange also represents 

that the purpose of extending the pilot 

is to recoup the license fees owed in 

connection with the trading of products 

that carry license fees. Even with the 

assessment of the $0.05 license fee per 

contract side, the Exchange believes that 

the fee caps and rebates should continue 

to encourage specialists and ROTs to 

provide liquidity for these types of 

options strategies. 

This proposal is scheduled to become 

effective for trades settling on or after 

March 1, 2007 and will remain in effect 

as a pilot program until March 1, 2008. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act,12 in general, and furthers the 

objectives of Section 6(b)(4) of the Act,13

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. 

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 either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A)(ii) of the Act 14 and 

Rule 19b–4(f)(2) thereunder 15 because it 

establishes or changes a due, fee, or 

other charge imposed by the Exchange. 

At any time within 60 days of the filing 

of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 


erjones on PRODPC74 with NOTICES
9830 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

16 17 CFR 200.30–3(a)(12). 

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 rulecomments@sec.gov. Please include File 

No. SR–Phlx–2007–14 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2007–14. 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 Commissions 

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. Copies of the filing also will be 

available for inspection and copying at 

the principal office of Phlx. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2007–14 and should 

be submitted on or before March 26, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3763 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SMALL BUSINESS ADMINISTRATION 

Emergence Capital Partners SBIC, L.P. 

License No. 09/79–0454; Notice 

Seeking Exemption Under Section 312 

of the Small Business Investment Act, 

Conflicts of Interest 

Notice is hereby given that Emergence 

Capital Partners SBIC, L.P., 160 Bovet 

Road, Suite 300, San Mateo, CA 94402, 

a Federal Licensee under the Small 

Business Investment Act of 1958, as 

amended (‘‘the Act’’), in connection 

with the financing of a small concern, 

has sought an exemption under Section 

312 of the Act and Section 107.730, 

Financings Which Constitute Conflicts 

of Interest of the Small Business 

Administration (‘‘SBA’’) Rules and 

Regulations (13 CFR 107.730). 

Emergence Capital Partners SBIC, L.P. 

proposes to provide equity/debt security 

financing to Intacct Corporation 

(‘‘Intacct’’), 125 S. Market Street, Suite 

600, San Jose, CA 95113. The financing 

is contemplated to bridge the company’s 

operations until either the round of 

equity is raised or a sale occurs. 

The financing is brought within the 

purview of § 107.730(a)(1) of the 

Regulations because Emergence Capital 

Partners, L.P. and Emergence Capital 

Associates, L.P., all Associates of 

Emergence Capital Partners SBIC, L.P., 

own more than ten percent of Intacct, 

and therefore Intacct is considered an 

Associate of Emergence Capital Partners 

SBIC, L.P. as detailed in § 107.50 of the 

Regulations. 

Notice is hereby given that any 

interested person may submit written 

comments on the transaction to the 

Associate Administrator for Investment, 

U.S. Small Business Administration, 

409 Third Street, SW., Washington, DC 

20416. 

Dated: January 11, 2007. 

Jaime Guzma ́n-Fournier, 

Associate Administrator for Investment . 

[FR Doc. E7–3785 Filed 3–2–07; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration # 10818] 

Pennsylvania Disaster # PA–00009 

AGENCY: Small Business Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the Commonwealth of Pennsylvania 

(FEMA–1684–DR), dated 02/23/2007. 

Incident: Severe Storms and Flooding. 

Incident Period: 11/16/2006 through 

11/17/2006. 

Effective Date: 02/23/2007. 

Physical Loan Application Deadline 

Date: 04/24/2007. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

02/23/2007, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: 

Bradford, Lackawanna, Luzerne, 

Sullivan, Susquehanna, Wayne, 

Wyoming. 

The Interest Rates are: 

Percent 

Other (Including Non-Profit Organizations) With Credit Available 

Elsewhere ................................. 5.250 

Businesses And Non-Profit Organizations Without Credit Available Elsewhere ......................... 4.000 

The number assigned to this disaster 

for physical damage is 10818. 

(Catalog of Federal Domestic Assistance 

Number 59008.) 

Herbert L. Mitchell, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. E7–3783 Filed 3–2–07; 8:45 am] 

BILLING CODE 8025–01–P 


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