Federal Register / Vol. 72, No. 45 / Thursday, March 8, 2007 / Notices 10579 

proposed rule change, or amendment thereto, prior 

to the thirtieth day after the date of publication of 

the notice thereof, unless the Commission finds 

good cause for so doing. 

31 15 U.S.C. 78s(b)(2). 

32 15 U.S.C. 78s(b)(2). 

33 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Act Release No. 54927 

(December 13, 2006), 71 FR 76397. 

3Similar proposed rule changes have been filed 

by the Fixed Income Clearing Corporation [File No. 

SR–FICC–2006–05] and the National Securities 

Clearing Corporation [File No. SR–NSCC–2006–05]. 

In Amendment No. 2, CBOE: (i) 

Amended Section 1.7 to clarify the role 

of CBOE, as the SRO, for the activities 

of CBSX LLC; (ii) amended Section 5.7 

to add a reference to CBOE; (iii) 

amended Section 6.14 to clarify that any 

transfer of Series A Voting Shares would 

require a rule filing under Section 19 of 

the Exchange Act, subject to approval by 

the Commission; (iv) amended Section 

6.15 by, among other things, revising 

paragraphs (c) and (d) to indicate that 

those paragraphs are inapplicable in the 

case of CBOE and its respective officers, 

directors, agents and employees for so 

long as CBSX LLC is a facility of CBOE 

and to clarify the application of these 

paragraphs in the case of the agents and 

employees of CBSX LLC and its Owners 

whose principal place of business and 

residence is outside of the United 

States; and (v) amended various sections 

of the Operating Agreement to refer to 

CBOE rather than ‘‘Regulatory Services 

Provider.’’ Amendment No. 2 also 

updated Exhibit A–1 of the Operating 

Agreement. Amendment No. 3 amended 

Section 6.15(c) to clarify the U.S. agent 

for service of process. 

The Commission believes that 

Amendment Nos. 2 and 3 serve to 

clarify and enhance the proposal and 

that publication of its provisions would 

needlessly delay the implementation of 

the proposal. The Commission therefore 

finds good cause exists to accelerate 

approval of Amendment Nos. 2 and 3, 

pursuant to Section 19(b)(2) of the 

Act.31

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether Amendment Nos. 2 

and 3 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 rulecomments@sec.gov. Please include File 

Number SR–CBOE–2006–110 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–CBOE–2006–110. 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. Copies of the 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 Amendment 

Nos. 2 and 3 of File Number SR–CBOE–

2006–110 and should be submitted on 

or before March 29, 2007. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,32 that the 

proposed rule change (SR–CBOE–2006–

110), as modified by Amendment No. 1, 

be, and it hereby is approved and 

Amendment Nos. 2 and 3 are approved 

on an accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.33

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4125 Filed 3–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55365; File No. SR–DTC–

2006–07] 

Self-Regulatory Organizations; The 

Depository Trust Company; Order 

Granting Approval of a Proposed Rule 

Change Relating to the Wind-Down of 

a Participant 

February 27, 2007. 

I. Introduction 

On March 28, 2006, The Depository 

Trust Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) and on September 29, 

2006, amended proposed rule change 

SR–DTC–2006–07 pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’).1 Notice of the proposal 

was published in the Federal Register 

on December 20, 2006.2 No comment 

letters were received. For the reasons 

discussed below, the Commission is 

granting approval of the proposed rule 

change as modified by Amendment No. 

1. 

II. Description 

The proposed rule change would add 

a new Rule 32, Wind-Down of a 

Participant, to DTC’s Rules to address a 

situation where a participant notifies 

DTC that it intends to wind down its 

activities, and DTC determines in its 

discretion that it must take special 

action in order to protect itself and its 

participants.3

The proposed rule change would 

allow DTC to make a determination that 

a participant is a wind-down participant 

and would set forth the conditions DTC 

using its discretion may place on a 

wind-down participant and the actions 

DTC using its discretion may take with 

respect to a wind-down participant to 

protect itself and its participants. Such 

actions may include restricting or 

modifying the wind-down participant’s 

use of any or all of DTC’s services and 

requiring the wind-down participant to 

post increased participants fund 

deposits. DTC will retain all of its other 

rights set forth in its rules and 

participant agreements, including the 

right to cease to act for the wind-down 

participant. 

The rule is designed to ensure that 

DTC has the needed flexibility to 

appropriately manage the risks 


sroberts on PROD1PC70 with NOTICES
10580 Federal Register / Vol. 72, No. 45 / Thursday, March 8, 2007 / Notices 

4 15 U.S.C. 78q–1(b)(3)(F). 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 15 

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

7 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Act Release No. 54929, 

(December 13, 2006), 71 FR 76398. 

3Similar proposed rule changes have been filed 

by The Depository Trust Company [File No. SR–

DTC–2006–07] and the National Securities Clearing 

Corporation [File No. SR–NSCC–2006–05]. 4 15 U.S.C. 78q–1(b)(3)(F). 

presented by an entity in crisis that 

remains a participant of DTC. This is 

particularly important to preserve 

orderly settlement in the marketplace 

and to minimize the risk of loss to DTC 

and its participants. The rule sets forth 

in a single rule DTC’s rights and the 

actions it may take in such a situation. 

Currently, these rights and actions are 

either permitted elsewhere in DTC’s 

rules or are permitted pursuant to DTC’s 

emergency authority. By placing DTC’s 

rights in a single rule, however, the 

proposed rule change should provide 

clarity and a clear legal basis for DTC’s 

rights or actions taken with respect to a 

wind-down participant. DTC also 

believes that the rule is designed to 

minimize the need for rule waivers. 

III. Discussion 

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

provides that the rules of a clearing 

agency should be designed to safeguard 

securities and funds which are in the 

custody or control of the clearing agency 

or for which it is responsible.4 The 

sudden or unanticipated financial or 

operational difficulties of a participant 

or the termination of its trading 

activities may create uncertainty among 

industry participants about DTC’s 

ability to meet its settlement obligations 

on time and concern about the risk to 

the assets of the clearing agency or of its 

participants. The proposed rule change 

clarifies that DTC has discretionary 

power in a wind-down situation to take 

certain actions to assure the ongoing 

operations of itself and to protect the 

securities and funds of DTC and of its 

participants. By making clear in a single 

rule the authority DTC has under its 

rules to facilitate the orderly wind down 

of a participant’s activities, the 

proposed rule change is designed to 

assure the safeguarding of securities or 

funds which are in DTC’s control or for 

which it is responsible.5

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.6

It is therefore ordered, pursuant to 

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

proposed rule change (File No. SR–

DTC–2006–07), as modified by 

Amendment No. 1, be, and hereby is 

approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4056 Filed 3–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55364; File No. SR–FICC–

2006–05] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Granting Approval of a Proposed Rule 

Change Relating to the Wind-Down of 

a Participant 

February 27, 2007. 

I. Introduction 

On March 28, 2006, Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) and on 

September 28, 2006 and October 13, 

2006, amended proposed rule change 

SR–FICC–2006–15 pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’).1 Notice of the proposal 

was published in the Federal Register 

on December 20, 2006.2 No comment 

letters were received. For the reasons 

discussed below, the Commission is 

granting approval of the proposed rule 

change as modified by Amendment Nos. 

1 and 2. 

II. Description 

The rule change adds new Rule 21A, 

Wind-Down of a Netting Member, to the 

Rules of FICC’s Government Securities 

Division (‘‘GSD’’) and new Rule 2A, 

Wind-Down of a Participant, to the 

Rules of FICC’s Mortgage-Backed 

Securities Division (‘‘MBSD’’) to address 

a situation where a member or 

participant notifies FICC that it intends 

to wind down its activities, and FICC 

determines, in its discretion, that it 

must take special action in order to 

protect itself and its members and 

participants.3

The new rules allow FICC to 

determine that a participant is a winddown member or wind-down 

participant and sets forth the conditions 

FICC using its discretion may place on 

a wind-down member or participant and 

the actions FICC using its discretion 

may take with respect to a wind-down 

member or participant to protect itself 

and its members or participants. Such 

actions may include restricting or 

modifying the wind-down member or 

participant’s use of any or all of FICC’s 

services and may include requiring the 

wind-down member or participant to 

post increased clearing fund deposits. 

FICC will retain all of its other rights set 

forth in its rules and membership and 

participant agreements, including the 

right to declare the wind-down member 

or participant insolvent, if applicable, 

and to cease to act for it. 

The rules are designed to ensure that 

FICC has the needed flexibility to 

appropriately manage the risks 

presented by an entity in crisis that 

remains a participant of FICC. This is 

particularly important to preserve 

orderly settlement in the marketplace 

and to minimize the risk of loss to FICC 

and its members and participants. Each 

rule sets forth in a single rule FICC’s 

rights and the actions it may take in 

such a situation. Currently, these rights 

and actions are either permitted 

elsewhere in FICC’s rules or are 

permitted pursuant to FICC’s emergency 

authority. By placing FICC’s rights in a 

single rule for each division, however, 

the rule change should provide clarity 

and a clear legal basis for FICC’s rights 

or actions taken with respect to a winddown member or participant. FICC also 

believes that the rules are designed to 

minimize the need for rule waivers. 

III. Discussion 

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

provides that the rules of a clearing 

agency should be designed to safeguard 

securities and funds which are in the 

custody or control of the clearing agency 

or for which it is responsible.4 The 

sudden or unanticipated financial or 

operational difficulties of a clearing 

member or participant or the 

termination of its trading activities may 

create uncertainty among industry 

participants about FICC’s ability to meet 

its settlement obligations on time and 

concern about the risk to the assets of 

the clearing agency or of its members or 

participants. The proposed rule change 

clarifies that FICC has discretionary 

power in a wind-down situation to take 

certain actions to assure the ongoing 

operations of itself and to protect the 

securities and funds of FICC and of its 

members and participants. By making 

clear in a single rule of each of its 

divisions the authority FICC has under 

its rules to facilitate the orderly wind 

down of a member or participant’s 


sroberts on PROD1PC70 with NOTICES