11922 Federal Register / Vol. 72, No. 49 / Wednesday, March 14, 2007 / Notices 

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). 

years in an easily accessible place, a 

written record of each purchase of 

securities in Affiliated Underwritings 

once an investment by a Fund of Funds 

in the securities of an Underlying 

Management Company exceeds the limit 

of section 12(d)(1)(A)(i) of the Act, 

setting forth from whom the securities 

were acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the determinations of the Board of the 

Underlying Management Company were 

made. 

8. Prior to an investment in shares of 

an Underlying Management Company in 

excess of the limit in section 

12(d)(1)(A)(i) of the Act, the Fund of 

Funds and the Underlying Management 

Company will execute a Participation 

Agreement stating, without limitation, 

that their Boards and their investment 

advisers understand the terms and 

conditions of the order and agree to 

fulfill their responsibilities under the 

order. At the time of its investment in 

shares of an Underlying Management 

Company in excess of the limit in 

section 12(d)(1)(A)(i), a Fund of Funds 

will notify the Underlying Management 

Company of the investment. At such 

time, the Fund of Funds also will 

transmit to the Underlying Management 

Company a list of the names of each 

Fund of Funds Affiliate and 

Underwriting Affiliate. The Fund of 

Funds will notify the Underlying 

Management Company of any changes 

to the list as soon as reasonably 

practicable after a change occurs. The 

Underlying Management Company and 

the Fund of Funds will maintain and 

preserve a copy of the order, the 

Participation Agreement, and the list 

with any updated information for the 

duration of the investment and for a 

period of not less than six years 

thereafter, the first two years in an 

easily accessible place. 

9. Prior to approving any investment 

advisory agreement under section 15 of 

the Act with respect to a Fund of Funds, 

the Board of the Company, including a 

majority of the Disinterested Directors, 

will find that the advisory fees charged 

under such agreement are based on 

services provided that are in addition to, 

rather than duplicative of, the services 

provided under the investment advisory 

agreement(s) of any Underlying Fund in 

which the Fund of Funds may invest. 

The finding, and the basis upon which 

the finding was made, will be recorded 

fully in the minute books of the 

Company. 

10. The Adviser will waive fees 

otherwise payable to it by a Fund of 

Funds in an amount at least equal to any 

compensation (including fees received 

pursuant to a plan adopted by an 

Underlying Management Company 

under rule 12b–1 under the Act) 

received from an Underlying Fund by 

the Adviser or an affiliated person of the 

Adviser, other than any advisory fees 

paid to the Adviser or its affiliated 

person by an Underlying Management 

Company, in connection with the 

investment by the Fund of Funds in the 

Underlying Fund. Any Sub-Adviser will 

waive fees otherwise payable to the SubAdviser, directly or indirectly, by the 

Fund of Funds in an amount at least 

equal to any compensation received 

from an Underlying Fund by the SubAdviser, or an affiliated person of the 

Sub-Adviser, other than any advisory 

fees paid to the Sub-Adviser or its 

affiliated person by an Underlying 

Management Company, in connection 

with the investment by the Fund of 

Funds in the Underlying Fund made at 

the direction of the Sub-Adviser. In the 

event that the Sub-Adviser waives fees, 

the benefit of the waiver will be passed 

through to the Fund of Funds. 

11. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to funds of funds set 

forth in NASD Conduct Rule 2830. 

12. No Underlying Fund will acquire 

securities of any other investment 

company or company relying on section 

3(c)(1) or 3(c)(7) of the Act in excess of 

the limits contained in section 

12(d)(1)(A) of the Act, except to the 

extent that such Underlying Fund (i) 

receives securities of another 

investment company as a dividend or as 

a result of a plan of reorganization of a 

company (other than a plan devised for 

the purpose of evading Section 12(d)(1) 

of the 1940 Act); or (ii) acquires (or is 

deemed to have acquired) securities of 

another investment company pursuant 

to exemptive relief from the 

Commission permitting such 

Underlying Fund to (a) acquire 

securities of one or more affiliated 

investment companies for short-term 

cash management purposes, or (b) 

engage in interfund borrowing and 

lending transactions. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4633 Filed 3–13–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55419; File No. SR–BSE–

2007–10] 

Self-Regulatory Organizations; Boston 

Stock Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Exchange Fees and Charges 

March 7, 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 March 1, 

2007, the Boston Stock Exchange, Inc. 

(‘‘BSE’’ 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 BSE. The 

BSE has designated this proposal as one 

establishing or changing a due, fee, or 

other charge imposed by the BSE under 

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

Rule 19b–4(f)(2) 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The BSE proposes to amend the 

Minimum Activity Charge (‘‘MAC’’) 

contained in the Fee Schedule for the 

Boston Options Exchange (‘‘BOX’’). The 

Exchange proposes to add an alternative 

calculation of the minimum activity 

charge called ‘‘MiniMAC.’’ The text of 

the proposed rule change is available at 

the BSE, the Commission’s Public 

Reference Room, and http:// 

www.bostonstock.com/legal/filings/ 

2007-10.pdf. 

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 

BSE 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 BSE has prepared 

summaries, set forth in Sections A, B, 


cprice-sewell on PROD1PC66 with NOTICES
Federal Register / Vol. 72, No. 49 / Wednesday, March 14, 2007 / Notices 11923 

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

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

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 19b–4(f)(2). 

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 the 

MAC which is contained in the Fee 

Schedule for BOX. Currently, in order to 

determine if a Market Maker has 

reached its MAC, volume in their 

assigned (and unassigned) classes is 

charged a flat fee, which is then 

compared to the MAC. The Exchange 

now proposes to establish an alternative 

calculation of the minimum activity 

charge called ‘‘MiniMAC.’’

The MiniMAC is the Minimum 

Activity Charge (‘‘MAC’’) discounted at 

fifty percent and is payable if a per 

contract traded fee of $0.40 (or $0.30 per 

contract traded in the case of classes 

traded that are included in the Penny 

Pilot Program), when multiplied by the 

Market Maker’s actual trade executions 

for the month, does not result in a total 

trading fee payable to BOX at least equal 

to the monthly total of 50% of the MAC 

(MiniMAC). If the MiniMAC is reached, 

the $0.40 per contract traded rate (or 

$0.30 per contract traded rate in the case 

of classes traded that are included in the 

Penny Pilot Program), will still be 

applied to the exceeding volume until 

MAC is reached. If the MAC is reached, 

the $0.20 per contract rate (or $0.15 per 

contract rate in the case of classes 

traded that are included in the Penny 

Pilot Program) will be applied to any 

exceeding volume. 

The following examples illustrate 

BOX billing calculations assuming one 

category A assigned class with a MAC 

of $10,000 and three different levels of 

volume executed: 

Example 1—Low Volume 

MAC: $10,000 MiniMAC: $5,000 

Volume: 5,000 Volume: 5,000 

Volume at $0.20: $1,000 Volume at $0.40: $2,000 (5,000 contracts) 

Volume at $0.20: $0 (0 contracts) 

Total $2,000 

Subtotal A: $10,000 Subtotal B: $5,000 Final Charge: $5,000 

Example 2—Mid Volume 

MAC: $10,000 MiniMAC: $5,000 

Volume: 20,000 Volume: 20,000 

Volume at $0.20: $4,000 Volume at $0.40: $8,000 (20,000 contracts) 

Volume at $0.20: $0 (0 contracts) 

Total $8,000 

Subtotal A: $10,000 Subtotal B: $8,000 Final Charge: $8,000 

Example 3—High Volume 

MAC: $10,000 MiniMAC: $5,000 

Volume: 60,000 Volume: 60,000 

Volume at $0.20: $12,000 Volume at $0.40: $10,000 (25,000 contracts) 

Volume at $0.20: $7,000 (35,000 contracts) 

Total $17,000 

Subtotal A: $12,000 Subtotal B: $17,000 Final Charge: $12,000 

BOX will apply whichever is lower, 

the MAC or the MiniMAC. The purpose 

of this proposed change is to provide for 

an alternative so that BOX is able to 

lower the fees for BOX Participants. The 

Exchange believes that the proposed 

change is necessary to equitably allocate 

the minimum activity charge fees to all 

of its Participants. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,5

in general, and Section 6(b)(4) of the 

Act,6 in particular, which requires that 

an exchange provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

issuers and other persons using its 

facilities. 

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 comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 7 and Rule 19b-4(f)(2) 8

thereunder because it changes a fee 

imposed by the Exchange. 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 furtherance of the purposes of the 

Act. 


cprice-sewell on PROD1PC66 with NOTICES
11924 Federal Register / Vol. 72, No. 49 / Wednesday, March 14, 2007 / Notices 

9 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). 

4 17 CFR 240.19b–4(f)(1). 

5See Rule 8.3A.01. 

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(1). 

5See Rule 8.3A.01. 

6 ‘‘Any actions taken by the President of the 

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–BSE–2007–10 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–BSE–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. Copies of such filing also will be 

available for inspection and copying at 

the principal office of the BSE. 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–BSE–2007–10 and should 

be submitted on or before April 4, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4588 Filed 3–13–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55418; File No. SR–CBOE–

2007–22] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Increase the Class 

Quoting Limit in the Option Class 

NYSE Group, Inc. (NYX) 

March 7, 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 

23, 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 and II 

below, which Items have been 

substantially prepared by the Exchange. 

The Exchange filed the proposed rule 

change pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(1) 

thereunder, which renders it effective 

upon filing with the Commission.4 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 

CBOE proposes to increase the class 

quoting limit in the option class NYSE 

Group, Inc. (NYX). The text of the 

proposed rule change is available at the 

CBOE, the Commission’s Public 

Reference Room, and http:// 

www.cboe.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 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 

CBOE Rule 8.3A, Maximum Number 

of Market Participants Quoting 

Electronically per Product, establishes 

class quoting limits (‘‘CQLs’’) for each 

class traded on the Hybrid Trading 

System.5 A CQL is the maximum 

number of quoters that may quote 

electronically in a given product and the 

current levels are established from 25–

40, depending on the trading activity of 

the particular product. 

Rule 8.3A, Interpretation .01(c) 

provides a procedure by which the 

President of the Exchange may increase 

the CQL for a particular product. In this 

regard, the President of the Exchange 

may increase the CQL in exceptional 

circumstances, which are defined in the 

rule as ‘‘* * * substantial trading 

volume, whether actual or expected.’’ 6

The effect of an increase in the CQL is 

procompetitive in that it increases the 

number of market participants that may 

quote electronically in a product. The 

purpose of this filing is to increase the 

CQL in the option class NYSE Group, 

Inc. (NYX) from its current limit of 40 

to 45.7

Increasing the CQL in NYX options 

will enable the Exchange to enhance the 

liquidity offered, thereby offering 

deeper and more liquid markets 

2. Statutory Basis 

CBOE believes the proposed rule 

change is consistent with the Act and 

the rules and regulations under the Act 

applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act.8

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 9 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts and, in general, to 

protect investors and the public interest. 


cprice-sewell on PROD1PC66 with NOTICES