Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Notices 14841 

2 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)(6). 

5The underlying rule text used in this proposed 

rule change is based on NASD Rule 2520, as 

amended by SR–NASD–2007–013, which will be 

implemented on April 2, 2007. See Exchange Act 

Release No. 55471 (March 14, 2007), 72 FR 13149 

(March 20, 2007) (Notice of filing and immediate 

effectiveness of File No. SR–NASD–2007–013). 

6The portfolio margin pilot program is 

substantially similar to recent margin rule 

amendments by the New York Stock Exchange 

(‘‘NYSE’’) and the Chicago Board Options Exchange 

(‘‘CBOE’’), which were approved by the 

Commission. See Exchange Act Release No. 54918 

(December 12, 2006), 71 FR 75790 (December 18, 

2006) (SR–NYSE–2006–13, relating to further 

amendments to the NYSE’s portfolio margin pilot 

program); Exchange Act Release No. 54125 (July 11, 

2006), 71 FR 40766 (July 18, 2006) (SR–NYSE–

2005–93, relating to amendments to the NYSE’s 

portfolio margin pilot program); Exchange Act 

Release No. 52031 (July 14, 2005) 70 FR 42130 (July 

21, 2005) (SR–NYSE–2002–19, relating to the 

NYSE’s original portfolio margin pilot). See also 

Exchange Act Release No. 54919 (December 12, 

2006), 71 FR 75781 (December 18, 2006) (SR–

CBOE–2006–014, relating to amendments to the 

CBOE’s portfolio margin pilot); Exchange Act 

Release No. 52032 (July 14, 2005) 70 FR 42118 (July 

21, 2005) (SR–CBOE–2002–03, relating to the 

CBOE’s original portfolio margin pilot). 

7See Exchange Act Release No. 55471 (March 14, 

2007), 72 FR 13149 (March 20, 2007) (Notice of 

filing and immediate effectiveness of File No. SR–

NASD–2007–013). 

submission should refer to File No. SR–

FICC–2006–19 and should be submitted 

on or before April 19, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.2

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5752 Filed 3–28–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55518; File No. SR–NASD–

2007–024] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Portfolio 

Margin 

March 23, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (‘‘Act’’

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on March 20, 2007, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’) 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 NASD. NASD 

has filed the proposed rule as a ‘‘noncontroversial’’ rule change pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(6) thereunder,4 which renders 

it 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 

NASD is proposing to correct a 

typographical error in NASD Rule 2520 

(Margin Requirements). In particular, 

the proposed rule change would amend 

NASD Rule 2520 to re-label a 

subparagraph that was incorrectly 

identified as part of a recent rule filing. 

Below is the text of the proposed rule 

change.5 Proposed new language is in 

italics; proposed deletions are in 

[brackets]. 

* * * * * 

2520. Margin Requirements 

(a) through (f) No Change. 

(g) Portfolio Margin. 

As an alternative to the ‘‘strategybased’’ margin requirements set forth in 

paragraphs (a) through (f) of this Rule, 

members may elect to apply the 

portfolio margin requirements set forth 

in this paragraph (g) to all margin equity 

securities,1 listed options, security 

futures products (as defined in Section 

3(a)(56) of the Exchange Act), unlisted 

derivatives, warrants, index warrants 

and related instruments, provided that 

the requirements of paragraph 

(g)(6)(B)(i) of this Rule are met. 

In addition, a member, provided that 

it is a Futures Commission Merchant 

(‘‘FCM’’) and is either a clearing 

member of a futures clearing 

organization or has an affiliate that is a 

clearing member of a futures clearing 

organization, is permitted under this 

paragraph (g) to combine an eligible 

participant’s related instruments as 

defined in paragraph (g)(2)(D), with 

listed index options, unlisted 

derivatives, options on exchange traded 

funds (‘‘ETF’’), index warrants and 

underlying instruments and compute a 

margin requirement for such combined 

products on a portfolio margin basis. 

The portfolio margin provisions of 

this Rule shall not apply to Individual 

Retirement Accounts (‘‘IRAs’’). 

(1) through (5) No Change. 

(6) Establishing Account and Eligible 

Positions.l 

(A) No Change. 

(B) Eligible Products. 

(i) For eligible participants as 

described in paragraphs (g)(4)(A) 

through (g)(4)(C), a transaction in, or 

transfer of, an eligible product may be 

effected in the portfolio margin account. 

Eligible products under this paragraph 

(g) consist of: 

(a) through (e) No Change. 

[(d)](f) a related instrument as defined 

in paragraph (g)(2)(D). 

(7) through (15) No Change. 

1For purposes of this paragraph (g) of the 

Rule, the term ‘‘margin equity security’’

utilizes the definition at Section 220.2 of 

Regulation T of the Board of Governors of the 

Federal Reserve System. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NASD 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. NASD 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 February 12, 2007, NASD filed 

with the Commission for immediate 

effectiveness a proposed rule change to 

amend Rule 2520 (Margin 

Requirements) to establish a portfolio 

margin pilot program.6 The Commission 

published notice of the proposed rule 

change in the Federal Register on 

March 20, 2007.7 The proposed rule 

change, among other things, added a 

new paragraph (g)(6)(B)(i) that specifies 

in separate subparagraphs a list of the 

eligible products for the portfolio 

margin pilot program. This list of 

eligible products in paragraph 

(g)(6)(B)(i) inadvertently identifies two 

provisions as subparagraph (d). NASD is 

filing this proposed rule change to relabel the last subparagraph (d) as 

subparagraph (f). 

NASD has filed the proposed rule 

change for immediate effectiveness. As 

noted above, the proposed rule change 

is part of a pilot program that would 


jlentini on PROD1PC65 with NOTICES
14842 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Notices 

8 15 U.S.C. 78o–3(b)(6). 

9 15 U.S.C. 78s(b)(3)(A)(iii). 

10 17 CFR 240.19b–4(f)(6). 

11For purposes only of waiving the 30-day preoperative period, the Commission has considered 

the proposed rule’s impact on efficiency, 

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

12See supra note 7. 

13 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

begin on April 2, 2007 and end on July 

31, 2007, unless the SEC approves an 

extension of the pilot or adoption of the 

program on a permanent basis. 

2. Statutory Basis 

NASD believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,8 which 

requires, among other things, that NASD 

rules be designed to prevent fraudulent 

and manipulative acts and practices, to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. NASD 

believes that this technical change is 

consistent with the protection of 

investors and the public interest in that 

it will avoid any confusion when 

reading the provisions of Rule 

2520(g)(6)(B)(i). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASD 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. 

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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change is 

subject to Section 19(b)(3)(A)(iii) of the 

Act 9 and Rule 19b–4(f)(6) thereunder 10

because the proposal: (i) Does not 

significantly affect the protection of 

investors or the public interest; (ii) does 

not impose any significant burden on 

competition; and (iii) does not become 

operative prior to 30 days after the date 

of filing or such shorter time as the 

Commission may designate. 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. 

NASD has asked the Commission to 

waive the five-day pre-filing notice 

requirement and the 30-day operative 

delay. The Commission believes such 

waivers are consistent with the 

protection of investors and the public 

interest because they would allow the 

technical corrections in the proposed 

rule change to be implemented on April 

2, 2007, when the NASD portfolio 

margin pilot program begins, pursuant 

to SR–NASD–2007–013.11 For this 

reason, the Commission designates the 

proposal to be operative upon filing 

with the Commission.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 

Number SR–NASD–2007–024 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–NASD–2007–024. 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 NASD. 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–NASD–2007–024 and 

should be submitted on or before April 

19, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5814 Filed 3–28–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55517; File No. SR–NYSE–

2007–06] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change to 

NYSE Rule 440A (‘‘Telephone 

Solicitations’’) 

March 23, 2007. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’),2 and Rule 19b-4 thereunder, 

notice is hereby given that on January 

25, 2007, the New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed amendments to its Rule 440A, 

as described in Items I, II and III 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 Substance of 

the Proposed Rule Change 

The New York Stock Exchange LLC is 

filing with the Securities and Exchange 

Commission proposed Rule 440A 

(‘‘Telephone Solicitations’’) which 

addresses member organizations’

telephone solicitations of customers. 

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 the 

proposed rule change is available on the 


jlentini on PROD1PC65 with NOTICES