26192 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Notices 

4CDS is the successor organization to Canadian 

Depository for Securities Ltd. OCC’s By-Law 

definition of CDS is being amended to reflect this 

organizational change. 

5OCC surveyed appointed clearing members that 

effect NSCC settlements for nonaffiliated clearing 

members and CDS to ascertain their views regarding 

the proposed change in the notice period for 

terminating such appointments. There were no 

objections to the proposed change. 

6Conforming changes have been made to the 

related appointment forms, which are attached as 

Exhibits 5A and 5B to the proposed rule filing. 

7 15 U.S.C. 78q–1(b)(3)(F). 

8 15 U.S.C. 78q–1. 

9 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). 

10 17 CFR 200.30–3(a)(12). 

II. Description of the Proposal 

1. Interpretation and Policy .03 

Prior to this rule change, 

Interpretation and Policy .03 to Article 

V, Section 1, of OCC’s By-Laws required 

applicants for membership to employ 

two key operations employees on a fulltime basis. This requirement was 

intended to ensure that an applicant 

maintains sufficient staff to fulfill its 

obligations as a clearing member. 

However, several recent applicants for 

clearing membership have had difficulty 

meeting this requirement because their 

entire staff was employed by an affiliate 

of the applicant (i.e., a parent or related 

organization) rather than by the 

applicant itself. While these applicants 

entered into employee leasing 

arrangements in order to comply with 

OCC’s policy, OCC decided to 

reevaluate the policy in light of the fact 

that it had proved burdensome to a 

number of applicants. 

OCC understands that it is not 

uncommon for some entities of an 

affiliated corporate group to outsource 

certain or all functions to another entity 

of the corporate group and let the latter 

be the sole employer of the people who 

perform those functions. In situations of 

that nature, OCC concluded that there is 

not the same reason to be concerned 

about whether the applicant will have 

adequate staffing as in cases where the 

applicant relies on an unaffiliated third 

party for staffing. OCC therefore is 

modifying its policy in order to provide 

greater flexibility to recognize this 

alternative employment structure by 

amending Interpretation and Policy .03 

to Article V, Section 1, to permit the 

Membership/Risk Committee 

(‘‘Committee’’) to waive the requirement 

that an applicant employ two key 

operations employees on a full-time 

basis if the daily operations of the 

applicant are conducted by staff 

employed on a full-time basis by an 

entity affiliated with such applicant. 

OCC believes that the Committee’s 

authority to waive such requirement is 

consistent with its existing authority to 

waive the requirement that an applicant 

employ at least one full-time person 

who is registered as a ‘‘Limited 

Principal—Financial and Operations’’ or 

comparable registration requirement, as 

applicable. 

2. Rule 309 

OCC is also amending Rule 309 by 

adding new paragraph (f) to clarify that 

if an operationally capable clearing 

member proposes to become a managed 

clearing member (i.e., outsource certain 

of its obligations as a clearing member 

to another clearing member [‘‘managing 

clearing member’’]), the applicant must 

obtain prior approval from the 

Committee. Prior to this rule change, 

Interpretation and Policy .04 to Rule 309 

primarily contemplated the use of 

facilities management agreements by 

applicants for membership rather than 

by existing clearing members. 

Nonetheless, OCC has always 

interpreted its By-Laws and Rules as 

requiring prior Committee review and 

approval of all facilities management 

agreements, including those proposed to 

be entered into by operationally capable 

clearing members. The amendment to 

Rule 309 makes this interpretation 

explicit. 

3. Rule 901 

OCC is amending Rule 901 to provide 

that a clearing member’s appointment of 

another clearing member or CDS 

Clearing and Depository Services Inc. 

(‘‘CDS’’) 4 for purposes of effecting 

settlements of exercised or matured 

cleared securities may not be terminated 

until after the 30th calendar day 

following notice to OCC of such 

termination.5 Prior to this rule change, 

clearing members were required to 

provide three business days notice of 

terminating such appointments. 

However, OCC concluded that three 

business days was insufficient time for 

OCC to determine whether or not the 

clearing member has made appropriate 

alternative settlement arrangements. 

Accordingly, OCC is changing the notice 

period to be consistent with the notice 

period required to advise OCC of the 

termination of a facilities management 

agreement.6

III. Discussion 

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 registered clearing 

agency. In particular, the Commission 

believes the proposal is consistent with 

the requirements of Section 

17A(b)(3)(F),7 which, among other 

things, requires the rules of a clearing 

agency to assure the safeguarding of 

securities and funds that are in the 

custody or control of the clearing agency 

or for which it is responsible. Although 

OCC is giving the Membership/Risk 

Committee the ability to waive the 

requirement that an applicant employ 

two key operations employees on a fulltime basis, the revised requirement that 

allows an applicant to have full-time 

operational staff employed by an 

affiliate of the applicant should provide 

OCC with the practical flexibility to 

permit such arrangements and still have 

reasonable assurance that its members 

are operationally sound. Moreover, 

specifying that a clearing member’s 

appointment of another clearing entity 

to effect settlement on its behalf can not 

be terminated until after the 30th 

calendar day following notice to OCC of 

such termination should provide OCC 

with an appropriate amount of time in 

which to determine that the clearing 

member has made alternative settlement 

arrangements. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act and in particular with the 

requirements of Section 17A of the Act 8

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–

OCC–2006–21) be, and hereby is, 

approved.9

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–8735 Filed 5–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55689; File No. SR–Phlx–

2007–36] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Quoting 

Obligations in Long Term Options 

May 1, 2007. 

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

Securities Exchange Act of 1934 


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Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Notices 26193 

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). 

5An SQT is an Exchange Registered Options 

Trader (‘‘ROT’’) who has received permission from 

the Exchange to generate and submit option 

quotations electronically through AUTOM in 

eligible options to which such SQT is assigned. An 

SQT may only submit such quotations while such 

SQT is physically present on the floor of the 

Exchange. See Phlx Rule 1014(b)(ii)(A). 

6An RSQT is an ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically through AUTOM in eligible options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Phlx Rule 

1014(b)(ii)(B). 

7The term ‘‘Directed Order’’ means any customer 

order (other than a stop or stop-limit order as 

defined in Phlx Rule 1066) to buy or sell which has 

been directed to a particular specialist, RSQT, or 

SQT by an Order Flow Provider. See Phlx Rule 

1080(l)(i)(A). 

8See Securities Exchange Act Release No. 54648 

(October 24, 2006), 71 FR 63375 (October 30, 2006) 

(SR–Phlx–2006–62). 

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

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires the self-regulatory 

organization to give the Commission notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. Phlx 

has satisfied the five-day pre-filing requirement. 

14 17 CFR 240.19b–4(f)(6)(iii). 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 24, 

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 and II below, which Items have 

been substantially prepared by the Phlx. 

The Exchange filed the proposal as a 

‘‘non-controversial’’ proposed rule 

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

of the Act 3 and Rule 19b–4(f)(6) 

thereunder,4 which rendered 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 Phlx proposes to adopt, on a 

permanent basis, Phlx Rule 

1014(b)(ii)(D)(4), which currently states 

that Streaming Quote Traders 

(‘‘SQTs’’),5 Remote Streaming Quote 

Traders (‘‘RSQTs’’),6 and SQTs and 

RSQTs that receive Directed Orders 7

(‘‘DSQTs’’ and ‘‘DRSQTs’’ respectively) 

are deemed not to be assigned in any 

option series until the time to expiration 

for such series is less than nine months. 

Accordingly, the obligations to quote 

continuous, two-sided markets 

described in Phlx Rule 1014(b)(ii)(D) 

currently do not apply to SQTs, RSQTs, 

DSQTs and DRSQTs respecting series 

with an expiration of nine months or 

greater. The Exchange originally 

adopted the rule on a six-month pilot 

basis (the ‘‘pilot’’).8 The pilot was 

scheduled to expire on April 24, 2007. 

The text of the proposed rule change 

is available at the Phlx, the 

Commission’s Public Reference Room, 

and http://www.phlx.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 

Phlx 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 Phlx 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 the proposed rule 

change is to adopt Phlx Rule 

1014(b)(ii)(D)(4) on a permanent basis in 

order to continue to mitigate the 

Exchange’s quote traffic by relaxing the 

quoting obligations applicable to SQTs, 

RSQTs, DSQTs and DRSQTs, thereby 

reducing the number of quotations 

required to be submitted on the 

Exchange. 

The pilot is part of an overall strategy 

to mitigate options quote traffic on the 

Exchange, under which SQTs, RSQTs, 

DSQTs and DRSQTs are deemed not to 

be assigned in any option series until 

the time to expiration for such series is 

less than nine months. The effect of this 

is to relax these traders quoting 

obligations, and ultimately the number 

of quotes they are required to submit, 

because the continuous quoting 

obligations described in Phlx Rule 

1014(b)(ii)(D)(1) apply only to those 

options in which they are assigned. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 9 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 10

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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 by 

relaxing the quoting requirements in 

option series with an expiration greater 

than nine months, thereby reducing the 

number of options quotations required 

to be submitted, which should enable 

the Exchange to mitigate quote traffic. 

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 by the Exchange. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change has become 

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

of the Act 11 and Rule 19b–4(f)(6) 

thereunder,12 because the foregoing 

proposed rule does not: (i) Significantly 

affect the protection of investors or the 

public interest; (ii) impose any 

significant burden on competition; and 

(iii) become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest. 

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30–days after 

the date of filing.13 However, Rule 19b–

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest.14 The 

Exchange has requested that the 

Commission waive the 30–day operative 

delay. The Commission believes that 

waiving the 30–day operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver will ensure 

continuity of the Exchange’s rules. 

Furthermore, the proposed rule change 


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26194 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Notices 

15See Securities Exchange Act Release No. 29103 

(April 18, 1991), 56 FR 19132 (April 25, 1991) (SR–

Phlx–91–18). 

16For purposes only of waiving the 30–day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

17See 15 U.S.C. 78s(b)(3)(C). 18 17 CFR 200.30–3(a)(12). 

does not present any novel regulatory 

issues. The Commission notes that this 

proposal is consistent with the approach 

in current Phlx Rule 1012, Commentary 

.03, which states that strike price 

interval, bid/ask differential and 

continuity rules will not apply to such 

long term option series until the time to 

expiration is less than nine months.15

For these reasons, the Commission 

designates the proposal to be operative 

upon filing with the Commission.16

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.17

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 rule–

comments@sec.gov. Please include File 

Number SR–Phlx–2007–36 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–Phlx–2007–36. 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 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–2007–36 and should 

be submitted on or before May 29, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–8736 Filed 5–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

Notice of Availability of a Final 

Environment Assessment (Final EA) 

and a Finding of No Significant Impact/ 

Record of Decision (FONSI/ROD) for 

the Proposed Runway 22R/4L Offset 

ILS at Detroit Metropolitan Wayne 

County Airport (DTW) Located in 

Romulus, Detroit 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of Availability of a Final 

Environmental Assessment and a 

Finding of No Significant Impact/ 

Record of Decision for the Proposed 

Runway 22R/4L Offset ILS at Detroit 

Metropolitan Wayne County Airport. 

SUMMARY: The Federal Aviation 

Administration (FAA) is issuing this 

notice to advise the public that it has 

prepared a Final Environmental 

Assessment (Final EA) for the Proposed 

Runway 22R/4L Offset ILS at Detroit 

Metropolitan Wayne County Airport 

and on April 27, 2007, it has approved 

a Finding of No Significant Impact/ 

Record of Decision (FONSI/ROD) based 

on this Final EA. The Federal Aviation 

Administration (FAA) prepared the 

Final EA in accordance with the 

National Environmental Policy Act and 

the Federal Aviation Administration’s 

regulations and guidelines for 

environmental documents. The Final 

EA was reviewed and evaluated by the 

FAA, and was accepted on April 27, 

2007 as a Federal document by the 

FAA’s Responsible Federal Official. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Virginia Marcks, Environmental 

Engineer, Engineering Services, Central 

Service Area, Federal Aviation 

Administration, 2300 East Devon 

Avenue, Des Plaines, Illinois 60018, 

Telephone number: 847–294–7494. 

SUPPLEMENTARY INFORMATION: The 

Federal Aviation Administration (FAA) 

has prepare and is making available the 

Final Environmental Assessment (Final 

EA) for the following proposed actions 

at the Detroit Metropolitan Wayne 

County Airport: The development and 

use of the offset ILS approach 

procedures for Runways 22R and 4L, the 

installation of two (2) offset localizers, 

the construction of localizer buildings 

and associated equipment, the 

construction of access roads, the 

installation of mulitlateration 

equipment including 32 precision 

runway monitors (Precision Runway 

Monitors), the installation of Airport 

Surveillance Detection Equipment 

(ASDE), the reissuance of aeronautical 

charts with the 22R/4L offset ILS 

approach information, the issuance of 

National Airspace System (NAS) Change 

Proposed (NCP) waivers associated with 

design and installation of the preceding, 

the development, issuance, and 

implementation of Air Traffic 

procedures, flight check and testing and 

certification of proposed equipment, 

and funding for development and 

implementation of the proposed action. 

The Final EA has been prepared in 

accordance with the National 

Environmental Policy Act (NEPA) of 

1969, as amended, FAA Orders 1050.1E, 

‘‘Environmental Impacts: Policies and 

Procedures’’ and FAA Order 5050.4B, 

‘‘NEPA Implementing Instructions for 

Airport Actions.’’ The proposed 

development action is consistent with 

the National Airspace System Plan 

prepared by the U.S. Department of 

Transportation Federal Aviation 

Administration (FAA). 

A Final Environmental Assessment 

and the Finding of No Significant 

Impact/Record of Decision (FONSI/ 

ROD) will be available for public 

viewing during normal business hours 

at the following locations: 

(1) Romulus Public Library, 11121 

Wayne Rd., Romulus, MI 48174, (734) 

942–7589. 

(2) Wayne City Pubic Library, 3737 S. 

Wayne Rd., Wayne, MI 48174 (734) 

721–7832. 


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