Federal Register / Vol. 72, No. 96 / Friday, May 18, 2007 / Notices 28087 

1 15 U.S.C. 78q(d) and 15 U.S.C. 78k–1(a)(3)(B), 

respectively. 

2 17 CFR 240.17d–2. 

3See Securities Exchange Act Release No. 55612 

(April 10, 2007), 72 FR 19556 (April 18, 2007) 

(‘‘Notice’’). CBOE serves as the self-regulatory 

authority for CBSX. 

4 15 U.S.C. 78s(g)(1). 

5 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), 

respectively. 

6 15 U.S.C. 78q(d)(1). 

7See Securities Act Amendments of 1975, Report 

of the Senate Committee on Banking, Housing, and 

Urban Affairs to Accompany S. 249, S. Rep. No. 94–

75, 94th Cong., 1st Session 32 (1975). 

8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, 

respectively. Rule 17d–1 authorizes the 

Commission to name a single SRO as the designated 

examining authority (‘‘DEA’’) to examine common 

members for compliance with the financial 

responsibility requirements imposed by the Act, or 

by Commission or SRO rules. 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to R. Corey Booth, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Shirley 

Martinson, 6432 General Green Way, 

Alexandria, VA 22312; or send an 

e-mail to: PRA_Mailbox@sec.gov. 

Dated: May 11, 2007. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. E7–9573 Filed 5–17–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Filings and 

Information Services, Washington, DC 

20549. 

Extension: 

Form 15; OMB Control No. 3235–

0167; SEC File No. 270–170. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Form 15 (17 CFR 249.232) is a 

certification of termination of a class of 

security under Section 12(g) or notice of 

suspension of duty to file reports 

pursuant to Sections 13 and 15(d) of the 

Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.). We estimate that 

approximately 3,000 issuers file Form 

15 annually and it takes approximately 

1.5 hours per response to prepare for a 

total of 4,500 annual burden hours. 

Written comments are invited on: (a) 

Whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden imposed by the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to R. Corey Booth, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Shirley 

Martinson, 6432 General Green Way, 

Alexandria, VA 22312; or send an 

e-mail to: PRA_Mailbox@sec.gov. 

Dated: May 11, 2007. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. E7–9574 Filed 5–17–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55755; File No. 4–536] 

Program for Allocation of Regulatory 

Responsibilities Pursuant to Rule 

17d–2; Order Approving and Declaring 

Effective a Plan for the Allocation of 

Regulatory Responsibilities Between 

the Chicago Board Options Exchange, 

Incorporated and the National 

Association of Securities Dealers, Inc. 

May 14, 2007. 

Notice is hereby given that the 

Securities and Exchange Commission 

(‘‘Commission’’) has issued an Order, 

pursuant to Sections 17(d) and 

11A(a)(3)(B) of the Securities Exchange 

Act of 1934 (‘‘Act’’),1 granting approval 

and declaring effective an amended and 

restated plan for the allocation of 

regulatory responsibilities (‘‘Plan’’) that 

was filed pursuant to Rule 17d–2 under 

the Act 2 by the Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’) and 

the National Association of Securities 

Dealers, Inc. (‘‘NASD’’) (together with 

CBOE, the ‘‘Parties’’) with respect to the 

CBOE Stock Exchange, LLC (‘‘CBSX’’), 

which is a facility of CBOE featuring a 

fully-automated marketplace for trading 

of non-option securities by CBOE 

members.3

Accordingly, NASD shall assume, in 

addition to the regulatory responsibility 

it has under the Act, the regulatory 

responsibilities allocated to it under the 

Plan as they relate to the CBSX. At the 

same time, CBOE is relieved of those 

regulatory responsibilities allocated to 

NASD under the Plan. 

I. Introduction 

Section 19(g)(1) of the Act,4 among 

other things, requires every selfregulatory organization (‘‘SRO’’) that is 

either a national securities exchange or 

registered securities association to 

examine for, and enforce compliance by, 

its members and persons associated 

with its members with the Act, the rules 

and regulations thereunder, and the 

SRO’s own rules, unless the SRO is 

relieved of this responsibility pursuant 

to Section 17(d) or 19(g)(2) of the Act.5

Section 17(d)(1) of the Act 6 was 

intended, among other things, to 

eliminate unnecessary multiple 

examinations and regulatory 

duplication for those broker-dealers that 

maintain memberships in more than one 

SRO (‘‘common members’’).7 With 

respect to a common member, Section 

17(d)(1) authorizes the Commission, by 

rule or order, to relieve an SRO of the 

responsibility to receive regulatory 

reports; to examine for and enforce 

compliance with applicable statutes, 

rules, and regulations; or to perform 

other specified regulatory functions. 

To implement Section 17(d)(1), the 

Commission adopted two rules: Rule 

17d–1 and Rule 17d–2 under the Act.8

Rule 17d–2 permits SROs to propose 

joint plans for the allocation of 

regulatory responsibilities, other than 

financial responsibility rules, with 

respect to their common members. 

Under paragraph (c) of Rule 17d–2, the 

Commission may declare such a plan 

effective if, after providing for notice 

and comment, it determines that the 

plan is necessary or appropriate in the 

public interest and for the protection of 

investors; to foster cooperation and 

coordination among the SROs; to 

remove impediments to, and foster the 

development of, a national market 


pwalker on PROD1PC71 with NOTICES
28088 Federal Register / Vol. 72, No. 96 / Friday, May 18, 2007 / Notices 

9See Notice, supra note 3. 

10See Section 1(c) of the Plan (defining Dual 

Member as ‘‘those CBOE members that are also 

members of NASD and the persons associated 

therewith’’). 

11As noted in the Certification, to the extent that 

any CBOE rule listed on the Certification makes 

reference to options, such rule shall be read to 

apply to equity securities as provided by CBOE 

Rule 53.6. 

12 15 U.S.C. 78q(d). 

13 17 CFR 240.17d–2(c). 

14CBOE has represented that, with respect to 

CBSX, there are no CBOE rules that are 

substantially similar to NASD rules that are within 

the scope of the Plan but not included in the 

Certification. See Telephone call between Richard 

Holley III, Special Counsel, Division of Market 

Regulation, Commission, and Lawrence J. 

Bresnahan, Vice President, Member Firm 

Regulation, CBOE, on May 11, 2007. 15 17 CFR 240.17d–1. 16See Section 2 of the Plan. 

17See Section 3 of the Plan. 

18The Commission also notes that the addition to 

or deletion from the Certification of any federal 

securities laws, rules, and regulations for which 

NASD would bear responsibility under the Plan for 

examining, and enforcing compliance by, Dual 

Members, also would constitute an amendment to 

the Plan. 

19The Commission notes that paragraph 13 of the 

Plan reflects the fact that NASD’s responsibilities 

under the Plan will continue in effect until the 

Commission approves the termination of the Plan. 

system and a national clearance and 

settlement system; and is in conformity 

with the factors set forth in Section 

17(d) of the Act. Upon effectiveness of 

a plan filed pursuant to Rule 17d–2, an 

SRO is relieved of those regulatory 

responsibilities for common members 

that are allocated by the plan to another 

SRO. 

On April 10, 2007, the Commission 

issued notice of the Plan filed by CBOE 

and NASD.9 The Commission received 

no comments on the Plan. The Plan is 

intended to reduce regulatory 

duplication in the examination of Dual 

Members 10 and in the filing and 

processing of certain registration and 

membership records as it relates to the 

CBSX by allocating to NASD certain 

examination and enforcement 

responsibilities with respect to CBSX. 

Included in the Plan is an attachment 

(the ‘‘CBOE Certification of Common 

Rules,’’ referred to herein as the 

‘‘Certification’’) that lists every CBOE 

rule applicable to CBSX,11 and any 

federal securities law, rule, or regulation 

for which, under the Plan, NASD would 

bear responsibility for examining, and 

enforcing compliance by, common 

members. 

II. Discussion 

The Commission finds that the 

proposed Plan is consistent with the 

factors set forth in Section 17(d) of the 

Act 12 and Rule 17d–2(c) thereunder 13

in that the proposed Plan is necessary 

or appropriate in the public interest and 

for the protection of investors, fosters 

cooperation and coordination among 

SROs, and removes impediments to and 

fosters the development of the national 

market system. In particular, the 

Commission believes that the proposed 

Plan should reduce unnecessary 

regulatory duplication by allocating to 

NASD certain responsibilities for 

common members that would otherwise 

be performed by both CBOE and NASD. 

Accordingly, the proposed Plan 

promotes efficiency by reducing costs to 

common members. Furthermore, 

because CBOE and NASD will 

coordinate their regulatory functions in 

accordance with the Plan, the Plan 

should promote investor protection. 

The Commission notes that, under the 

Plan, CBOE and NASD have allocated 

regulatory responsibility for those CBOE 

governing the operation of CBSX that 

are substantially similar to NASD rules 

in that examination for compliance with 

each applicable CBOE rule would not 

require NASD to develop one or more 

new examination standards, modules, 

procedures, or criteria to analyze the 

application of the rule, or a Dual 

Member’s activity, conduct, or output in 

relation to such rule (‘‘Common Rules’’). 

The Common Rules covered by the Plan 

are specifically listed in the 

Certification, as may be amended by the 

Parties from time to time.14 In addition, 

under the Plan, NASD would assume 

regulatory responsibility for any 

provisions of the federal securities laws 

and the rules and regulations 

thereunder that are set forth in the 

Certification. 

The Plan further provides that NASD 

shall not assume regulatory 

responsibility, and CBOE will retain full 

responsibility, for: (1) Surveillance and 

enforcement with respect to trading 

activities or practices involving CBOE’s 

own marketplace, including without 

limitation CBOE’s rules relating to the 

rights and obligations of market makers; 

(2) registration pursuant to CBOE’s 

applicable rules of associated persons 

(i.e., registration rules that are not 

Common Rules); (3) CBOE’s duties as a 

DEA under Rule 17d–1 of the Act;15 and 

(4) any rules of CBOE that do not qualify 

as Common Rules. 

According to the Plan, CBOE will 

review the Certification, at least 

annually, or more frequently if required 

by changes in either the rules of CBOE 

or NASD, and, if necessary, submit to 

NASD an updated list of Common Rules 

to add CBOE rules not included on the 

then-current list of Common Rules that 

are substantially similar to NASD rules; 

delete CBOE rules included in the thencurrent list of Common Rules that are no 

longer substantially similar to NASD 

rules; and confirm that the remaining 

rules on the list of Common Rules 

continue to be CBOE rules that are 

substantially similar to NASD rules.16

NASD will then confirm in writing 

whether the rules listed in any updated 

list are Common Rules as defined in the 

Plan. Under the Plan, CBOE will also 

provide NASD with a current list of 

dual members and shall update the list 

no less frequently than once each 

quarter.17

The Commission is hereby declaring 

effective and approving a plan that, 

among other things, allocates regulatory 

responsibility to NASD for the oversight 

and enforcement of all CBOE rules 

applicable to CBSX that are 

substantially similar to the rules of 

NASD for Dual Members of CBOE and 

NASD. Therefore, modifications to the 

Certification need not be filed with the 

Commission as an amendment to the 

Plan, provided that the Parties are only 

adding to, deleting from, or confirming 

changes to CBOE rules in the 

Certification in conformance with the 

definition of Common Rules provided in 

the Plan. However, should the Parties 

decide to add a CBOE rule to the 

Certification that is not substantially 

similar to an NASD rule; delete a CBOE 

rule from the Certification that is 

substantially similar to an NASD rule; 

or leave on the Certification a CBOE rule 

that is no longer substantially similar to 

an NASD rule, then such a change 

would constitute an amendment to the 

Plan, which must be filed with the 

Commission pursuant to Rule 17d–2 

under the Act and noticed for public 

comment.18

The Plan also permits CBOE and 

NASD to terminate the Plan, subject to 

notice. The Commission notes, however, 

that while the Plan permits the Parties 

to terminate the Plan, the Parties cannot 

by themselves reallocate the regulatory 

responsibilities set forth in the Plan, 

since Rule 17d–2 under the Act requires 

that any allocation or re-allocation of 

regulatory responsibilities be filed with 

the Commission.19

III. Conclusion 

This Order gives effect to the Plan 

filed with the Commission in File No. 

4–536. The Parties shall notify all 

members affected by the Plan of their 

rights and obligations under the Plan. 

It is therefore ordered, pursuant to 

Sections 17(d) and 11A(a)(3)(B) of the 

Act, that the Plan in File No. 4–536, 

between CBOE and NASD, filed 

pursuant to Rule 17d–2 under the Act, 

is approved and declared effective. 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 72, No. 96 / Friday, May 18, 2007 / Notices 28089 

20 17 CFR 200.30–3(a)(34). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange clarified 

that pursuant to Article IV, Section 1(d) of the 

Amex Constitution, applicants for associate 

membership are also currently required to provide 

five letters of reference. 

4Article IV, Section 1(d) of the Amex 

Constitution provides that applications for associate 

membership shall be in a form and manner 

prescribed by the Exchange. The Exchange also 

currently requires associate member applicants to 

provide five letters of reference, as is set forth in 

Rule 353. 

5The Exchange stated that it intends to reduce 

the requirement for associate membership 

applicants from five to two letters of reference to 

correspond with the proposed change effecting 

regular, options principal members or LTP holders. 

Telephone conversation among Nyieri Nazarian, 

Associate General Counsel, Amex; Jennifer Colihan, 

Special Counsel, Commission, Division of Market 

Regulation (‘‘Division’’); and Kristie Diemer, 

Special Counsel, Commission, Division on May 2, 

2007. 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(5). 

It is therefore ordered that CBOE is 

relieved of those responsibilities 

allocated to the NASD under the Plan in 

File No. 4–536. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.20

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. E7–9569 Filed 5–17–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55756; File No. SR–Amex2007–42] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing of Proposed Rule Change as 

Modified by Amendment No. 1 

Amending the Required Number of 

Letters of Reference an Applicant Must 

Provide 

May 14, 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 April 26, 

2007, the American Stock Exchange LLC 

(‘‘Amex’’ 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 Amex. On 

May 3, 2007, Amex submitted 

Amendment No. 1 to the proposed rule 

change.3 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Amex Rule 353 to require member 

applicants to provide two, instead of 

five, letters of reference. The text of the 

proposed rule change is available at the 

Amex’s Office of the Secretary, at the 

Commission’s Public Reference Room, 

and on the Amex’s Web site at http:// 

www.amex.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, 

Amex 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. Amex 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 

Amex Rule 353 currently requires a 

member applicant to provide five letters 

of reference from any person seeking 

status as a regular, options principal 

member or LTP holder.4 The Exchange 

proposes to amend Rule 353 to require 

member applicants to provide two, as 

opposed to five, letters of reference from 

responsible persons.5 Requiring five 

letters of reference has proven 

burdensome and time-consuming for 

member applicants and often delays the 

application process. Furthermore, the 

content of such references is of little 

consequence in an applicant’s ultimate 

approval. Finally, with the availability 

of more objective background 

information provided through other 

resources, such as WEBCRD, FBI 

fingerprints, and credit reports, Amex 

believes that the need for these letters of 

reference has largely been diminished. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6 of the Act 6 in general and 

furthers the objectives of Section 

6(b)(5) 7 in particular in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

This proposed rule change does not 

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 solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 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 

90 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 Amex 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–Amex–2007–42 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–Amex–2007–42. This file 


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