46128 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78q–1. 

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 File 

Number SR–NYSEArca–2008–79 and 

should be submitted on or before 

August 28, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18156 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58252; File No. SR–DTC–

2008–05] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of a Proposed Rule Change 

Relating to Establishing a New Money 

Market Instrument Procedure 

Disincentive Fee 

July 30, 2008. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

June 5, 2008, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) and on July 16, 2008, 

amended the proposed rule change and 

as described in Items I, II, and III below, 

which Items have been prepared 

primarily by DTC. 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 proposed rule change would 

establish a new disincentive fee for 

DTC’s Money Market Instrument 

(‘‘MMI’’) settlement services. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

DTC 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. DTC 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 

The purpose of the proposed rule 

change is to add a new $10,000 

disincentive fee for ‘‘reversal of a failure 

or refusal to pay instruction’’ that will 

be listed in DTC’s fee schedule for 

settlement services under the heading 

‘‘Money Market Instruments (MMI) by 

Book Entry Only.’’

As background, DTC automatically 

sweeps all maturing money market 

instruments’ (‘‘MMIs’’) positions each 

morning from investors’ custodian 

accounts and generates the appropriate 

maturity payment (‘‘MP’’). The MMIs 

are then delivered to the account of the 

appropriate issuer paying agent (‘‘IPA’’). 

DTC debits the IPA’s account in the 

amount of the MP for settlement that 

day and credits the same MP amount to 

the investor’s custodian account for 

payment that day to the investor. 

However, because MPs are processed 

automatically and randomly against the 

IPA’s DTC account, IPAs can refuse to 

pay a specific issuer’s MP if that issuer 

defaults on its obligation to the IPA. An 

IPA that refuses payment on an MMI 

must communicate its intention to do so 

to DTC by using the MP Refusal 

function on DTC’s Participant Terminal 

System (‘‘PTS’’). This communication is 

referred to as an Issuer Failure/Refusal 

to Pay and it allows the paying agent to 

enter refusal to pay notifications for a 

particular defaulting issuer through PTS 

until 3:00 p.m., eastern time, on the 

maturity date. The paying agent 

understands that entering such a 

notification will cause DTC to follow its 

Defaulting Issuer procedures, which 

include devaluing the collateral value of 

all of the defaulting issuer’s MMIs to 

zero, reversing all of the issuer’s 

issuances and maturities processed that 

day, notifying DTC participants of the 

default, and blocking all further 

issuances by the issuer from entering 

DTC. If, thereafter, an IPA contacts DTC 

to complete all of the transactions that 

it previously cancelled through the MP 

Refusal Function, DTC must undo all 

the actions it took under its Defaulting 

Issuer procedures. This process of 

reversing a refusal or failure to pay 

instruction and effectively resettling the 

security is an operational burden to DTC 

and of great financial concern to 

investors and their custodians. 

Accordingly, DTC is proposing to 

implement a disincentive $10,000 fee to 

each IPA that requests such reversal. 

Additionally, DTC expects such fee to 

serve as a disincentive to IPAs that 

request such reversal. 

DTC states that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 2

and the rules and regulations 

thereunder applicable to DTC because 

the disincentive fee is designed to deter 

the practice of requesting a refusal or 

failure to pay instruction, thereby 

promoting the prompt and accurate 

clearance and settlement of securities 

transactions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

DTC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change have not yet been 

solicited or received. DTC will notify 

the Commission of any written 

comments it receives. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within thirty-five 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 

ninety 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 the self-regulatory 

organization 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 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 46129 

3 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Changes are marked to the rules of The 

NASDAQ Stock Market LLC found at http:// 

nasdaq.complinet.com. 

No. SR–DTC–2008–05 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–DTC–2008–05. 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. to 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

DTC’s principal office and on DTC’s 

Web site at http://www.dtcc.com/legal/ 

rule_filings/dtc/2008.php. 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 No. 

DTC–2008–05 and should be submitted 

on or before August 28, 2008. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.3

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18070 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58275; File No. SR–

NASDAQ–2008–025] 

Self-Regulatory Organizations; the 

NASDAQ Stock Market LLC; Notice of 

Filing of a Proposed Rule Change, and 

Amendment No. 2 Thereto, Relating to 

the Establishment of the Equity Value 

Indicator Cross 

July 31, 2008. 

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 March 20, 

2008, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’ 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 Exchange. 

On July 23, 2008, Nasdaq filed 

Amendment No. 1 to the proposed rule 

change. On July 30, 2008, Nasdaq 

withdrew Amendment No. 1 and filed 

Amendment No. 2 to the proposed rule 

change. Amendment No. 2 replaces the 

original filing in its entirety. 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 

Nasdaq is proposing to establish a 

crossing mechanism for EVI securities, 

which is designed to allow issuers of 

employee stock options a market-based 

way of measuring the cost of such 

options. The text of the proposed rule 

change is below. Proposed new 

language is italicized; deletions are 

bracketed.3

* * * * * 

6300. [RESERVED] Nasdaq Equity 

Value Indicator Cross 

(a) Definitions. For the purposes of 

this rule the term: 

(1) ‘‘Imbalance’’ shall mean the 

amount of Eligible Interest that may not 

be matched with other orders at a 

particular price at any given time. 

(2) ‘‘Order Imbalance Indicator’’ shall 

mean a message disseminated by 

electronic means containing 

information about Eligible Interest and 

the price at which such interest would 

execute at the time of dissemination. 

The Order Imbalance Indicator shall 

disseminate the following information: 

(A) ‘‘Current Reference Price’’ shall 

mean the highest price at which the 

maximum amount of Eligible Interest 

can be paired. 

(B) the amount of Eligible Interest that 

is paired at the Current Reference Price; 

(C) the size of any Imbalance at the 

Current Reference Price; and 

(D) the buy/sell direction of any 

Imbalance. 

(3) ‘‘Nasdaq EVI Cross’’ shall mean 

the process for determining the price at 

which Eligible Interest shall be 

executed. All prices referred to in this 

rule shall be in minimum increments of 

one penny. 

(4) ‘‘Eligible Interest’’ shall mean any 

priced order that may be entered into 

the system for the EVI Cross. 

(5) ‘‘EVI’’ shall mean any Equity 

Value Indicator Tracking Security which 

is issued for the purpose of generating 

a market-based value of employee stock 

options for purposes of FASB Statement 

of Financial Accounting Standards No. 

123(R), Share-Based Payment. The 

number of EVIs made available via the 

EVI Cross, the limit price, if any, of the 

EVIs, and the terms of the EVIs shall be 

determined by the EVI issuer which 

shall make that information available to 

the public at the earliest time 

practicable. 

(b) Processing of Nasdaq EVI Cross. 

(1) (A) No later than 4:00 p.m. EST on 

the day of the scheduled EVI Cross, a 

Nasdaq member authorized to act for 

the EVI Issuer shall direct in writing that 

Nasdaq enter into the System a single 

sell order with the quantity and limit 

price if any of EVI Eligible Interest. The 

sell order may not be modified after 4 

p.m. and may be cancelled after 4:00 

p.m. only in connection with a 

cancellation of the EVI Cross as set forth 

in subsection (c) below. 

(B) Beginning at 8 a.m. and 

continuing until 4:59:59 p.m. Nasdaq 

members may enter buy orders into the 

System. Except as provided below, once 

entered, buy orders may be cancelled 

but may not be modified. 

(C) The EVI Cross shall occur at 5 

p.m. EST. in the manner set forth below 

unless the time of execution is 

extended. The time of execution of the 

EVI Cross shall be extended only if the 

Current Reference Price of the EVI 

security changes by 1 percent or more 

between 4:59 p.m. and 5 p.m, in which 

case the time of the EVI Cross will be 

extended by 2 minutes. The time of 

execution of the EVI Cross shall be 

extended for an additional 2 minutes if 

the Current Reference Price of the EVI 

Security changes by 1 percent or more 

in the final minute of a two-minute 


sroberts on PROD1PC70 with NOTICES