Federal Register / Vol. 73, No. 167 / Wednesday, August 27, 2008 / Notices 50661 

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

2 15 U.S.C. 78s(b)(3)(A)(iii). 

3 17 CFR 240.19b–4(f)(4). 

4For more information regarding the record 

layout changes, see DTC Important Notice B 3577–

08. http://www.dtcc.com/downloads/legal/ 

imp_notices/2008/dtc/set/3577–08.pdf. 

5The Commission has modified the text of the 

summaries prepared by DTC. 

6For more information about The Options 

Clearing Corporation’s Options Symbology 

Initiative see the most recent plan at http:// 

www.theocc.com/initiatives/symbology/ 

implementation_plan.jsp. 

filed by 1,170 respondents for a total of 

3,510 annual burden hours. 

Written comments regarding the 

above information should be directed to 

the following persons: (i) Desk Officer 

for the Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, Room 10102, 

New Executive Office Building, 

Washington, DC 20503 or send an email to 

Alexander_T._Hunt@omb.eop.gov; and 

(ii) Lewis W. Walker, Acting Director/ 

Chief Information Officer, Securities 

and Exchange Commission, C/O Shirley 

Martinson, 6432 General Green Way, 

Alexandria, VA 22312; or send an email to: PRA_Mailbox@sec.gov. 

Comments must be submitted to OMB 

within 30 days of this notice. 

Dated: August 20, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19820 Filed 8–26–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold an Open Meeting 

on August 27, 2008 at 10 a.m., in the 

Auditorium, Room L–002. 

Commissioner Paredes, as duty 

officer, determined that no earlier notice 

thereof was possible. 

The subject matter of the Open 

Meeting will be: 

1. The Commission will consider 

whether to adopt amendments to its 

rules regarding the circumstances under 

which a foreign private issuer is 

required to register a class of equity 

securities under Section 12(g) of the 

Exchange Act. 

2. The Commission will consider 

whether to adopt amendments to the 

forms and rules applicable to foreign 

private issuers that are intended to 

enhance the information that is 

available to investors. 

3. The Commission will consider 

whether to adopt revisions to the 

current exemptions for cross-border 

business combination transactions and 

rights offerings to expand and enhance 

the usefulness of the exemptions, and to 

adopt changes to the beneficial 

ownership reporting rules to permit 

certain foreign institutions to file reports 

on a shorter form. The Commission also 

will consider whether to publish 

interpretive guidance on issues related 

to cross-border transactions. 

4. The Commission will consider 

whether to propose a Roadmap for the 

potential use by U.S. issuers for 

purposes of their filings with the 

Commission of financial statements 

prepared in accordance with 

International Financial Reporting 

Standards (‘‘IFRS’’) as issued by the 

International Accounting Standards 

Board. As part of the Roadmap, the 

Commission will also consider whether 

to propose amendments to various rules 

and forms that would permit early use 

of IFRS by a limited number of U.S. 

issuers. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: August 22, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19857 Filed 8–26–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58407; File No. SR–DTC–

2008–10] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Make 

Technical Changes to the Collateral 

Loan System 

August 21, 2008. 

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

Securities Exchange Act of 1934 

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

August 1, 2008, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by DTC. DTC filed the 

proposal pursuant to Section 

19(b)(3)(A)(iii) of the Act 2 and Rule 

19b–4(f)(4) 3 thereunder so that the 

proposal was effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the rule change from 

interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The purpose of the rule change is to 

(i) modify record layouts for the 

Collateral Loan System to comply with 

the new Symbology series key defined 

by the Options Symbology Initiative 

(‘‘OSI’’) and (ii) implement record 

layout changes that will allow The 

Options Clearing Corporation (‘‘OCC’’) 

members to process collateral loan 

transactions directly against OCC subaccounts.4

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 these statements.5

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Options Symbology Initiative 

Currently organizations that support 

trading in listed options typically use a 

three to five alpha character 

representation. The first three characters 

identify the option root symbol, and the 

remaining two alpha characters identify 

the expiration month, call/put indicator, 

and strike price. In an effort to 

standardize option symbols and 

overhaul the existing method of 

identifying exchange-listed options 

contracts, OCC is spearheading an 

industry-wide adoption of the OSI.6

The OSI supports the elimination of 

alpha codes that are currently used to 

denote expiration month, call/put code, 

and strike price. As a result, DTC is 

proposing to modify its record layouts 

for DTC’s Collateral Loan System to 


sroberts on PROD1PC70 with NOTICES
50662 Federal Register / Vol. 73, No. 167 / Wednesday, August 27, 2008 / Notices 

7Commission customer protection rules require 

firms to compute the amount a clearing firm must 

place in a reserve account to back their customers’

assets. There are effectively two calculations: One 

for retail customers (‘‘Reserve’’) and one for the 

proprietary accounts of introducing brokers 

(‘‘PAIB’’). Under both of these calculations the 

clearing firm is allowed to take as a debit in the 

calculation OCC’s clearing level margin associated 

with these customers’ positions. At the 

clearinghouse level both Reserve and PAIB 

customers are cleared in the customer range, and 

currently only one margin requirement is produced. 

Since the OCC margin requirement is comprised of 

both Reserve and PAIB clients, clearing firms do not 

use the OCC margin requirement as a debit in their 

computations. As a result, firms have to post more 

in their Reserve accounts since they cannot use the 

offsets provided for under Commission customer 

protection rules. 

OCC sub-accounting would provide clearing 

firms with the ability to maintain subaccounts 

under the customer range for Reserve customers 

and PAIB customers. As a result, OCC could 

compute two separate margin requirements to 

which the clearing firm can post collateral and 

apply Reserve and PAIB calculations. This would 

free up additional liquidity for clearing firms that 

currently cannot include the OCC margin in the 

customer protection rule computations due to the 

inability to create a subaccount. 

8Participants use DTC’s Collateral Loan function 

on the PTS to pledge securities to OCC in order to 

meet OCC’s option collateralization requirements. 

Participants can also use PTS to input requests for 

the release of securities pledged to OCC, and OCC 

can use PTS to approve or cancel release requests. 

9 15 U.S.C. 78q–1. 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(4). 12 17 CFR 200.30–3(a)(12). 

comply with the new Symbology series 

key defined by the OSI. DTC believes 

these changes will increase efficiency 

and improve the mechanism for 

participants to perform under the OSI 

initiative. 

2. OCC Sub-Accounting Initiative 

The purpose of the OCC subaccounting initiative is to eliminate the 

need for multiple OCC clearing member 

numbers. OCC sub-accounting also 

allows OCC clearing members to 

separate retail and professional 

customers for purposes of reserve/PAIB 

computations 7 and to separate 

traditional and portfolio margin 

customers for purposes of portfolio 

margining. In support of the OCC subaccounting initiative, OCC has 

requested that DTC implement record 

layout changes that will allow OCC 

members to process collateral loan 

transactions directly against these OCC 

sub-accounts. 

The OCC has mandated that 

modifications for the OSI and the OCC 

sub-accounting initiative be 

implemented simultaneously because 

both initiatives require modifications to 

input and output file formats as well as 

some of DTC’s screen based applications 

on the Participant Terminal System 

(‘‘PTS’’) and Participant Browser 

Services (‘‘PBS’’).8 OCC has requested 

that DTC implement these changes on 

August 8, 2008, so that OCC members 

can begin to migrate to the new formats. 

OCC has mandated that OCC members 

be ready to use the new formats by 

October 10, 2008. 

The proposed rule change is 

consistent with Section 17A of the Act,9

as amended, because it will reduce 

operational and financial risks 

associated with multiple OCC clearing 

member numbers thereby promoting the 

prompt and accurate clearance and 

settlement of securities transactions. 

Additionally, record layout 

modifications will increase efficiency 

and improve the mechanism for DTC 

Participants to perform under the OSI 

initiative. 

(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 received by DTC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has become effective upon filing 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 10 and Rule 19b–4(f)(4) 11

thereunder because the proposed rule 

change effects a change in an existing 

service of a registered clearing agency 

that: (i) does not adversely affect the 

safeguarding of securities or funds in 

the custody or control of the clearing 

agency or for which it is responsible and 

(ii) does not significantly affect the 

respective rights or obligations of the 

clearing agency or persons using the 

service. At any time within sixty 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. 

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–DTC–2008–10 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 

Number SR–DTC–2008–10. 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

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

Copies of such filings also will be 

available for inspection and copying at 

the principal office of DTC and on 

DTC’s Web site at http://www.dtcc.com/ 

downloads/legal/rule_filings/2008/dtc/ 

2008–10.pdf. 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–DTC–

2008–10 and should be submitted on or 

before September 17, 2008. 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 73, No. 167 / Wednesday, August 27, 2008 / Notices 50663 

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

2 17 CFR 240.19b–4. 

3A crossing transaction consists of an order the 

EAM represents as agent and a counter-side order. 

The counter-side order may represent interest for 

the EAM’s own account or interest the EAM may 

have solicited from one or more parties, or both. 

4See ISE Rule 716. 

5See CBOE Rule 6.74B. 

6When using the NOM crossing procedure to 

achieve an execution in penny increments, there is 

no requirement that there be any NOM market 

makers quoting the particular series or that they 

even be aware that the initiating NOM member is 

attempting to cross an order in an undisplayed 

penny increment. For example, a NOM member 

could enter an agency limit order to buy at $1.03 

that is rounded and displayed at $1.00, wait three 

seconds, then enter a principal or solicited order to 

sell at $1.03. Although the initiating member knows 

it has entered an agency order to buy at $1.03, other 

market participants would only see the size of the 

agency order displayed on the bid at $1.00. See 

NOM Chapter IV, Section 5, Chapter VI, Sections 

7(b) and 10, and Chapter VII, Sections 6 and 12. The 

Exchange understands that NOM’s method of 

crossing orders in non-standard increments differs 

from ISE’s PIM in so much as PIM will allocate the 

initiating Member a certain minimum participation 

entitlement if certain conditions are met (e.g., after 

public customer orders, 40% of the order is 

allocated to the initiating Member if its single-price 

submission equals the best price), whereas NOM 

does not have any such participation entitlement. 

However, the Exchange does not believe this 

distinction is dispositive to our proposal to 

eliminate the requirement that there be a minimum 

number of quoters for a PIM auction. In this regard, 

we note that participation entitlements already 

apply to the ISE Facilitation and Solicited Order 

Mechanisms and the CBOE Solicitation Auction 

Mechanism. See ISE Rule 716 and CBOE Rule 

6.74B. The Exchange also notes that an Agency 

Order displayed through ISE’s PIM process will 

receive the benefit of any price improvement 

received during the auction, whereas an agency 

order displayed on NOM generally will not get any 

price improvement beyond its limit price (using the 

example above, once displayed at the rounded price 

the agency order to buy will generally only execute 

at $1.03, not better). 

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

8 15 U.S.C. 78f(b)(5). 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19822 Filed 8–26–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58401; File No. SR–ISE–

2008–63] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change Relating to the Price 

Improvement Mechanism 

August 21, 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 July 31, 

2008, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) 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 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 Exchange proposes to modify its 

Price Improvement Mechanism (PIM) 

auction eligibility requirements to 

eliminate the requirement that there be 

at least three market makers quoting the 

relevant series. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http:// 

www.ise.com), at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

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 these 

statements may be examined at the 

places specified in Item IV below. 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 

In order to provide additional 

opportunities for price improvement, 

the Exchange proposes to expand the 

PIM auction process. The Exchange’s 

PIM permits Electronic Access Members 

(‘‘EAMs’’) to provide penny price 

improvement for agency orders.3 ISE’s 

current rules require, among other 

things, that an EAM enter an order into 

the PIM only when there are at least 

three market makers quoting in the 

options series. The Exchange is now 

proposing to eliminate this requirement. 

The Exchange does not believe that 

orders should be denied the benefits of 

the PIM auction simply because there 

may be less than three ISE market 

makers quoting in a particular series. 

The Exchange believes this is a 

reasonable modification designed to 

provide additional flexibility for 

members to obtain executions on behalf 

of their customers while continuing to 

provide a meaningful, competitive 

auction. 

In support of its proposal, the 

Exchange notes the ISE and other 

options exchanges already have 

provisions within their rules that permit 

price improvement in non-standard 

increments without a condition that 

there be a minimum number of market 

makers quoting in the particular series. 

For example, ISE has electronic auction 

mechanisms for crossing agency order 

with facilitation or solicited orders 

(referred to as the ‘‘Facilitation 

Mechanism’’ and ‘‘Solicited Order 

Mechanism’’) in ‘‘split price’’

increments (e.g., $1.025, $1.05 and 

$1.075 for series trading in $0.05 

increments. The Facilitation and 

Solicited Order Mechanisms do not 

require that there be any minimum 

number of ISE market makers quoting in 

the particular series.4 Further, the 

Chicago Board Options Exchange 

(‘‘CBOE’’) has an electronic auction 

mechanism for crossing agency orders 

for 500 contracts or more with solicited 

orders (referred to as the ‘‘Solicitation 

Auction Mechanism’’) in increments as 

small as $0.01. This CBOE Solicitation 

Auction Mechanism does not require 

that there be any minimum number of 

CBOE market makers quoting in the 

particular series.5 Finally, the NASDAQ 

Options Market (‘‘NOM’’) has a 

procedure that permits a member who 

enters an agency order in penny 

increments (which is then rounded and 

displayed at the standard increment 

price) to enter a contra-side order in 

penny increments after the agency order 

has been exposed at the rounded price 

for three seconds. This NOM crossing 

procedure does not require that there be 

any minimum number of NOM market 

makers quoting in the particular series.6

Because these other mechanisms are 

currently able to offer price 

improvement in a non-standard 

increment without a minimum quoter 

requirement, the Exchange believes it is 

essential for competitive reasons to be 

able to offer the same opportunities for 

price improvement on ISE through the 

PIM. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Act 7 in general and furthers 

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

Act 8 in particular in that it is designed 


sroberts on PROD1PC70 with NOTICES