Federal Register / Vol. 73, No. 185 / Tuesday, September 23, 2008 / Notices 54875 

1This estimate is based, in part, on the total 

number of operating companies that filed annual 

reports on Form 10–K, Form 10–KSB, Form 20–F, 

or Form 40–F, during the 2008 fiscal year and an 

estimate of the average number of issuers that may 

have a registration statement filed under the 

Securities Act pending with the Commission at any 

time (12,939). In addition, we estimate that 

approximately 3,672 investment companies 

currently file periodic reports on Form N–SAR. 

2 Indications are that the 2005 estimate of the 

percentage of issuers that would establish QLCCs 

(10%) was high. Our adjusted estimate in the 

percentage of QLCCs (5%) results in a reduced 

burden estimate as compared to the previouslyapproved collection. 

1See Exchange Act Release No. 58166 (July 15, 

2008). 

Issuer’’ (17 CFR 205.1–205.7). The 

information collection embedded in the 

rules is necessary to implement the 

Standards of Professional Conduct for 

Attorneys prescribed by the rule and 

required by Section 307 of the SarbanesOxley Act of 2002 (15 U.S.C. 7245). The 

rules impose an ‘‘up-the-ladder’’ 

reporting requirement when attorneys 

appearing and practicing before the 

Commission become aware of evidence 

of a material violation by the issuer or 

any officer, director, employee, or agent 

of the issuer. An issuer may choose to 

establish a qualified legal compliance 

committee (‘‘QLCC’’) as an alternative 

procedure for reporting evidence of a 

material violation. In the rare cases in 

which a majority of a QLCC has 

concluded that an issuer did not act 

appropriately, the information may be 

communicated to the Commission. The 

collection of information is, therefore, 

an important component of the 

Commission’s program to discourage 

violations of the federal securities laws 

and promote ethical behavior of 

attorneys appearing and practicing 

before the Commission. 

The respondents to this collection of 

information are attorneys who appear 

and practice before the Commission 

and, in certain cases, the issuer, and/or 

officers, directors and committees of the 

issuer. We believe that, in providing 

quality representation to issuers, 

attorneys report evidence of violations 

to others within the issuer, including 

the Chief Legal Officer, the Chief 

Executive Officer, and, where necessary, 

the directors. In addition, officers and 

directors investigate evidence of 

violations and report within the issuer 

the results of the investigation and the 

remedial steps they have taken or 

sanctions they have imposed. Except as 

discussed below, we therefore believe 

that the reporting requirements imposed 

by the rule are ‘‘usual and customary’’ 

activities that do not add to the burden 

that would be imposed by the collection 

of information. 

Certain aspects of the collection of 

information, however, may impose a 

burden. For an issuer to establish a 

QLCC, the QLCC must adopt written 

procedures for the confidential receipt, 

retention, and consideration of any 

report of evidence of a material 

violation. We estimate for purposes of 

the PRA that there are approximately 

16,611 issuers that are subject to the 

rules.1 Of these, we estimate that 

approximately five percent, or 831, have 

established or will establish a QLCC.2

Establishing the written procedures 

required by the rule should not impose 

a significant burden. We assume that an 

issuer would incur a greater burden in 

the year that it first establishes the 

procedures than in subsequent years, in 

which the burden would be incurred in 

updating, reviewing, or modifying the 

procedures. For purposes of the PRA, 

we assume that an issuer would spend 

6 hours every three-year period on the 

procedures. This would result in an 

average burden of 2 hours per year. 

Thus, we estimate for purposes of the 

PRA that the total annual burden 

imposed by the collection of 

information would be 1,662 hours. 

Assuming half of the burden hours will 

be incurred by outside counsel at a rate 

of $400 per hour would result in a cost 

of $332,400. 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act, and is not 

derived from a comprehensive or even 

a representative survey or study. An 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless it 

displays a currently valid OMB control 

number. 

Written comments are requested on: 

(a) Whether the collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information has practical utility; (b) the 

accuracy of the Commission’s estimate 

of the burden[s] of 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 Lewis W. Walker, Acting Director/ 

Chief Information Officer, Securities 

and Exchange Commission, C/O Shirley 

Martinson, 6432 General Green Way, 

Alexandria, Virginia 22312; or send an 

e-mail to: PRA_Mailbox@sec.gov. 

September 15, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22115 Filed 9–22–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Securities Exchange Act of 1934; Release 

No. 34–58572/ September 17, 2008] 

Emergency Order Pursuant to Section 

12(K)(2) of the Securities Exchange Act 

of 1934 Taking Temporary Action To 

Respond to Market Developments 

The Commission continues to be 

concerned that there is a substantial 

threat of sudden and excessive 

fluctuations of securities prices and 

disruption in the functioning of the 

securities markets that could threaten 

fair and orderly markets. As evidenced 

by our recent publication of an 

emergency order under Section 12(k) of 

the Securities Exchange Act of 1934 (the 

‘‘July Emergency Order’’),1 we are 

concerned about the possible 

unnecessary or artificial price 

movements based on unfounded rumors 

regarding the stability of financial 

institutions and other issuers 

exacerbated by ‘‘naked’’ short selling. 

Our concerns, however, are no longer 

limited to just the financial institutions 

that were the subject of the July 

Emergency Order. In addition, we have 

become concerned that some persons 

may take advantage of issuers that have 

become temporarily weakened by 

current market conditions to engage in 

inappropriate short selling in the 

securities of such issuers. 

Given the importance of confidence in 

our financial markets as a whole, we 

have become concerned about sudden 

and unexplained declines in the prices 

of securities. Such price declines can 

give rise to questions about the 

underlying financial condition of an 

issuer, which in turn can create a crisis 

of confidence without a fundamental 

underlying basis. This crisis of 

confidence can impair the liquidity and 

ultimate viability of an issuer, with 

potentially broad market consequences. 

As a result of these recent 

developments, the Commission 

concluded that there continues to exist 

a substantial threat of sudden and 

excessive fluctuations of securities 

prices generally and disruption in the 

functioning of the securities markets 

that could threaten fair and orderly 

markets. Based on this conclusion, the 


jlentini on PROD1PC65 with NOTICES
54876 Federal Register / Vol. 73, No. 185 / Tuesday, September 23, 2008 / Notices 

2This finding of an ‘‘emergency’’ is solely for 

purposes of Section 12(k)(2) of the Exchange Act 

and is not intended to have any other effect or 

meaning or to confer any right or impose any 

obligation other than set forth in this Order. 

3The term ‘‘participant’’ has the same meaning as 

in section 3(a)(24) of the Exchange Act. See 15 

U.S.C. 78c(a)(24). 

4The term ‘‘registered clearing agency’’ means a 

clearing agency, as defined in section 3(a)(23)(A) of 

the Exchange Act, that is registered as such 

pursuant to section 17A of the Exchange Act. See 

15 U.S.C. 78c(a)(23)(A) and 78q–1, respectively. 

5Rule 204T, as set forth in this Order, applies 

only to fails to deliver resulting from trades that 

occur after this Order becomes effective. Rule 

203(b)(3) of Regulation SHO, as amended by this 

Order, continues to apply to fails to deliver that 

occurred prior to the Order becoming effective. For 

example, if a participant has a fail to deliver 

position in a threshold security that has persisted 

for six consecutive settlement days prior to the 

effective date of this Order and the fail continues 

to persist until the thirteenth settlement day, the 

participant must still close out its position pursuant 

to Rule 203(b)(3). 

Commission is exercising its powers 

under Section 12(k)(2) of the Securities 

Exchange Act of 1934.2 Pursuant to 

Section 12(k)(2), in appropriate 

circumstances the Commission may 

issue summarily an order to alter, 

supplement, suspend, or impose 

requirements or restrictions with respect 

to matters or actions subject to 

regulation by the Commission. 

We have concluded that it is 

necessary to impose enhanced delivery 

requirements on sales of all equity 

securities, by adding and making 

immediately effective a temporary rule 

to Regulation SHO, Rule 204T. The 

temporary rule imposes a penalty on 

any participant 3 of a registered clearing 

agency,4 and any broker-dealer from 

which it receives trades for clearance 

and settlement, for having a fail to 

deliver position at a registered clearing 

agency in any equity security. In 

addition, we have concluded it is 

necessary to make immediately effective 

amendments to Rule 203(b)(3) of 

Regulation SHO that eliminate the 

options market maker exception from 

Regulation SHO’s close-out 

requirement. We are also making 

immediately effective Rule 10b–21, a 

‘‘naked’’ short selling antifraud rule.5

We intend these enhanced delivery 

requirements and the antifraud rule to 

impose powerful disincentives to those 

who might otherwise exacerbate 

artificial price movements through 

‘‘naked’’ short selling. 

In addition, in these unusual and 

extraordinary circumstances, we believe 

such requirements are in the public 

interest and for the protection of 

investors to maintain fair and orderly 

securities markets, and to prevent 

substantial disruption in the securities 

markets. 

This emergency requirement should 

significantly reduce any possibility that 

‘‘naked’’ short selling may contribute to 

the disruption of markets in these 

securities. We described in the releases 

in which we proposed and adopted 

Regulation SHO the bases for the 

current delivery requirements 

Regulation SHO imposes. We believe, 

however, that the unusual 

circumstances we now confront require 

the enhanced requirements we are 

imposing today. 

It is ordered that, pursuant to our 

Section 12(k)(2) powers, we are adding 

§ 242.204T to read as follows: 

§ 242.204T Short Sales. 

(a) A participant of a registered 

clearing agency must deliver securities 

to a registered clearing agency for 

clearance and settlement on a long or 

short sale in any equity security by 

settlement date, or if a participant of a 

registered clearing agency has a fail to 

deliver position at a registered clearing 

agency in any equity security for a long 

or short sale transaction in that equity 

security, the participant shall, by no 

later than the beginning of regular 

trading hours on the settlement day 

following the settlement date, 

immediately close out the fail to deliver 

position by borrowing or purchasing 

securities of like kind and quantity; 

Provided, however: 

(1) If a participant of a registered 

clearing agency has a fail to deliver 

position at a registered clearing agency 

in any equity security and the 

participant can demonstrate on its books 

and records that such fail to deliver 

position resulted from a long sale, the 

participant shall by no later than the 

beginning of regular trading hours on 

the third consecutive settlement day 

following the settlement date, 

immediately close out the fail to deliver 

position by purchasing securities of like 

kind and quantity; or 

(2) If a participant of a registered 

clearing agency has a fail to deliver 

position at a registered clearing agency 

in any equity security sold pursuant to 

§ 230.144 of this chapter for thirty-five 

consecutive settlement days after the 

settlement date for a sale in that equity 

security, the participant shall, by no 

later than the beginning of regular 

trading hours on the thirty-sixth 

consecutive settlement day following 

the settlement date for the transaction, 

immediately close out the fail to deliver 

position by purchasing securities of like 

kind and quantity; 

(b) If a participant of a registered 

clearing agency has a fail to deliver 

position in any equity security at a 

registered clearing agency and does not 

close out such fail to deliver position in 

accordance with the requirements of 

paragraph (a) of this section, the 

participant and any broker or dealer 

from which it receives trades for 

clearance and settlement, including any 

market maker that would otherwise be 

entitled to rely on the exception 

provided in § 242.203(b)(2)(iii), may not 

accept a short sale order in the equity 

security from another person, or effect a 

short sale in the equity security for its 

own account, to the extent that the 

broker or dealer submits its short sales 

to that participant for clearance and 

settlement, without first borrowing the 

security, or entering into a bona-fide 

arrangement to borrow the security, 

until the participant closes out the fail 

to deliver position by purchasing 

securities of like kind and quantity and 

that purchase has cleared and settled at 

a registered clearing agency; 

(c) The participant must notify any 

broker or dealer from which it receives 

trades for clearance and settlement, 

including any market maker that would 

otherwise be entitled to rely on the 

exception provided in 

§ 242.203(b)(2)(iii): 

(1) That the participant has a fail to 

deliver position in an equity security at 

a registered clearing agency that has not 

been closed out in accordance with the 

requirements of paragraph (a) of this 

section; and 

(2) When the purchase that the 

participant has made to close out the 

fail to deliver position has cleared and 

settled at a registered clearing agency; 

and 

(d) Definitions: (1) For purposes of 

this section, the term settlement date 

shall mean the business day on which 

delivery of a security and payment of 

money is to be made through the 

facilities of a registered clearing agency 

in connection with the sale of a security. 

(2) For purposes of this section, the 

term regular trading hours has the same 

meaning as in Rule 600(b)(64) of 

Regulation NMS (17 CFR 242.600(b)(64). 

It is further ordered that, pursuant to 

our Section 12(k)(2) powers, 

§ 242.203(b)(3)(iii) of Regulation SHO is 

amended by revising paragraphs 

(b)(3)(iii) and (b)(3)(v) to read as follows: 

(iii) Provided, however, that a 

participant of a registered clearing 

agency that has a fail to deliver position 

at a registered clearing agency in a 

threshold security on the effective date 

of this amendment and which, prior to 

the effective date of this amendment, 

had been previously excepted from the 

close-out requirement in paragraph 

(b)(3) of this section (i.e., because the 

participant of a registered clearing 

agency had a fail to deliver position in 


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Federal Register / Vol. 73, No. 185 / Tuesday, September 23, 2008 / Notices 54877 

the threshold security that is attributed 

to short sales effected by a registered 

options market maker to establish or 

maintain a hedge on options positions 

that were created before the security 

became a threshold security), shall 

immediately close out that fail to deliver 

position, including any adjustments to 

the fail to deliver position, within 35 

consecutive settlement days of the 

effective date of this amendment by 

purchasing securities of like kind and 

quantity; 

* * * * * 

(v) If a participant of a registered 

clearing agency entitled to rely on the 

35 consecutive settlement day close-out 

requirement contained in paragraph 

(b)(3)(i), (b)(3)(ii), or (b)(3)(iii) of this 

section has a fail to deliver position at 

a registered clearing agency in the 

threshold security for 35 consecutive 

settlement days from the effective date 

of the amendment, the participant and 

any broker or dealer for which it clears 

transactions, including any market 

maker, that would otherwise be entitled 

to rely on the exception provided in 

paragraph (b)(2)(iii) of this section, may 

not accept a short sale order in the 

threshold security from another person, 

or effect a short sale in the threshold 

security for its own account, without 

borrowing the security or entering into 

a bona-fide arrangement to borrow the 

security, until the participant closes out 

the fail to deliver position by 

purchasing securities of like kind and 

quantity; 

It is further ordered that, pursuant to 

our Section 12(k)(2) powers, we are 

adding § 240.10b–21 to read as follows: 

§ 240.10b–21 Deception in connection with 

a seller’s ability or intent to deliver 

securities on the date delivery is due. 

PRELIMINARY NOTE to rule 10b–21: 

This rule is not intended to limit, or 

restrict, the applicability of the general 

antifraud provisions of the federal 

securities laws, such as section 10(b) of 

the Act and rule 10b–5 thereunder. 

It shall also constitute a 

‘‘manipulative or deceptive device or 

contrivance’’ as used in section 10(b) of 

this Act for any person to submit an 

order to sell an equity security if such 

person deceives a broker or dealer, a 

participant of a registered clearing 

agency, or a purchaser about its 

intention or ability to deliver the 

security on or before the settlement 

date, and such person fails to deliver the 

security on or before the settlement 

date. For purposes of this section, 

settlement date is as defined in 

§ 242.204T of this chapter. 

This Order shall be effective at 12:01 

a.m. EDT on September 18, 2008, and 

shall terminate at 11:59 p.m. on October 

1, 2008 unless further extended by the 

Commission. 

By the Commission. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22166 Filed 9–22–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: [to be published]. 

STATUS: Closed Meeting. 

PLACE: 100 F Street, NE., Washington, 

DC. 

DATE AND TIME OF PREVIOUSLY ANNOUNCED

MEETING: Thursday, September 18, 2008 

at 1 p.m. 

CHANGE IN THE MEETING: Cancellation of 

Meeting. 

The Closed Meeting scheduled for 

Thursday, September 18, 2008 has been 

cancelled. 

For further information please contact 

the Office of the Secretary at (202) 551– 

5400. 

Dated: September 18, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22195 Filed 9–22–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of Quality Resorts of 

America, Inc., Quentra Networks, Inc., 

and Quokka Sports, Inc.; Order of 

Suspension of Trading 

September 19, 2008. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Quality 

Resorts of America, Inc. because it has 

not filed any periodic reports since the 

period ended June 30, 1997. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Quentra 

Networks, Inc. because it has not filed 

any periodic reports since the period 

ended September 30, 2000. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Quokka 

Sports, Inc. because it has not filed any 

periodic reports since the period ended 

December 31, 2000. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

companies. 

Therefore, it is ordered, pursuant to 

Section 12(k) of the Securities Exchange 

Act of 1934, that trading in the 

securities of the above-listed companies 

is suspended for the period from 9:30 

a.m. EDT on September 19, 2008, 

through 11:59 p.m. EDT on October 2, 

2008. 

By the Commission. 

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E8–22373 Filed 9–19–08; 4:15 pm] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of Ragen Corp. Rainwire 

Partners, Inc., Rako Capital Corp., 

Ramtek Corp. (n/k/a Ramtek I Corp.), 

Ranger Industries, Inc., RCS Holdings, 

Inc., and Recycling Industries, Inc., 

Respondents.; Order of Suspension of 

Trading 

September 19, 2008. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Ragen Corp. 

because it has not filed any periodic 

reports since the period ended June 30, 

1993. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Rainwire 

Partners, Inc. because it has not filed 

any periodic reports since the period 

ended March 31, 2003. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Rako 

Capital Corp. because it has not filed 

any periodic reports since the period 

ended March 31, 2003. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Ramtek 

Corp. (n/k/a Ramtek I Corp.) because it 

has not filed any periodic reports since 

April 2, 1993. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Ranger 

Industries, Inc. because it has not filed 


jlentini on PROD1PC65 with NOTICES