57166 Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 

reasonably designed to monitor any 

purchases of securities by the 

Unaffiliated Fund in an Affiliated 

Underwriting once an investment by a 

Fund of Funds in the securities of the 

Unaffiliated Fund exceeds the limit of 

section 12(d)(1)(A)(i) of the Act, 

including any purchases made directly 

from an Underwriting Affiliate. The 

Board of the Unaffiliated Fund will 

review these purchases periodically, but 

no less frequently than annually, to 

determine whether the purchases were 

influenced by the investment by the 

Fund of Funds in shares of the 

Unaffiliated Fund. The Board of the 

Unaffiliated Fund will consider, among 

other things: (a) Whether the purchases 

were consistent with the investment 

objectives and policies of the 

Unaffiliated Fund; (b) how the 

performance of securities purchased in 

an Affiliated Underwriting compares to 

the performance of comparable 

securities purchased during a 

comparable period of time in 

underwritings other than Affiliated 

Underwritings or to a benchmark such 

as a comparable market index; and (c) 

whether the amount of securities 

purchased by the Unaffiliated Fund in 

Affiliated Underwritings and the 

amount purchased directly from an 

Underwriting Affiliate have changed 

significantly from prior years. The 

Board of the Unaffiliated Fund will take 

any appropriate actions based on its 

review, including, if appropriate, the 

institution of procedures designed to 

ensure that purchases of securities in 

Affiliated Underwritings are in the best 

interests of shareholders. 

7. Each Unaffiliated Fund will 

maintain and preserve permanently in 

an easily accessible place a written copy 

of the procedures described in the 

preceding condition, and any 

modifications to such procedures, and 

will maintain and preserve for a period 

of not less than six years from the end 

of the fiscal year in which any purchase 

from an Affiliated Underwriting 

occurred, the first two years in an easily 

accessible place, a written record of 

each purchase made once an investment 

by a Fund of Funds in the securities of 

an Unaffiliated Fund exceeds the limit 

of section 12(d)(1)(A)(i) of the Act, 

setting forth from whom the securities 

were acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the determinations of the Board of the 

Unaffiliated Fund were made. 

8. Prior to its investment in shares of 

an Unaffiliated Fund in excess of the 

limit in section 12(d)(1)(A)(i) of the Act, 

the Fund of Funds and the Unaffiliated 

Fund will execute a Participation 

Agreement stating, without limitation, 

that their boards of directors or trustees 

and their investment advisers 

understand the terms and conditions of 

the order and agree to fulfill their 

responsibilities under the order. At the 

time of its investment in shares of an 

Unaffiliated Fund in excess of the limit 

in section 12(d)(1)(A)(i), a Fund of 

Funds will notify the Unaffiliated Fund 

of the investment. At such time, the 

Fund of Funds will also transmit to the 

Unaffiliated Fund a list of the names of 

each Fund of Funds Affiliate and 

Underwriting Affiliate. The Fund of 

Funds will notify the Unaffiliated Fund 

of any changes to the list as soon as 

reasonably practicable after a change 

occurs. The Unaffiliated Fund and the 

Fund of Funds will maintain and 

preserve a copy of the order, the 

Participation Agreement, and the list 

with any updated information for the 

duration of the investment and for a 

period of not less than six years 

thereafter, the first two years in an 

easily accessible place. 

9. Prior to approving any investment 

advisory contract under section 15 of 

the Act, each Fund of Funds Board, 

including a majority of the Disinterested 

Trustees, will find that the advisory fees 

charged under the advisory contract are 

based on services provided that are in 

addition to, rather than duplicative of, 

services provided under the advisory 

contract(s) of any Underlying Funds in 

which the Fund of Funds may invest. 

This finding, and the basis upon which 

the finding was made, will be recorded 

fully in the minute books of the 

appropriate Fund of Funds. 

10. The Adviser will waive fees 

otherwise payable to it by the Fund of 

Funds in an amount at least equal to any 

compensation (including fees received 

pursuant to a plan adopted by an 

Unaffiliated Fund under rule 12b–1 

under the Act) received by the Adviser, 

or an affiliated person of the Adviser, 

from an Unaffiliated Underlying Fund, 

other than any advisory fees paid to the 

Adviser or an affiliated person of the 

Adviser by the Unaffiliated Fund, in 

connection with the investment by the 

Fund of Funds in the Unaffiliated 

Underlying Fund. Any Subadviser will 

waive fees otherwise payable to the 

Subadviser, directly or indirectly, by the 

Fund of Funds in an amount at least 

equal to any compensation received by 

the Subadviser, or an affiliated person of 

the Subadviser, from an Unaffiliated 

Underlying Fund, other than any 

advisory fees paid to the Subadviser or 

an affiliated person of the Subadviser by 

the Unaffiliated Fund, in connection 

with the investment by the Fund of 

Funds in the Unaffiliated Underlying 

Fund made at the direction of the 

Subadviser. In the event that the 

Subadviser waives fees, the benefit of 

the waiver will be passed through to the 

Fund of Funds. 

11. No Underlying Fund will acquire 

securities of any other investment 

company or company relying on section 

3(c)(1) or 3(c)(7) of the Act, in excess of 

the limits contained in section 

12(d)(1)(A) of the Act, except to the 

extent that such Underlying Fund: (a) 

Receives securities of another 

investment company as a dividend or as 

a result of a plan of reorganization of a 

company (other than a plan devised for 

the purpose of evading section 12(d)(1) 

of the Act); or (b) acquires (or is deemed 

to have acquired) securities of another 

investment company pursuant to 

exemptive relief from the Commission 

permitting such Underlying Fund to: (i) 

Acquire securities of one or more 

investment companies for short-term 

cash management purposes, or (ii) 

engage in interfund borrowing and 

lending transactions. 

12. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to funds of funds set 

forth in NASD Conduct Rule 2830. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23043 Filed 9–30–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58630; File No. 4–443] 

Joint Industry Plan; Order Granting 

Permanent Approval to Amendment 

No. 2 to the Plan for the Purpose of 

Developing and Implementing 

Procedures Designed To Facilitate the 

Listing and Trading of Standardized 

Options 

September 24, 2008. 

I. Introduction 

On August 12, 2008, August 18, 2008, 

August 15, 2008, August 13, 2008, 

August 8, 2008, August 14, 2008, 

August 14, 2008, and August 18, 2008, 

the American Stock Exchange LLC 

(‘‘Amex’’), the Boston Stock Exchange, 

Inc. (‘‘BSE’’), Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’), the 

International Securities Exchange, LLC 

(‘‘ISE’’), The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’), NYSE Arca Inc. 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 57167 

1 15 U.S.C. 78k–1. 

2 17 CFR 242.608. 

3On July 6, 2001, the Commission approved the 

OLPP, which was originally proposed by the Amex, 

CBOE, ISE, OCC, Phlx, and Pacific Exchange, Inc. 

(k/n/a NYSE Arca). See Securities Exchange Act 

Release No. 44521, 66 FR 36809 (July 13, 2001). On 

February 5, 2004, BSE was added as a sponsor to 

the OLPP. See Securities Exchange Act Release No. 

49199, 69 FR 7030 (February 12, 2004). On March 

21, 2008, Nasdaq was added as a sponsor to the 

OLPP. See Securities Exchange Act Release No. 

57546 (March 21, 2008), 73 FR 16393 (March 27, 

2008). 

4See Securities Exchange Act Release No. 58385 

(August 19, 2008), 73 FR 50375 (August 26, 2008) 

(‘‘Temporary Approval Order’’). 

5The Plan Sponsors represented that, in 2007, if 

this proposal had been in effect, the industry would 

not have added a new expiration year in 550 

underlying securities, which would have reduced 

the overall number of listed series (LEAP and nonLEAP series) by 8%. These LEAP series generated 

only .43% of industry trading volume in a typical 

(non-expiration) sample week. 

6 In approving this proposed OPRA Plan 

Amendment, the Commission has considered its 

impact on efficiency, competition, and capital 

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

7 15 U.S.C. 78k–1. 

8 17 CFR 242.608. 

9 15 U.S.C. 78k–1. 

10 17 CFR 242.608. 11 17 CFR 200.30–3(a)(29). 

(‘‘NYSE Arca’’), the Philadelphia Stock 

Exchange, Inc. (‘‘Phlx’’), and the 

Options Clearing Corporation (‘‘OCC’’) 

respectively, filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to section 

11A of the Securities Exchange Act 1 of 

1934 (‘‘Act’’) and Rule 608 thereunder,2

Amendment No. 2 to the Plan for the 

Purpose of Developing and 

Implementing Procedures Designed to 

Facilitate the Listing and Trading of 

Standardized Options (‘‘the Options 

Listing Procedures Plan’’ or ‘‘OLPP’’).3

Amendment No. 2 would provide a 

uniform minimum volume threshold 

per underlying class to qualify for the 

introduction of a new expiration year of 

Long-term Equity AnticiPation 

securities (‘‘LEAP’’ or ‘‘LEAPS’’) 

options. 

On August 19, 2008, the Commission 

issued notice of and approved 

Amendment No. 2 on a temporary basis 

not to exceed 120 days, and solicited 

comment on the proposal.4 The 

Commission received no comment 

letters in response to the Temporary 

Approval Order. This order approves 

Amendment No. 2 on a permanent 

basis. 

II. Description of the Proposal 

Currently, Plan Sponsors may list a 

new LEAP expiration year at the 

appropriate time without any 

consideration as to the activity level of 

the class of options. Amendment No. 2 

proposes to apply a uniform minimum 

volume threshold per underlying class 

to qualify for the introduction of a new 

expiration year of LEAP options. 

By agreeing to a minimum volume 

threshold per underlying class to qualify 

for an additional year of LEAP series, 

the Plan Sponsors intend to mitigate the 

number of option series available for 

trading. It is intended that this will in 

turn mitigate quote traffic, because 

Participants will not be submitting 

quotes in the not-listed series. The Plan 

Sponsors have agreed on a minimum 

volume threshold of 1,000 contracts 

national average daily volume in the 

preceding three calendar months 

(excluding volume in LEAP and FLEX 

series) to qualify for the introduction of 

a new LEAP expiration year.5

The Amendment does not restrict the 

introduction of a new LEAP expiration 

year in Index options, or in classes that 

have had options products trading at 

any exchange for less than six months. 

In addition, it also does not restrict, for 

a particular options class, the 

introduction of new LEAP series with 

an expiration year that has already been 

introduced by at least one Exchange. 

III. Discussion 

After careful review, the Commission 

finds that Amendment No. 2 is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder.6 Specifically, the 

Commission finds that Amendment No. 

2 to the OLPP is consistent with section 

11A of the Act 7 and Rule 608 

thereunder 8 in that it is in the public 

interest and appropriate for the 

protection of investors and the 

maintenance of fair and orderly markets. 

Specifically, the Commission believes 

that by adopting a uniform minimum 

volume threshold per underlying class 

to qualify for the introduction of a new 

expiration year for LEAP series, the 

options exchanges should reduce the 

number of option series available for 

trading, and thus may reduce increases 

in the options quote rate because market 

participants would not be submitting 

quotes in the not-yet-available LEAP 

series. Accordingly, the Commission 

believes that it is necessary or 

appropriate in the public interest, for 

the protection of investors and the 

maintenance of fair and orderly markets, 

to remove impediments to, and perfect 

mechanisms of, a national market 

system to approve Amendment No. 2 to 

the OLPP on a permanent basis. 

IV. Conclusion 

It is therefore ordered, pursuant to 

section 11A of the Act,9 and Rule 608 

thereunder,10 that proposed 

Amendment No. 2 to the OLPP be, and 

it hereby is, approved on a permanent 

basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22965 Filed 9–30–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release Nos. 33–8962; 34–58657; File No. 

4–567] 

Roundtable on Modernizing the SEC’s 

Disclosure System 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Notice of roundtable discussion; 

request for comment. 

SUMMARY: On October 8, 2008 from 9 

a.m. to 1 p.m., the Securities and 

Exchange Commission will hold a 

roundtable to discuss ways in which its 

current disclosure system can be 

modernized to provide investors more 

useful and timely information to help 

them make investment choices. The 

roundtable will be organized as two 

panels. The panels will be moderated by 

Commission staff and will include 

investor representatives, company 

officials, information intermediaries, 

practitioners, and academics. The 

roundtable is part of the Commission’s 

21st Century Disclosure Initiative. 

The roundtable will be held in the 

auditorium of SEC headquarters at 100 

F Street, NE., Washington, DC, from 9 

a.m. until approximately 1 p.m. The 

roundtable will be open to the public 

with seating on a first-come, first-served 

basis. The roundtable discussions will 

be Webcast on the Commission’s Web 

site at http://www.sec.gov. The 

roundtable agenda and other related 

materials, including a list of participants 

and moderators, will be accessible at 

http://www.sec.gov/disclosureinitiative. 

The Commission welcomes comments 

regarding any of the topics to be 

addressed at the roundtable and is 

particularly interested in comments 

responding to the questions that are set 

forth below. 

DATES: We must receive comments on or 

before October 22, 2008. 

ADDRESSES: You may submit your 

comments by any of the following 

methods: 


jlentini on PROD1PC65 with NOTICES