968 Federal Register / Vol. 74, No. 6 / Friday, January 9, 2009 / Notices 

4Rule 18f–3(d). 

5This estimate is based on data from Form N– 

SAR, the semi-annual report that funds file with the 

Commission. In previous years, the staff estimated 

that each multiple class fund prepared and 

approved a rule 18f–3 plan. However, the staff has 

revised this estimate to reflect its belief that most 

registrants prepare and approve a single rule 18f– 

3 plan for all series funds offered by the registrants. 

6The estimate reflects the assumption that each 

registrant prepares and approves a rule 18f–3 plan 

every two years when issuing a new fund or new 

class or amending a plan (or that 560 of all 1,120 

registrants prepare and approve a plan each year). 

The estimate assumes that the time required to 

prepare a plan is 6 hours per plan (or 3360 hours 

for 560 registrants annually), and the time required 

to approve a plan is an additional 4 hours per plan 

(or 2240 hours for 560 registrants annually). 

7This hourly rate estimate is derived from annual 

salaries reported in: Securities Industry and 

Financial Markets Association, Management and 

Professional Earnings in the Securities Industry 

(2007), modified to account for an 1800-hour work 

year and multiplied by 5.35 to account for bonuses, 

firm size, employee benefits and overhead. 

8This hourly rate estimate is derived from fund 

representatives. 

1Most filings are made via the Commission’s 

electronic filing system; therefore, paper filings 

under Rule 30b2–1 occur only in exceptional 

circumstances. Electronic filing eliminates the need 

for multiple copies of filings. 

2Annual and periodic reports to the Commission 

become part of its public files and, therefore, are 

available for use by prospective investors and 

stockholders. 

3Rule 30b2–1(a) [17 CFR 270.30b2–1(a)]. 

18f–3 plan’’).4 Approval of the plan 

must occur before the fund issues any 

shares of multiple classes and whenever 

the fund materially amends the plan. In 

approving the plan, a majority of the 

fund board, including a majority of the 

fund’s independent directors, must 

determine that the plan is in the best 

interests of each class and the fund as 

a whole. 

The requirement that the fund prepare 

and directors approve a written rule 

18f–3 plan is intended to ensure that the 

fund compiles information relevant to 

the fairness of the separate arrangement 

and expense allocation for each class, 

and that directors review and approve 

the information. Without a blueprint 

that highlights material differences 

among classes, directors might not 

perceive potential conflicts of interests 

when they determine whether the plan 

is in the best interests of each class and 

the fund. In addition, the plan may be 

useful to Commission staff in reviewing 

the fund’s compliance with the rule. 

There are approximately 5,300 

multiple class funds offered by 1,120 

registrants.5 Based on a review of 

typical rule 18f–3 plans, the 

Commission’s staff estimates that the 

1,120 registrants together make an 

average of 560 responses each year to 

prepare and approve a written rule 18f– 

3 plan, requiring approximately 10 

hours per response and a total of 5,600 

burden hours per year in the aggregate.6

The staff estimates that preparation of 

the rule 18f–3 plan may require 6 hours 

of the services of an attorney employed 

by the fund, at a cost of approximately 

$295 per hour for professional time,7

and approval of the plan may require 4 

hours of the services of the board of 

directors, at a cost of approximately 

$2000 per hour.8 The staff therefore 

estimates that the aggregate annual cost 

of complying with the paperwork 

requirements of the rule is 

approximately $5,471,200 ((6 hours × 

560 responses × $295 = $991,200) + (4 

hours × 560 responses × $2000 = 

4,480,000)). 

The estimated annual burden of 5,600 

hours represents a decrease of 110 hours 

over the prior estimate of 5,710 hours. 

The decrease in burden hours is 

attributable to a change in the estimate 

of the number of responses that are 

submitted pursuant to the rule. 

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act. The estimate 

is not derived from a comprehensive or 

even a representative survey or study of 

the costs of Commission rules. 

Complying with this collection of 

information requirement is mandatory. 

Responses will not be kept confidential. 

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 control 

number. 

Please direct general comments 

regarding the above information to the 

following persons: (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or send an e-mail to: 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Charles Boucher Director/CIO, 

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. Comments must 

be submitted to OMB within 30 days of 

this notice. 

January 5, 2009. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–159 Filed 1–8–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Filings and 

Information Services, Washington, DC 

20549–0213. 

Extension: 

Rule 30b2–1; SEC File No. 270–213; OMB 

Control No. 3235–0220. 

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 (the 

‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 30b2–1 (17 CFR 270.30b2–1) 

under the Investment Company Act of 

1940 (15 U.S.C. 80a) requires the filing 

of four copies of every periodic or 

interim report transmitted by or on 

behalf of any registered investment 

company to its stockholders.1 This 

requirement ensures that the 

Commission has information in its files 

to perform its regulatory functions and 

to apprise investors of the operational 

and financial condition of a registered 

investment companies.2

Registered management investment 

companies are required to send reports 

to stockholders at least twice annually. 

In addition, under rule 30b2–1, each 

registered investment company is 

required to file with the Commission 

Form N–CSR (17 CFR 274.128), 

certifying the financial statements.3 The 

annual burden of filing the reports is 

included in the burden estimate for 

Form N–CSR; however, we are 

requesting one burden hour remain in 

inventory for administrative purposes. 

The burden estimate for rule 30b2–1 

is made solely for the purposes of the 

Act and is not derived from a 

comprehensive or even representative 

survey or study of the costs of 

Commission rules and forms. 

The collection of information under 

rule 30b2–1 is mandatory. The 

information provided by rule 30b2–1 is 

not kept confidential. 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. 

Please direct general comments 

regarding the above information to the 

following persons: (i) Desk Officer for 

the Securities and Exchange 

Commission, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or send an e-mail to: 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 6 / Friday, January 9, 2009 / Notices 969 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5The Exchange does not believe the type of 

extreme situation that is covered by the proposed 

rule would occur in the normal course of trading. 

Rather, this type of situation could potentially 

occur as a result of, for example, an error in a 

paticipant’s quotation system that causes a market 

maker to severly misprice an option. 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Charles Boucher, Director/CIO, 

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. Comments must 

be submitted to OMB within 30 days of 

this notice. 

January 5, 2009. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–160 Filed 1–8–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59197; File No. SR–BSE– 

2008–52] 

Self-Regulatory Organizations; the 

Boston Stock Exchange, Inc.; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

BOX Rules Relating to Obvious Error 

Provisions To Address Catastrophic 

Errors, Erroneous Quotes or Prints in 

the Underlying Security, and Some 

Additional Modifications 

January 5, 2009. 

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 December 

24, 2008, the Boston Stock Exchange, 

Inc.) (‘‘BSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by BSE. The Exchange 

filed the proposed rule change as a 

‘‘non-controversial’’ proposed rule 

change pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b-4(f)(6) 

thereunder,4 which renders the proposal 

effective upon filing with the 

Commission. 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 amend 

Chapter V, Section 20 (Obvious Errors) 

of the Rules of the Boston Options 

Exchange Group, LLC ) (‘‘BOX’’) to 

address catastrophic errors ) 

(‘‘Catastrophic Errors’’) as well as 

erroneous quotes or prints in the 

underlying security and some additional 

modifications to this section. The text of 

the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet Web site at http:// 

nasdaqtrader.com/Trader.aspx?id=

Boston_Stock_Exchange. 

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 

self-regulatory organization 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 self-regulatory organization 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 

The purpose of the proposed rule 

change is to amend Chapter V, Section 

20 of the BOX Rules (the ‘‘Obvious Error 

Rule’’) to address certain extreme 

circumstances. In particular, the 

Exchange proposes to add criteria for 

identifying ‘‘Catastrophic Errors’’ and 

making adjustments when Catastrophic 

Errors occur, as well as a streamlined 

procedure for reviewing actions taken in 

these extreme circumstances. This 

proposed rule change also seeks to 

incorporate provisions within the BOX 

Obvious Error Rule which will allow for 

the nullification or adjustment of trades 

that are the result of either an erroneous 

quote or print in the underlying 

security. In addition, the proposed rule 

also amends the Supplementary 

Material to remove references to a $.05 

offer and to provide that executions may 

be busted, if at least one strike below 

(for calls) or above (for puts), rather than 

the three strikes. 

The Exchange notes that, currently 

under the Obvious Error Rule, trades 

that result from an Obvious Error may 

be adjusted or busted according to 

objective standards. Under the rule, 

whether an Obvious Error has occurred 

is determined by comparing the 

execution price to the Theoretical Price 

of the option. The rule requires that 

participants notify the Market 

Operations Center ) (‘‘MOC’’) within a 

short time period following the 

execution of a trade (five minutes for 

market makers and 20 minutes for nonmarket makers) if they believe the trade 

qualifies as an Obvious Error. Trades 

that qualify for adjustment are adjusted 

under the rule to a price that matches 

the Theoretical Price plus or minus an 

adjustment value, which is $.15 if the 

theoretical value is under $3 and $.30 if 

the theoretical value is at or above $3. 

By adjusting trades above or below the 

Theoretical Price, the rule assesses a 

‘‘penalty’’ in that the adjustment price is 

not as favorable as what the party 

making the error would have received 

had it not made the error. 

In formulating the Obvious Error 

Rule, the Exchange has weighed 

carefully the need to assure that one 

market participant is not permitted to 

receive a wind-fall at the expense of 

another market participant that made an 

Obvious Error, against the need to 

assure that market participants are not 

simply being given an opportunity to 

reconsider poor trading decisions. The 

Exchange states that, while it believes 

that the Obvious Error Rule strikes the 

correct balance in most situations, in 

some extreme situations, participants 

may not be aware of errors that result in 

very large losses within the time periods 

required under the rule. In this type of 

extreme situation, the Exchange believes 

participants should be given more time 

to seek relief so that there is a greater 

opportunity to mitigate very large losses 

and reduce the corresponding large 

wind-falls. However, to maintain the 

appropriate balance, the Exchange 

believes participants should only be 

given more time when the execution 

price is much further away from the 

Theoretical Price than is required for 

Obvious Errors, and that the adjustment 

‘‘penalty’’ should be much greater, so 

that relief is only provided in extreme 

circumstances.5

Accordingly, the Exchange proposes 

to amend the Obvious Error Rule to 

address ‘‘Catastrophic Errors.’’ Under 

the proposed rule, participants will 

have until 8:30 a.m. Eastern Time on the 

day following the trade to notify the 

MOC of a potential Catastrophic Error. 

For trades that take place in an expiring 

series on expiration Friday, participants 

must notify the MOC of a potential 

Catastrophic Error by 5 p.m. Eastern 

Time that same day. Once a participant 

has notified the MOC of a Catastrophic 

Error within the required time period, 

mstockstill on PROD1PC66 with NOTICES