13986 Federal Register / Vol. 66, No. 46 / Thursday, March 8, 2001 / Notices

12For purposes only of accelerating the operative

date of this proposal, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. See

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

13See 17 CFR 240.19b–4(f)(6)(iii).

14 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See letter from Hassan Abedi, Attorney,

Regulatory Policy, PCX, to Nancy Sanow, Assistant

Director, Division of Market Regulation,

Commission, dated February 28, 2001. In

Amendment No. 1, the PCX made certain technical

changes to its proposed rule language and added

various sections that were erroneously excluded

from the original filing. In addition, PCX

represented that holders of options on Fund Shares

who exercise and receive the underlying Fund

Shares must receive, like any purchaser of Fund

Shares, a product description or prospectus, as

appropriate.

4 In general, FLEX options provide investors with

the ability to customize basic option features

including size, expiration date, exercise style, and

certain exercise prices. See PCX Rule 8. 5Currently, the Exchange trades unit investment

trust securities known as Portfolio Depository

Receipts and Investment Company Units, which are

issued by an open-end management investment

company. Portfolio Depository Receipts and

Investment Company Units are listed on the PCX

pursuant to PCX Equities Rules 8.100(a) and

5.2(j)(3), respectively, and trade like shares of

common stock. The Commission notes that not all

Portfolio Depository Receipts and Investment

Company Units trading on the PCX may meet the

standards for options trading approved by this

order.

Wheel in equity options trading

stations, requiring the Exchange to

discontinue the use of the 100 Spoke

RAES Wheel as of March 1, 2001, would

cause disruption to those trading

stations, and thus, be disruptive to

investors and the public interest.

Accordingly, the Commission finds

good cause to waive the 30-day

operative waiting period and to

designate that the proposal become

operative immediately.12

The Commission has also waived the

requirement that the Exchange provide

written notice of its intent to file the

proposed rule change at least five

business days prior to the date of

filing.13

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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. 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. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to File No.

SR–CBOE–01–07 and should be

submitted by March 29, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–5691 Filed 3–7–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44025; File No. SR–PCX

01–12]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change and Amendment No. 1 by

the Pacific Exchange, Inc. Relating to

Listing and Trading of Options on

Exchange-Traded Fund Shares

February 28, 2001.

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 February

27, 2001, the Pacific Exchange, Inc.

(‘‘PCX’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) the proposed

rule change as described in Items I and

II below, which Items have been

prepared by the PCX. On February 28,

2001, the PCX submitted Amendment

No. 1 to the proposed rule change.3 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons and to

approve the proposal, as amended, on

an accelerated basis.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The PCX proposes to amend its rules

to create listing criteria and amend

trading rules to allow the Exchange to

list options on Exchange-Traded Fund

Shares. The text of the proposed rule

change is available at the PCX or the

Commission.

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

PCX 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 III below. The PCX 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 provide for the trading of

options and FLEX options on ExchangeTraded Fund Shares.4 As noted above,

Exchange-Traded Fund Shares are

exchange-listed securities representing

interests in open-end unit investment

trusts or open-end management

investment companies (‘‘Funds’’) that

hold securities based on an index or a

portfolio of securities.5 ExchangeTraded Fund Shares are issued in

exchange for an ‘‘in kind’’ deposit of a

specified portfolio of securities, together

with a cash payment, in minimum size

aggregations or multiples thereof

(‘‘Creation Units’’). The size of the

applicable Creation Unit size

aggregation is set forth in the Fund’s

prospectus, and varies from one series

of Exchange-Traded Fund Shares to

another, but generally is of substantial

size (e.g., value in excess of $450,000

per Creation Unit). A Fund, generally,

will issue and sell Exchange-Traded

Fund Shares in Creation Unit size

through a principal underwriter on a

continuous basis at the net asset value

per share next determined after an order

to purchase Exchange-Traded Fund

Shares and the appropriate securities

are received. Following issuance,

Exchange-Traded Fund Shares are

traded on an exchange like other equity

securities, and equity trading rules

apply. Likewise, redemption of

Exchange-Traded Fund Shares is made

in Creation Unit size and ‘‘in kind,’’

with a portfolio of securities and cash

exchanged for the Exchange-Traded

fund shares that have been tendered for

redemption.

Generally, options on ExchangeTraded Fund Shares are proposed to be

Federal Register / Vol. 66, No. 46 / Thursday, March 8, 2001 / Notices 13987

6The 1000 share feature was proposed and

approved by the American Stock Exchange

(‘‘Amex’’) and The Options Clearing Corporation.

Securities Exchange Act Release Nos. 40157 (July 1,

1998), 63 FR 37426 (July 10, 1998) (SR–Amex–96–

44) and 40132 (June 25, 1998), 63 FR 37467 (July

6, 1998) (SR–OCC–97–02). In the event the

Exchange lists options covering both 100 and 1000

of the same underlying Exchange-Traded Fund

Shares, the Exchange will assign separate trading

symbols to the options and will issue an

Information Circular to all its members advising of

the trading symbols.

7Specifically, PCX Rule 3.6(a) requires the

underlying security to have a public float of

7,000,000 shares, 2,000 holders, trading volume of

2,400,000 shares in the preceding 12 months, a

share price of $7.50 for the majority of the business

days during the three calendar months preceding

the date of the selection, and that the issuer of the

underlying security is in compliance with the Act.

8This assumes that the authorized creation

participant has undertaken to deliver the shares as

soon as possible and such undertaking has been

secured by the delivery and maintenance of

collateral consisting of cash or cash equivalents

satisfactory to the Fund which underlies the option,

as described in the Fund prospectus.

9Specifically, Commentary .01 to PCS Rule 3.7(a)

provides that an underlying security will not meet

the Exchange’s requirements for continued listing

when, among other things; (1) there are fewer than

6,300,000 publicly-held shares; (2) there are fewer

than 1,600 holders; (3) trading volume was less than

1,800,000 shares in the preceding twelve months;

or (4) the share price of the underlying security

closed below $5 on a majority of the business days

during the preceding 6 months.

10An American-style option may be exercised at

any time prior to its expiration. A European-style

option, however, may be exercised only on its

expiration date.

traded on the Exchange pursuant to the

same rules and procedures that apply to

trading in options on equity securities.

However, the Exchange is also

proposing to list FLEX options on

Exchange-Traded Fund Shares and

some options will have a unit of trading

of 1000 Exchange-Traded Fund Shares.

The Exchange will list option contracts

covering either 100 or 1000 ExchangeTraded Fund Shares, or both, depending

on the price and volatility of the

underlying Exchange-Traded fund

Shares and the popularity of the

options.6

The proposed position, exercise and

reporting limits for options on

Exchange-Traded Fund Shares would be

the same as those established for stock

options as set forth in PCX Rules 6.8(a),

6.9, and 6.6(a), respectively. The PCX

anticipates that most options on

Exchange-Traded Fund Shares initially

will qualify for only the lowest position

limit. As with other equity options, the

position limits will be increased for

options if the volume of trading in the

Exchange-Traded Fund Shares increases

to meet the requirements of a higher

limit. As is currently the case for all

FLEX options, no position or exercise

limits will be applicable to FLEX

options overlying Exchange-Traded

Fund Shares.

The listing and maintenance

standards proposed for options on

Exchange-Traded Fund Shares are set

forth in proposed Commentary .06

under PCX Rule 3.6 and in proposed

Commentary .10 under PCX Rule 3.7,

respectively. Pursuant to the proposed

initial listing standards, PCX will only

list options on Exchange-Traded Fund

Shares that are principally traded on a

national securities exchange or through

the facilities of a national securities

association and reported as national

market securities. In addition, the initial

listing standards require that either: (1)

The Exchange-Traded Fund Shares meet

the uniform options listing standards set

forth in PCX Rule 3.6(a), which include

minimum public float, trading volume,

and share price of the underlying

security in order to list the option; 7 or

(2) the Exchange-Traded Fund Shares

must be available for creation or

redemption each business day in cash or

in kind from the Fund at a price related

to the net asset value, and the Exchange

will require that the investment

company shall provide that ExchangeTrader Fund Shares may be created

even though some or all of the securities

needed to be deposited have not been

received by the Fund.8

In addition, the initial listing

standards require that: (1) Any

Exchange-Traded Fund Share with nonU.S. stocks in the underlying index or

portfolio that are not subject to

comprehensive surveillance agreements

do not in the aggregate represent more

than 50% of the weight of the index or

portfolio; (2) stocks for which the

primary market is in any one country

that is not subject to a comprehensive

surveillance agreement do not represent

20% or more of the weight of the index

or portfolio; and (3) stocks for which the

primary market is in any two countries

that are not subject to comprehensive

surveillance agreements do not

represent 33% or more of the weight of

the index or portfolio.

The Exchange’s proposed

maintenance standards provide that if a

particular series of Exchange-Traded

Fund Shares should cease to trade on an

exchange or as national market

securities traded through the facilities of

a national securities association, there

will be no opening transactions in the

options on the Exchange-Traded Fund

Shares, and all such options will trade

on a liquidation-only basis. In addition,

the PCX will consider the suspension of

opening transactions in any series of

options of the class covering ExchangeTraded Fund Shares if: (1) The options

fail to meet the uniform equity option

maintenance standards in Commentary

.01 to Rule 3.7,9 when the options were

listed pursuant to the equity option

listing standards of PCX Rule 3.6(a); (2)

following the initial twelve-month

period beginning upon the

commencement of trading of the

Exchange-Traded Fund Shares on a

national securities exchange or as

national market securities through the

facilities of a national securities

association there are fewer than 50

record and/or beneficial holders of

Exchange-Traded Fund Shares for 30 or

more consecutive trading days; (3) the

value of the index or portfolio of

securities on which the ExchangeTraded Fund Shares are based is no

longer calculated or available; or (4)

such other event shall occur or

condition exist that in the opinion of the

Exchange makes further dealing in such

options on the Exchange inadvisable.

Options on Exchange-Traded Fund

Shares will be physically-settled and

will have the American-style exercise

feature used on all standardized equity

options. The Exchange, however, also

proposes to trade FLEX options, which

will be available with both the

American-style and European-style

exercise feature, as well as other FLEX

option features.10

The proposed margin requirements

for options on Exchange-Traded Fund

Shares are at the same levels that apply

to options generally under PCX Rule

2.16, except, with respect to ExchangeTraded Fund Shares based on a broadbased index or portfolio, minimum

margin must be deposited and

maintained equal to 100% of the current

market value of the option plus 15% of

the market value of equivalent units of

the underlying security value.

Exchange-Traded Fund Shares that hold

securities based upon a narrow-based

index or portfolio must have options

margin that equals at least 100% of the

current market value of the contract

plus 20% of the market value of

equivalent units of the underlying

security value. In this respect, the

margin requirements proposed for

options on Exchange-Traded Fund

Shares are comparable to margin

requirements that currently apply to

broad-based and narrow-based index

options.

The Exchange believes it has the

necessary systems capacity to support

the additional series of options that

would result from the introduction of

options on Exchange-Traded Fund

Shares, and it has been advised that the

Options Price Reporting Authority

13988 Federal Register / Vol. 66, No. 46 / Thursday, March 8, 2001 / Notices

11The Exchange confirmed with OPRA that it

will have the capacity to support these additional

series related to trading of Exchange-Traded Fund

Shares.

12 15 U.S.C. 78f(b)(5).

13 15 U.S.C. 78f(b)(5).

14The Commission hereby incorporates by

reference its findings and conclusions with respect

to the appropriateness of FLEX Equity options

generally. See Securities Exchange Act Release No.

37336 (June 19, 1996), 61 FR 33558 (June 27, 1996).

15 In approving this rule, the Commission notes

that it has also considered the proposed rule’s

impact on efficiency, competition, and capital

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

16The PCX represents that holders of options on

Fund Shares who exercise and receive the

underlying Fund Shares will receive, like any

purchaser of Fund Shares, a product description or

prospectus, as appropriate. See Amendment No. 1.

17See supra not 8.

18See supra note 7.

(‘‘OPRA’’) 11 also will have the capacity

to support these additional series due to

recent enhancements.

2. Statutory Basis

The PCX believes that the listing and

trading of options on Exchange-Traded

Fund Shares should provide investors

with another choice of venue to conduct

trading in these products. Thus, the

Exchange believes that the proposed

rule change is consistent with section

6(b)(5) of the Act 12 in that it is designed

to promote just and equitable principles

of trade, to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system and, in general, to protect

investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The PCX does not believe that the

proposed rule change will impose any

inappropriate burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

The PCX has neither solicited nor

received written comments on the

proposed rule change.

III. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing,

including whether the proposed rule

change, as amended, is consistent with

the Act. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street, NW, Washington, DC 20549–

0609. 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. Copies of such filing will also be

available for inspection and copying at

the principal office of the PCX. All

submissions should refer to File No.

SR–PCX 01–12 and should be submitted

by March 29, 2001.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission finds that the

proposed rule change, as amended, is

consistent with the requirements of the

Act and the rules and regulations

thereunder applicable to a national

securities exchange, and, in particular,

with the requirements of Section

6(b)(5).13 Specifically, the Commission

believes that providing for the listing

and trading of options and FLEX Equity

options 14 on Exchange-Traded Fund

Shares should give investors a better

means to hedge their positions in the

underlying Fund Shares. Further, the

Commission believes that pricing of the

underlying Fund Shares may become

more efficient and market makers in

these shares, by virtue of enhanced

hedging opportunities, may be able to

provide deeper and more liquid

markets. In sum, the Commission

believes that options on Fund Shares

likely will engender the same benefits to

investors and the market place that exist

with respect to options on common

stock, thereby serving to promote the

public interest and remove impediments

to a free and open securities market.15

As a general matter, the Commission

believes that a regulatory system

designed to protect public customers

must be in place before the trading of

sophisticated financial instruments,

such as options on Fund Shares, can

commence trading on a national

securities exchange. The Commission

notes that the trading of standardized

exchange-traded options occurs in an

environment that is designed to ensure,

among other things, that: (1) The special

risks of options are disclosed to public

customers; (2) only investors capable of

evaluating and bearing the risks of

options trading are engaged in such

trading; and (3) special compliance

procedures are applicable to options

accounts. With regard to position and

exercise limits, the Commission finds

that it is appropriate to adopt the tiered

approach used in setting position and

exercise limits for standardized stock

options. This approach should serve to

minimize potential manipulation and

market impact concerns. In addition, the

Commission believes that the rationale

for allowing FLEX Equity options

generally to trade without position and

exercise limits is equally applicable in

the context of FLEX Equity options on

Fund Shares.

Accordingly, because options and

FLEX Equity options on Fund Shares

will be subject to the same regulatory

regime as the other options and FLEX

Equity options currently traded on the

Phlx, the Commission believe that

adequate safeguards are in place to

ensure the protection of investors in

options and FLEX Equity options on

Fund Shares.

The Commission also believes that it

is appropriate to permit the PCX to list

and trade options, including FLEX

Equity options, on Exchange-Traded

Fund Shares given that these options

must meet specific requirements related

to the protection of investors.16 First,

the Exchange’s listing and delisting

criteria for options on Fund Shares are

adequate. With regard to initial listing,

the proposal requires that either: (1) The

underlying Fund Shares meet the PCX’s

uniform options listing standards; or (2)

the Exchange-Traded Fund Shares must

be available for creation or redemption

each business day in cash or in kind

from the Fund at a price related to the

net asset value, and the Exchange will

require that the underlying Fund Shares

may be created even though some or all

of the securities needed to be deposited

have not been received by the Fund.17

This listing requirement should ensure

that there exists sufficient supply of the

underlying Fund Shares so that a short

call writer, for example, will have the

ability to secure delivery of the Fund

Shares upon exercise of the option.

The Commission believes the PCX has

adequately addressed potential concerns

about the ability to produce Fund

Shares upon exercise of the option

through the adoption of the listing

standards set forth above. In particular,

options listed pursuant to the uniform

options listing standards will have to

meet the options maintenance listing

standards that require, among other

things, that a minimum number of Fund

Shares be outstanding to continue

trading the options.18 The alternative

listing criteria, noted above, should also

help to ensure that the underlying Fund

Shares will be available upon exercise

by requiring the Fund to allow market

participants to create Fund Shares even

though some or all of the necessary

securities needed to be deposited are

Federal Register / Vol. 66, No. 46 / Thursday, March 8, 2001 / Notices 13989

19See supra note 8.

20See Securities Exchange Act Release No. 40157

(July 1, 1998), 63 FR 37426 (July 10, 1998), (SR–

Amex–96–44); Securities Exchange Release No.

43921 (February 2, 2001), 66 FR 9739 (February 9,

2001) (SR–Phlx–00–107); Securities Exchange Act

Release No. 40166 (July 2, 1998), 63 FR 37430 (July

10, 1998) (SR–CBOE–97–03).

21 15 U.S.C. 78s(b).

22 15 U.S.C. 78s(b)(2).

23 17 CFR 200.30–3(a)(12).

not available.19 Although there is no

absolute assurance that market

participants will go ahead and create

Fund Shares in the event a short call

writer needs to purchase Fund Shares to

meet an exercise notice, it is likely that

arbitrage opportunities will create an

incentive to do so. Further, in the event

there are not enough Fund Shares to

meet exercise requirements, as with

other physically-settled equity options,

the Options Clearing Corporation has

rules that would apply to such

situations.

Second, the Commission believes that

the surveillance standard developed by

the PCX for options on Fund shares is

adequate to address the concerns

associated with the listing and trading

of such securities. Specifically, the PCX

has proposed that: (1) Any Fund Share

with non-US stocks in the underlying

index or portfolio that are not subject to

comprehensive surveillance agreements

do not in the aggregate represent more

than 50% of the weight of the index or

portfolio; (2) stocks for which the

primary market is in any one country

that is not subject to a comprehensive

surveillance agreement do not represent

20% or more of the weight of the index

or portfolio; and (3) stocks for which the

primary market is in any two countries

that are not subject to comprehensive

surveillance agreements do not

represent 33% or more of the weight of

the index or portfolio.

As a general matter, the Commission

believes that comprehensive

surveillance agreements provide an

important deterrent to manipulation

because they facilitate the availability of

information needed to fully investigate

a potential manipulation if it were to

occur. These agreements are especially

important in the content of derivative

products based on foreign securities

because they facilitate the collection of

necessary regulatory, surveillance and

other information from foreign

jurisdictions. In evaluating the current

proposal, the Commission believes that

requiring comprehensive surveillance

agreements to be in place between the

PCX and the primary markets for foreign

securities that comprise 50% or more of

the weight of the underlying index or

portfolio upon which Fund Shares are

based, as well as the other conditions

discussed above, provides an adequate

mechanism for the exchange of

surveillance sharing information

necessary to detect and deter possible

market manipulations. Although the

Commission recognizes that up to 50%

of the Portfolio’s value may not be

covered by comprehensive surveillance

agreements, the other requirements will

ensure that a significant percentage of

the portfolio is not made up of securities

from uncovered countries. Further, as to

the domestically-traded Fund Shares

themselves and the domestic stocks in

the underlying index or portfolio upon

which Fund Shares are based, the

Intermarket Surveillance Group

Agreement will be applicable to the

trading of options on Fund Shares.

Finally, the Commission believes that

it is appropriate to require minimum

margin of 100% of the current market

value of the option plus 15% of the

market value of the underlying security

value (‘‘broad-based margin’’) for

options on Fund Shares based on a

broad-based index or portfolio and for

options on Fund Shares which have

been approved to date. Moreover, the

Commission believes that requiring

minimum margin of 100% of the current

market value of the option plus 20% of

the market value of the underlying

security value (‘‘narrow-based margin’’)

for options on Fund Shares based on a

narrow-based index or portfolio is

appropriate. The Commission notes that

these margin requirements for options

on Exchange-Traded Fund Shares are

comparable to margin requirements that

currently apply to broad-based and

narrow-based index options.

The Commission finds good cause for

approving the proposed rule change

(SR–PCX–01–12), as amended, prior to

the thirtieth day after the date of

publication of notice thereof in the

Federal Register. The Commission notes

that the proposed rule change, as

amended, is similar to rules previously

approved by the Commission for the

American Stock Exchange, LLC, the

Chicago Board Options Exchange, Inc.,

and the Philadelphia Stock Exchange,

Inc.20 The Commission also observes

that the proposed rule change, as

amended, concerns issues that

previously have been the subject of a

full comment period pursuant to

Section 19(b) of the Act.21 The

Commission does not believe that the

proposed rule change, as amended,

raises novel regulatory issues that were

not addressed in the previous filings.

Moreover, the Commission believes that

approving the listing and trading of

Exchange-Traded Fund Shares on the

PCX will increase industry

competitiveness by providing an

additional venue for the trading of such

issues, to the benefit of the investor.

Accordingly, the Commission finds that

there is good cause, consistent with

section 6(b)(5) of the Act, to approve the

amended proposal on an accelerated

basis.

It is Therefore Ordered, pursuant to

Section 19(b)(2) of the Act,22 that the

proposed rule change (SR–PCX–01–12),

as amended, is hereby approved on an

accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.23

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–5692 Filed 3–7–01; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[Amendment #1]

Declaration of Disaster #3318; State of

Mississippi

In accordance with a notice received

from the Federal Emergency

Management Agency, dated February

27, 2001, the above-numbered

Declaration is hereby amended to

include Alcorn, Attala, Bolivar,

Calhoun, Carroll, Chickasaw, Choctaw,

Clay, Coahoma, Grenada, Humphreys,

Itawamba, Lafayette, Lee, Leflore,

Madison, Monroe, Noxubee, Panola,

Pontotoc, Prentiss, Quitman, Sunflower,

Tallahatchie, Tippah, Tishomingo,

Union, Washington, Webster, Winston,

Yalobusha and Yazoo counties in the

State of Mississippi as disaster areas due

to damages caused by severe storms and

tornadoes. This notice also amends the

incident period for this disaster as

beginning on February 16, 2001 and

continuing.

In addition, applications for economic

injury loans from small businesses

located in the following contiguous

counties may be filed until the specified

date at the previously designated

location: Benton, Hinds, Issaquena,

Kemper, Leake, Marshall, Montgomery,

Neshoba, Rankin, Scott, Sharkey, Tate,

Tunica and Warren in the State of

Mississippi; Colbert, Franklin,

Lauderdale, Marion, and Sumter

Counties in the State of Alabama;

Chicot, Desha and Phillips Counties in

the State of Arkansas; East Carroll in the

State of Louisiana; Hardeman, Hardin

and McNairy Counties in the State of

Tennessee. Any counties contiguous to

the above named primary counties and