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9828 Federal Register / Vol. 72, No.

42 / Monday, March 5, 2007 / Notices

applicable to each series of CDOs. OCC (C) Self-Regulatory Organization’s proposed rule change between the
would have discretion to reduce the Statement on Comments on the Commission and any person, other than
requirement to something less than Proposed Rule Change Received From those that may be withheld from the
100% if research, analysis, and Members, Participants, or Others public in accordance with the
experience suggest that a lower Written comments were not and are provisions of 5 U.S.C. 552, will be
percentage is sufficient. Initially, long not intended to be solicited with respect
available for inspection and copying in
positions in CDOs will be valued at zero the Commission’s Public Reference
to the proposed rule change, and none
and will provide no offset against Section, 100 F Street, NE., Washington,
have been received.
margin requirements on the shorts. DC 20549. The text of the proposed rule
Again, based on research, analysis, and III. Date of Effectiveness of the change is available at OCC, the
experience, OCC may determine to give Proposed Rule Change and Timing for Commission’s Public Reference Room,
some value to the longs. Ultimately, Commission Action and http://www.theocc.com/
CDOs will be incorporated into the Within thirty-five days of the date of publications/rules/proposed_changes/
STANS system and valued and will be publication of this notice in the Federal sr_occ_07_01.pdf. All comments
margined on a risk basis. Register or within such longer period: received will be posted without change;
OCC does not propose to accept the Commission does not edit personal
(i) As the Commission may designate up
escrow deposits in lieu of clearing identifying information from
to ninety days of such date if it finds
margin for binary options. Therefore, submissions. You should submit only
such longer period to be appropriate
Rule 1506 states that Rule 610, which information that you wish to make
otherwise would permit such deposits, and publishes its reasons for so finding
available publicly. All submissions
does not apply to binary options. or (ii) as to which the self-regulatory
should refer to File Number SR–OCC–
organization consents, the Commission
7. Acceleration of Expiration Date—Rule 2007–01 and should be submitted on or
will:
1507 before March 26, 2007.
(A) By order approve such proposed
rule change or For the Commission by the Division of
This provision permits OCC to Market Regulation, pursuant to delegated
accelerate the expiration date of a binary (B) Institute proceedings to determine
authority.7
option when the value of the underlying whether the proposed rule change
should be disapproved. Florence E. Harmon,
interest has become fixed (e.g., where a
Deputy Secretary.
stock underlying a binary option has IV. Solicitation of Comments [FR Doc. E7–3773 Filed 3–2–07; 8:45 am]
been converted by a merger into the
right to receive a fixed amount of cash). Interested persons are invited to BILLING CODE 8010–01–P

If the value of the underlying interest submit written data, views, and
does not meet the specified criterion for arguments concerning the foregoing,
including whether the proposed rule SECURITIES AND EXCHANGE
automatic exercise, it will expire
change is consistent with the Act. COMMISSION
unexercised. Otherwise, it will be
automatically exercised. Comments may be submitted by any of [Release No. 34–55358; File No. SR–Phlx–
The proposed changes to OCC’s By- the following methods: 2007–14]
Laws and Rules are consistent with the Electronic Comments
purposes and requirements of Section Self-Regulatory Organizations;
17A of the Act, as amended, because • Use the Commission’s Internet Philadelphia Stock Exchange, Inc.;
they are designed to promote the comment form (http://www.sec.gov/ Notice of Filing and Immediate
prompt and accurate clearance and rules/sro.shtml) or Effectiveness of Proposed Rule
settlement of transactions in, including • Send an e-mail to rule- Change Extending the Dividend,
exercises of, credit default options and comments@sec.gov. Please include File Merger, and Short Stock Interest
other binary options, and to foster Number SR–OCC–2007–01 on the Strategies Fee Cap Program
cooperation and coordination with subject line.
February 27, 2007.
persons engaged in the clearance and Paper Comments Pursuant to Section 19(b)(1) of the
settlement of such transactions, to Securities Exchange Act of 1934
remove impediments to and perfect the • Send paper comments in triplicate
to Nancy M. Morris, Secretary, (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
mechanism of a national system for the notice is hereby given that on February
prompt and accurate clearance and Securities and Exchange Commission,
100 F Street, NE., Washington, DC 21, 2007, the Philadelphia Stock
settlement of such transactions, and, in Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
general, to protect investors and the 20549–1090.
filed with the Securities and Exchange
public interest. They accomplish these All submissions should refer to File
Commission (‘‘Commission’’) the
purposes by applying substantially the Number SR–OCC–2007–01. This file
proposed rule change as described in
same rules and procedures to binary number should be included on the
Items I, II, and III below, which Items
options and specifically CDOs as OCC subject line if e-mail is used. To help the
have been substantially prepared by the
applies to similar transactions in other Commission process and review your
Exchange. Phlx has designated this
cash-settled options. Other than as comments more efficiently, please use
proposal as one establishing or changing
described in this Item II, the proposed only one method. The Commission will
a due, fee, or other charge imposed by
rule change is not inconsistent with the post all comments on the Commission’s
a self-regulatory organization pursuant
existing rules of OCC, including rules Internet Web site (http://www.sec.gov/
to Section 19(b)(3)(A)(ii) of the Act 3 and
proposed to be amended. rules/sro.shtml). Copies of the
Rule 19b–4(f)(2) thereunder,4 which
submission, all subsequent
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(B) Self-Regulatory Organization’s amendments, all written statements 7 17 CFR 200.30–3(a)(12).


Statement on Burden on Competition with respect to the proposed rule 1 15 U.S.C. 78s(b)(1).
OCC does not believe that the change that are filed with the 2 17 CFR 240.19b–4.

proposed rule change would impose any Commission, and all written 3 15 U.S.C. 78s(b)(3)(A)(ii).

burden on competition. communications relating to the 4 17 CFR 240.19b–4(f)(2).

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Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9829

renders the proposal effective upon any comments it received on the additional liquidity to the Exchange and
filing with the Commission. The proposed rule change. The text of these to remain competitive with other
Commission is publishing this notice to statements may be examined at the options exchanges in connection with
solicit comments on the proposed rule places specified in Item IV below. The these types of options strategies. In
change from interested persons. Exchange has prepared summaries, set addition, the Exchange also represents
forth in Sections A, B, and C below, of that the purpose of extending the pilot
I. Self-Regulatory Organization’s
the most significant aspects of such is to recoup the license fees owed in
Statement of the Terms of Substance of
statements. connection with the trading of products
the Proposed Rule Change
A. Self-Regulatory Organization’s that carry license fees. Even with the
Phlx proposes to extend for a period assessment of the $0.05 license fee per
of one year, until March 1, 2008, the Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule contract side, the Exchange believes that
pilot programs for: (1) The $1,000 and the fee caps and rebates should continue
$25,000 fee caps on equity option Change
to encourage specialists and ROTs to
transaction and comparison charges on 1. Purpose provide liquidity for these types of
dividend,5 merger,6 and short stock options strategies.
Currently, the Exchange imposes a fee
interest 7 strategies; and (2) the license
cap on equity option transaction and This proposal is scheduled to become
fee of $0.05 per contract side imposed
comparison charges on dividend, effective for trades settling on or after
on dividend and short stock interest
merger, and short stock interest March 1, 2007 and will remain in effect
strategies, as described below. The
strategies executed on the same trading as a pilot program until March 1, 2008.
current fee caps and $0.05 per contract
day in the same options class.
side license fee are in effect as a pilot 2. Statutory Basis
Specifically, Registered Options Trader
program that is scheduled to expire on
(‘‘ROT’’) and specialist net equity option The Exchange believes that its
March 1, 2007.8 Other than extending
transaction and comparison charges are proposal to amend its schedule of fees
the pilot program for an additional one-
capped at $1,000 for dividend, merger, is consistent with Section 6(b) of the
year period until March 1, 2008, no
and short stock interest strategies Act,12 in general, and furthers the
other changes to the Exchange’s current
executed on the same trading day in the objectives of Section 6(b)(4) of the Act,13
dividend, merger and short stock
same options class.9 In addition, there is in particular, in that it is an equitable
interest strategy program, which
a $25,000 per member organization fee allocation of reasonable fees and other
includes the $0.05 per contract side
cap on equity option transaction and charges among Exchange members.
license fee, are being proposed at this
comparison charges incurred in one
time. B. Self-Regulatory Organization’s
The text of the proposed rule change month for dividend, merger, and short
stock interest strategies combined. The Statement on Burden on Competition
is available on the Exchange’s Web site
(http://www.phlx.com/exchange/ $1,000 and $25,000 fee caps are The Exchange does not believe that
phlx_rule_fil.html), at the Exchange’s implemented after any applicable the proposed rule change will impose
principal office, and at the rebates are applied to ROT and any burden on competition that is not
Commission’s Public Reference Room. specialist equity option transaction and necessary or appropriate in furtherance
comparison charges occurring as part of of the purposes of the Act.
II. Self-Regulatory Organization’s a dividend, merger, or short stock
Statement of the Purpose of, and interest strategy.10 C. Self-Regulatory Organization’s
Statutory Basis for, the Proposed Rule In addition, the Exchange assesses a Statement on Comments on the
Change license fee of $0.05 per contract side for Proposed Rule Change Received From
In its filing with the Commission, the dividend and short stock interest Members, Participants or Others
Exchange included statements strategies in connection with certain No written comments were either
concerning the purpose of, and basis for, products that carry license fees, if solicited or received.
the proposed rule change and discussed applicable.11 The applicable license fee
is assessed on every transaction and is III. Date of Effectiveness of the
5 For purposes of this proposal, the Exchange not subject to the $1,000 or $25,000 fee Proposed Rule Change and Timing for
defines a ‘‘dividend strategy’’ as transactions done caps described above, nor does it count Commission Action
to achieve a dividend arbitrage involving the towards reaching the $1,000 or $25,000
purchase, sale, and exercise of in-the-money The foregoing proposed rule change
fee caps.
options of the same class, executed prior to the date has become effective pursuant to
on which the underlying stock goes ex-dividend. The Exchange represents that the
Section 19(b)(3)(A)(ii) of the Act 14 and
See, e.g., Securities Exchange Act Release No. purpose of extending the pilot program
54174 (July 19, 2006), 71 FR 42156 (July 25, 2006) for the fee caps on equity option Rule 19b–4(f)(2) thereunder 15 because it
(SR–Phlx–2006–40).
transaction and comparison charges on establishes or changes a due, fee, or
6 For purposes of this proposal, the Exchange
dividend, merger, and short stock other charge imposed by the Exchange.
defines a ‘‘merger strategy’’ as transactions done to At any time within 60 days of the filing
achieve a merger arbitrage involving the purchase, interest strategies and the $0.05 per
sale and exercise of options of the same class and contract fee imposed on dividend and of the proposed rule change, the
expiration date, executed prior to the date on which short stock interest strategies until Commission may summarily abrogate
shareholders of record are required to elect their
March 1, 2008 is to continue to attract such rule change if it appears to the
respective form of consideration, i.e., cash or stock. Commission that such action is
Id.
7 For purposes of this proposal, the Exchange 9 See Securities Exchange Act Release No. 54424 necessary or appropriate in the public
defines a ‘‘short stock interest strategy’’ as (September 11, 2006), 71 FR 54699 (September 18, interest, for the protection of investors,
transactions done to achieve a short stock interest 2006) (SR–Phlx–2006–55). or otherwise in furtherance of the
arbitrage involving the purchase, sale and exercise 10 Currently, the Exchange rebates $0.08 per
purposes of the Act.
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of in-the-money options of the same class. Id. contract side for ROT executions and $0.07 per
8 See Securities Exchange Act Release Nos. 54381 contract side for trades occurring as part of a
12 15 U.S.C. 78f(b).
(August 29, 2006), 71 FR 52598 (September 6, 2006) dividend, merger, or short stock interest strategy.
13 15 U.S.C. 78f(b)(4).
(SR–Phlx–2006–50) and 54424 (September 11, 11 For a complete list of these product symbols,
14 15 U.S.C. 78s(b)(3)(A)(ii).
2006), 71 FR 54699 (September 18, 2006) (SR–Phlx– see the Exchange’s $60,000 Firm-Related Equity
2006–55). Option and Index Option Cap Fee Schedule. 15 17 CFR 19b–4(f)(2).

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9830 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices

IV. Solicitation of Comments For the Commission, by the Division of SMALL BUSINESS ADMINISTRATION
Market Regulation, pursuant to delegated
Interested persons are invited to authority.16
[Disaster Declaration # 10818]
submit written data, views, and Florence E. Harmon,
arguments concerning the foregoing, Deputy Secretary. Pennsylvania Disaster # PA–00009
including whether the proposed rule
[FR Doc. E7–3763 Filed 3–2–07; 8:45 am]
change is consistent with the Act. AGENCY: Small Business Administration.
BILLING CODE 8010–01–P
Comments may be submitted by any of ACTION: Notice.
the following methods:
SUMMARY: This is a Notice of the
Electronic Comments Presidential declaration of a major
SMALL BUSINESS ADMINISTRATION
• Use the Commission’s Internet disaster for Public Assistance Only for
comment form (http://www.sec.gov/ Emergence Capital Partners SBIC, L.P. the Commonwealth of Pennsylvania
rules/sro.shtml); or License No. 09/79–0454; Notice (FEMA–1684–DR), dated 02/23/2007.
Seeking Exemption Under Section 312 Incident: Severe Storms and Flooding.
• Send an e-mail to rule-
of the Small Business Investment Act, Incident Period: 11/16/2006 through
comments@sec.gov. Please include File 11/17/2006.
No. SR–Phlx–2007–14 on the subject Conflicts of Interest
Effective Date: 02/23/2007.
line.
Notice is hereby given that Emergence Physical Loan Application Deadline
Paper Comments Capital Partners SBIC, L.P., 160 Bovet Date: 04/24/2007.
Road, Suite 300, San Mateo, CA 94402, ADDRESSES: Submit completed loan
• Send paper comments in triplicate
a Federal Licensee under the Small applications to: U.S. Small Business
to Nancy M. Morris, Secretary,
Business Investment Act of 1958, as Administration, Processing and
Securities and Exchange Commission, Disbursement Center, 14925 Kingsport
amended (‘‘the Act’’), in connection
Station Place, 100 F Street, NE., Road, Fort Worth, TX 76155.
with the financing of a small concern,
Washington, DC 20549–1090.
has sought an exemption under Section FOR FURTHER INFORMATION CONTACT: A.
All submissions should refer to File 312 of the Act and Section 107.730, Escobar, Office of Disaster Assistance,
Number SR–Phlx–2007–14. This file Financings Which Constitute Conflicts U.S. Small Business Administration,
number should be included on the of Interest of the Small Business 409 3rd Street SW, Suite 6050,
subject line if e-mail is used. To help the Administration (‘‘SBA’’) Rules and Washington, DC 20416.
Commission process and review your Regulations (13 CFR 107.730). SUPPLEMENTARY INFORMATION: Notice is
comments more efficiently, please use Emergence Capital Partners SBIC, L.P. hereby given that as a result of the
only one method. The Commission will proposes to provide equity/debt security President’s major disaster declaration on
post all comments on the Commissions financing to Intacct Corporation 02/23/2007, Private Non-Profit
Internet Web site (http://www.sec.gov/ (‘‘Intacct’’), 125 S. Market Street, Suite organizations that provide essential
rules/sro.shtml). Copies of the 600, San Jose, CA 95113. The financing services of a governmental nature may
submission, all subsequent is contemplated to bridge the company’s file disaster loan applications at the
amendments, all written statements operations until either the round of address listed above or other locally
with respect to the proposed rule equity is raised or a sale occurs. announced locations.
change that are filed with the The financing is brought within the The following areas have been
Commission, and all written purview of § 107.730(a)(1) of the determined to be adversely affected by
communications relating to the Regulations because Emergence Capital the disaster:
proposed rule change between the Partners, L.P. and Emergence Capital Primary Counties:
Commission and any person, other than Associates, L.P., all Associates of Bradford, Lackawanna, Luzerne,
those that may be withheld from the Emergence Capital Partners SBIC, L.P., Sullivan, Susquehanna, Wayne,
public in accordance with the own more than ten percent of Intacct, Wyoming.
provisions of 5 U.S.C. 552, will be and therefore Intacct is considered an The Interest Rates are:
available for inspection and copying in Associate of Emergence Capital Partners
the Commission’s Public Reference SBIC, L.P. as detailed in § 107.50 of the Percent
Room. Copies of the filing also will be Regulations.
available for inspection and copying at Other (Including Non-Profit Orga-
Notice is hereby given that any nizations) With Credit Available
the principal office of Phlx. All
interested person may submit written Elsewhere ................................. 5.250
comments received will be posted
comments on the transaction to the Businesses And Non-Profit Orga-
without change; the Commission does
Associate Administrator for Investment, nizations Without Credit Avail-
not edit personal identifying able Elsewhere ......................... 4.000
U.S. Small Business Administration,
information from submissions. You
409 Third Street, SW., Washington, DC
should submit only information that The number assigned to this disaster
20416.
you wish to make available publicly. All for physical damage is 10818.
submissions should refer to File Dated: January 11, 2007.
(Catalog of Federal Domestic Assistance
Number SR–Phlx–2007–14 and should Jaime Guzmán-Fournier, Number 59008.)
be submitted on or before March 26, Associate Administrator for Investment .
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2007. [FR Doc. E7–3785 Filed 3–2–07; 8:45 am] Herbert L. Mitchell,
Associate Administrator for Disaster
BILLING CODE 8025–01–P
Assistance.
[FR Doc. E7–3783 Filed 3–2–07; 8:45 am]
16 17 CFR 200.30–3(a)(12). BILLING CODE 8025–01–P

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