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					                                                                                           Monday,
                                                                                           April 5, 2004




                                                                                           Part V

                                                                                           Securities and
                                                                                           Exchange
                                                                                           Commission
                                                                                           17 CFR Parts 232, 240, and 249
                                                                                           Proposed Rule Changes of Self-Regulatory
                                                                                           Organizations; Proposed Rule




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     17864                     Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules

     SECURITIES AND EXCHANGE                                 submissions. You should submit only                      interested persons. In addition, the
     COMMISSION                                              information that you wish to make                        proposed amendments should permit
                                                             available publicly.                                      the Commission to monitor and process
     17 CFR Parts 232, 240, and 249                          FOR FURTHER INFORMATION CONTACT:                         proposed SRO rule changes more
     [Release No. 34–49505; File No. S7–18–04]               Florence Harmon, Senior Special                          efficiently and effectively. Second, the
                                                             Counsel, at (202) 942–0773; Elizabeth                    Commission would mandate that SROs
     RIN 3235–AJ20                                                                                                    promptly post on their websites a copy
                                                             Badawy, Accountant, at (202) 942–0740;
                                                             Joseph Morra, Special Counsel, at (202)                  of all proposed rule changes filed with
     Proposed Rule Changes of Self-
                                                             942–0781; Sonia Trocchio, Special                        the Commission. Website posting of
     Regulatory Organizations
                                                             Counsel, at (202) 942–0753; Cyndi N.                     SRO proposed rule changes should
     AGENCY:  Securities and Exchange                        Rodriguez, Special Counsel, at (202)                     facilitate the ability of interested
     Commission.                                             942–4163; Michael L. Milone, Special                     persons to comment on the proposals
     ACTION: Proposed rule.                                  Counsel, at (202) 942–0179 (clearance                    and save resources currently used to
                                                             and settlement SROs), Timothy Fox,                       monitor the Commission’s Public
     SUMMARY: The Securities and Exchange                                                                             Reference Room for proposed rule
                                                             Attorney, at (202) 942–0146, Division of
     Commission (‘‘Commission’’) is                          Market Regulation, Securities and                        changes. The Commission is also
     proposing to amend certain                              Exchange Commission, 450 Fifth Street                    proposing that SROs maintain a current
     requirements relating to rule changes                   NW., Washington, DC 20549–1001.                          and complete version of their rules on
     proposed by self-regulatory                                                                                      their websites. Current practices in this
     organizations (‘‘SROs’’). Specifically,                 SUPPLEMENTARY INFORMATION:
                                                                                                                      area vary considerably among SROs,
     SRO proposed rule changes would be                      I. Introduction                                          often resulting in confusion by SRO
     required to be filed electronically with                                                                         members, others seeking to comply with
                                                               Under Section 19(b) of the Act, SROs
     the Commission, rather than in paper                                                                             SRO rules, and other interested parties.
                                                             generally must file proposed rule
     form. In addition, the Commission is                                                                             Finally, the Commission is proposing to
                                                             changes with the Commission for
     proposing to require SROs to post all                                                                            make certain technical amendments to
                                                             notice, public comment, and
     proposed rule changes, as well as                                                                                clarify Rule 19b–4 and to reflect
                                                             Commission approval, prior to
     current and complete sets of their rules,                                                                        practice.
                                                             implementation.1 This requirement
     on their websites. The Commission is
                                                             helps assure, through Commission                         II. Background
     also proposing to make certain technical
                                                             review and the public comment process,
     amendments to the requirements for                                                                                  Section 19(b)(1) of the Act 2 requires
                                                             that SROs’ rules are consistent with the
     SRO rule changes under the Securities                                                                            each SRO to file with the Commission
                                                             purposes of the Act.
     Exchange Act of 1934 (‘‘Act’’). Together,                                                                        its proposed rule changes,3
                                                               The Commission is proposing changes
     the proposed amendments are designed                                                                             accompanied by a concise general
                                                             to the rule filing process that should
     to modernize the SRO rule filing process                                                                         statement of the basis for, and purpose
                                                             make it more efficient and transparent
     by making it more efficient and cost                                                                             of, the proposed rule change.4 Once an
                                                             and reduce costs for the SROs and the
     effective. The proposed amendments                                                                               SRO files a proposed rule change, the
                                                             public. First, the Commission would
     also should improve the transparency of                                                                          Commission must publish notice of it
                                                             require SROs to file their proposed rule
     the rule filing process and assure that all                                                                      and provide an opportunity for public
                                                             changes with the Commission
     SRO members and other interested                                                                                 comment. The proposed rule change
                                                             electronically, rather than in paper
     persons have ready access to an                                                                                  may not take effect unless the
                                                             format. By amending Rule 19b–4 and
     accurate, up-to-date version of SRO                                                                              Commission approves it, or it is
                                                             Form 19b–4 to require electronic filing,
     rules.                                                                                                           otherwise permitted to become effective
                                                             the rule filing process would be
     DATES: Comments should be submitted                     initiated more quickly and                               under Section 19(b)(3)(A) or Section
     on or before June 4, 2004.                              economically, to the benefit of both the                 19(b)(7) of the Act.5
     ADDRESSES: Comments may be                              Commission and the SROs, as well as
     submitted electronically or by paper.                   SRO members, investors, and other                          2 15  U.S.C. 78s(b)(1).
     Electronic comments may be submitted                                                                               3 Section  19(b)(1) of the Act requires each SRO to
     by: (1) Electronic form on the SEC                        1 15 U.S.C. 78s(b). Section 3(a)(26) of the Act, 15    file with the Commission ‘‘any proposed rule or any
                                                             U.S.C. 78c(a)(26), defines the term ‘‘self-regulatory    proposed change in, addition to, or deletion from
     website (http://www.sec.gov) or (2) e-                                                                           the rules of * * * [a] self-regulatory organization.’’
                                                             organization’’ to mean any national securities
     mail to rule-comments@sec.gov. Mail                     exchange, registered securities association,             See 15 U.S.C. 78s(b)(1).
     paper comments in triplicate to                         registered clearing agency, and, for purposes of
                                                                                                                         4 Many proposed rule changes are filed pursuant

     Jonathan G. Katz, Secretary, Securities                 Section 19(b) and other limited purposes, the            to Section 19(b)(1) of the Act for a 21-day notice
                                                             Municipal Securities Rulemaking Board (‘‘MSRB’’).        and comment period. 15 U.S.C. 78s(b)(1). The Act
     and Exchange Commission, 450 Fifth                                                                               requires the Commission, within 35 days of
                                                             Currently, there are 27 SROs that file proposed rule
     Street NW., Washington, DC 20549–                       changes with the Commission. Section 107 of the          publication, to either issue an order approving a
     0609. All submissions should refer to                   Sarbanes-Oxley Act of 2002 provides that the Public      proposed rule change or to institute a proceeding
     file number S7–18–04; this file number                  Company Accounting Oversight Board (‘‘PCAOB’’)           to determine whether a proposed rule change
                                                             shall file proposed rule changes with the                should be disapproved. The Commission may
     should be included on the subject line                                                                           extend this 35-day period up to 90 days if it
                                                             Commission ‘‘as if the Board were a registered
     if e-mail is used. To help us process and               securities association for purposes of that section      publishes its findings for doing so. The Commission
     review your comments more efficiently,                  19(b) * * *.’’ 15 U.S.C. 7217(b)(4). Because PCAOB       also may approve a proposed rule change on an
     please use only one method. The                         rule filings are not tracked by the SRO Rule             accelerated basis prior to 30 days after publication
                                                             Tracking System (‘‘SRTS’’), the Division of Market       of the notice in the Federal Register if the
     Commission will post all comments on                                                                             Commission finds good cause for doing so and
                                                             Regulation’s (‘‘Division’’) internal tracking database
     the Commission’s Internet website                       for rule filings, the Commission is not requiring, at    publishes its reasons. 15 U.S.C. 78s(b)(2).
     (http://www.sec.gov). Comments are also                 this time, the PCAOB to file electronically its             Section 19(b)(3)(A) of the Act and Section
     available for public inspection and                     proposed rules. Further, as the proposal for web         19(b)(7) of the Act provide that, in certain
     copying in the Commission’s Public                      posting of proposed and final SRO rules is designed      circumstances, a proposed rule change may become
                                                             to make the SRO rule filings in the SRTS accessible      effective without the approval procedures specified
     Reference Room, 450 Fifth Street NW.,                   to the public in a uniform manner, the Commission        in Section 19(b)(2) of the Act. 15 U.S.C.
     Washington, DC 20549. We do not edit                    does not intend for these proposed amendments to         78s(b)(3)(A); 15 U.S.C. 78s(b)(7); 15 U.S.C. 78s(b)(2).
     personal identifying information from                   apply to the PCAOB.                                         5 15 U.S.C. 78s(b)(3)(A); 15 U.S.C. 78s(b)(7).




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                               Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules                                                          17865

        The SRO rule filing process under the                is submitted electronically, so long as                    typed form.13 In addition, each
     Act serves several important policy                     the Commission receives it on or before                    signatory would be required to
     goals. First, the notice and comment                    5:30 p.m., Eastern Standard Time or                        manually sign the Form 19b–4,
     requirement helps assure that interested                Eastern Daylight Savings Time, and it is                   authenticating, acknowledging, or
     persons have an opportunity to provide                  filed in accordance with the                               otherwise adopting his or her electronic
     input into SRO actions that could have                  requirements of Rule 19b–4 and Form                        signature that is attached to or logically
     a significant impact on the market,                     19b–4, as amended.                                         associated with the filing.14 In
     market participants—both professionals                     Occasionally, an SRO may find it                        accordance with Rule 17a–1 of the
     and individual investors—and others.6                   necessary to file documents that cannot                    Act,15 the SRO would be required to
     Second, the rule filing process allows                  be submitted in electronic format, such                    retain that manual signature page of the
     the Commission to review proposed rule                  as pre-filing comment letters from SRO                     rule filing, authenticating the signatory’s
     changes to determine whether they are                   members or other exhibits. In addition,                    electronic signature, for not less than
     consistent with the Act, including the                  it may not be appropriate to require                       five years after the Form 19b–4 is filed
     national market system goals of fair                    proprietary and other information                          with the Commission 16 and, upon
     competition, price transparency, best                   subject to a request for confidential                      request, furnish a copy of it to the
     execution, and investor protection.                     treatment to be filed electronically.9                     Commission or its staff.17
     Finally, the rule filing process helps                  Accordingly, the proposed amendments                          In recent years, the Commission has
     assure that SRO members, among                          to Rule 19b–4 and Form 19b–4 retain                        been processing increasing volumes of
     others, are treated fairly in accordance                the flexibility to permit portions of a                    SRO rule proposals, as both the number
     with the Act, such that there is fair                   rule filing to be made in paper form                       of SROs and SRO facilities,18 and their
     representation of members in the                        under limited circumstances.                               rulemaking activity, has increased.19
     selection of the SRO’s directors and the                   As to signature requirements, Form                      The Commission believes that requiring
     administration of its affairs, the                      19b–4 currently requires that a ‘‘duly
                                                                                                                        SROs to file proposed rule changes
     equitable allocation of reasonable dues,                authorized officer’’ of an SRO manually
                                                                                                                        electronically would have several
     fees, and other charges, and the                        sign all rule filings.10 The Commission
                                                                                                                        benefits.
     appropriate and fair discipline of                      proposes to amend Form 19b–4 so that
                                                             SROs would be required to file their                          First, electronic filing of proposed
     members.
                                                             proposed rule changes with an                              rule changes should speed the initiation
     III. Proposed Amendments                                electronic signature.11 Furthermore,                       of the rule filing process. In today’s
                                                             each duly authorized signatory would                       highly competitive market environment,
     A. Electronic Filing
                                                             be required to obtain a ‘‘digital ID’’ in                  SROs are under pressure to complete
        The Commission proposes to                                                                                      the rule filing process quickly.20 Under
                                                             order to provide both the Commission
     modernize the rule filing process by
                                                             and the SRO with assurances that the
     requiring SROs to file proposed rule                                                                                  13 See Rule 301 of Regulation S–T. 17 CFR
                                                             Form 19b–4 has been transmitted
     changes electronically with the                                                                                    232.301. The Commission proposes defining
                                                             without external interference.12 As with                   ‘‘electronic signature’’ as an electronic entry in the
     Commission through a web-based
                                                             the EDGAR system, any required                             form of a magnetic impulse or other form of
     system.7 To implement electronic web-                                                                              computer data compilation of any letter or series of
                                                             signatures with respect to an SRO
     based filing of proposed SRO rule                                                                                  letters or characters comprising a name, executed,
                                                             proposed rule change would appear in
     changes, the Commission would amend                                                                                adopted or authorized as a signature. This
     Rule 19b–4 and Form 19b–4 to require                                                                               definition is the same as the definition that governs
                                                                9 In a similar context, Section 232.202(c) of
                                                                                                                        EDGAR filings in Rule 302 of Regulation S–T, 17
     that all Forms 19b–4, and any                           Regulation S–T governing EDGAR filers permits              CFR 232.302.
     amendments thereto, be submitted                        paper filing of confidential treatment requests and           14 See Rule 302(b) of Regulation S–T, which
     electronically to the Commission in                     the information with respect to which confidential         requires similar authentication, acknowledgement,
     accordance with the procedures, and in                  treatment is requested. SROs sometimes submit              or otherwise adoption of his or her signature that
                                                             confidential surveillance procedures or proprietary        appears in typed form within the electronic filing.
     the format, specified therein. Each SRO                 data to the Commission in connection with                  17 CFR 232.302(b).
     would have access to a secure website                   proposed rule changes, which may not be                       15 17 CFR 240.17a–1.
     that would enable authorized                            electronically accessible, and, in any event, is              16 Id.
     individuals at the SRO to file with the                 segregated from the public file pursuant to a
                                                                                                                           17 See Proposed Rule 19b–4(j). These
                                                             Freedom of Information Act (‘‘FOIA’’) exemption
     Commission an electronic Form 19b–4                     request.                                                   requirements were adapted from Section 232.302 of
     on behalf of the SRO.8 The current                         10 The signature requirement of Form 19b–4 states       Regulation S–T, 17 CFR 232.302 for EDGAR filers.
                                                                                                                           18 For instance, in February 2000, the
     requirement in Form 19b–4 that SROs                     that ‘‘pursuant to the requirements of the Act, the
                                                             [SRO] has caused the filing to be signed on its            Commission approved the registration of the
     submit multiple, paper copies of                                                                                   International Securities Exchange, Inc., and in
                                                             behalf by the undersigned thereunto duly
     proposed rule changes would be                          authorized.’’                                              October 2001, the Commission approved a
     eliminated. Under the proposed                             11 The Commission notes that the Electronic             proposed Pacific Exchange, Inc. (‘‘PCX’’) rule
     amendments, a proposed rule change                      Signatures in Global and National Commerce Act,            change to create a facility of PCX, the Archipelago
                                                                                                                        Exchange, LLC. In addition, in January 2004, the
     would be deemed filed with the                          15 U.S.C. 7001, et seq. does not apply in this regard.
                                                                                                                        Boston Stock Exchange, Inc. (‘‘BSE’’) created the
                                                                12 A digital ID, sometimes called a ‘‘digital
     Commission on the business day that it                                                                             Boston Options Exchange, LLC (‘‘BOX’’) as a new
                                                             certificate,’’ is a file on the computer that identifies
                                                             the user. Computers can use a digital ID to create         electronic options facility of the BSE. Division staff
        6 For example, SROs exercise certain quasi-
                                                             a digital signature that verifies both that the            also must quickly review effective-upon-filing rule
     governmental powers over members through their          message originated from a specific person and that         changes from new notice-registered exchanges, such
     ability to impose disciplinary sanctions, deny          the message has not been altered either                    as One Chicago, LLC and NQLX, LLC.
     membership, and require members to cease doing          intentionally or accidentally. The user obtains a
                                                                                                                           19 The Division has processed approximately 28%

     business entirely or in specified ways.                 digital ID from a ‘‘Certificate Authority’’ (‘‘CA’’) for   more rule filings since fiscal year 2001 and has
        7 The Commission previously proposed electronic
                                                             a modest sum (currently approximately $15 per              processed approximately 60% more rule filings
     filing of SRO proposed rule changes in the Rule         year). When the SRO electronically sends the Form          since fiscal year 1999.
     19b–6 proposal. See Securities Exchange Act             19b–4 to the Commission, the digital ID will                  20 For example, SROs that operate securities

     Release No. 43860 (January 19, 2001), 66 FR 8912        encrypt the data through a system that uses ‘‘key          markets are facing increased competition from
     (February 5, 2001). The Commission has not taken        pairs.’’ With key pairs, the SRO’s software                electronic communication networks (‘‘ECNs’’),
     action on this proposal.                                application uses one key to encrypt the document.          which as registered broker-dealers are not subject to
        8 The SRO would determine which individuals          When the Commission receives the SRO’s                     the rule filing requirements that are imposed on
     would be supplied with User IDs and passwords to        electronic document, the Commission’s software             SROs, and foreign markets, which may be subject
     access the secure website. See infra Note 13.           will use a matching key to decrypt the document.                                                       Continued




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     17866                     Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules

     the current system, SROs send paper                     resources currently used to monitor the                 accurate, and complete versions of the
     copies of proposed rule changes to the                  Commission’s Public Reference Room                      rules of each SRO are readily accessible
     Commission via messenger, overnight                     for competitors’ proposed rule changes.                 to interested parties, thus enhancing
     delivery, or U.S. mail. Once the                        By providing ready access to proposed                   compliance with SRO rules.
     Commission receives a proposed rule                     SRO rule changes, effective public
                                                                                                                     D. Amendments to Rule 19b–4
     change, internal processing of paper                    comment should be facilitated, thus
     filings may take several days before the                enhancing the transparency of the rule                     The Commission is proposing to make
     rule filing is received by the staff person             filing process.23 Although practices                    two amendments to clarify Rule 19b–4
     assigned to review it. Electronic filing                vary, several SROs now post selected                    and reflect current practice. First, the
     would substantially reduce the time it                  rule filings on their websites. Nearly all              Commission is proposing to amend Rule
     takes to process SRO rule filings by                    of the SROs have informally indicated                   19b–4(e), which addresses rule filing
     eliminating paper delivery, copying and                 to Commission staff that they favor such                requirements applicable to ‘‘new
     distribution.                                           increased accessibility to proposed rule                derivative securities products,’’ to
        Second, electronic rule filing should                filings, as long as it is a uniform                     clarify that that term does not include
     reduce costs for the SROs 21 and should                 requirement.                                            a single equity option or a security
     also result in a more efficient use of                                                                          futures product.25 Second, the
     Commission resources. The SROs no                       C. Posting of Current and Complete Rule
                                                                                                                     Commission is proposing to amend Rule
     longer would incur delivery costs for                   Text on SRO Websites
                                                                                                                     19b–4(f)(2) to more clearly reflect the
     paper filings or the SRO staff time                       In addition, the Commission proposes                  Commission’s stated position that a
     currently devoted to preparing filing                   to amend Rule 19b–4 to require SROs to                  proposed fee change applicable to non-
     packages. The Commission also would                     post and maintain a current and                         members and non-participants must be
     benefit from reducing the personnel                     complete version of their rules on their                filed under Section 19(b)(2) of the Act
     time currently associated with manually                 websites. Under the proposal, each SRO                  for full notice and comment, and not
     processing paper filings.                               would be required to update its public                  filed under Section 19(b)(3)(A)(ii) of the
        Finally, by integrating the electronic               website to reflect rule changes no later                Act.26
     filing technology with SRTS,                            than the next business day after it has
     Commission staff could more easily                      been notified of Commission approval                    E. Technical Amendments to Regulation
     monitor and process proposed SRO rule                   of the rule change or Commission notice                 S–T
     changes. Pertinent information                          of an effective-upon-filing SRO rule.24                    Regulation S–T 27 currently states that
     regarding proposed rule changes, as                     The Commission has chosen the next                      all Exchange Act filings, except for
     well as amendments, would be captured                   business day to provide interested                      Form 25,28 must be submitted in paper.
     automatically by SRTS.22 As a result,                   persons with prompt access to the                       Therefore, the Commission is proposing
     the Commission would be able to                         SROs’ rules, while at the same time                     to make a technical amendment to
     monitor electronically the progress of                  providing SROs with sufficient time to                  Regulation S–T to reflect that the Form
     SRO rule filings from initial receipt                   comply with this posting requirement. If                19b–4 will be filed electronically.
     through final disposition, and thereby                  an approved rule change is not effective
     enhance its management of the rule                      for a certain period after Commission                   F. Form 19b–4 Amendments;
     filing process.                                         approval, the SRO would be required to                  Commission Policy
     B. Posting of Proposed Rule Changes on                  indicate clearly the implementation date                1. Form 19b–4 Amendments
     SRO Websites                                            in the relevant rule text. Notification to
                                                                                                                        Form 19b–4 would be amended to
                                                             the SRO would either be done
       The Commission also is proposing to                                                                           eliminate the required submission of
                                                             electronically through SRTS or by
     amend Rule 19b–4 to require each SRO                                                                            nine paper copies and instead require
                                                             faxing the Commission’s approval order
     to post all proposed rule changes, and                                                                          electronic filing of Form 19b–4.29 To
                                                             or the Commission’s notice of effective-
     any amendments thereto, on its public                                                                           access the secure Internet site for web-
                                                             upon-filing SRO rules to the SRO.
     website no later than the next business                                                                         based filing of the Form 19b–4, the SRO
                                                             Current practices with respect to
     day after filing with the Commission.                   website availability of rules vary                         25 See Securities Exchange Act Release No. 40761
     The Commission has chosen the next                      considerably among SROs, often                          (December 8, 1998), 63 FR 70952 (December 22,
     business day to provide interested                      resulting in confusion by SRO members                   1998) (‘‘New Product Release’’). As the options
     persons with quick access to the                        and others seeking to comply with SRO                   markets already had listing standards for single
     proposed rule change, while at the same                 rules, as well as other interested                      equity options that addressed relevant regulatory
     time providing SROs with sufficient                                                                             concerns, the Commission did not intend for SROs
                                                             persons. Members and other interested                   to comply with Rule 19b–4(e) for single equity
     time to comply with this posting                        parties often need prompt and accurate                  options. Similarly, the Commission did not intend
     requirement. A copy of the complete                     notification of SRO rule changes to be                  to include traditional issuer warrants and
     proposed rule change would continue to                  able to comply with such rules. The                     traditional convertible securities in the definition of
     be available in the Commission’s Public                                                                         ‘‘new derivative securities product.’’ Id. at 70956.
                                                             Commission believes that this proposal                     26 See Securities Exchange Act Release No. 35123
     Reference Room, but in electronic and                   should help assure that current,                        (December 20, 1994), 59 FR 66692 (December 28,
     paper format. The Commission believes                                                                           1994). (‘‘[A]s a matter of general policy, an SRO
     that website accessibility of proposed                    23 It can take as long as seven to ten days for the   proposed rule change that establishes or changes a
     SRO rule changes would facilitate the                   notice of the proposed rule change to appear in the     due, fee or other charge applicable to a non-member
                                                             Federal Register. All SROs have websites, and the       or non-participant must be filed under Section
     ability of interested persons to comment                                                                        19(b)(2) for full notice and comment.’’ Id. At 66697;
                                                             expeditious posting of the Form 19b–4 should
     on the proposals and save SRO                           facilitate the public comment process. If the SRO       see also Securities Exchange Act Release No. 17258
                                                             withdrew the proposed rule change, the SRO could        (October 30, 1980), 45 FR 73906 (November 7,
     to less rigorous regulatory requirements in their       remove the proposed rule change from its website.       1980)(footnote 40). The terms ‘‘member’’ and
     home jurisdictions.                                       24 Practices vary among SROs as to the extent to      ‘‘participant’’ are defined in Section 3(a)(3)(A) and
       21 See Section VI, infra.
                                                             which they post rule text on their websites and the     Section 3(a)(24), respectively, of the Act.
       22 Such data would include whether the proposed                                                                  27 17 CFR 232.101.
                                                             timeliness with which such rule text is updated.
                                                                                                                        28 17 CFR 249.25.
     rule change is filed pursuant to Section 19(b)(3)(A)    Prompt posting of SRO rule changes’on a next
     or Section 19(b)(2) of the Act. 15 U.S.C.               business day basis’should reduce confusion and             29 The proposed amendments to Form 19b–4 are

     78s(b)(3)(A); 15 U.S.C. 78s(b)(2).                      facilitate compliance by market participants.           attached as Appendix A.



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                               Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules                                            17867

     would submit to the Commission an                         In addition, the Commission notes                     filings: (1) Contain a properly completed
     External Application User                               that, generally, Form 19b–4 requires,                   Form 19b–4; (2) contain a clear and
     Authentication Form (‘‘EAUF’’) 30 to                    and will continue to require, an SRO to:                accurate statement of the authority for,
     register each individual at the SRO who                 (1) Submit a complete description of the                and basis and purpose of, such rule
     will be submitting Forms 19b–4 on                       terms of its proposal; (2) describe the                 change, including the impact on
     behalf of the SRO. Upon receipt and                     impact of the proposed rule change on                   competition; (3) contain a summary of
     verification of the information in the                  various segments of the market,                         any written comments received by the
     EAUF process, the Commission would                      including members, member                               SRO; and (4) state that the proposal is
     issue each such person a User ID and                    constituencies, and non-members; and                    not inconsistent with the existing rules
     Password to permit access to the                        (3) describe how the filing relates to                  of the SRO, including any other rules
     Commission’s secure website. As Form                    existing rules of the SRO.36 In addition,               proposed to be amended. As described
     19b–4 will be electronic, initially the                 a proposed rule change must provide an                  in the current Form 19b–4, filings that
     authorized user at an SRO would access                  accurate statement of the authority and                 do not comply with the foregoing are
     a screen containing a filing template,                  statutory basis for, and purpose of, the                deemed not filed and returned to the
     referenced as Page 1, in which it could                 proposed rule change, including its                     SRO. Consistent with the requirements
     identify the SRO and the statutory                      consistency with the Act and rules                      of Rule 19b–4 and Form 19b–4,
     section pursuant to which the rule filing               thereunder, and its impact on                           electronically filed proposed rule
     would be submitted (i.e., Section                       competition, if any, as well as a                       changes that do not comply with the
     19(b)(2), Section 19(b)(3)(A), or Section               summary of any written comments                         foregoing will continue to be returned to
     19(b)(3)(B)).31 Page 1 of Form 19b–4 will               received by the SRO. The proposed rule                  the SRO, but in electronic format, and,
     also require a brief description of the                 change must be consistent with the                      consistent with current practice, will be
     proposed rule change, as well as an                     existing rules of the SRO, including any                deemed not filed with the Commission
     indication whether a pilot is being                     other proposed rule changes. Form 19b–                  until all required information has been
                                                             4 also contains certain technical                       provided.
     proposed. The SRO would provide
                                                             requirements so that information
     contact information and place the                                                                               IV. Request for Comment
                                                             presented in the Form is
     electronic signature of a duly authorized                                                                          The Commission requests the views of
                                                             comprehensible. Finally, as stated, the
     officer on this Page 1 initial screen.32                                                                        commenters on all aspects of the
                                                             chief executive officer, general counsel,
     The second screen of the electronic                                                                             proposed amendments, discussed
                                                             or other officer or director of the SRO
     Form 19b–4 would provide the SRO                        that exercises similar authority must                   above, to Rule 19b–4 and Form 19b–4
     with a means to attach the proposed                     electronically sign the Form 19b–4.                     under the Act. In particular, the
     rule change and related exhibits in                                                                             Commission requests comment on the
     Microsoft Word format.33 SRO users                      2. Commission Policy: Accurate,                         following:
     would have electronic access to the                     Consistent, and Complete Forms 19b–4                       1. Are there positive or negative
     general instructions for using the Form,                   The Commission firmly believes that,                 implications, in addition to those
     as adapted for electronic filing.34                     to provide the public with a meaningful                 discussed above, of the Commission
     Finally, the SRO would use the                          opportunity to comment, a proposed                      requiring SROs to file all proposed rule
     electronic Form 19b–4 to amend or                       rule change must be accurate,                           changes electronically?
     withdraw a rule filing pending with the                 consistent, and complete. Form 19b–4                       2. Is there a need for additional
     Commission or to file an extension of                   states that ‘‘[t]his form, including the                exceptions to the electronic rule filing
     the statutory period in Section 19 of the               exhibits, is intended to elicit                         requirement for SROs? For example,
     Act in which the Commission is                          information necessary for the public to                 should express accommodation be made
     required to act on the rule filing.35                   provide meaningful comment on the                       for paper filings in emergency situations
                                                             proposed rule change and for the                        when web-based, electronic filing may
        30 This Commission web-based application             Commission to determine whether the                     be temporarily unavailable? If so, what
     currently exists and allows authorized external         proposed rule change is consistent with                 specific situations should be excepted,
     users to access select Commission systems.              the requirements of the Act and the                     and what accommodations should be
        31 The authorized user also would be able to

     indicate if there would be a separate filing of any
                                                             rules and regulations thereunder                        made? Should the existing Rule and
     hard copy exhibits that are unable to be submitted      applicable to the self-regulatory                       Form requirements be available for use
     electronically.                                         organization. The SRO must provide all                  in such a situation?
        32 As noted in Section III. A. above, a ‘‘duly
                                                             the information called for by the form,                    3. Is the requirement that SROs post
     authorized officer’’ at the SRO would be required       including the exhibits, and must present                all proposed rule changes, and any
     to place his or her ‘‘electronic signature’’ on the
     Form 19b–4 before it is transmitted electronically      the information in a clear and                          amendments, on their websites no later
     to the Commission.                                      comprehensible manner.’’ 37 The                         than the next business day after filing
        33 Exhibits 2 and 3 may not be available in          Commission, however, receives many                      with the Commission appropriate?
     Microsoft Word and could be submitted in another        SRO proposed rule changes that are not                  Should this time period be longer or
     acceptable electronic format or in paper.                                                                       shorter?
        34 For example, the SRO would click separate
                                                             carefully prepared in accordance with
                                                             Form 19b–4.                                                4. If the SRO proposed rule change is
     boxes on the second screen to attach one Microsoft
     Word document containing Items I through IV of             Currently, Commission staff devotes                  incomplete because it does not comply
     the Form 19b–4 and other documents for the              significant time to processing proposed                 with the requirements of Rule 19b–4
     different exhibits: the completed notice of the         rule changes, reviewing them for                        and Form 19b–4 and deemed not
     proposed rule change for publication in the Federal                                                             properly filed and returned to the SRO,
     Register; copies of notices issued by the SRO           accuracy and completeness, and
     soliciting comment and copies of all written            preparing them for publication. The                     should the SRO inform the public of the
     comments; copies of transcripts or summaries of         Commission encourages SRO staff to                      status of the proposed rule change?
     any public meeting; copies of any form, report, or      review carefully proposed rule changes                  Similarly, if the SRO withdraws a
     questionnaire; marked copies of amendments; and                                                                 proposed rule change, should the SRO
     separate rule text, if the SRO wishes to attach such    to ensure, among other things, that the
     rule text as an exhibit, instead of including it in                                                             inform the public of the withdrawal?
     Item I of the Form 19b–4.                                 36 17    CFR 249.819.                                 Should that information be required to
        35 15 U.S.C. 78s(b)(2).                                37 Id.                                                be maintained on the SRO’s website?


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     17868                     Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules

     The Commission believes such                            Procedures Plan’’ or ‘‘OLPP’’) governs                    electronically. The proposed
     requirement may be necessary to                         the listing of standardized options. The                  amendments, however, would require
     provide needed information to those                     OPRA Plan is administered by the                          website posting of all proposed rule
     monitoring the proposed rule change.                    Options Price Reporting Authority                         changes, and any amendments thereto.
        5. Is the requirement that SROs                      (‘‘OPRA’’), the Linkage Plan is                           In addition, the proposed amendments
     update their websites to reflect rule                   administered by the Options Linkage                       would require SROs to post a current
     changes no later than the next business                 Authority (‘‘OLA’’), and the OLPP is                      and complete set of their rules on their
     day after notification of Commission                    administered by The Options Clearing                      websites. Several SROs currently post
     approval appropriate? Should this time                  Corporation and the options exchanges.                    some of this information on their
     period be longer or shorter? Is the                        Should the plan administrators for                     websites. SROs are required by Sections
     proposed process for Commission                         each of these plans post on their                         6(b)(1),41 15A(b)(2),42 17A,43 and 15B 44
     notification to the SRO of its approval                 websites or on a separate plan website                    of the Act to enforce compliance with
     order of a SRO proposed rule or the                     a current version of the plans as well as                 their rules. Presumably, each SRO
     Commission’s notice of an effective-                    proposed amendments to these plans                        maintains a current and complete set of
     upon-filing SRO rule, through SRTS or                   within the time periods proposed for                      its rules to facilitate compliance with
     facsimile, adequate? If an SRO rule                     SROs?                                                     this requirement.
     change is not effective until a certain                 V. Paperwork Reduction Act
     period after Commission approval,                                                                                 B. Proposed Use of Information
     should the website update be delayed                       Certain provisions of the proposed                       The information provided via EAUF,
     until the effective date?                               rule and form contain ‘‘collection of                     as required by the proposed
        6. Are the SRO recordkeeping                         information requirements’’ within the                     amendments to Form 19b–4, would be
     requirements for the page containing the                meaning of the Paperwork Reduction                        used by the Commission to verify the
     manual signature of the Form 19b–4                      Act of 1995.40 The Commission has                         identity of the SRO individual and
     appropriate?                                            submitted the information to the Office                   provide such individual access to a
        7. There are currently seven national                of Management and Budget (‘‘OMB’’) for                    secure Commission website for filing of
     market system plans that have been                      review in accordance with 44 U.S.C.                       the Form 19b–4. The Commission
     approved by the Commission. Three of                    3507 and 5 CFR 1320.11. The                               proposes to require that SROs post their
     these plans are also transaction                        Commission is proposing to submit the                     proposed rule changes on their websites
     reporting plans. In the equity securities               current collection of information titled                  so that these proposals could be viewed
     market, there are four plans. The                       ‘‘Rule 19b–4 Under the Securities                         by the general public, SRO members,
     Intermarket Trading System (‘‘ITS’’) Plan               Exchange Act of 1934’’ (OMB Control                       competing SROs, other market
     governs trading of exchange-listed                      Nos. 3235–0045, 3235–0504). The                           participants, and Commission staff. The
     securities by exchanges and Nasdaq                      Commission is also proposing to submit                    information would enable interested
     market makers. The ITS Operating                        the current collection of information                     parties to more easily access SRO rules
     Committee administers the ITS Plan.                     titled ‘‘Form 19b–4 Under the Securities                  and rule filings, which would facilitate
     The Consolidated Tape Association                       Exchange Act of 1934’’ (OMB Control                       public comment on proposed SRO rules.
     (‘‘CTA’’) administers two plans: the                    No. 3235–0045). An agency may not                         Additionally, SRO staff, members,
     Consolidated Tape Plan 38 and the                       conduct or sponsor, and a person is not                   industry participants, and Commission
     Consolidated Quotation Plan. These                      required to respond to, a collection of                   staff would utilize the accurate and
     plans address how trades in exchange-                   information unless it displays a                          current version of SRO rules that are
     listed equity securities are reported and               currently valid control number.                           posted on the SRO website to facilitate
     how quotations for these securities are                 A. Summary of Collection of                               compliance with such rules.
     made public. The OTC/UTP Plan 39                        Information                                               C. Respondents
     addresses how both transaction and                        Rule 19b–4 currently requires an SRO
     quotation information in Nasdaq-listed                                                                               There are currently 27 SROs subject to
                                                             seeking Commission approval for a                         the collection of information, though
     securities is consolidated and                          proposed rule change to provide the
     disseminated.                                                                                                     that number may vary owing to the
                                                             information stipulated in Form 19b–4.                     consolidation of SROs or the
        In the options market, there are three
                                                             Form 19b–4 currently calls for a                          introduction of new entities. In fiscal
     plans. The Plan for Reporting of
                                                             description of: The terms of a proposed                   year 2003, these respondents filed 769
     Consolidated Options Last Sale Reports
                                                             rule change; the proposed rule change’s                   rule change proposals and 510
     and Quotation Information (‘‘OPRA
                                                             impact on various market segments; and                    amendments to those proposed rule
     Plan’’) is the transaction reporting plan
                                                             the relationship between the proposed                     change proposals, for a total of 1279
     for options. The Plan for the Purpose of
                                                             rule change and the SRO’s existing                        filings that are subject to the current
     Creating and Operating an Options
                                                             rules. Form 19b–4 also currently calls                    collection of information. Of these 769
     Intermarket Linkage (‘‘Linkage Plan’’)
                                                             for an accurate statement of the                          proposed rule changes filed by SROs,
     governs inter-market trading of options.
                                                             authority and statutory basis for, and                    705 ultimately became effective because
     The Plan for the Purpose of Developing
                                                             purpose of, the proposed rule change;                     the SROs withdrew 64 proposed rule
     and Implementing Procedures Designed
                                                             the proposal’s impact on competition;                     changes.
     to Facilitate the Listing and Trading of
                                                             and a summary of any written
     Standardized Options (‘‘Options Listing                                                                           D. Total Annual Reporting and
                                                             comments received by the SRO from
        38 The Consolidated Tape Plan is also a
                                                             SRO members. The proposed                                 Recordkeeping Burden
     transaction reporting plan.                             amendments would not change the                             The proposed amendments to Rule
        39 The formal name of the OTC/UTP Plan is: Joint     information currently required by Rule                    19b–4 and Form 19b–4 are designed to
     Self-Regulatory Organization Plan Governing the         19b–4 or Form 19b–4; the proposed
     Collection, Consolidation, and Dissemination of         amendments would only require that                          41 15
     Quotation and Transaction Information for Nasdaq-                                                                         U.S.C. 78f(b)(1).
     Listed Securities Traded on Exchanges on an             such information be submitted                               42 15 U.S.C. 78o–3(b)(2).
                                                                                                                         43 15 U.S.C. 78q–1.
     Unlisted Trading Privilege Basis. The OTC/UTP
     Plans is also a transaction reporting plan.               40 44   U.S.C. 3501 et seq.                               44 15 U.S.C. 78o–4.




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                               Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules                                            17869

     modernize the SRO rule filing process                   proposals and amendments with the                      hours for updating SRO final rules on
     and to make the process more efficient                  Commission under the proposed                          SRO websites).
     by conserving both SRO and                              amendments would be 27,676 hours                          The Commission does not expect that
     Commission resources. Rule 19b–4 and                    (769 rule change proposals × 34 hours                  the proposed amendments with regard
     Form 19b–4 would be amended to                          + 510 amendments × 3 hours).                           to electronic filing would impose any
     require SROs to electronically file their                  The Commission staff estimates that                 material additional costs on SROs.
     proposed rule changes. In addition,                     30 minutes is the amount of time that                  Instead, the Commission believes that
     Form 19b–4 would be revised to                          would be required to post a proposed                   the proposed amendments to Rule 19b–
     accommodate electronic submission.                      rule on an SRO’s website and that 30                   4 and Form 19b–4, on balance, would
     The Commission expects that an                          minutes is the amount of time that                     reduce paperwork costs related to the
     electronic form would reduce by one                     would be required to post an                           submission of SRO proposed rule
     hour the amount of SRO clerical time                    amendment on an SRO’s website. The                     changes. The technology for electronic
     required to prepare the average filing.                 Commission staff estimates that the                    filing would be web-based; therefore,
     The proposed amendments would also                      reporting burden for posting rule change               the SROs should not have any
     require SROs to post all proposed rule                  proposals and amendments on the SRO                    technology expenditures for electronic
     changes, and any amendments, on their                   websites would be 640 hours (769 rule                  filing because all SROs currently have
     websites, as well as maintain a current                 change proposals 46 × 0.5 hours + 510                  access to the Internet.
     and complete set of their rules on their                amendments × 0.5 hours).                                  However, each SRO would be
     websites. The Commission staff                                                                                 required to obtain a digital ID from a
                                                                The Commission staff estimates that
     estimates that it would take an SRO 30                                                                         certificating authority. The Commission
                                                             one hour would be the amount of time
     minutes to post a filing on its website,                                                                       staff estimates the annual cost of the ID
                                                             required to post an SRO’s current rules
     irrespective of whether this filing is an                                                                      to be $15 for each SRO. The
                                                             on its website. Currently, 22 of the 27
     SRO rule change proposal, amendment,                                                                           Commission staff estimates that SROs
                                                             SROs have posted their rules on their
     or final SRO rule.                                                                                             would purchase two such digital IDs for
        An SRO rule change proposal is                       websites; five have not.47 The
                                                                                                                    their staff. Thus, the annual cost of the
     generally filed with the Commission                     Commission staff estimates that the total
                                                                                                                    ID for all SROs would be $810 (27 SROs
                                                             reporting burden for posting current
     after an SRO’s staff has obtained                                                                              × $15 × 2).
     approval by its Board. The time required                rules on the SROs’ websites would be 27                   As previously stated, the SROs could
     to complete a filing varies significantly               hours (27 SROs × 1 hour) because each                  incur nominal costs on posting on their
     and is difficult to separate from the time              SRO should have a current version of its               website their proposed rules,
     an SRO spends in developing internally                  rules available for posting on its                     amendments thereto, no later than the
     the proposed rule change. However,                      website.                                               next business day after filing with or
     several SROs have estimated at 35 hours                    The Commission staff estimates that                 approval by the Commission. With
     the amount of time required to complete                 two hours is the amount of time that                   regard to posting of accurate and
     an average rule filing using present                    would be required to update the SRO’s                  complete text of SRO final rules, the
     Form 19b–4. This figure includes an                     website when the SRO’s proposed rule                   Commission notes that most of the SROs
     estimated 25 hours of in-house legal                    becomes effective. Therefore, each time                currently post some of this information,
     work and ten hours of clerical work.                    the Commission approves an SRO rule                    if not all of this information, on their
     The amount of time required to prepare                  change or does not abrogate an SRO                     websites. Some SROs currently rely on
     amendments varies because some                          effective-upon-filing rule change (total               CCH, Incorporated (‘‘CCH’’) to maintain
     amendments are comprehensive, while                     of 705 rules in fiscal year 2003), the                 a current version of their rules, and a
     other amendments are submitted in the                   Commission staff estimates that the                    cost may be involved in expediting
     form of a one-page letter. The                          reporting burden for updating the                      prompt publication of rule changes with
     Commission staff estimates that, under                  already website posted SRO rules on the                CCH. However, the Commission notes
     current rules, four hours is the amount                 SRO website would be 1410 hours (705                   that SROs are required by Sections
     of time required to prepare an                          SRO Commission approved or non-                        6(b)(1),48 15A(b)(2),49 17A,50 and 15B 51
     amendment to the rule proposal. This                    abrogated rules × 2 hours).                            of the Act to enforce compliance with
     figure includes an estimated two hours                     The Commission staff estimates that                 their rules. Therefore, at all times, each
     of in-house legal work and two hours of                 the total annual reporting burden under                SRO should maintain a current and
     clerical work.                                          the proposed rule would be 29,753                      complete set of its rules to facilitate
        With the proposed electronic filing,                 hours (27,676 hours for filing proposed                compliance with this requirement.
     the Commission staff estimates that 34                  rule changes and amendments + 640                      Accordingly, the Commission does not
     hours is the amount of time that would                  hours for posting proposed rule changes                believe that SROs would incur material
     be required to complete an average rule                 and amendments on the SROs’ websites                   costs in simply posting this information
     filing and at three hours the amount of                 + 27 hours for initial posting of accurate             on their websites.
     time required to complete an average                    SRO rule text on SRO websites + 1410
     amendment. These figures reflect the                                                                           E. Retention Period of Recordkeeping
     one hour in savings in clerical hours                     46 This number includes SRO proposed rule
                                                                                                                    Requirements
     that would result from the use of an                    changes that the Commission notices pursuant to           The SROs would be required to retain
     electronic form for both the rule filings               Section 19(b)(3)(A) of the Act, which are effective-   records of the collection of information
     and the amendments.45 The                               upon-filing, and SRO proposed rule changes that
                                                             the Commission notices and accelerates approval in     (the manually signed signature page of
     Commission staff estimates that the                     the same document pursuant to Section 19(b)(2) of      the Form 19b–4) for a period of not less
     reporting burden for filing rule change                 the Act, along with notices issued by the              than five years, the first two years in an
                                                             Commission pursuant to Section 19(b)(2) of the Act.    easily accessible place, according to the
        45 The SROs’ one hour time savings would result        47 The National Stock Exchange, Inc. (f/k/a

     from the elimination of tasks such as making            Cincinnati Stock Exchange, Inc.), Chicago Stock          48 15
     multiple copies of the Form 19b–4 and                   Exchange, Inc., Boston Stock Exchange Clearing                 U.S.C. 78f(b)(1).
                                                                                                                      49 15 U.S.C. 78o–3(b)(2).
     amendments, arranging for couriers, and making          Corporation, INET Futures Exchange, LLC, and
                                                                                                                      50 15 U.S.C. 78q–1.
     follow-up telephone calls to ensure Commission          Pacific Clearing Corporation do not appear to post
     receipt.                                                their final rules on their websites.                     51 15 U.S.C. 78o–4.




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     17870                     Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules

     current recordkeeping requirements set                     (3) Enhance the quality, utility and                A. Benefits
     forth in Rule 17a–1 of the Act.52 The                   clarity of the information to be                          The proposed amendments are
     SROs would be required to retain                        collected; and                                         designed to modernize the filing,
     proposed rule changes, and any                             (4) Minimize the burden of collection               receipt, and processing of SRO proposed
     amendments, on their websites until the                 of information on those who are to                     rule changes and to make the SRO rule
     proposal is either approved or                          respond, including through the use of                  filing process more efficient by
     disapproved. The SRO would be                           automated collection techniques or                     conserving both SRO and Commission
     required at all times to maintain an                    other forms of information technology.                 resources. The Commission believes
     accurate and up-to-date copy of all of its                                                                     that the proposed changes to Rule 19b–
     rules on its website.                                      Persons wishing to submit comments
                                                             on the collection of information                       4 and Form 19b–4 would permit SROs
     F. Collection of Information Is                                                                                to file proposed rule changes with the
                                                             requirements should direct them to the
     Mandatory                                                                                                      Commission more quickly and
                                                             following persons: (1) Desk Officer for
                                                                                                                    economically. For example, SROs are
        Any collection of information                        the Securities and Exchange
                                                                                                                    currently required to pay for delivery
     pursuant to the proposed amendments                     Commission, Office of Information and
                                                                                                                    costs of multiple paper copies to the
     to Rule 19b–4 and Form 19b–4 to                         Regulatory Affairs, Office of
                                                                                                                    Commission as well as the costs
     require electronic filing with the                      Management and Budget (‘‘OMB’’),                       associated with monitoring the
     Commission of SRO proposed rule                         Room 3208, New Executive Office                        Commission’s Public Reference Room
     changes would be a mandatory                            Building, Washington, DC 20503; and                    for competitors’ rule filings. Requiring
     collection of information filed with the                (2) Jonathan G. Katz, Secretary,                       SROs to file electronically proposed rule
     Commission as a means for the                           Securities and Exchange Commission,                    changes should reduce expenses
     Commission to review, and, as required,                 450 Fifth Street, NW., Washington, DC                  associated with clerical time, postage,
     take action with respect to SRO                         20549–0609 with reference to File No.                  and copying and should increase the
     proposed rule changes. Any collection                   S7–18–04. OMB is required to make a                    speed, accuracy, and availability of
     of information pursuant to the proposed                 decision concerning the collection of                  information beneficial to investors,
     amendments to require website posting                   information between 30 and 60 days                     other SROs, and financial markets.
     by the SROs of their proposed and final                 after publication, so a comment to OMB                    Because Commission staff would no
     rules would also be a mandatory                         is best assured of having its full effect              longer manually process the receipt and
     collection of information; however, it                  if OMB receives it within 30 days of                   distribution of SRO rule filings,
     would not be a collection of information                publication. The Commission has                        electronic filing would also expedite the
     filed with the Commission upon which                    submitted the proposed collection of                   Commission’s receipt of SRO proposed
     the Commission would review and take                    information to OMB for approval.                       rule changes and provide the SROs with
     action.                                                 Requests for the materials submitted to                the certainty that the Commission has
     G. Responses to Collection of                           OMB by the Commission with regard to                   received the proposed rule changes and
     Information Will Not Be Kept                            this collection of information should be               has captured pertinent information
     Confidential                                            in writing, refer to File No. S7–18–04,                about the rule changes in SRTS. The
                                                             and be submitted to the Securities and                 Commission believes that integrating
       Other than information for which an
     SRO requests confidential treatment and                 Exchange Commission, Records                           the electronic filing technology with
     which may be withheld from the public                   Management, Office of Filings and                      SRTS should also enhance the
     in accordance with the provisions of 5                  Information Services, 450 Fifth Street,                Commission’s ability to monitor and
     U.S.C. 522, and the posting of proposed                 NW., Washington, DC 20549.                             process SRO proposed rule changes.
                                                                                                                       Moreover, requiring SROs to post
     and final rules on the SRO website, and                 VI. Costs and Benefits of the Proposed                 proposed rule changes on their websites
     thus not information filed with the                     Rulemaking                                             no later than the next business day after
     Commission, the collection of
                                                               The Commission is considering the                    filing with the Commission should
     information pursuant to the proposed
                                                             costs and benefits of the proposed                     increase availability of SRO proposed
     amendments to Rule 19b–4 and Form
                                                             amendments to Rule 19b–4 and Form                      rules, and thereby facilitate the ability of
     19b–4 under the Act would not be
                                                             19b–4 discussed above. As noted above,                 interested parties to comment on
     confidential and would be publicly
                                                             the Commission staff estimates that the                proposed rule changes. For instance, the
     available.53
                                                             total annual paperwork reporting                       posting of proposed rule changes would
     H. Request for Comment                                                                                         provide the public with access to the
                                                             burden under the proposed rule would
       Pursuant to 44 U.S.C. 3506(c)(2)(B),                  be 29,753 hours. The Commission staff,                 filings on the SROs’ websites and
     the Commission solicits comments to:                    however, believes that there would be                  thereby reduce the burden on SRO and
       (1) Evaluate whether the proposed                     an overall reduction of costs based on                 Commission staff of providing
     collection of information is necessary                                                                         information about proposed rule
                                                             the proposed amendments.54 The
     for the performance of the functions of                                                                        changes to interested parties. The
                                                             Commission encourages commenters to
     the agency, including whether the                                                                              Commission believes that the posting of
                                                             identify, discuss, analyze, and supply
     information shall have practical utility;                                                                      the proposed rule changes would also
                                                             relevant data regarding any such costs
       (2) Evaluate the accuracy of the                                                                             save SRO resources that are currently
                                                             or benefits.
     agency’s estimate of the burden of the                                                                         being used to monitor the Commission’s
     proposed collection of information;                       54 As noted in the Paperwork Reduction Act
                                                                                                                    Public Reference Room for competitors’
                                                             analysis, the Commission staff based this total
                                                                                                                    proposed rule changes. Furthermore,
       52 SROs may also destroy or otherwise dispose of
                                                             reporting burden of 29,753 hours on 27,676 hours       requiring an SRO to post and maintain
     such records at the end of five years according to      for filing proposed rule changes and amendments        on its website a current and complete
     Rule 17a–6 of the Act. 17 CFR 240.17a–6.                + 640 hours for posting proposed rule changes and      set of its rules could eliminate the
       53 However, consistent with applicable law,           amendments on the SROs’ websites + 27 hours for
     proposed SRO rule changes containing proprietary        initial posting of accurate SRO rule text on SROs’
                                                                                                                    confusion among SROs, members of the
     or otherwise sensitive information may be kept          websites + 1410 hours for updating SRO final rules     industry, and the public regarding the
     confidential and nonpublic.                             on SROs’ websites.                                     accuracy of SRO rule text and facilitate


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                                Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules                                            17871

     immediate availability of an SRO’s rule                 However, there should be no additional                  unanticipated costs on the SROs and the
     text.                                                   costs associated with such                              public.
                                                             recordkeeping as SROs are currently
     B. Costs                                                                                                        VII. Consideration of the Burden on
                                                             required to retain the Form 19b–4 for
        As noted, the Commission staff                                                                               Competition, Promotion of Efficiency,
                                                             not less than five years. The
     estimates that there would be                                                                                   and Capital Formation
                                                             Commission requests comment on the
     paperwork reporting costs of 29,753                     anticipated costs, if any, on SROs to                      Section 3(f) of the Act 60 requires the
     hours under the proposed rule. The                      comply with the proposed requirement                    Commission, whenever it engages in
     Commission, however, does not expect                    of retaining a manual signature of each                 rulemaking and is required to consider
     that the proposed amendments would                      proposed rule change submitted                          or determine whether an action is
     impose additional costs on SROs.                        electronically.                                         necessary or appropriate in the public
     Instead, the Commission believes that                      Moreover, the Commission believes                    interest, to consider whether the action
     the proposed amendments to Rule 19b–                    that the proposed requirement that                      will promote efficiency, competition,
     4 and Form 19b–4, on balance, would                     SROs post proposed rule changes, as                     and capital formation. In addition,
     reduce costs related to the submission of               well as a current and complete version                  Section 23(a)(2) of the Act 61 requires
     SRO proposed rule changes. The                          of their rules, on their websites would                 the Commission, when promulgating
     technology for electronic filing would                  impose some but not substantial costs                   rules under the Act, to consider the
     be web-based; therefore, the SRO should                 on most SROs. The Commission notes                      impact any such rules would have on
     not have any technology expenditures                    that most of the SROs currently post                    competition. Section 23(a)(2) further
     for electronic filing because all SROs                  some of this information, if not all of                 provides that the Commission may not
     currently have access to the Internet.                  this information, on their websites.                    adopt a rule that would impose a
     Most of the information that would be                   Some SROs currently rely on CCH to                      burden on competition not necessary or
     required to be submitted by the SROs                    maintain a current version of their rules,              appropriate in furtherance of the
     electronically is currently submitted in                and a cost could be involved in                         purposes of the Act.
     multiple paper copies to the                            expediting prompt publication of rule
                                                                                                                        The proposed amendments to Rule
     Commission. There are personnel and                     changes with CCH or maintaining a
                                                                                                                     19b–4 and Form 19b–4 are intended to
     delivery costs associated with paper                    current version of their rules at the SRO.
                                                                                                                     modernize the receipt and review of
     filings that would not be incurred with                 However, the Commission notes that
                                                                                                                     SRO proposed rule changes and to make
     electronic filing. Accordingly, the                     SROs are required by Sections 6(b)(1),56
                                                                                                                     the SRO rule filing process more
     Commission believes that the proposed                   15A(b)(2),57 17A,58 and 15B 59 of the Act               efficient by conserving both SRO and
     amendments to Rule 19b–4 and Form                       to enforce compliance with their rules.                 Commission resources. They also are
     19b–4, by requiring the SROs to submit                  Therefore, at all times, each SRO should                intended to improve the transparency of
     proposed rule changes in electronic                     maintain a current and complete set of                  the SRO rule filing process and facilitate
     format, would reduce their costs.                       its rules to facilitate compliance with                 access to current and complete sets of
        If the proposed changes were adopted,                this requirement. Accordingly, the                      SRO rules. All of these changes should
     the Commission believes that SROs                       Commission does not believe that SROs                   help to foster innovation, increase
     could incur some costs associated with                  would incur substantial costs in simply                 competition, efficiency, and capital
     training their personnel about the                      posting this information on their                       formation and thereby benefit investors.
     procedures for submitting proposed rule                 websites because if the SRO does not
                                                             currently maintain a current and                           The Commission generally requests
     changes in electronic format and
                                                             complete set of its rules, it should have               comment on the competitive or
     submission of the information via
                                                             done so and have provided for such                      anticompetitive effects of these
     EAUF. However, the Commission
                                                             administrative costs.                                   amendments to Rule 19b–4 and Form
     believes that such costs would be one-
                                                                                                                     19b–4 on any market participants if
     time costs and insubstantial since the                  C. Request for Comment                                  adopted as proposed. The Commission
     SROs are already familiar with the
                                                               The Commission requests data to                       also requests comment on what impact
     information required in filing a
                                                             quantify the costs and the benefits                     the amendments, if adopted, would
     proposed rule change with the
                                                             above. The Commission seeks estimates                   have on efficiency and capital
     Commission and would only be
                                                             of these costs and benefits, as well as                 formation. Commenters should provide
     required to submit the same information
                                                             any costs and benefits not already                      analysis and empirical data to support
     electronically under this proposal. The
                                                             defined, which could result from the                    their views on the costs and benefits
     Commission staff believes that the SROs
                                                             adoption of these proposed amendments                   associated with the proposal.
     could also incur some minimal costs
     (currently $15 per year) associated with                to Rule 19b–4 and Form 19b–4.                           VIII. Initial Regulatory Flexibility
     purchasing digital IDs for each duly                    Specifically, the Commission requests                   Analysis
     authorized officer electronic                           commenters to address whether
                                                             proposed amendments to Rule 19b–4                         Section 3(a) of the Regulatory
     signatories.55 The Commission also
                                                             and Form 19b–4 that would require                       Flexibility Act 62 requires the
     believes that the SROs would have to
                                                             electronic filing of SRO proposed rule                  Commission to undertake an initial
     make temporary adjustments to their
                                                             changes, the posting of these proposed                  regulatory flexibility analysis of the
     recordkeeping procedures since, under
                                                             rule changes on the SROs’ websites, as                  proposed rule on small entities unless
     the proposal, the SROs would be
                                                             well as the posting and maintenance of                  the Commission certifies that the rule, if
     required to print out the Form 19b–4
                                                             current and complete sets of rules on                   adopted, would not have a significant
     signature block, manually sign proposed
                                                             the SROs’ websites, would generate the                  economic impact on a substantial
     rule changes, and retain the manual
                                                             anticipated benefits or impose any                      number of small entities.63 Twenty-
     signature for not less than five years.
                                                               56 15 U.S.C. 78f(b)(1).                                 60 15 U.S.C. 78c(f).
       55 The Commission staff estimates that each SRO
                                                               57 15 U.S.C. 78o–3(b)(2).                               61 15 U.S.C. 78w(a)(2).
     will purchase two of their staff such digital IDs.
                                                               58 15 U.S.C. 78q–1.                                     62 5 U.S.C. 603(a).
     Thus, the annual cost of the digital ID for all SROs
     would be $810 (27 SROs × $15 × 2).                        59 15 U.S.C. 78o–4.                                     63 5 U.S.C. 605(b).




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     17872                       Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules

     seven SROs 64—the 13 national                              PART 232—REGULATION S–T—                                (a) Filings with respect to proposed
     securities exchanges, the 11 clearing                      GENERAL RULES AND REGULATIONS                        rule changes by a self-regulatory
     agencies, and the two national securities                  FOR ELECTRONIC FILINGS                               organization, except filings with respect
     associations and the Municipal                                                                                  to proposed rules changes by self-
     Securities Rulemaking Board—would be                         1. The authority citation for part 232             regulatory organizations submitted
     required to provide the Commission                         continues to read in part as follows:                pursuant to section 19(b)(7) of the Act
     with information pursuant to Rule 19b–                       Authority: 15 U.S.C. 77f, 77g, 77h, 77j,           (15 U.S.C. 78s(b)(7), shall be made
     4 and Form 19b–4. Rule 19b–4 and                           77s(a), 77sss(a), 78c(b), 78l, 78m, 78n, 78o(d),     electronically on Form 19b–4 (17 CFR
     Form 19b–4 apply only to SROs and no                       78w(a), 78ll(d), 79t(a), 80a–8, 80a–29, 80a–30       249.819).
     SRO is a small entity. Accordingly, the                    and 80a–37.
                                                                                                                     *       *     *    *    *
     Commission certifies that the proposed                     *     *     *     *     *                               (e) For the purposes of this paragraph,
     amendments, if adopted, would not                            2. Section 232.101 is amended by:                  new derivative securities product means
     have a significant economic impact on                        a. Removing the word ‘‘and’’ at the                any type of option, warrant, hybrid
     a substantial number of small entities.65                  end of paragraph (a)(1)(vii);                        securities product or any other security,
     IX. Statutory Basis and Text of                              b. Removing the period at the end of               other than a single equity option or a
     Proposed Amendments                                        paragraph (a)(1)(viii) and in its place              security futures product, whose value is
                                                                adding ‘‘; and’’;                                    based, in whole or in part, upon the
       The amendments to Regulation S–T
                                                                  c. Adding paragraph (a)(1)((ix); and               performance of, or interest in, an
     under the Securities Act of 1933, Rule
                                                                  d. Revising paragraph (c)(9).                      underlying instrument.
     19b–4 and Form 19b–4 under the Act
                                                                  The additions and revisions read as                *       *     *    *    *
     are being proposed pursuant to 15
                                                                follows:                                                (f) * * *
     U.S.C. 78a et seq., particularly sections
     3(a)(26), 3(a)(27), 3(b), 6, 15A, 15B, 17A,                                                                        (2) Establishing or changing a due,
                                                                § 232.101 Mandated electronic
     19(b), 23(a) and 36(a) of the Act.                                                                              fee, or other charge applicable only to a
                                                                submissions and exceptions.
                                                                                                                     member;
     List of Subjects in 17 CFR Parts 232,                        (a) * * *
                                                                  (1) * * *                                          *       *     *    *    *
     240, and 249                                                                                                       (j) Filings with respect to proposed
                                                                  (ix) Form 19b–4 (§ 249.819 of this
       Reporting and recordkeeping                                                                                   rule changes by a self-regulatory
                                                                chapter).
     requirements, Securities.                                                                                       organization submitted on Form 19b–4
                                                                *     *    *     *    *                              (17 CFR 249.819) electronically shall
       In accordance with the foregoing,                          (c) * * *
     Title 17, Chapter II of the Code of                                                                             contain an electronic signature. For the
                                                                  (9) Exchange Act filings submitted to              purposes of this section, the term
     Federal Regulations is proposed to be                      the Division of Market Regulation,
     amended as follows:                                                                                             electronic signature means an electronic
                                                                except for Form 19b–4 (§ 249.819 of this             entry in the form of a magnetic impulse
        64 American Stock Exchange LLC, Boston Stock
                                                                chapter).                                            or other form of computer data
     Clearing Corporation, Boston Stock Exchange, Inc.,         *     *    *     *    *                              compilation of any letter or series of
     Chicago Board Options Exchange, Inc., Chicago                                                                   letters or characters comprising a name,
     Mercantile Exchange, Inc., Chicago Stock Exchange,         PART 240—GENERAL RULES AND                           executed, adopted or authorized as a
     Inc., The Depository Trust Co., Emerging Markets           REGULATIONS, SECURITIES
     Clearing Corporation, Fixed Income Clearing                                                                     signature. Each signatory to an
     Corporation, INET Futures Exchange, LLC,
                                                                EXCHANGE ACT OF 1934                                 electronically submitted rule filing shall
     International Securities Exchange, Inc., Midwest                                                                manually sign a signature page or other
     Clearing Corporation, Midwest Securities Trust Co.,
                                                                  3. The authority citation for part 240
     Municipal Securities Rulemaking Board, National            continues to read in part as follows:                document, in the manner prescribed by
     Association of Securities Dealers, Inc., National                                                               Form 19b–4, authenticating,
                                                                  Authority: 15 U.S.C. 77c, 77d, 77g, 77j,
     Futures Association, National Securities Clearing
                                                                77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn,
                                                                                                                     acknowledging or otherwise adopting
     Corporation, The National Stock Exchange, Inc.                                                                  his or her signature that appears in
     (f/k/a Cincinnati Stock Exchange, Inc.), New York          77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j,
     Stock Exchange, Inc., NQLX, LLC, One Chicago,              78j–1, 78k, 78k–1, 78l, 78m, 78n, 78o, 78p,          typed form within the electronic filing.
     LLC, The Options Clearing Corporation, Pacific             78q, 78s, 78u–5, 78w, 78x, 78ll, 78mm, 79q,          Such document shall be executed before
     Exchange, Inc., Pacific Clearing Corporation, Pacific      79t, 80a–20, 80a–23, 80a–29, 80a–37, 80b–3,          or at the time the rule filing is
     Securities Depository Trust, Co., Philadelphia Stock       80b–4, 80b–11, and 7201 et seq.; and 18              electronically submitted and shall be
     Exchange, Inc., and Stock Clearing Corporation of          U.S.C. 1350, unless otherwise noted.
     Philadelphia.
                                                                                                                     retained by the filer in accordance with
        65 See 17 CFR 240.0–10(d) and (e). Paragraph (d)
                                                                *     *    *      *    *                             § 240.17a–1.
     of Rule 0–10 of the Act states that the term ‘‘small         4. Section 240.19b–4 is amended by:                   (k) If the conditions of this section
     business,’’ when referring to a clearing agency,
                                                                  a. Adding a preliminary note;                      and Form 19b–4 (17 CFR 249.819) are
     means a clearing agency that: (1) Compared, cleared                                                             otherwise satisfied, all filings submitted
     and settled less than $500 million in securities             b. Revising paragraph (a), the
     transactions during the preceding fiscal year (or in       introductory text of paragraph (e),                  electronically on or before 5:30 p.m.
     the time that it has been in business, if shorter); (2)    paragraph (f)(2); and                                Eastern Standard Time or Eastern
     had less than $200 million of funds and securities
                                                                  c. Adding paragraphs (j), (k), (l), and            Daylight Saving Time, whichever is
     in its custody or control at all times during the                                                               currently in effect, on a business day,
     preceding fiscal year (or in the time that it has been     (m).
     in business, if shorter); and (3) is not affiliated with     The additions and revisions read as                shall be deemed filed on that business
     any person (other than a natural person) that is not       follows:                                             day, and all filings submitted after 5:30
     a small business or small organization as defined                                                               p.m. Eastern Standard Time or Eastern
     in Rule 0–10. Paragraph (e) of Rule 0–10 states that       § 240.19b–4 Filings with respect to                  Daylight Saving Time, whichever is
     the term ‘‘small business,’’ when referring to an          proposed rule changes by self-regulatory
     exchange, means any exchange that has been                                                                      currently in effect, shall be deemed filed
     exempted from the reporting requirements of Rule
                                                                organizations.                                       on the next business day.
     11Aa3–1 under the Act, 17 CFR 2450.11Aa3–1, and              Preliminary Note: A self-regulatory                   (l) The self-regulatory organization
     is not affiliated with any person (other than a            organization must also refer to Form                 shall post the proposed rule change, and
     natural person) that is not a small business or small
     organization as defined in Rule 0–10. The
                                                                19b–4 (17 CFR 249.819) for further                   any amendments thereto, on its website
     Commission also has found that the NASD is not             requirements with respect to the filing              no later than the next business day after
     a small business.                                          of proposed rule changes.                            the filing of the proposed rule change,


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                                Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules                                                17873

     and any amendments thereto, with the                    format through the SRO Rule Tracking                   if the amendment changes the purpose of or
     Commission.                                             System (‘‘SRTS’’) operated by the                      basis for the proposed rule change, the
        (m) The self-regulatory organization                 Commission. This form shall be used for                amended response shall also provide a
     shall post and maintain a current and                   filings of proposed rule changes by all self-          revised purpose and basis statement for the
                                                             regulatory organizations pursuant to Section           proposed rule change. Exhibit 1 shall be re-
     complete version of its rules on its                    19(b) of the Act, except filings with respect          filed if there is a material change from the
     website. The self-regulatory                            to proposed rule changes by self-regulatory            immediately preceding filing in the language
     organization shall update its website to                organizations submitted pursuant to Section            of the proposed rule change or in the
     reflect rule changes no later than the                  19(b)(7) of the Act. National securities               information provided.
     next business day after it has been                     exchanges, registered securities associations,            If the amendment alters the text of an
     notified of the Commission’s approval                   registered clearing agencies, and the                  existing rule, the amendment shall include
                                                             Municipal Securities Rulemaking Board are
     of a proposed rule change filed pursuant                self-regulatory organizations for purposes of
                                                                                                                    the text of the existing rule, marked in the
     to section 19(b)(2) of the Act (15 U.S.C.               this form.                                             manner described in Item 1(a) using brackets
     78s(b)) or of the Commission’s notice of                                                                       to indicate words to be deleted from the
     a proposed rule change filed pursuant to                B. Need for Careful Preparation of the                 existing rule and underscoring to indicate
                                                             Completed Form, Including Exhibits                     words to be added. The purpose of this
     section 19(b)(3)(A) or section 19(b)(7) of
                                                                This form, including the exhibits, is               marking requirement is to maintain a current
     the Act (15 U.S.C. 78s(b)(3)(A) or 15
                                                             intended to elicit information necessary for           copy of how the text of the existing rule is
     U.S.C. 78s(b)(7)). If a rule change is not                                                                     being changed.
                                                             the public to provide meaningful comment
     effective for a certain period, the self-               on the proposed rule change and for the                   If the amendment alters the text of the
     regulatory organization shall clearly                   Commission to determine whether the                    proposed rule change as it appeared in the
     indicate the effective date in the                      proposed rule change is consistent with the            immediately preceding filing (even if the
     relevant rule text.                                     requirements of the Act and the rules and              proposed rule change does not alter the text
                                                             regulations thereunder applicable to the self-         of an existing rule), the amendment shall
     PART 249—FORMS, SECURITIES                              regulatory organization. The self-regulatory           include, as Exhibit 4, the entire text of the
     EXCHANGE ACT OF 1934                                    organization must provide all the information          rule as altered. This full text shall be marked,
                                                             called for by the form, including the exhibits,        in any convenient manner, to indicate
       5. The authority citation for Part 249                and must present the information in a clear            additions to and deletions from the
     continues to read in part as follows:                   and comprehensible manner.                             immediately preceding filing. The purpose of
                                                                The proposed rule change shall be                   Exhibit 4 is to permit the staff to identify
        Authority: 15 U.S.C. 78a, et seq. and 7201           considered filed on the date on which the
     et seq.; and 18 U.S.C. 1350, unless otherwise                                                                  immediately the changes made from the text
                                                             Commission receives the proposed rule
     noted.                                                                                                         of the rule with which it has been working.
                                                             change if the filing complies with all
     *     *    *      *     *                                                                                         If the self-regulatory organization is
                                                             requirements of this form. Any filing that
       6. Section 249.819 and Form 19b–4                     does not comply with the requirements of               amending only part of the text of a lengthy
     are revised to read as follows:                         this form may be returned to the self-                 proposed rule change, it may, with the
                                                             regulatory organization at any time before the         Commission’s permission, file only those
       [Note: Form 19b–4 is attached as Appendix             issuance of the notice of filing. Any filing so        portions of the text of the proposed rule
     A to this document.]                                    returned shall for all purposes be deemed not          change in which changes are being made if
                                                             to have been filed with the Commission. See            the filing (i.e., partial amendment) is clearly
     § 249.819 Form 19b–4, for electronic filing             also Rule 0–3 under the Act (17 CFR 240.0–             understandable on its face. Such partial
     with respect to proposed rule changes by                3).                                                    amendment shall be clearly identified and
     all self-regulatory organizations.                                                                             marked to show deletions and additions.
                                                             C. Documents Comprising the Completed                     If, after the rule change is filed but before
       This form shall be used by all self-                  Form
     regulatory organizations, as defined in                                                                        the Commission takes final action on it, the
     section 3(a)(26) of the Securities                         The completed form filed with the                   self-regulatory organization receives or
                                                             Commission shall consist of the Form 19b–              prepares any correspondence or other
     Exchange Act of 1934 (15 U.S.C.                         4 Page 1, numbers and captions for all items,          communications reduced to writing
     78c(a)(26)), to file electronically                     responses to all items, and exhibits required          (including comment letters) to and from such
     proposed rule changes with the                          in Item 9. In responding to an item, the               self-regulatory organization concerning the
     Commission pursuant to section 19(b) of                 completed form may omit the text of the item           proposed rule change, the communications
     the Act and § 240.19b–4 of this chapter.                as contained herein if the response is                 shall be filed as Exhibit 2. If information in
                                                             prepared to indicate to the reader the                 the communication makes the rule change
       By the Commission.                                    coverage of the item without the reader
       Dated: March 30, 2004.                                                                                       filing inaccurate, the filing shall be amended
                                                             having to refer to the text of the item or its
                                                                                                                    to correct the inaccuracy. If such
     Margaret H. McFarland,                                  instructions. Each filing shall be marked on
                                                                                                                    communications cannot be filed
     Deputy Secretary.                                       the Form 19b–4 with the initials of the self-
                                                                                                                    electronically in accordance with Instruction
                                                             regulatory organization, the four-digit year,
                                                             and the number of the filing for the year (i.e.,       F, the communications shall be filed in
       [Note: Appendix A to the preamble will
     not appear in the Code of Federal                       SRO–YYYY–XX). If the SRO is filing Exhibit             accordance with Instruction G.
     Regulations.]                                           2 and 3 via paper, the exhibits must be filed          E. Completion of Action by the Self-
                                                             within 5 days of the electronic submission of          Regulatory Organization on the Proposed
     Appendix A—General Instructions for                     all other required documents.                          Rule Change
     Form 19b–4                                              D. Amendments                                             The Commission will not approve a
     A. Use of the Form                                        If information on this form is or becomes            proposed rule change before the self-
                                                             inaccurate before the Commission takes                 regulatory organization has completed all
       All self-regulatory organization proposed                                                                    action required to be taken under its
     rule changes, except filings with respect to            action on the proposed rule change, the self-
                                                             regulatory organization shall file                     constitution, articles of incorporation,
     proposed rule changes by self-regulatory
                                                             amendments correcting any such inaccuracy.             bylaws, rules, or instruments corresponding
     organizations submitted pursuant to Section
                                                             Amendments shall be filed as specified in              thereto (excluding action specified in any
     19(b)(7) 66 of the Securities Exchange Act of
                                                             Instruction F.                                         such instrument with respect to (i)
     1934 (‘‘Act’’), shall be filed in an electronic
                                                               Amendments to a filing shall include the             compliance with the procedures of the Act or
                                                             Form 19b–4 Page 1 marked to number                     (ii) the formal filing of amendments pursuant
       66 Because section 19(b)(7)(C) of the Act states
                                                             consecutively the amendments, numbers and              to state law). Nevertheless, proposed rule
     that filings abrogated pursuant to this section
     should be re-filed pursuant to paragraph (b)(1) of      captions for each amended item, amended                changes (other than proposed rule changes
     section 19 of the Act, SROs are required to file        response to the item, and required exhibits.           that are to take, or to be put into, effect
     electronically such proposed rule changes in            The amended response to Item 3 shall                   pursuant to Section 19(b)(3) of the Act) may
     accordance with this form.                              explain the purpose of the amendment and,              be initially filed before the completion of all



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     17874                     Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules

     such action if the self-regulatory organization         website where basic profile information will           Regulation, Securities and Exchange
     consents, under Item 6 of this form, to an              be requested.                                          Commission, 450 Fifth Street, NW.,
     extension of the period of time specified in              A duly authorized officer of the self-               Washington, DC 20549–1001. Page 1 of the
     Section 19(b)(2) or Section 19(b)(7)(D) of the          regulatory organization shall electronically           electronic Form 19b–4 shall accompany
     Act until at least thirty-five days after the           sign the completed Form 19b–4 as indicated             paper submissions of Exhibits 2 and 3. If the
     self-regulatory organization has filed an               on Page 1 of the form. In addition, a duly             SRO is filing Exhibit 2 and 3 via paper, they
     appropriate amendment setting forth the                 authorized officer of the self-regulatory              must be filed within five days of the
     taking of all such action. If a proposed rule           organization shall manually sign one copy of           electronic filing of all other required
     change to be filed for review under Section             the completed Form 19b–4, and the manually             documents.
     19(b)(2) or Section 19(b)(7)(D) of the Act is           signed signature page shall be maintained
                                                                                                                    H. Withdrawals of Proposed Rule Changes
     in preliminary form, the self-regulatory                pursuant to Section 17 of the Act. A
     organization may elect to file initially Exhibit        registered clearing agency for which the                 If a self-regulatory organization determines
     1 setting forth a description of the subjects           Commission is not the appropriate regulatory           to withdraw a proposed rule change, it must
     and issues expected to be involved.                     agency shall also file with its appropriate            complete Page 1 of the Form 19b–4 and
                                                             regulatory agency three copies of the form,            indicate by selecting the appropriate check
     F. Signature and Filing of the Completed                                                                       box to withdraw the filing.
                                                             one of which shall be manually signed,
     Form                                                    including exhibits. The Municipal Securities           I. Procedures for Granting an Extension of
        All proposed rule changes, amendments,               Rulemaking Board shall also file copies of the         Time for Commission Final Action
     and withdrawals of proposed rule changes                form, including exhibits, with the Board of
     shall be filed through the SRTS. In order to            Governors of the Federal Reserve System, the              After the Commission publishes notice of
     file Form 19b–4 through SRTS, self-                     Comptroller of the Currency, and the Federal           a proposed rule change, if a self-regulatory
     regulatory organizations must request access            Deposit Insurance Corporation.                         organization wishes to grant the Commission
     to the SEC’s External Application Server by                                                                    an extension of the time to take final action
     completing a request for an external account            G. Procedures for Submission of Paper                  as specified in Section 19(b)(2), the self-
     user ID and password. Initial requests will be          Documents for Exhibits 2 and 3                         regulatory organization shall indicate on the
     received by contacting the Market Regulation              To the extent that Exhibits 2 and 3 cannot           Form 19b–4 Page 1 the granting of said
     Administrator located on our website (http:/            be filed electronically in accordance with             extension as well as the date the extension
     /www.sec.gov). E-mail will be sent to the               Instruction F, four copies of Exhibits 2 and           expires.
     requestor that will provide a link to a secure          3 shall be filed with the Division of Market           BILLING CODE 8010–01–P




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     Information To Be Included in the Completed                (i) proposed to be used in connection with          Instruction F, the documents shall be filed in
     Form (‘‘Form 19b–4 Information’’)                       the implementation or operation of the                 accordance with Instruction G.
                                                             proposed rule change, or                                  (b) If the self-regulatory organization
     1. Text of the Proposed Rule Change
                                                                (ii) prescribed or referred to in the               reasonably expects that the proposed rule
        (a) Include the text of the proposed rule            proposed rule change, or                               change will have any direct effect, or
     change. Changes in, additions to, or deletions             (iii) voluntary or required pursuant to an          significant indirect effect, on the application
     from, any existing rule shall be set forth with         existing rule of the self-regulatory                   of any other rule of the self-regulatory
     brackets used to indicate words to be deleted           organization, such form, report, or                    organization, set forth the designation or title
     and underscoring used to indicate words to              questionnaire, together with a statement               of any such rule and describe the anticipated
     be added.                                               identifying any existing rule that requires            effect of the proposed rule change on the
                                                             completion of the form, report, or                     application of such other rule.
        If any form, report, or questionnaire or the
                                                             questionnaire, shall be attached as Exhibit 3.            (c) Include the file numbers for prior filings
                                                                                                                                                                        EP05AP04.013</GID></GPH>




     completion of such is                                   If the form, report, or questionnaire cannot be        with respect to any existing rule specified in
                                                             filed electronically in accordance with                response to Item 1(b).



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                               Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules                                                 17877

     2. Procedures of the Self-Regulatory                    custody or control or for which it is                  respond in detail to written comments as to
     Organization                                            responsible. Certain limitations that the Act          any significant impact or burden on
        Describe action on the proposed rule                 imposes on self-regulatory organizations are           competition perceived by any person who
     change taken by the members or board of                 summarized in the notes that follow.                   has made comments on the proposed rule
     directors or other governing body of the self-            Note 1: National Securities Exchanges and            change to the self-regulatory organization.
     regulatory organization (by amendment if                Registered Securities Associations. Under              The statement concerning burdens on
     initial filing is prior to completion of final          Sections 6 and 15A of the Act, rules of a              competition should be sufficiently detailed
     action). See Instruction E.                             national securities exchange or registered             and specific to support a Commission finding
                                                             securities association may not permit unfair           that the proposed rule change does not
     3. Self-Regulatory Organization’s Statement                                                                    impose any unnecessary or inappropriate
                                                             discrimination between customers, issuers,
     of the Purpose of, and Statutory Basis for, the                                                                burden on competition.
                                                             brokers, or dealers, and may not regulate, by
     Proposed Rule Change
                                                             virtue of any authority conferred by the Act,          5. Self-Regulatory Organization’s Statement
        Provide a statement of the purpose of the            matters not related to the purposes of the Act         on Comments on the Proposed Rule Change
     proposed rule change and its basis under the            or the administration of the self-regulatory           Received From Members, Participants, or
     Act and the rules and regulations thereunder            organization. Rules of a registered securities         Others
     applicable to the self-regulatory organization.         association may not fix minimum profits or
     With respect to proposed rule changes filed                                                                       If written comments were received
                                                             impose any schedule of or fix rates of
     pursuant to Section 19(b)(1) of the Act,                                                                       (whether or not comments were solicited)
                                                             commissions, allowances, discounts, or other
     except for proposed rule changes that have                                                                     from members of or participants in the self-
                                                             fees to be charged by its members.
     been abrogated pursuant to Section                                                                             regulatory organization or others, summarize
                                                               Under Section 11A(c)(5) of the Act, a
     19(b)(7)(C) of the Act, the statement should                                                                   the substance of all such comments received
                                                             national securities exchange or registered
     be sufficiently detailed and specific to                                                                       and respond in detail to any significant
                                                             securities association may not limit or
     support a finding under Section 19(b)(2) of                                                                    issues that those comments raised about the
                                                             condition the participation of any member in
     the Act that the proposed rule change is                                                                       proposed rule change. If an issue is
                                                             any registered clearing agency.
     consistent with the requirements of the Act                                                                    summarized and responded to in detail
     and the rules and regulations thereunder                  Note 2: Registered Clearing Agencies.                under Item 3 or Item 4, that response need
     applicable to the self-regulatory organization.         Under Section 17A of the Act, rules of a               not be duplicated if appropriate cross-
     With respect to proposed rule changes filed             registered clearing agency may not permit              reference is made to the place where the
     pursuant to Section 19(b)(1) of the Act that            unfair discrimination in the admission of              response can be found. If comments were not
     have been abrogated pursuant to Section                 participants or among participants in the use          or are not to be solicited, so state.
     19(b)(7)(C) of the Act, the statement should            of the clearing agency, may not regulate, by           6. Extension of Time Period for Commission
     be sufficiently detailed and specific to                virtue of any authority conferred by the Act,          Action
     support a finding under Section 19(b)(7)(D)             matters not related to the purposes of Section
                                                             17A of the Act or the administration of the               State whether the self-regulatory
     of the Act that the proposed rule change does                                                                  organization consents to an extension of the
     not unduly burden competition or efficiency,            clearing agency, and may not impose any
                                                             schedule of prices, or fix rates or other fees,        time period specified in Section 19(b)(2) or
     does not conflict with the securities laws,                                                                    Section 19(b)(7)(D) of the Act and the
     and is not inconsistent with the public                 for services rendered by its participants.
                                                                                                                    duration of the extension, if any, to which
     interest or the protection of investors. At a             Note 3: Municipal Securities Rulemaking              the self-regulatory organization consents.
     minimum, the statement should:                          Board. Under Section 15B of the Act, rules                Note: The self-regulatory organization may
        (a) Describe the reasons for adopting the            of the Municipal Securities Rulemaking                 elect to consent to an extension of the time
     proposed rule change, any problems the                  Board may not permit unfair discrimination             period specified in Section 19(b)(2) or
     proposed rule change is intended to address,            between customers, issuers, municipal                  Section 19(b)(7)(D) of the Act until it shall
     the manner in which the proposed rule                   securities brokers, or municipal securities            file an amendment which specifically states
     change will resolve those problems, the                 dealers, may not fix minimum profits, or               that the time period specified in Section
     manner in which the proposed rule change                impose any schedule or fix rates of                    19(b)(2) or Section 19(b)(7)(D) of the Act shall
     will affect various persons (e.g., brokers,             commissions, allowances, discounts, or other           begin to run on the date of filing such
     dealers, issuers, and investors), and any               fees to be charged by municipal securities             amendment.
     significant problems known to the self-                 brokers or municipal securities dealers, and
     regulatory organization that persons affected           may not regulate, by virtue of any authority           7. Basis for Summary Effectiveness Pursuant
     are likely to have in complying with the                conferred by the Act, matters not related to           to Section 19(b)(3) or for Accelerated
     proposed rule change; and                               the purposes of the Act with respect to                Effectiveness Pursuant to Section 19(b)(2) or
        (b) With respect to the proposed rule                municipal securities or the administration of          Section 19(b)(7)(D)
     changes filed pursuant to both Sections                 the Board.                                                (a) If the proposed rule change is to take,
     19(b)(1) and 19(b)(2) of the Act, explain why                                                                  or to be put into, effect, pursuant to Section
     the proposed rule change is consistent with             4. Self-Regulatory Organization’s Statement
                                                                                                                    19(b)(3), state whether the filing is made
     the requirements of the Act and the rules and           on Burden on Competition
                                                                                                                    pursuant to paragraph (A) or (B) thereof.
     regulations thereunder applicable to the self-             State whether the proposed rule change                 (b) In the case of paragraph (A) of Section
     regulatory organization. A mere assertion that          will have an impact on competition and, if             19(b)(3), designate that the proposed rule
     the proposed rule change is consistent with             so, (i) state whether the proposed rule change         change:
     those requirements is not sufficient. With              will impose any burden on competition or                  (i) is a stated policy, practice, or
     respect to a proposed rule change filed                 whether it will relieve any burden on, or              interpretation with respect to the meaning,
     pursuant to Section 19(b)(1) of the Act that            otherwise promote, competition and (ii)                administration, or enforcement of an existing
     has been abrogated pursuant to Section                  specify the particular categories of persons           rule,
     19(b)(7)(C) of the Act, explain why the                 and kinds of businesses on which any burden               (ii) establishes or changes a due, fee, or
     proposed rule change does not unduly                    will be imposed and the ways in which the              other charge applicable only to a member,
     burden competition or efficiency, does not              proposed rule change will affect them. If the             (iii) is concerned solely with
     conflict with the securities laws, and is not           proposed rule change amends an existing                administration of the self-regulatory
     inconsistent with the public interest and the           rule, state whether that existing rule, as             organization,
     protection of investors, in accordance with             amended by the proposed rule change, will                 (iv) effects a change in an existing service
     Section 19(b)(7)(D) of the Act. A mere                  impose any burden on competition. If any               of a registered clearing agency that (A) does
     assertion that the proposed rule change                 impact on competition is not believed to be            not adversely affect the safeguarding of
     satisfies these requirements is not sufficient.         a significant burden on competition, explain           securities or funds in the custody or control
     In the case of a registered clearing agency,            why. Explain why any burden on                         of the clearing agency or for which it is
     also explain how the proposed rule change               competition is necessary or appropriate in             responsible and (B) does not significantly
     will be implemented consistently with the               furtherance of the purposes of the Act. In             affect the respective rights or obligations of
     safeguarding of securities and funds in its             providing those explanations, set forth and            the clearing agency or persons using the



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     17878                     Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules

     service, and set forth the basis on which such             (d) If accelerated effectiveness pursuant to        place of providing it in Item I and which may
     designation is made,                                    Section 19(b)(2) or Section 19(b)(7)(D) of the         otherwise be more easily readable if provided
        (v) effects a change in an existing order-           Act is requested, provide a statement                  separately from Form 19b–4. Exhibit 5 shall
     entry or trading system of a self-regulatory            explaining why there is good cause for the             be considered part of the proposed rule
     organization that (A) does not significantly            Commission to accelerate effectiveness.                change.
     affect the protection of investors or the public        8. Proposed Rule Change Based on Rules of              Specific Instructions for Exhibit 1—Notice of
     interest; (B) does not impose any significant           Another Self-Regulatory Organization or of             Proposed Rule Change
     burden on competition; and (C) does not                 the Commission
     have the effect of limiting the access to or                                                                   Exhibit 1
     availability of the system, or                             State whether the proposed rule change is
        (vi) effects a change that (A) does not              based on a rule either of another self-                Securities and Exchange Commission
     significantly affect the protection of investors        regulatory organization or of the                      [Release No. 34–    ; File No. SR ]
     or the public interest; (B) does not impose             Commission, and, if so, identify the rule and
                                                             explain any differences between the                    Self-Regulatory Organizations
     any significant burden on competition; and
     (C) by its terms, does not become operative             proposed rule change and that rule, as the               Proposed Rule Change By (Name of Self-
     for 30 days after the date of the filing, or such       filing self-regulatory organization                    Regulatory Organization) Relating to (brief
     shorter time as the Commission may                      understands it. In explaining any such                 description of subject matter of proposed rule
                                                             differences, give particular attention to              change)
     designate if consistent with the protection of
                                                             differences between the conduct required to            lllllllllllllllllllll
     investors and the public interest; provided
                                                             comply with the proposed rule change and
     that the self-regulatory organization has given                                                                General Instructions
                                                             that required to comply with the other rule.
     the Commission written notice of its intent
     to file the proposed rule change, along with            9. Exhibits                                            A. Format Requirements
     a brief description and text of the proposed               List of exhibits to be filed, as specified in          Leave a 1-inch margin at the top, bottom,
     rule change, at least five business days prior          Instructions C and D:                                  and right hand side, and a 11⁄2 inch margin
     to the date of filing of the proposed rule                 Exhibit 1. Completed Notice of Proposed             at the left hand side. Number all pages
     change, or such shorter time as designated by           Rule Change for publication in the Federal             consecutively. Double space all primary text
     the Commission. If it is requested that the             Register. Amendments to Exhibit 1 should be            and single space lists of items, quoted
     proposed rule change become operative in                filed in accordance with Instruction D and F.          material when set apart from primary text,
     less than 30 days, provide a statement                     Exhibit 2. (a) Copies of notices issued by          footnotes, and notes to tables.
     explaining why the Commission should                    the self-regulatory organization soliciting
     shorten this time period.                               comment on the proposed rule change and                B. Need for Careful Preparation of the Notice
        (c) In the case of paragraph (B) of Section          copies of all written comments on the                     The self-regulatory organization must
     19(b)(3), set forth the basis upon which the            proposed rule change received by the self-             provide all information required in the notice
     Commission should, in the view of the self-             regulatory organization (whether or not                and present it in a clear and comprehensible
     regulatory organization, determine that the             comments were solicited), presented in                 manner. It is the responsibility of the self-
     protection of investors, the maintenance of             alphabetical order, together with an                   regulatory organization to prepare Items I, II
     fair and orderly markets, or the safeguarding           alphabetical listing of such comments. If              and III of the notice. The Commission
     of securities and funds requires that the               such notices and comments cannot be filed              cautions self-regulatory organizations to pay
     proposed rule change should be put into                 electronically in accordance with Instruction          particular attention to assure that the notice
     effect summarily by the Commission.                     F, the notices and comments shall be filed in          accurately reflects the information provided
        Note: The Commission has the power                   accordance with Instruction G.                         in the Form 19b–4 it accompanies. Any filing
     under Section 19(b)(3)(C) of the Act to                    (b) Copies of any transcript of comments            that does not comply with the requirements
     abrogate summarily within sixty days of its             on the proposed rule change made at any                of Form 19b–4, including the requirements
     filing any proposed rule change which has               public meeting or, if a transcript is not              applicable to the notice, may, at any time
     taken effect upon filing pursuant to Section            available, a copy of the summary of                    before the Commission issues a notice of
     19(b)(3)(A) of the Act or was put into effect           comments on the proposed rule change made              filing, be returned to the self-regulatory
                                                             at such meeting. If such transcript of                 organization. Any document so returned
     summarily by the Commission pursuant to
                                                             comments or summary of comments cannot                 shall for all purposes be deemed not to have
     Section 19(b)(3)(B) of the Act. In exercising
                                                             be filed electronically in accordance with             been filed with the Commission. See
     its summary power under Section 19(b)(3)(B),
                                                             Instruction F, the transcript of comments or           Instruction B to Form 19b–4.
     the Commission is required to make one of
                                                             summary of comments shall be filed in                  lllllllllllllllllllll
     the findings described above but may not                                                                          Pursuant to Section 19(b)(1) of the
                                                             accordance with Instruction G.
     have a full opportunity to make a                                                                              Securities Exchange Act of 1934, 15 U.S.C.
                                                                (c) If after the proposed rule change is filed
     determination that the proposed rule change                                                                    78s(b)(1), notice is hereby given that on
                                                             but before the Commission takes final action
     otherwise is consistent with the requirements           on it, the self-regulatory organization                (date),67 the (name of self-regulatory
     of the Act and the rules and regulations                prepares or receives any correspondence or             organization) filed with the Securities and
     thereunder. The Commission will generally               other communications reduced to writing                Exchange Commission the proposed rule
     exercise its summary power under Section                (including comment letters) to and from such           change as described in Items I, II and III
     19(b)(3)(B) on condition that the proposed              self-regulatory organization concerning the            below, which Items have been prepared by
     rule change to be declared effective                    proposed rule change, the communications               the self-regulatory organization. The
     summarily shall also be subject to the                  shall be filed in accordance with Instruction          Commission is publishing this notice to
     procedures of Section 19(b)(2) of the Act.              F. If such communications cannot be filed              solicit comments on the proposed rule
     Accordingly, in most cases, a summary order             electronically in accordance with Instruction          change from interested persons.
     under Section 19(b)(3)(B) shall be effective            F, the communications shall be filed in                Information to Be Included in the Completed
     only until such time as the Commission shall            accordance with Instruction G.                         Notice
     enter an order, pursuant to Section                        Exhibit 3. Copies of any form, report, or
     19(b)(2)(A) of the Act, to approve such                 questionnaire covered by Item 1(a). If such            I. Self-Regulatory Organization’s Statement
     proposed rule change or, depending on the               form, report, or questionnaire cannot be filed         of the Terms of Substance of the Proposed
     circumstances, until such time as the                   electronically in accordance with Instruction          Rule Change
     Commission shall institute proceedings to               F, the form, report, or questionnaire shall be            (Supply a brief statement of the terms of
     determine whether to disapprove such                    filed in accordance with Instruction G.                substance of the proposed rule change. If the
     proposed rule change or, alternatively, such               Exhibit 4. For amendments to a filing,
     time as the Commission shall, at the                    marked copies, if required by Instruction D,             67 To be completed by the Commission. This date
     conclusion of such proceedings, enter an                of the text of the proposed rule change as             will be the date on which the Commission receives
     order, pursuant to Section 19(b)(2)(B),                 amended.                                               the proposed rule change filing if the filing
     approving or disapproving such proposed                    Exhibit 5. The SRO may choose to attach             complies with all requirements of this form. See
     rule change.                                            as Exhibit 5 proposed changes to rule text in          Instruction B to Form 19b–4.



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                               Federal Register / Vol. 69, No. 65 / Monday, April 5, 2004 / Proposed Rules                                                 17879

     proposed rule change is relatively brief, a             finding or (ii) as to which the self-regulatory        IV. Solicitation of Comments
     separate statement need not be prepared, and            organization consents, the Commission will:               Interested persons are invited to submit
     the text of the proposed rule change may be                (A) By order approve such proposed rule             written data, views and arguments
     inserted in lieu of the statement of the terms          change, or                                             concerning the foregoing, including whether
     of substance. If the proposed rule change                  (B) Institute proceedings to determine              the proposed rule change is consistent with
     amends an existing rule, indicate changes in            whether the proposed rule change should be             the Act. Comments may be submitted
     the rule by brackets for words to be deleted            disapproved.                                           electronically or by paper. Electronic
     and underlined for words to be added.)                     (If the proposed rule change is to take, or         comments may be submitted by: (1)
                                                             to be put into, effect pursuant to Section             Electronic form on the SEC website (http://
     II. Self-Regulatory Organization’s Statement            19(b)(3) and subparagraph (f) of Securities
     of the Purpose of, and Statutory Basis for,                                                                    www.sec.gov) or (2) e-mail to rule-
                                                             Exchange Act Rule 19b–4, the following                 comments@sec.gov. Mail paper comments in
     the Proposed Rule Change
                                                             paragraph should be used.)                             triplicate to Jonathan G. Katz, Secretary,
        In its filing with the Commission, the self-            The foregoing rule change has become                Securities and Exchange Commission, 450
     regulatory organization included statements             effective pursuant to Section 19(b)(3) of the          Fifth Street, NW., Washington, DC 20549–
     concerning the purpose of and basis for the             Act and paragraph (f) of Rule 19b–4                    0609. All submissions should refer to file
     proposed rule change and discussed any                  thereunder. At any time within 60 days of the          number XX; this file number should be
     comments it received on the proposed rule               filing of the proposed rule change, the                included on the subject line if e-mail is used.
     change. The text of these statements may be             Commission may summarily abrogate the                  To help us process and review your
     examined at the places specified in Item IV             rule change if it appears to the Commission            comments more efficiently, please use only
     below. The self-regulatory organization has             that such action is necessary or appropriate           one method. The Commission will post all
     prepared summaries, set forth in sections (A),          in the public interest, for the protection of          comments on the Commission’s internet
     (B), and (C) below, of the most significant             investors, or otherwise in furtherance of the          website (http://www.sec.gov). Comments are
     aspects of such statements. (Reproduce the              purposes of the Act.                                   also available for public inspection and
     headings, and summarize briefly the most                   (If the proposed rule change is to be               copying in the Commission’s Public
     significant aspects of the responses, to Items          considered by the Commission pursuant to               Reference Room, 450 Fifth Street, NW.,
     3, 4, and 5 of Form 19b–4, redesignating                Section 19(b)(7)(D) of the Act, the following          Washington, DC 20549. We do not edit
     them as (A), (B), and (C), respectively.)               paragraph should be used.)                             personal identifying information from
                                                                Within 35 days of the date of publication           submissions. You should submit only
     III. Date of Effectiveness of the Proposed                                                                     information that you wish to make available
     Rule Change and Timing for Commission                   of this notice in the Federal Register or
                                                             within such longer period (i) as the                   publicly. All comments should be submitted
     Action                                                                                                         on or before April 26, 2004.
                                                             Commission may designate up to 90 days of
       (If the proposed rule change is to be                 such date if it finds such longer period to be            For the Commission, by the Division of
     considered by the Commission pursuant to                appropriate and publishes its reasons for so           Market Regulation, pursuant to delegated
     Section 19(b)(2), the following paragraph               finding or (ii) as to which the self-regulatory        authority.68
     should be used.)                                        organization consents, the Commission will:            Jonathan G. Katz,
       Within 35 days of the date of publication                (A) By order approve such proposed rule             Secretary.
     of this notice in the Federal Register or               change, or
     within such longer period (i) as the                       (B) After consultation with the Commodity           [FR Doc. 04–7538 Filed 4–2–04; 8:45 am]
     Commission may designate up to 90 days of               Futures Trading Commission, institute                  BILLING CODE 8010–01–P
     such date if it finds such longer period to be          proceedings to determine whether the
     appropriate and publishes its reasons for so            proposed rule change should be disapproved.              68 17   CFR 200.30–3(a).




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