Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to a Direct Registration System, 71013-71015 [E6-20726]

Download as PDF Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: a. By order approve the proposed rule change, or b. Institute proceedings to determine whether the proposed rule change should be disapproved. Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE–2006–97 and should be submitted on or before December 28, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.4 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–20733 Filed 12–6–06; 8:45 am] BILLING CODE 8011–01–P IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments sroberts on PROD1PC70 with NOTICES • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2006–97 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54834; File No. SR–Phlx– 2006–69] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to a Direct Registration System November 29, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on October 31, 2006, the Philadelphia Stock Paper Comments Exchange, Inc. (‘‘Phlx’’) filed with the • Send paper comments in triplicate Securities and Exchange Commission to Nancy M. Morris, Secretary, (‘‘Commission’’) and on November 14, Securities and Exchange Commission, 2006, amended the proposed rule 100 F Street, NE., Washington, DC change described in Items I, II, and III 20549–1090. below, which items have been prepared All submissions should refer to File primarily by Phlx. The Commission is Number SR–NYSE–2006–97. This file publishing this notice to solicit number should be included on the comments on the proposed rule change subject line if e-mail is used. To help the from interested parties. Commission process and review your I. Self-Regulatory Organization’s comments more efficiently, please use only one method. The Commission will Statement of the Terms of Substance of post all comments on the Commission’s the Proposed Rule Change Internet Web site (http://www.sec.gov/ Phlx proposes to adopt new Rule 868 rules/sro.shtml). Copies of the to require certain listed securities to be submission, all subsequent eligible for a Direct Registration System amendments, all written statements (‘‘DRS’’) operated by a securities with respect to the proposed rule depository registered as a clearing change that are filed with the Commission, and all written 4 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). communications relating to the 2 17 CFR 240.19b–4. proposed rule change between the VerDate Aug<31>2005 17:29 Dec 06, 2006 Jkt 211001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 71013 agency under Section 17A of the Act starting on January 1, 2007. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Phlx has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change (1) Purpose The purpose of proposed new Phlx Rule 868 4 is to reduce the cots, risks, and delays associated with the physical delivery of securities certificates by requiring that certain securities be eligible for DRS.5 Proposed Rule 868 would require that on or after January 1, 2007, all securities initially listing on Phlx must be eligible for DRS operated by a securities depository that is a clearing agency registered under Section 17A of the Act (‘‘securities depository’’). This provision would not extend to (i) securities of companies which already have securities listed on Phlx; (ii) securities of companies which immediately prior to such listing had securities listed on another national securities exchange; (iii) derivative products,6 or (iv) securities (other than stocks) which are book-entry-only. 3 The Commission has modified portions of the text of the summaries prepared by the Phlx. 4 The exact text of the Phlx proposed rule change is set forth in its filing, which can be found at http://www.phlx.com/exchange/rulefilngs/2006/S2006-69.pdf. 5 The Commission has approved similar rule changes filed by the New York Stock Exchange LLC, NASDAQ Stock Market LLC, the American Stock Exchange LLC, and the NYSE Arca, Inc. that require certain listed companies securities become DRS eligible. Securities Exchange Act Release Nos. 54289 (August 8, 2006), 71 FR 47278 (August 16, 2006) [File No. SR–NYSE–2006–29]; 54288 (August 8, 2006), 71 FR 47276 (August 16, 2006) [File No. SR–NASDAQ–2006–008]; 54290 (August 8, 2006), 71 FR 47262 (August 16, 2006) [File No. SR–Amex– 2006–40]; 54410 (September 7, 2006), 71 FR 54316 (September 14, 2006) [File No. SR–NYSE Arca– 2006–31]. 6 For purposes of proposed Rule 868, the term ‘‘derivative products’’ means standardized options issued by The Options Clearing Corporation (‘‘OCC’’) or other securities that are issued by OCC or another limited purpose entity or trust and that are based solely on the performance of an index or E:\FR\FM\07DEN1.SGM Continued 07DEN1 71014 Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices sroberts on PROD1PC70 with NOTICES Proposed Rule 868 would also require that on or after January 1, 2008, all securities listed on the Phlx must be eligible for DRS operated by a securities depository. This provision would not extend to derivative products or securities (other than stocks) that are book-entry-only. Securities certificates are used by issuers as a means to evidence and transfer ownership. Because securities certificates require manual processing, significant delays, expenses, and risks associated with lost, stolen, and forged certificates are attendant in processing securities transactions involving securities certificates. In Section 17A of the Act, Congress recognized these concerns by calling for the establishment of a national system for the prompt and accurate clearance and settlement of securities transactions, including the transfer of record ownership and the safeguarding of securities.7 DRS allows an investor to establish, either through an issuer’s transfer agent or through the investor’s broker-dealer, a book-entry position in a security and to electronically transfer that position between the transfer agent and the investor’s broker-dealer of the investor’s choice through a facility currently administered by The Depository Trust Company (‘‘DTC’’).8 By using DRS, investors receive a DRS statement as evidence of share ownership instead of a securities certificate. Investors retain all the rights associated with securities certificates, including such rights as control of ownership and voting rights, without having the responsibility of holding and safeguarding securities certificates. In addition, in corporate actions such as reverse stock splits and mergers, cancellation of old securities positions and issuance of new securities positions is handled electronically with no securities certificates to be returned to or received from transfer agents. Issuers and their transfer agents may incur initial costs when making an issue DRS-eligible as required by this proposed rule change. In order to make a security DRS-eligible, the issuer must portfolio of other publicly traded securities. The term ‘‘derivative product’’ does not include warrants of any type or closed-end management investment companies. 7 15 U.S.C. 78q–1 8 Currently, the only registered clearing agency operating a DRS is DTC. For a description of DRS and the DRS facilities administered by DTC, see Securities Exchange Act Release Nos. 37931 (November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR–DTC–96–15] (order granting approval to establish DRS) and 41862 (September 10, 1999), 64 FR 51162 (September 21, 1999), [File No. SR–DTC–99–16] (order approving implementation of the Profile Modification System). VerDate Aug<31>2005 17:29 Dec 06, 2006 Jkt 211001 have a transfer agent which is a DRS Limited Participant at DTC.9 Transfer agents will need to meet certain DTC criteria, such as insurance and connectivity requirements, in order to become a DRS Limited Participant. Further, issuers may need to amend their corporate documents, such as their by-laws or charter, in order to permit the issuance of book-entry shares. Phlx believes that the proposed deadlines for DRS eligibility coupled with instructive communication by Phlx to issuers, will allow issuers sufficient time to make the necessary changes to comply with the proposed rule change. While the proposed rule change should significantly reduce the number of transactions in securities for which settlement is effected by the physical delivery of securities certificates, the propose rule change will not eliminate the ability of investors to obtain securities certificates provided the issuer chooses to issue or continue to issue certificates. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others (2) Statutory Basis IV. Solicitation of Comments Phlx believes the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange. In particular, the proposed rule change is consistent with Section 6(b)(5) of the Act because it would promote just and equitable principles of trade, foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest by confirming that certain Phlx’s issuers would be required to make their securities eligible for a DRS operated by a securities depository.10 (B) Self-Regulatory Organization’s Statement on Burden on Competition Phlx does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 9 DTC’s rules require that a transfer agent (including an issuer acting as its own transfer agent) acting for a company issuing securities in DRS must be a DRS Limited Participant. Securities Exchange Act Release No. 37931 (November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR–DTC–96– 15]. 10 15 U.S.C. 78f(b)(5). PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 Phlx has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the Federal Register or within such longer period: (i) as the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Phlx–2006–69 in the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx–2006–69. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the E:\FR\FM\07DEN1.SGM 07DEN1 Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filings also will be available for inspection and copying at the principal office of Phlx and on Phlx’s Web site, http:// www.phlx.com. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–Phlx– 2006–69 and should be submitted on or before December 28, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority.11 Nancy M. Morris, Secretary. [FR Doc. E6–20726 Filed 12–6–06; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10741 and # 10742] Alabama Disaster # AL–00006 sroberts on PROD1PC70 with NOTICES AGENCY: U.S. Small Business Administration. ACTION: Notice. SUMMARY: This is a notice of an Administrative declaration of a disaster for the State of Alabama dated 11/29/ 2006. Incident: Severe Storms and Tornadoes. Incident Period: 11/16/2006. Effective Date: 11/29/2006. Physical Loan Application Deadline Date: 01/29/2007. Economic Injury (Eidl) Loan Application Deadline Date: 08/29/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing And Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator’s disaster declaration, applications for disaster loans may be 11 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 17:29 Dec 06, 2006 Jkt 211001 71015 filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Montgomery. Contiguous Counties: Alabama Autauga, Bullock, Crenshaw, Elmore, Lowndes, Macon, Pike. The Interest Rates are: FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator’s disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by Percent the disaster: Homeowners With Credit AvailPrimary County: Essex. able Elsewhere ......................... 6.000 Contiguous Counties: Homeowners Without Credit Massachusetts: Middlesex, Suffolk. Available Elsewhere .................. 3.000 New Hampshire: Hillsborough, Businesses With Credit Available Elsewhere ................................. 8.000 Rockingham. The Interest Rates are: Businesses & Small Agricultural Homeowners With Credit Available Cooperatives Without Credit Available Elsewhere .................. 4.000 Elsewhere: 6.000. Other (Including Non-Profit OrgaHomeowners Without Credit nizations) With Credit Available Available Elsewhere: 3.000. Elsewhere ................................. 5.250 Businesses With Credit Available Businesses And Non-Profit OrgaElsewhere: 8.000. nizations Without Credit AvailBusinesses and Small Agricultural able Elsewhere ......................... 4.000 Cooperatives Without Credit Available Elsewhere: 4.000. The number assigned to this disaster Other (Including Non-Profit for physical damage is 10741 C and for Organizations) With Credit Available economic injury is 10742 0. Elsewhere: 5.250. The State which received an EIDL Businesses And Non-Profit Declaration # is Alabama. Organizations Without Credit Available (Catalog of Federal Domestic Assistance Elsewhere: 4.000. Numbers 59002 and 59008) The number assigned to this disaster Dated: November 29, 2006. for physical damage is 10743 4 and for Steven C. Preston, economic injury is 10744 0. The Commonwealth and State which Administrator. received an EIDL Declaration # are [FR Doc. E6–20758 Filed 12–6–06; 8:45 am] Massachusetts, New Hampshire. BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #10743 and #10744] Massachusetts Disaster #MA–00008 AGENCY: U.S. Small Business Administration. ACTION: Notice. Frm 00070 Fmt 4703 Sfmt 4703 Dated: November 29, 2006. Steven C. Preston, Administrator. [FR Doc. E6–20759 Filed 12–6–06; 8:45 am] BILLING CODE 8025–01–P SUMMARY: This is a notice of an Administrative declaration of a disaster for the Commonwealth of Massachusetts dated 11/29/2006. Incident: Explosion and Fires. Incident Period: 11/22/2006. Effective Date: 11/29/2006. Physical Loan Application Deadline Date: 01/29/2007. Economic Injury (Eidl) Loan Application Deadline Date: 08/29/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. PO 00000 (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) DEPARTMENT OF STATE [Public Notice 5625] Notice of Proposal to Extend the Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Cyprus Concerning the Imposition of Import Restrictions on Pre-Classical and Classical Archaeological Objects and Byzantine Period Ecclesiastical and Ritual Ethnological Materials The Government of the Republic of Cyprus has informed the Government of the United States of its interest in an E:\FR\FM\07DEN1.SGM 07DEN1

Agencies

[Federal Register Volume 71, Number 235 (Thursday, December 7, 2006)]
[Notices]
[Pages 71013-71015]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20726]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54834; File No. SR-Phlx-2006-69]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change Relating to a Direct 
Registration System

November 29, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 31, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx'') 
filed with the Securities and Exchange Commission (``Commission'') and 
on November 14, 2006, amended the proposed rule change described in 
Items I, II, and III below, which items have been prepared primarily by 
Phlx. The Commission is publishing this notice to solicit comments on 
the proposed rule change from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Phlx proposes to adopt new Rule 868 to require certain listed 
securities to be eligible for a Direct Registration System (``DRS'') 
operated by a securities depository registered as a clearing agency 
under Section 17A of the Act starting on January 1, 2007.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Phlx included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. Phlx has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified portions of the text of the 
summaries prepared by the Phlx.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    The purpose of proposed new Phlx Rule 868 \4\ is to reduce the 
cots, risks, and delays associated with the physical delivery of 
securities certificates by requiring that certain securities be 
eligible for DRS.\5\ Proposed Rule 868 would require that on or after 
January 1, 2007, all securities initially listing on Phlx must be 
eligible for DRS operated by a securities depository that is a clearing 
agency registered under Section 17A of the Act (``securities 
depository''). This provision would not extend to (i) securities of 
companies which already have securities listed on Phlx; (ii) securities 
of companies which immediately prior to such listing had securities 
listed on another national securities exchange; (iii) derivative 
products,\6\ or (iv) securities (other than stocks) which are book-
entry-only.
---------------------------------------------------------------------------

    \4\ The exact text of the Phlx proposed rule change is set forth 
in its filing, which can be found at http://www.phlx.com/exchange/
rulefilngs/2006/S-2006-69.pdf.
    \5\ The Commission has approved similar rule changes filed by 
the New York Stock Exchange LLC, NASDAQ Stock Market LLC, the 
American Stock Exchange LLC, and the NYSE Arca, Inc. that require 
certain listed companies securities become DRS eligible. Securities 
Exchange Act Release Nos. 54289 (August 8, 2006), 71 FR 47278 
(August 16, 2006) [File No. SR-NYSE-2006-29]; 54288 (August 8, 
2006), 71 FR 47276 (August 16, 2006) [File No. SR-NASDAQ-2006-008]; 
54290 (August 8, 2006), 71 FR 47262 (August 16, 2006) [File No. SR-
Amex-2006-40]; 54410 (September 7, 2006), 71 FR 54316 (September 14, 
2006) [File No. SR-NYSE Arca-2006-31].
    \6\ For purposes of proposed Rule 868, the term ``derivative 
products'' means standardized options issued by The Options Clearing 
Corporation (``OCC'') or other securities that are issued by OCC or 
another limited purpose entity or trust and that are based solely on 
the performance of an index or portfolio of other publicly traded 
securities. The term ``derivative product'' does not include 
warrants of any type or closed-end management investment companies.

---------------------------------------------------------------------------

[[Page 71014]]

    Proposed Rule 868 would also require that on or after January 1, 
2008, all securities listed on the Phlx must be eligible for DRS 
operated by a securities depository. This provision would not extend to 
derivative products or securities (other than stocks) that are book-
entry-only.
    Securities certificates are used by issuers as a means to evidence 
and transfer ownership. Because securities certificates require manual 
processing, significant delays, expenses, and risks associated with 
lost, stolen, and forged certificates are attendant in processing 
securities transactions involving securities certificates. In Section 
17A of the Act, Congress recognized these concerns by calling for the 
establishment of a national system for the prompt and accurate 
clearance and settlement of securities transactions, including the 
transfer of record ownership and the safeguarding of securities.\7\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1
---------------------------------------------------------------------------

    DRS allows an investor to establish, either through an issuer's 
transfer agent or through the investor's broker-dealer, a book-entry 
position in a security and to electronically transfer that position 
between the transfer agent and the investor's broker-dealer of the 
investor's choice through a facility currently administered by The 
Depository Trust Company (``DTC'').\8\ By using DRS, investors receive 
a DRS statement as evidence of share ownership instead of a securities 
certificate. Investors retain all the rights associated with securities 
certificates, including such rights as control of ownership and voting 
rights, without having the responsibility of holding and safeguarding 
securities certificates. In addition, in corporate actions such as 
reverse stock splits and mergers, cancellation of old securities 
positions and issuance of new securities positions is handled 
electronically with no securities certificates to be returned to or 
received from transfer agents.
---------------------------------------------------------------------------

    \8\ Currently, the only registered clearing agency operating a 
DRS is DTC. For a description of DRS and the DRS facilities 
administered by DTC, see Securities Exchange Act Release Nos. 37931 
(November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR-
DTC-96-15] (order granting approval to establish DRS) and 41862 
(September 10, 1999), 64 FR 51162 (September 21, 1999), [File No. 
SR-DTC-99-16] (order approving implementation of the Profile 
Modification System).
---------------------------------------------------------------------------

    Issuers and their transfer agents may incur initial costs when 
making an issue DRS-eligible as required by this proposed rule change. 
In order to make a security DRS-eligible, the issuer must have a 
transfer agent which is a DRS Limited Participant at DTC.\9\ Transfer 
agents will need to meet certain DTC criteria, such as insurance and 
connectivity requirements, in order to become a DRS Limited 
Participant. Further, issuers may need to amend their corporate 
documents, such as their by-laws or charter, in order to permit the 
issuance of book-entry shares. Phlx believes that the proposed 
deadlines for DRS eligibility coupled with instructive communication by 
Phlx to issuers, will allow issuers sufficient time to make the 
necessary changes to comply with the proposed rule change.
---------------------------------------------------------------------------

    \9\ DTC's rules require that a transfer agent (including an 
issuer acting as its own transfer agent) acting for a company 
issuing securities in DRS must be a DRS Limited Participant. 
Securities Exchange Act Release No. 37931 (November 7, 1996), 61 FR 
58600 (November 15, 1996), [File No. SR-DTC-96-15].
---------------------------------------------------------------------------

    While the proposed rule change should significantly reduce the 
number of transactions in securities for which settlement is effected 
by the physical delivery of securities certificates, the propose rule 
change will not eliminate the ability of investors to obtain securities 
certificates provided the issuer chooses to issue or continue to issue 
certificates.
(2) Statutory Basis
    Phlx believes the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange. In particular, the 
proposed rule change is consistent with Section 6(b)(5) of the Act 
because it would promote just and equitable principles of trade, foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
by confirming that certain Phlx's issuers would be required to make 
their securities eligible for a DRS operated by a securities 
depository.\10\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    Phlx does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Phlx has neither solicited nor received written comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period: (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) By order approve such proposed rule change or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2006-69 in the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2006-69. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the

[[Page 71015]]

Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for inspection and copying in the Commission's Public 
Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of 
such filings also will be available for inspection and copying at the 
principal office of Phlx and on Phlx's Web site, http://www.phlx.com. 
All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-Phlx-2006-69 
and should be submitted on or before December 28, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-20726 Filed 12-6-06; 8:45 am]
BILLING CODE 8011-01-P