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Federal Register / Vol. 71, No.

36 / Thursday, February 23, 2006 / Notices 9387

reporting burdens are not typically Dated: February 15, 2006. Hancock Patriot Premium Dividend
spread evenly among the exchanges.1 J. Lynn Taylor, Fund, John Hancock Patriot Premium
For purposes of this analysis of burden, Assistant Secretary. Dividend Fund II, John Hancock Patriot
however, the staff has assumed that [FR Doc. E6–2533 Filed 2–22–06; 8:45 am] Select Dividend Trust, John Hancock
each exchange files an equal number BILLING CODE 8010–01–P Preferred Income Fund, John Hancock
(five) of Form 26 notifications. Each Preferred Income Fund II, John Hancock
notification requires approximately 20 Series Trust, John Hancock Tax-Free
minutes to complete. Each respondent’s SECURITIES AND EXCHANGE Bond Trust, John Hancock Financial
compliance burden, then, in a given COMMISSION Trends Fund, Inc. (each, an ‘‘Investment
year would be approximately 100 Company’’ and collectively, the
[Release No. IC–27224; 812–12969]
minutes (20 minutes/report × 5 reports ‘‘Investment Companies’’), and John
= 100 minutes), which translates to just John Hancock Capital Series, et al.; Hancock Advisers, LLC (together with
over 13 hours in the aggregate for all Notice of Application any entity controlling, controlled by or
respondents (8 respondents × 100 under common control with John
minutes/respondent = 800 minutes, or February 15, 2006. Hancock Advisers, LLC, ‘‘JHA’’).
131⁄3 hours). AGENCY: Securities and Exchange Filing Dates: The application was
Commission (‘‘Commission’’). filed on April 24, 2003, and amended on
Based on the most recent available
ACTION: Notice of application for an February 7, 2006.
information, the Commission staff Hearing or Notification of Hearing: An
order under section 12(d)(1)(J) of the
estimates that the cost to respondents of order granting the requested relief will
Investment Company Act of 1940
completing a notification on Form 26 is, (‘‘Act’’) for an exemption from sections be issued unless the Commission orders
on average, $14.35 per response. The 12(d)(1)(A) and (B) of the Act, under a hearing. Interested persons may
staff estimates that the total annual sections 6(c) and 17(b) of the Act for an request a hearing by writing to the
related reporting cost per respondent is exemption from sections 17(a)(1) and (2) Commission’s Secretary and serving
$71.75 (5 responses/respondent × of the Act, and under section 17(d) of applicant with a copy of the request,
$14.35 cost/response), for a total annual the Act and rule 17d–1 under the Act to personally or by mail. Hearing requests
related cost to all respondents of $574 permit certain joint transactions. should be received by the Commission
($71.75 cost/respondent × 8 by 5:30 p.m. on March 13, 2006, and
respondents). Summary of Application: The should be accompanied by proof of
Compliance with Rule 12a–5 is applicants request an order that would service on applicant, in the form of an
required to obtain the benefit of the permit (a) certain registered affidavit or, for lawyers, a certificate of
temporary exemption from registration management investment companies and service. Hearing requests should state
offered by the Rule. Rule 12a–5 does not certain entities that are excluded from the nature of the writer’s interest, the
have a record retention requirement per the definition of investment company reason for the request, and the issues
se. However, responses made pursuant under section 3(c)(1), 3(c)(7) or 3(c)(11)
contested. Persons who wish to be
to Rule 12a–5 are subject to the of the Act to invest uninvested cash and
notified of a hearing may request
recordkeeping requirements of Rules cash collateral in (i) affiliated money
notification by writing to the
17a–3 and 17a–4 of the Act. Information market funds and/or short-term bond
Commission’s Secretary.
funds or (ii) one or more affiliated
received in response to Rule 12a–5 shall ADDRESSES: Secretary, U.S. Securities
entities that operate as cash
not be kept confidential; the information and Exchange Commission, 100 F St.,
management investment vehicles and
collected is public information. NE., Washington, DC 20549–1090.
that are excluded from the definition of
An agency may not conduct or investment company under section Applicants, c/o David C. Phelan,
sponsor, and a person is not required to 3(c)(1) or 3(c)(7) of the Act, and (b) the Wilmer Cutler Pickering Hale and Dorr
respond to, a collection of information registered management investment LLP, 60 State Street, Boston,
unless it displays a currently valid companies and certain affiliated entities Massachusetts 02109.
control number. to engage in purchase and sale FOR FURTHER INFORMATION CONTACT:
Written comments regarding the transactions involving portfolio Nadya B. Roytblat, Assistant Director, at
above information should be directed to securities in reliance on rule 17a–7 (202) 551–6821 (Office of Investment
the following persons: (i) Desk Officer under the Act. Company Regulation, Division of
for Securities and Exchange Applicants: John Hancock Capital Investment Management).
Commission, Office of Information and Series, John Hancock Declaration Trust, SUPPLEMENTARY INFORMATION: The
Regulatory Affairs, Office of John Hancock Equity Trust, John following is a summary of the
Management and Budget, Room 10102, Hancock Income Securities Trust, John application. The complete application
New Executive Office Building, Hancock Investment Trust II, John may be obtained for a fee at the
Washington, DC 20503 or by sending an Hancock Investment Trust III, John Commission’s Public Reference Branch,
e-mail to:; Hancock Investors Trust, John Hancock 100 F Street, NE., Washington, DC
and (ii) R. Corey Booth, Director/Chief Sovereign Bond Fund, John Hancock 20549–0102 (tel. 202–551–5850).
Information Officer, Office of Strategic Series, John Hancock Tax-
Exempt Series Fund, John Hancock Applicants’ Representations
Information Technology, Securities and
Exchange Commission, Station Place, World Fund, John Hancock Bank and 1. Each Investment Company is
100 F Street, NE., Washington, DC Thrift Opportunity Fund, John Hancock organized as a Massachusetts business
20549. Comments must be submitted to Bond Trust, John Hancock California trust or a Maryland corporation and is
Office of Management and Budget Tax-Free Income Fund, John Hancock registered under the Act as an open-end
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within 30 days of this notice. Current Interest, John Hancock or closed-end management investment
Institutional Series Trust, John Hancock company. Each Fund, as defined below,
1 In fact, some exchanges do not file any Investment Trust, John Hancock Patriot that is a series of an Investment
notifications on Form 26 with the Commission in Global Dividend Fund, John Hancock Company has separate investment
a given year. Patriot Preferred Dividend Fund, John objectives, policies, and assets. JHA is

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9388 Federal Register / Vol. 71, No. 36 / Thursday, February 23, 2006 / Notices

an investment adviser registered under management investment companies that Applicants’ Legal Analysis
the Investment Advisers Act of 1940 are money market funds or short-term I. Investment of Cash Balances by the
and serves as investment adviser to each bond funds (the ‘‘Registered Central Participating Funds in the Central
Investment Company.1 Funds,’’ and together with the Funds
2. Each Fund that is not a money Registered Participating Funds, the
market fund (a ‘‘Participating Fund’’) ‘‘Registered Funds’’) or shares of one or A. Section 12(d)(1)
has, or may be expected to have cash more Funds that operate as cash 1. Section 12(d)(1)(A) of the Act
that has not been invested in portfolio management investment vehicles and provides that no investment company
securities (‘‘Uninvested Cash’’). that are excluded from the definition of may acquire securities of a registered
Uninvested Cash may result from a investment company pursuant to investment company if such securities
variety of sources, including dividends section 3(c)(1) and 3(c)(7) of the Act (the represent more than 3% of the acquired
or interest received from portfolio ‘‘Non-Registered Central Funds,’’ and company’s outstanding voting stock,
securities, unsettled securities together with the Non-Registered more than 5% of the acquiring
transactions, reserves held for Participating Funds, the ‘‘Non- company’s total assets, or if such
investment strategy purposes, scheduled Registered Funds’’) (the Registered securities, together with the securities of
maturity of investments, liquidation of Central Funds and the Non-Registered other acquired investment companies,
investment securities to meet Central Funds, collectively, the ‘‘Central represent more than 10% of the
anticipated redemptions and dividend Funds’’); (ii) the Central Funds to sell acquiring company’s assets. Section
payments, and new monies received their shares to and purchase (redeem) 12(d)(1)(B) of the Act provides that a
from investors. Each Fund that is a such shares from the Participating registered open-end investment
series of an Investment Company may company, its principal underwriter or
Funds; and (iii) JHA to effect the
participate in a securities lending any broker or dealer may not sell the
transactions in (i) and (ii) above.
program (‘‘Securities Lending Program’’) company’s securities to another
under which it may lend its portfolio 3. Applicants state that certain Funds
investment company if the sale will
securities to registered broker-dealers or currently rely on rule 17a–7 under the cause the acquiring company to own
other institutional investors deemed by Act to conduct certain purchase and more than 3% of the acquired
JHA to be of good standing. The loans sale transactions (‘‘Interfund company’s voting stock or if the sale
are secured by collateral, including cash Transactions’’). Applicants seek relief to will cause more than 10% of the
(‘‘Cash Collateral’’ and together, with permit these Interfund Transactions to acquired company’s voting stock to be
Uninvested Cash, ‘‘Cash Balances’’), continue in the event that the owned by investment companies. Any
equal at all times to at least the market Participating Funds, pursuant to the entity that is excluded from the
value of the securities loaned. The requested order, use Cash Balances to definition of investment company under
Securities Lending Program, including purchase shares of the Central Funds section 3(c)(1) or 3(c)(7) of the Act is
the investment of Cash Collateral, will and become affiliated persons of each deemed to be an investment company
comply with all present and future other or affiliated persons of the Central for the purposes of the 3% limitation
applicable Commission and staff Funds by virtue of owning 5% or more specified in sections 12(d)(1)(A) and (B)
positions regarding securities lending of the outstanding voting securities of a with respect to purchases by and sales
arrangements. Currently, certain Central Fund. Applicants also seek to such entity.
Participating Funds may be permitted to relief to permit in-kind Interfund 2. Section 12(d)(1)(J) of the Act
invest a portion of their assets in money Transactions in which a Participating provides that the Commission may
market securities or other short-term Fund, solely in instances where the exempt any person, security, or
obligations. Applicants state that Participating Fund holds portfolio transaction from any provision of
Participating Funds either will be securities that would be appropriate section 12(d)(1) if and to the extent that
management investment companies investments for a Central Fund, invests such exemption is consistent with the
registered under the Act (‘‘Registered in the Central Fund by transferring such public interest and the protection of
Participating Funds’’) or trusts or other portfolio securities to the Central Fund investors. Applicants request relief
entities that are excluded from the in exchange for shares of the Central under section 12(d)(1)(J) to permit the
definition of investment company under Fund. Participating Funds to use their Cash
section 3(c)(1), 3(c)(7) or 3(c)(11) of the Balances to acquire shares of the
Act (the ‘‘Non-Registered Participating 4. The investment by each Registered
Participating Fund in shares of the Registered Central Funds in excess of
Funds’’). Applicants request an order to the percentage limitations in section
permit: (i) The Participating Funds to Central Funds will be in accordance
with that Registered Participating 12(d)(1)(A), provided however, that in
use their Cash Balances to purchase all cases a Registered Participating
shares of one or more of the Funds Fund’s investment policies and
restrictions as set forth in its registration Fund’s aggregate investment of
registered under the Act as open-end Uninvested Cash in shares of the Central
statement. The Registered Central Funds
1 Applicants request that any relief granted also are or will be open-end management Funds will not exceed the greater of
apply to (a) any other registered management investment companies registered under 25% of the Registered Participating
investment company or series thereof and (b) any Fund’s total assets or $10 million.
the Act operating either as money
entity excluded from the definition of investment Applicants also request relief to permit
company under section 3(c)(1), section 3(c)(7) or market funds pursuant to rule 2a–7
the Registered Central Funds to sell
section 3(c)(11) of the Act, for which JHA is or in under the Act or short-term bond funds
their securities to the Participating
the future may serve as investment adviser or that seek to achieve high current income
trustee exercising investment discretion (each, a Funds in excess of the percentage
consistent with the preservation of
‘‘Fund,’’ and together with the Investment limitations in section 12(d)(1)(B).2
capital by investing in fixed-income
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Companies and any existing or future series of the 3. Applicants state that the proposed
Investment Companies, the ‘‘Funds’’). All Funds securities and maintain a dollar-
that currently intend to rely on the requested order
arrangement will not result in the
weighted average maturity of three years
are named as applicants. Any other existing or
future Fund will rely on the order only in
or less. The Non-Registered Central 2 The references to Participating Funds in the

accordance with the terms and conditions of the Funds will comply with rule 2a–7 under paragraph do not include Funds relying on section
application. the Act. 3(c)(11) of the Act.

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Federal Register / Vol. 71, No. 36 / Thursday, February 23, 2006 / Notices 9389

abuses that sections 12(d)(1)(A) and (B) investment adviser or trustee exercising Commission has approved the joint
were intended to prevent. Applicants investment discretion, the Funds may arrangement. Applicants state that the
state that there is no threat of be deemed to be under common control Participating Funds and the Central
redemption to gain undue influence and therefore affiliated persons of each Funds, by participating in the proposed
over the Registered Central Funds due other. In addition, if a Participating transactions, and JHA, by managing the
to the highly liquid nature of each Fund purchases more than 5% of the proposed transactions, could be deemed
Registered Central Fund’s portfolio. voting securities of a Central Fund, the to be participating in a joint
Applicants state that the proposed Central Fund and the Participating Fund arrangement within the meaning of
arrangement will not result in may be affiliated persons of each other. section 17(d) and rule 17d–1.
inappropriate layering of fees. Shares of As a result, section 17(a) would prohibit 2. In considering whether to approve
the Central Funds sold to the the sale of the shares of Central Funds a joint transaction under rule 17d–1, the
Participating Funds will not be subject to the Participating Funds, and the Commission considers whether the
to a sales load, redemption fee, asset- redemption of the shares by the registered investment company’s
based distribution fee, or service fee (as Participating Funds. participation in the joint transaction is
defined in rule 2830(b)(9) of the 2. Section 17(b) of the Act authorizes consistent with the provisions, policies
Conduct Rules of the National the Commission to exempt a transaction and purposes of the Act, and the extent
Association of Securities Dealers Inc. from section 17(a) of the Act if the terms to which the participation is on a basis
(‘‘NASD Conduct Rules’’). If a Central of the proposed transaction, including different from or less advantageous than
Fund offers multiple classes of shares, a the consideration to be paid or received, that of other participants. Applicants
Registered Participating Fund will are reasonable and fair and do not state that the investment by the
invest in the class with the lowest involve overreaching on the part of any Registered Participating Funds in shares
expense ratio at the time of investment person concerned, and the proposed of the Central Funds would be on the
(after giving effect to the Registered transaction is consistent with the policy same basis and no different from or less
Participating Fund’s investment). Before of each registered investment company advantageous than that of other
the next meeting of the board of trustees concerned and with the general participants. Applicants submit that the
(‘‘Board’’) of a Registered Participating purposes of the Act. Section 6(c) of the proposed transactions meet the
Fund that invests in the Central Funds Act permits the Commission to exempt standards for an order under
is held for the purpose of voting on an persons or transactions from any rule 17d–1.
advisory contract under section 15 of provision of the Act, if the exemption is
II. Interfund Transactions
the Act, JHA will provide the Board necessary or appropriate in the public
with such information as the Board, interest and consistent with the 1. As noted above, section 17(a) of the
including a majority of the directors or protection of investors and the purposes Act would prohibit the purchase and
trustees who are not ‘‘interested fairly intended by the policy and sale of portfolio securities between the
persons,’’ as defined in section 2(a)(19) provisions of the Act. Funds. Rule 17a–7 under the Act
of the Act (the ‘‘Independent Trustees’’), 3. Applicants submit that their provides an exemption from section
may request to evaluate the effect of the request for relief to permit the purchase 17(a) for a purchase or sale of certain
investment of Uninvested Cash in a and redemption of shares of the Central securities between a registered
Central Fund upon the direct and Funds by the Participating Funds is investment company and an affiliated
indirect compensation by the Registered consistent with the standards in person (or an affiliated person of an
Participating Funds to JHA. Applicants sections 6(c) and 17(b) of the Act. affiliated person), provided certain
represent that no Central Fund will Applicants note that shares of the conditions are met, including that the
acquire securities of any investment Central Funds will be purchased and affiliation between the registered
company or company relying on section redeemed at their net asset value. investment company and the affiliated
3(c)(1) or 3(c)(7) of the Act in excess of Applicants state that the Registered person (or an affiliated person of the
the limitations contained in section Participating Funds will retain their affiliated person) must exist solely by
12(d)(1)(A) of the Act. ability to invest Cash Balances directly reason of the entities having a common
in money market instruments and other investment adviser, common directors
B. Section 17(a) of the Act short-term obligations as permitted by and/or common officers and the
1. Section 17(a) of the Act makes it their investment objectives and policies. transaction must be for no consideration
unlawful for any affiliated person of a Applicants state that a Registered other than cash. Applicants state that
registered investment company, acting Central Fund has the right to the Participating Funds could become
as principal, to sell or purchase any discontinue selling shares to any of the affiliated persons of each other, and
security to or from the investment Participating Funds if the Registered affiliated persons of the Central Funds,
company. Section 2(a)(3) of the Act Central Fund’s Board or JHA determines by virtue of a Participating Fund owning
defines an affiliated person of another that such sale would adversely affect the 5% or more of the outstanding voting
person to include any person directly or Registered Central Fund’s portfolio securities of a Central Fund (‘‘5%
indirectly owning, controlling, or management and operations. Ownership Affiliation’’). In addition, a
holding with power to vote 5% or more Participating Fund may invest in a
of the outstanding voting securities of C. Section 17(d) of the Act and Rule Central Fund by transferring its
the other person, any person 5% or 17d–1 Under the Act portfolio securities to the Central Fund
more of whose outstanding securities 1. Section 17(d) of the Act and rule in exchange for shares of the Central
are directly or indirectly owned, 17d–1 under the Act prohibit an Fund.
controlled, or held with power to vote affiliated person of a registered 2. Applicants request relief under
by the other person, any person directly investment company, acting as sections 6(c) and 17(b) of the Act to
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or indirectly controlling, controlled by, principal, from participating in or permit the Interfund Transactions. The
or under common control with the other effecting any transaction in connection Interfund Transactions for which relief
person, and any investment adviser to with any joint enterprise or joint is requested are transactions between
an investment company. Because JHA arrangement in which the investment Registered Participating Funds and Non-
serves as, or will serve as each Fund’s company participates, unless the Registered Central Funds and between

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9390 Federal Register / Vol. 71, No. 36 / Thursday, February 23, 2006 / Notices

Non-Registered Participating Funds and contract for a Registered Participating such procedures, and maintain the
Registered Central Funds. Applicants Fund, the Registered Participating records required by rules 31a–1(b)(1),
submit that the requested relief satisfies Fund’s Board, including a majority of 31a–1(b)(2)(ii), and 31a–1(b)(9) under
the standards for relief in sections 6(c) the Independent Trustees, shall the Act. All books and records required
and 17(b). Applicants state that, with consider to what extent, if any, the to be made pursuant to this condition
respect to the Participating Funds’ in- advisory fees charged to the Registered will be maintained and preserved for a
kind purchases of shares of the Central Participating Fund by JHA should be period of not less than six years from
Funds, the consideration paid by the reduced to account for reduced services the end of the fiscal year in which any
Participating Funds for shares of the provided to the Registered Participating transaction occurred, the first two years
Central Funds will be based on the net Fund by JHA as a result of the in an easily accessible place, and will be
asset value of the Central Funds. With Uninvested Cash being invested in the subject to examination by the
respect to the purchase and sale of Central Funds. The minute books of the Commission and its staff.
portfolio securities between the Funds, Registered Participating Fund will 8. Each Non-Registered Central Fund
Applicants state that the price paid for record fully the Board’s consideration in will comply with rule 2a–7 under the
the securities will be the current market approving the advisory contract, Act and will use the amortized cost
price of the securities. Further, including the considerations relating to method of valuation. With respect to
Applicants state that the Funds will fees referred to above. each Non-Registered Central Fund, JHA
comply with the requirements set forth 3. Each Registered Participating Fund will adopt and monitor the procedures
in rule 17a–7 in all respects other than will invest Uninvested Cash in, and described in rule 2a–7(c)(7) under the
(a) the requirement that the parties to hold shares of, the Central Funds only Act and will take such other actions as
the transactions be affiliated persons (or to the extent that the Registered are required to be taken under those
affiliated persons of affiliated persons) Participating Fund’s aggregate procedures. A Participating Fund may
of each other solely by reason of having investment of Uninvested Cash in the only purchase shares of a Non-
a common investment adviser or Central Funds does not exceed the Registered Central Fund if JHA
investment advisers that are affiliated greater of 25% of the Registered determines on an ongoing basis that the
persons of each other, common officers Participating Fund’s total assets or $10 Non-Registered Central Fund is in
and/or common directors, solely million. compliance with rule 2a–7. JHA will
because the Participating Funds and the 4. Investment by a Registered preserve for a period of not less than six
Central Funds might become affiliated Participating Fund in shares of the years from the date of determination,
persons within the meaning of section Central Funds will be in accordance the first two years in an easily accessible
2(a)(3)(A) and (B) of the Act and (b) the with each Registered Participating place, a record of such determination
requirement that the transactions be for Fund’s respective investment and the basis upon which the
no consideration other than cash, solely restrictions and will be consistent with determination was made. This record
because certain of the Interfund each Registered Participating Fund’s will be subject to examination by the
Transactions may be effected in shares investment policies as set forth in its Commission and its staff.
of a Central Fund. prospectus and statement of additional 9. Each Participating Fund will
information. purchase and redeem shares of any Non-
Applicants’ Conditions 5. Each Registered Participating Fund Registered Central Fund as of the same
Applicants agree that the order and the Registered Central Fund in time and at the same price, and will
granting the requested relief shall be which it invests shall be in the same receive dividends and bear its
subject to the following conditions: group of investment companies as proportionate share of expenses on the
1. Shares of the Central Funds sold to defined in section 12(d)(1)(G) of the Act. same basis, as other shareholders of the
and redeemed by the Participating Each Non-Registered Fund that may rely Non-Registered Central Fund. A
Funds will not be subject to a sales load, on the order shall have JHA as its separate account will be established in
redemption fee, asset-based distribution investment adviser or trustee exercising the shareholder records of each Non-
fee under a plan adopted in accordance investment discretion. Registered Central Fund for the account
with rule 12b–1 under the Act, or 6. No Central Fund shall acquire of each Participating Fund that invests
service fee (as defined in rule 2830(b)(9) securities of any investment company or in such Non-Registered Central Fund.
of the NASD Conduct Rules). company relying on section 3(c)(1) or 10. To engage in Interfund
2. Before the next meeting of the 3(c)(7) of the Act in excess of the limits Transactions, the Funds will comply
Board of the Registered Participating contained in section 12(d)(1)(A) of the with rule 17a–7 under the Act in all
Fund that invests in the Central Funds Act. respects other than (a) the requirement
is held for the purpose of voting on an 7. The Non-Registered Central Funds that the parties to the transaction be
advisory contract under section 15 of will comply with the requirements of affiliated persons (or affiliated persons
the Act, JHA will provide the Board sections 17(a), (d), and (e), and 18 of the of affiliated persons) of each other solely
with such information as the Board may Act as if the Non-Registered Central by reason of having a common
request to evaluate the effect of the Funds were registered open-end investment adviser, or investment
investment of Uninvested Cash in the investment companies. With respect to advisers which are affiliated persons of
Central Funds upon the direct and all redemption requests made by a each other, common officers, general
indirect compensation to JHA. Such Participating Fund, the Non-Registered partners, trustees, managers and/or
information will include specific Central Funds will comply with section common directors, solely because a
information regarding the approximate 22(e) of the Act. JHA will adopt Participating Fund and a Central Fund
cost to JHA of, or portion of the advisory procedures designed to ensure that each might become affiliated persons within
fee under the existing advisory contract Non-Registered Central Fund complies the meaning of section 2(a)(3)(A) and (B)
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attributable to, managing the with sections 17(a), (d), and (e), 18 and of the Act and (b) the requirement that
Uninvested Cash of the Registered 22(e) of the Act. JHA will also the transactions be for no consideration
Participating Fund that can be expected periodically review and update as other than cash, solely because certain
to be invested in the Central Funds. In appropriate such procedures and will of the Interfund Transactions may be
connection with approving any advisory maintain books and records describing effected in shares of a Central Fund.

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Federal Register / Vol. 71, No. 36 / Thursday, February 23, 2006 / Notices 9391

11. Before a Registered Participating I. Self-Regulatory Organization’s calculator, which currently calculates
Fund may participate in the Securities Statement of the Terms of Substance of prices for the firm’s other options
Lending Program, a majority of the the Proposed Rule Change products, including the Mini Nasdaq
Board (including a majority of the The Exchange proposes to amend Index (MNX), an index valued at one-
Independent Trustees) will approve the Amex Rule 900—ANTE to extend the tenth the value of NDX. The specialist
Registered Participating Fund’s deadline for implementation of the for NDX has sought more time to gain
participation in the Securities Lending Amex New Trading Environment experience using its proprietary price
Program. No less frequently than trading platform (the ‘‘ANTE System’’ or calculator before it moves NDX onto the
annually, the Board also will evaluate, ‘‘ANTE’’) for all option classes from ANTE System. The Exchange expects
with respect to each Registered December 31, 2005, to June 30, 2006. that NDX will be moved onto the ANTE
Participating Fund, any securities The text of the proposed rule change is System by June 30, 2006.
lending arrangement and its results and available on Amex’s Web site (http:// Amex is now proposing to revise its
determine that any investment of Cash, at Amex’s principal implementation schedule to provide
Collateral in the Central Funds is in the office, and at the Commission’s Public that all option classes traded by the
best interests of the Registered Reference Room. Exchange will be on the ANTE System
Participating Fund. by June 30, 2006. Maintaining two
12. The Board of each Registered II. Self-Regulatory Organization’s platforms for options trading—the
Participating Fund will satisfy the fund Statement of the Purpose of, and legacy systems (AODB, the Amex
governance standards as defined in rule Statutory Basis for, the Proposed Rule Options Display Book; XTOPS, Amex’s
0–1(a)(7) under the Act by the Change theoretical price calculator; and Auto-
compliance date for the rule. In its filing with the Commission, the Ex) and ANTE—is costly. In a separate
Exchange included statements filing submitted February 6, 2006, for
For the Commission, by the Division of
concerning the purpose of, and basis for, immediate effectiveness pursuant to
Investment Management, under delegated
authority. the proposed rule change and discussed Section 19(b)(3)(A)(ii) of the Act,7 the
any comments it received on the Exchange is proposing to impose a
J. Lynn Taylor,
proposed rule change. The text of these Technology Assessment Fee on
Assistant Secretary. members for the continued use of its
statements may be examined at the
[FR Doc. E6–2534 Filed 2–22–06; 8:45 am] legacy options trading systems.8 The
places specified in Item IV below. The
Exchange has prepared summaries, set intent of this assessment is to recover
forth in sections A, B, and C below, of some of the costs incurred for
the most significant aspects of such maintaining the legacy systems and to
SECURITIES AND EXCHANGE provide an additional incentive to the
COMMISSION NDX specialist to transition NDX to the
A. Self-Regulatory Organization’s ANTE System as soon as possible.
[Release No. 34–53319; File No. SR–Amex– Statement of the Purpose of, and
2006–13] 2. Statutory Basis
Statutory Basis for, the Proposed Rule
Self-Regulatory Organizations; Change The Exchange believes that the
American Stock Exchange LLC; Notice 1. Purpose proposed rule change is consistent with
of Filing and Immediate Effectiveness Section 6(b) of the Act 9 in general and
On May 20, 2004, the Commission furthers the objectives of Section
of Proposed Rule Change To Extend approved Amex’s proposal to
the Deadline for Implementation of the 6(b)(5) 10 in particular in that it is
implement a new options trading designed to prevent fraudulent and
ANTE System platform known as ANTE.5 On May 25, manipulative acts and practices, to
February 15, 2006. 2004, Amex began rolling out the ANTE promote just and equitable principles of
Pursuant to Section 19(b)(1) of the System on its trading floor on a trade, to foster cooperation and
Securities Exchange Act of 1934 specialist’s post-by-specialist’s post coordination with persons engaged in
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 basis. At that time it was anticipated the regulating, clearing, settling, processing
notice is hereby given that on February roll-out would be completed by the end information with respect to, and
6, 2006, the American Stock Exchange of the second quarter of 2005. The facilitating transactions in securities, to
LLC (‘‘Exchange’’ or ‘‘Amex’’) filed with implementation date for the full roll-out remove impediments to and perfect the
the Securities and Exchange of the ANTE System was subsequently mechanism of a free and open market
Commission (‘‘Commission’’) the extended to December 31, 2005.6 Amex and a national market system, and, in
proposed rule change as described in has rolled out the ANTE System to all general, to protect investors and the
Items I and II below, which Items have its option classes except one—the public interest; and is not designed to
been prepared by the Exchange. Amex Nasdaq 100 Index (‘‘NDX’’). NDX has permit unfair discrimination between
has designated this proposal as non- the largest notional value of any option customers, issuers, brokers, and dealers.
controversial under Section class, with average option premiums of
$40. The specialist for this product is B. Self-Regulatory Organization’s
19(b)(3)(A)(iii) of the Act 3 and Rule Statement on Burden on Competition
19b–4(f)(6) thereunder,4 which renders concerned that the theoretical price
the proposed rule change effective upon calculator provided by the ANTE The Exchange does not believe that
filing with the Commission. The System may not accurately price the the proposed rule change will impose
Commission is publishing this notice to options on this index. The specialist has any burden on competition that is not
solicit comments on the proposed rule installed its own theoretical index price
7 15 U.S.C. 78s(b)(3)(A)(ii).
change from interested persons.
rwilkins on PROD1PC63 with NOTICES

5 See 8 See File No. SR–Amex–2006–12, notice of

Securities Exchange Act Release No. 49747,
69 FR 30344 (May 27, 2004) (File No. SR–Amex– which the Commission is separately publishing for
1 15 U.S.C. 78s(b)(1). 2003–89). comment today (Securities Exchange Act Release
2 17 CFR 240.19b–4. 6 See Securities Exchange Act Release No. 52984 No. 53318).
3 15 U.S.C. 78s(b)(3)(A)(iii). 9 15 U.S.C. 78f(b).
(December 20, 2005), 70 FR 76472 (December 27,
4 17 CFR 240.19b–4(f)(6). 2005) (File No. SR–Amex–2005–123). 10 15 U.S.C. 78f(b)(5).

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