Sunteți pe pagina 1din 5

61850 Federal Register / Vol. 70, No.

206 / Wednesday, October 26, 2005 / Notices

based upon resulted in settlement, it Shelley S. Dreifuss, director of the ‘‘1940 Act’’ or ‘‘Act’’) approving certain
believes that the same level of Commission’s Office of the Consumer substitutions of securities and for an
widespread support exists for making Advocate (OCA), to represent the order of exemption pursuant to Section
the service permanent, and that it interests of the general public in this 17(b) of the Act from Section 17(a) of
should have no significant adverse proceeding. Pursuant to this the Act.
impact on other mailers or competitors. designation, Ms. Dreifuss will direct the
Accordingly, the Postal Service believes activities of Commission personnel Applicants: Ameritas Variable Life
there is a distinct possibility for assigned to assist her and, upon request, Insurance Company (‘‘Ameritas’’),
settlement.8 The Postal Service requests will supply their names for the record. Ameritas Variable Life Insurance
that a settlement conference be Neither Ms. Dreifuss nor any of the Company Separate Account V
scheduled as soon as possible following assigned personnel will participate in or (‘‘Account V’’) and Ameritas Variable
the deadline for intervention. Id. at 2. Life Insurance Company Separate
provide advice on any Commission
Account VA–2 (‘‘Account VA–2’’,
IV. Commission Response decision in this proceeding.
together with Account V ‘‘Separate
Intervention. Those wishing to be V. Ordering Paragraphs Accounts’’) and Ameritas Investment
heard in this matter are directed to file It is ordered: Corp. (‘‘Ameritas Investment’’)
a notice of intervention on or before The Commission establishes Docket (collectively, the ‘‘Applicants’’).
November 10, 2005. The notice of Summary of Application: The
No. MC2006–1, Parcel Return Service,
intervention shall be filed using the Applicants request an order pursuant to
to consider the Postal Service Request
Internet (Filing Online) at the Section 26(c) of the 1940 Act to permit
referred to in the body of this order.
Commission’s Web site (http:// the substitution of shares of Calvert
1. The Commission will sit en banc in, unless a waiver is Variable Series, Inc.’s Ameritas
this proceeding.
obtained for hardcopy filing. 39 CFR Portfolios (‘‘Ameritas Portfolios’’)
2. Postal Service counsel is appointed
3001.9(a) and 10(a). No decision has Income & Growth Fund (‘‘Ameritas
to serve as settlement coordinator in this Income & Growth’’ or ‘‘Replacement
been made at this point on whether a proceeding. The Commission will make
hearing will be held in this case. Notices Fund’’) for (a) shares of Alger American
its hearing room available upon request Leveraged AllCap—Class 0 Portfolio
should indicate whether participation for a settlement conference on
will be on a full or limited basis. See 39 (‘‘Alger AllCap’’) of the Alger American
November 14–15, 2005, at such times as Fund and (b) shares of Salomon
CFR 3001.20 and 3001.20a. scheduled by the settlement
Settlement. Given the Postal Service’s Variable All Cap Portfolio (‘‘Salomon
coordinator. Variable All Cap’’) of the Salomon
representations that the proposal is 3. Shelley S. Dreifuss, director of the
widely supported and should not Brothers Variable Series Trust (Alger
Commission’s Office of the Consumer AllCap and Salomon Variable All Cap
adversely affect competitors or other Advocate, is designated to represent the
mailers, the Commission will authorize collectively, the ‘‘Substituted
interests of the general public. Portfolios’’) currently held by the
settlement negotiations in this 4. The deadline for filing notices of
proceeding. It appoints Postal Service Separate Accounts. Applicants also
intervention is November 10, 2005. request an order of exemption pursuant
counsel as settlement coordinator. In 5. A prehearing conference will be
this capacity, Postal Service counsel to Section 17(b) of the 1940 Act from the
held November 17, 2005, at 10 a.m. in provisions of Section 17(a) of the Act to
shall file periodic reports on the status the Commission’s hearing room.
of settlement discussions. The permit certain in-kind transactions in
6. Responses to the Postal Service’s connection with the substitutions.
Commission authorizes the settlement Conditional Motion for Waiver of
coordinator to hold a settlement Filing Date: The application was filed
certain filing requirements are due on or on May 31, 2005 and amended and
conference on November 14–15, 2005. before November 17, 2005.
The Commission will make its hearing restated on September 12, 2005,
7. The Secretary shall arrange for September 29, 2005, October 3, 2005
room available for this purpose upon publication of this notice and order in
request. Authorization of settlement and October 7, 2005.
the Federal Register. Hearing or Notification of Hearing: An
discussions does not constitute a
finding on the necessity of hearings in By the Commission. order granting the application will be
this case. Issued: October 21, 2005. issued unless the Commission orders a
Prehearing conference. A prehearing Garry J. Sikora, hearing. Interested person may request a
conference will be held November 17, Acting Secretary.
hearing by writing to the Secretary of
2005, at 10 a.m. in the Commission’s the Commission and serving Applicants
[FR Doc. 05–21401 Filed 10–25–05; 8:45am]
hearing room. Participants shall be with a copy of the request, in person or
prepared to identify any issue(s) that by mail. Hearing requests must be
would indicate a need to schedule a received by the Commission by 5:30
hearing, along with other matters p.m. on November 14, 2005, and should
SECURITIES AND EXCHANGE be accompanied by proof of service on
referred to in this ruling.
Conditional Motion for Waiver. COMMISSION the Applicants, in the form of an
Participants may comment on the Postal [Release No. IC–27118; File No. 812–13195]
affidavit or, for lawyers, a certificate of
Service’s conditional motion to waive service. Hearing requests should state
certain filing requirements. Responses Ameritas Variable Life Insurance the nature of the writer’s interest, the
to the Postal Service’s Motion for Company, et al.: Notice of Application reason for the request, and the issues
Waiver are due on or before November contested. Persons who wish to be
October 20, 2005. notified of a hearing may request
17, 2005.
Representation of the general public. AGENCY: Securities and Exchange notification by writing to the Secretary
In conformance with section 3624(a) of Commission (‘‘Commission’’). of the Commission.
title 39, the Commission designates ACTION: Notice of application for an ADDRESSES: Secretary, Securities and
order pursuant to Section 26(c) of the Exchange Commission, 100 F Street,
8 Request for Settlement Procedures at 1–2. Investment Company Act of 1940 (the NE., Washington, DC 20549–9303.

VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\26OCN1.SGM 26OCN1
Federal Register / Vol. 70, No. 206 / Wednesday, October 26, 2005 / Notices 61851

Applicants, c/o Kenneth W. Reitz, (together, ‘‘Contracts’’) have been of an investment company held by a
Ameritas Variable Life Insurance registered under the 1933 Act. Subaccount of the Separate Accounts.
Company, 5900 ‘‘O’’ Street, Lincoln, NE 4. Calvert Variable Series, Inc. Ameritas proposes to substitute shares
68501. (‘‘CVS’’) is registered under the 1940 of Ameritas Income and Growth for
FOR FURTHER INFORMATION CONTACT: Act as an open-end management shares of (a) Alger AllCap and (b)
Joyce M. Pickholz, Senior Counsel, or investment company of the series type. Salomon Variable All Cap held by
William J. Kotapish, Assistant Director, The Ameritas Portfolios, including Subaccounts of the Separate Accounts
Office of Insurance Products, Division of Ameritas Income and Growth, are series (each a ‘‘Substitution’’ and together, the
Investment Management at (202) 551– of CVS. CVS obtained an order pursuant ‘‘Substitutions’’).
6795. to Section 6(c) of the 1940 Act 8. The investment objectives and
exempting it and Ameritas Investment, principal investment policies of the
SUPPLEMENTARY INFORMATION: The as investment advisor, from Section
following is a summary of the Replacement Fund and the Substituted
15(a) of the 1940 Act with respect to Portfolios are as follows: Ameritas
application. The complete application subadvisory agreements (the ‘‘Manager
may be obtained for a fee from the Income & Growth primarily seeks to
of Managers Order’’). The Manager of
Public Reference Branch of the provide a high level of dividend
Managers Order permits Ameritas
Commission, 100 F Street, NE., Room income, with a secondary goal to
Investment to replace any sub-adviser or
1580, Washington, DC 20549 (telephone provide capital appreciation, by
to employ a new sub-adviser for each of
(202) 551–5850). investing in dividend paying equity
its series without obtaining shareholder
securities, such as common or preferred
Applicants’ Representations approval. At a meeting held on January
stocks, preferably those which the
15, 2002, shareholders of each Ameritas
1. Ameritas is a stock life insurance subadviser believes also offer
Portfolio approved the implementation
company organized in the State of opportunities for capital appreciation.
of procedures contemplated in the
Nebraska currently licensed to sell life Alger AllCap seeks long-term capital
Manager of Managers Order. Fred Alger
insurance in 49 states (all except New appreciation by investing in equity
Management, Inc. is the subadviser to
York) and in the District of Columbia. securities of companies of any size
Ameritas Income & Growth.
Ameritas is a wholly owned subsidiary 5. Each of the Contracts permits its which demonstrate promising growth
of AMAL Corp. which is a direct owners to allocate the Contract’s potential. Salomon Variable All Cap
subsidiary of Ameritas Life Insurance accumulated value among numerous seeks capital appreciation by investing
Corp. Ameritas Life Insurance Corp. is Subaccounts of the Separate Accounts. primarily in securities which the
a subsidiary of Ameritas Acacia Mutual Each Subaccount invests exclusively in manager believes have above-average
Holding Company. a different investment portfolio capital appreciation potential. A
2. Ameritas Investment, a Nebraska (‘‘Fund’’) of an underlying mutual fund. secondary consideration is given to a
corporation, is registered as an Depending on the Contract, between company’s dividend record and the
investment adviser under the 1940 Act twenty-one and thirty-six different potential for improved dividend return.
and as a broker-dealer under the Subaccounts (and corresponding funds) Salomon Variable All Cap invests
Securities Exchange Act of 1934. are currently available for this purpose. primarily in common stocks and
Ameritas Investment is an affiliate of 6. Contract Owners can allocate common stock equivalents of large well
Ameritas. Ameritas Investment is the accumulated Contract value to one or known domestic companies, but may
investment adviser of the Ameritas more Subaccounts and/or, where also invest a significant portion of its
Portfolios and principal underwriter of available, to the Fixed Account, subject assets in securities of small to medium-
the Contracts. to certain potential restrictions sized companies and may invest in
3. Account V is a separate account described in the application and in the fixed income securities, convertible debt
established by Ameritas under Nebraska prospectus relating to each Contract. No securities, securities of foreign issuers,
law to fund variable life insurance sales charge applies to any transfer of and in non-dividend paying stocks.
contracts issued by Ameritas. Account accumulated Contract value among 9. Following is the comparative
VA–2 is a separate account established Subaccounts. Applicants represent that expense data for the Substitutions as of
by Ameritas under Nebraska law to fund the relief requested here will not affect December 31, 2004. Applicants submit
variable annuity contracts issued by any charge to which Contract Owners of that each Substitution will result in a
Ameritas. Account V and Account VA– any Contract would otherwise be Replacement Fund with net expenses
2 are registered under the 1940 Act as subject, or affect any right or privilege and management fees less than the
unit investment trusts (File Nos. 811– to which such owners are otherwise Substituted Fund. Applicants also
04473 and 811–05192 respectively). The entitled. represent that there are no breakpoints
variable life insurance contracts and 7. The Contracts expressly reserve to in fund expenses for either the
variable annuity contracts issued Ameritas the right to substitute shares of Substituted Funds or the Replacement
through the Separate Accounts another investment company for shares Fund.
[In percent]

Replacement Replacement
Substituted fund fund
fund Ameritas In- Ameritas In-
Salomon Vari-
Alger AllCap come & come &
able All Cap
Growth Growth

Management Fees ........................................................................................... 0.85 0.74 0.75 0.74

Distribution and service (12b–1) fees .............................................................. ........................ ........................ ........................ ........................
Other Expenses ............................................................................................... 0.12 0.22 0.05 0.22
Total Expenses ................................................................................................ 0.97 0.96 0.80 0.96
Waivers ............................................................................................................ ........................ 1 0.18 ........................ 2 0.18

VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 E:\FR\FM\26OCN1.SGM 26OCN1
61852 Federal Register / Vol. 70, No. 206 / Wednesday, October 26, 2005 / Notices

[In percent]

Replacement Replacement
Substituted fund fund
fund Ameritas In- Ameritas In-
Salomon Vari-
Alger AllCap come & come &
able All Cap
Growth Growth

Net Expenses .................................................................................................. 0.97 0.78 0.80 0.78

1 Pursuant to a contractual agreement between Ameritas Portfolios and Ameritas Investment, Ameritas Investment, has agreed to waive fees
or reimburse expenses so that Total Expenses do not exceed the rate shown in the table above through April 30, 2006. Management Fee in-
cludes both the investment advisory fee and administrative service fee. The administrative service fee is 0.05% of the fund’s average daily net
assets with a minimum of $50,000.
2 Supra, footnote 1.

10. The day-to-day manager of both Contract Owners will continue to be expenses incurred in connection with
the Substituted Alger AllCap Fund as its able to select among a large number of the proposed Substitutions, including
adviser and to the Replacement funds, with a full range of investment brokerage, legal, accounting, and other
Ameritas Income & Growth Fund as its objectives, investment strategies, and fees and expenses, will be paid by
subadviser is Fred Alger Management, managers. Applicants believe there will Ameritas. In addition, the proposed
Inc. also be a significant savings to Contract Substitutions will not impose any tax
11. Applicants note that Contract Owners because certain costs, such as liability on Contract Owners. The
Owners with Subaccount balances the costs of printing and mailing lengthy proposed Substitutions will not cause
invested in shares of the Replacement periodic reports and prospectuses for the Contract fees and charges currently
Funds will have lower total expense the Substituted Funds will be being paid by existing Contract owners
ratios than they currently have in the substantially reduced. to be greater after the proposed
Substituted Funds. Moreover, there will 12. Applicants represent that they Substitutions than before the proposed
be no increase in Contract fees and will not receive, for three years from the Substitutions. No fees will be charged
expenses including mortality and date of the Substitutions, any direct or on the transfers made at the time of the
expense risk fees and administration indirect benefits from the new fund, its proposed Substitutions because the
and distribution fees charged to the advisors or underwriters, or from proposed Substitutions will not be
Separate Accounts as a result of the affiliates of the new funds, their treated as a transfer for the purpose of
Substitutions. Applicants believe that, if advisors or underwriters, in connection assessing transfer charges or for
the proposed Substitutions are with assets attributable to Contracts determining the number of remaining
implemented, the core investment goals affected by the Substitutions, at a higher permissible transfers in a Contract year.
of affected Contract Owners will not be rate than Applicants have received from
15. Following the date on which
frustrated and the investment substituted funds, their advisors or
Ameritas is notified that the notice of
expectations of affected Contract underwriters, or from affiliates of
substituted funds, their advisors or the Application is to be published in the
Owners can continue to be met. Federal Register, but before the date on
Applicants expect that the Substitutions underwriters, including without
limitation Rule 12b–1 fees, shareholder which the order requested by the
will provide significant benefits to application becomes effective, Ameritas
service or administrative or other
Contract Owners, including improved will send to affected Contract Owners
service fees, revenue sharing or other
selection of portfolio managers and notice (‘‘Substitution Notice’’). The
arrangements (collectively ‘‘Revenue
simplification of fund offerings through Substitution Notice will inform affected
Arrangements’’). Applicants represent
the elimination of overlapping offerings. Contract Owners of (a) the Effective Date
that the substitutions and the selection
Applicants state that Ameritas of the new fund was not motivated by of the Substitutions (‘‘Effective Date’’);
considered the performance history of any financial consideration paid or to be (b) the right of each affected Contract
the Substituted Funds and the paid to Applicants or any affiliate of Owner, under their Contract, to transfer
Replacement Funds and determined Applicants by the new fund, its contract values among the various
that no Contract Owners would be advisors, underwriters, or affiliates. Subaccounts; and (c) the fact that any
materially adversely affected as a result 13. The proposed Substitutions will such transfer involving a transfer from
of the Substitutions. Applicants believe take place at relative net asset value a substituted fund will not be subject to
that the Substitutions, each of which with no change in the amount of any any administrative charge and will not
replaces outside funds with a fund for Contract Owner’s Contract value, cash count as one of the ‘‘free transfers’’ to
which Ameritas Investment acts as value, or death benefit or in the dollar which affected Contract Owners may
investment advisor, will permit value of his or her investment in the otherwise be entitled. The Substitution
Ameritas Investment, under a multi- Separate Accounts. Applicants expect Notice will also inform affected Contract
manager order granted by the that the Substitutions will be effected by Owners that (a) Ameritas will not
Commission and under shareholder redeeming shares of a Substituted Fund exercise any rights reserved under any
approval previously obtained, to hire, and reinvesting the proceeds of such Contract to impose additional
monitor and replace subadvisers as redemption in shares of the restrictions on transfers (other than with
necessary to seek optimal performance Replacement Fund through a respect to ‘‘market timing’’ activity
and to ensure a consistent investment combination of cash and ‘‘in kind’’ described in each Contract’s prospectus)
style. Applicants further believe that the transactions. until at least 30 days after the proposed
subadviser to the Replacement Fund is 14. Contract Owners will not incur Substitutions; (b) for 30 days after the
better positioned to provide consistent any fees or charges as a result of the proposed Substitutions, Ameritas will
above-average performance for its Fund proposed Substitutions, nor will their permit affected Contract Owners to
than the adviser or subadvisers of the rights or Ameritas’ obligations under the make transfers of Contract value (or
Substituted Funds. Applicants state that Contracts be altered in any way. All annuity unit exchange) out of the

VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 E:\FR\FM\26OCN1.SGM 26OCN1
Federal Register / Vol. 70, No. 206 / Wednesday, October 26, 2005 / Notices 61853

Replacement Fund Subaccount to security unless the Commission shall 6. Applicants assert that, for the
another Subaccount without the transfer have approved such substitution.’’ reasons summarized above, the
(or exchange) being treated as one of a Section 26(c) of the 1940 Act also proposed Substitutions and related
limited number of transfers (or provides that the Commission shall transactions meet the standards of
exchanges) permitted without a transfer issue an order approving such Section 26(c) of the 1940 Act and that
charge. substitutions if the evidence establishes the requested order should be granted.
16. Within five days after the Effective that the substitutions are consistent 7. Sections 17(a)(1) and (2) of the 1940
Date, Ameritas will also send affected with the protection of investors and the Act prohibit an affiliated person of a
Contract Owners a second written purposes fairly intended by the policies registered investment company, or
notice (‘‘Confirmation Notice’’). The and provisions of the 1940 Act. affiliated persons of any such affiliated
Confirmation Notice will (a) confirm 2. The Contracts expressly reserve to person, or any principal underwriter for
that the Substitutions were carried out; Ameritas the right, subject to such company (collectively,
(b) reiterate that each affected Contract compliance with applicable law, to ‘‘Transaction Affiliates’’) from selling a
Owner may transfer all of the contract substitute shares of another investment security to, or purchasing a security
value or cash value under a Contract company for shares of an investment from, the registered investment
that is invested in a Substituted Fund to company held by a Subaccount of the company. Applicants may be deemed to
any other Subaccount available under Separate Accounts. Applicants assert be Transaction Affiliates of one another
their Contract without such transfer that the prospectuses for the Contracts based upon the definition of ‘‘affiliated
being subject to any administrative and the Separate Accounts contain person’’ under Section 2(a)(3) of the
charge, or being counted as one of the appropriate disclosure of this right. 1940 Act. Because the Substitutions
‘‘free transfers’’ (or one of the limited 3. In each case, Applicants believe may be effected, in whole or in part, by
number of transfers) to which affected that it is in the best interests of the means of in-kind redemptions and
Contract Owners may be entitled under Contract Owners to substitute the purchases, the Substitutions may be
the Contracts; and (c) state that, other Replacement Fund for the Substituted deemed to involve one or more
than with respect to ‘‘market timing’’ Fund. In this regard, Applicants purchases or sales of securities or
activity described above, Ameritas will contend that the proposed Replacement property between Transaction Affiliates.
not exercise any rights reserved by it Fund for each Substituted Fund has an 8. Section 17(b) provides that the
under the Contracts to impose investment objective that is at least Commission may grant an application
additional restrictions on transfers until substantially similar to that of the exempting proposed transactions from
at least 30 days after the Effective Date. Substituted Fund. Applicants also assert the prohibitions of Section 17(a) if the
17. For those who were Contract that the principal investment policies of terms of the proposed transaction are
Owners on the date of the proposed the Replacement Funds are similar to reasonable and fair and do not involve
Substitutions, Ameritas and Ameritas those of the corresponding Substituted overreaching on the part of any person
Investment will reimburse, on the last Funds. In addition, with respect to each concerned; the transaction is consistent
business day of each fiscal period (not proposed substitution, Applicants note with the investment policies of each
to exceed a fiscal quarter) during the that affected Contract Owners with registered investment company
twenty-four months following the date balances invested in the Replacement concerned; and the transaction is
of the proposed Substitutions, the Fund will have a lower or the same consistent with the general purposes of
Subaccount investing in the expense ratio in all cases. the Act. Applicants state that the
Replacement Fund such that the sum of 4. Applicants anticipate that Contract consideration to be paid by the
the Replacement Fund’s operating Owners will be better off with the array Replacement Fund, and each of the
expenses (taking into account fee of Subaccounts offered after the Substituted Funds, will be fair and
waivers and expense reimbursements) proposed Substitutions than they have reasonable and will not involve
and Subaccount expenses (asset-based been with the array of Subaccounts overreaching because the Substitutions
fees and charges deducted on a daily offered prior to the Substitutions. The will not result in the dilution of the
basis from Subaccount assets and proposed Substitutions retain for interests of any affected Contract
reflected in the calculation of Contract Owners the investment Owners and will not effect any change
Subaccount unit values) for such period flexibility which is a central feature of in economic interest, Contract value or
will not exceed, on an annualized basis, the Contracts. If the proposed the dollar value of any variable contract
the sum of the Replacement Fund’s Substitutions are carried out, all held by an affected Contract Owner.
operating expenses (taking into account Contract Owners will be permitted to 9. In addition, Applicants state that to
fee waivers and expense allocate purchase payment and transfer the extent the Substitutions are effected
reimbursements) and Subaccount Contract values and cash values by redeeming shares of the Substituted
expenses for the fiscal year preceding between and among approximately the Funds and using the redemption
the date of the proposed Substitutions. same number of Subaccounts as they proceeds to purchase shares of the
In addition, for twenty-four months could before the proposed Substitutions. Replacement Funds, the Substitutions
following the proposed Substitutions, Moreover, the elimination of the costs of will satisfy each of the procedural
Ameritas and Ameritas Investment will printing and mailing prospectuses and safeguards adopted by the Board of
not increase separate account fees or periodic reports of the Substituted Directors responsible for each of the
charges for Contracts outstanding on the Funds will benefit Contract Owners. Ameritas Portfolios and the Substituted
date of the proposed Substitutions. 5. Applicants note that Contract Funds, respectively under Rule 17a–7
Owners who do not wish to participate under the 1940 Act.
Applicants’ Legal Analysis in a Replacement Fund will have an
1. Section 26(c) of the 1940 Act opportunity to reallocate their Applicants’ Conclusion
provides, in pertinent part, that ‘‘it shall accumulated value among other Applicants assert that for the reasons
be unlawful for any depositor or trustee available Subaccounts without the summarized above the proposed
of a registered unit investment trust imposition of any charge or limitation substitutions and transactions meet the
holding the security of a single issuer to (other than with respect to ‘‘market standards of Section 26(c) of the Act and
substitute another security for such timing’’ activity). are consistent with the standards of

VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\26OCN1.SGM 26OCN1
61854 Federal Register / Vol. 70, No. 206 / Wednesday, October 26, 2005 / Notices

Section 17(b) of the Act and that the and Special Allocations Committees with the securities allocation process. In
requested orders should be granted. into a single Allocations Committee for addition, the Commission believes that,
For the Commission, by the Division of equities, options and other listed by providing the Performance
Investment Management, pursuant to securities. The proposal would create a Committee with the sole authority to
delegated authority. single Allocations Committee consisting reallocate securities in connection with
Jonathan G. Katz, of the Chief Executive Officer (or his or specialist unit transfers, the proposed
Secretary. her designee 6), a representative of an rule change is designed to streamline
[FR Doc. E5–5944 Filed 10–25–05; 8:45 am] upstairs member firm and either: (i) the reallocation process in these special
Four (4) brokers for equities and other circumstances.
securities admitted to trading on the It is therefore ordered, pursuant to
Exchange except for Exchange Traded section 19(b)(2) of the Act,10 that the
SECURITIES AND EXCHANGE Funds and options; (ii) two (2) brokers proposed rule change (SR–Amex–2005–
COMMISSION and two (2) Registered Traders for ETFs; 068), as amended, is approved.
or (iii) two (2) brokers and two (2) For the Commission, by the Division of
[Release No. 34–52646; File No. SR–Amex– Registered Options Traders for options.
2005–068] Market Regulation, pursuant to delegated
The Chief Executive Officer (or his or authority.11
Self-Regulatory Organizations; her designee) would chair the Jonathan G. Katz,
American Stock Exchange LLC; Order Allocations Committee and would not
Granting Approval of Proposed Rule vote except to make or break a tie. In the
[FR Doc. E5–5946 Filed 10–25–05; 8:45 am]
Change and Amendment Nos. 1 and 2 absence of the Chief Executive Officer
Thereto Relating to Amendments to (or his or her designee), a Floor
Amex Rules 26 and 27 Governor or a Senior Floor Official may
chair the Allocation Committee. In
October 20, 2005. addition, the Exchange proposes to
On June 17, 2005, the American Stock permit the Performance Committee to
Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) reallocate securities in connection with [Release No. 34–52639; File No. SR–BSE–
filed with the Securities and Exchange specialist unit transfers resulting from 2005–41]
Commission (‘‘Commission’’), pursuant business transactions.
to section 19(b)(1) of the Securities The Commission finds that the Self-Regulatory Organizations; Boston
Exchange Act of 1934 (‘‘Act’’) 1 and Rule proposed rule change, as amended, is Stock Exchange, Inc.; Notice of Filing
19b–4 thereunder,2 a proposed rule consistent with the requirements of and Order Granting Accelerated
change to: (i) Combine the Equities, section 6 of the Act,7 and the rules and Approval to Proposed Rule Change To
Options and Special Allocations regulations thereunder applicable to a Establish Certain Fees With Respect to
Committees into a single Allocations national securities exchange.8 In Transactions Executed Through the
Committee; (ii) change the composition particular, the Commission finds that Intermarket Trading System
of the new Allocations Committee; and the proposed rule change is consistent
(iii) provide the Performance Committee with section 6(b)(5) of the Act,9 which October 19, 2005.
with sole authority to reallocate requires, among other things, that the Pursuant to Section 19(b)(1) of the
securities in connection with specialist Exchange’s rules be designed to prevent Securities Exchange Act of 1934
unit transfers resulting from business fraudulent and manipulative acts and (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
transactions. On June 30, 2005, Amex practices, to promote just and equitable notice is hereby given that on
filed Amendment No. 1 to the proposed principles of trade, to foster cooperation September 9, 2005, the Boston Stock
rule change.3 On August 19, 2005, and coordination with persons engaged Exchange, Inc. (‘‘BSE’’ or ‘‘Exchange’’)
Amex filed Amendment No. 2 to the in facilitating transactions in securities, filed with the Securities and Exchange
proposed rule change.4 The proposed and to remove impediments to and Commission (‘‘Commission’’ or ‘‘SEC’’)
rule change, as amended, was published perfect the mechanism of a free and the proposed rule change as described
for comment in the Federal Register on open market and a national market in Items I and II below, which Items
September 1, 2005.5 The Commission system. The Commission believes that, have been prepared by the BSE. The
received no comments on the proposal. by combining the Equities, Options and Commission is publishing this notice to
This order approves the proposed rule Special Allocations Committees into a solicit comments on the proposed rule
change, as amended. single Allocations Committee and change from interested persons, and is
The proposed rule change would streamlining the composition of the approving the proposal on an
combine the existing Equity, Options Allocations Committee, the proposed accelerated basis.
rule change is designed to reduce I. Self-Regulatory Organization’s
1 15 U.S.C. 78s(b)(1).
2 17
potential inefficiencies in connection Statement of the Terms of Substance of
CFR 240.19b–4.
3 In Amendment No. 1, the Exchange made a the Proposed Rule Change
6 The Exchange represents that the designee of the
technical correction to the proposed amendment to
Amex Rule 26 and proposed to amend Amex Rule Chief Executive Officer would be an Exchange The Exchange proposes to enter into
27 to reflect that, in the case of an equity security, employee knowledgeable about the securities arrangements with other national
the list of qualified specialists shall consist of five business and capable of representing the views of securities exchanges to pass certain fees
specialists. the Chief Executive Officer. Telephone conversation
4 In Amendment No. 2, the Exchange proposed to of October 12, 2005, between Jeffery Burns, they have collected from members for
amend Amex Rule 27 to clarify: (1) the composition Associate General Counsel, Amex, and David transactions executed on another
of the Allocations Committee for equities and other Michehl, Attorney, Division of Market Regulation, exchange through the Intermarket
securities admitted for trading on the Exchange Commission. Trading System (‘‘ITS’’). This proposal
7 15 U.S.C. 78f(b).
except Exchange Traded Funds (‘‘ETFs’’) and
options; and (2) that the Allocations Committee 8 In approving this proposed rule change, the
10 15 U.S.C. 78s(b)(2).
may be chaired by the Chief Executive Officer’s Commission has considered the proposed rule’s
11 17 CFR 200.30–3(a)(12).
designee. impact on efficiency, competition, and capital
5 See Securities Exchange Act Release No. 52334 formation. 15 U.S.C. 78c(f). 1 15 U.S.C. 78s(b)(1).

(August 25, 2005), 70 FR 52146. 9 15 U.S.C. 78f(b)(5). 2 17 CFR 240.19b–4.

VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 E:\FR\FM\26OCN1.SGM 26OCN1