Common Questions and Answers Reporting Requirements for Pesticide, Active Ingredient, and Device Producers ( EPA Form 3540 16) December 2001 1. What must I report? Each producer operating an establishment must submit the following information for each pesticide, active ingredient, or pesticide device [ including, but not limited to, unregistered pesticides, Experimental Use Permits, Special Local Need products under § 24( c) of FIFRA, or pesticides produced for export only]: ° types and amounts produced in 2001; ° types and amounts sold/ distributed in 2001, regardless when the product was produced; and ° an estimate of the amount expected to be produced in 2002. For each of the above amounts, round all numbers to the nearest whole number.

2. What does the term " produce" include? " Produce" means to manufacture, prepare, compound, propagate, or process any pesticide or device or active ingredient used in producing a pesticide. ( FIFRA)

" Produce" means also to " manufacture, prepare, propagate, compound or process any pesticide, including any pesticide product pursuant to Section 5 of the Act, any active ingredient or device, or to package, repackage, label, relabel, or otherwise change the container of any pesticide or device." ( 40 CFR 167.3) ( NOTE: This includes repackaging of pesticides in bulk containers.)

3. How is the information I provide used by the EPA? The information is used by EPA's Office of Enforcement and Compliance Assurance and the Office of Prevention, Pesticides, and Toxic Substances to support risk benefit analysis, inspection, compliance, and enforcement activities.

4. How do I make corrections to the name( s) or addresses shown? All companies or producers must provide name and address changes to the EPA within 30 days after such change occurs. Domestic ( United States) companies or producers should send such information to the EPA regional office where the ompany headquarters is located. Foreign companies or producers should send such information to the EPA Washington, D. C. office. See page 4 of Instructions for Completing EPA Form 3540 16 ( hereinafter " Instructions") for all EPA mail and telephone contacts.

5. Where can I get assistance in completing this report? Domestic producers should contact the EPA regional office which services their company headquarters. Foreign producers should contact EPA's Washington, D. C. office. ( See Instructions  Page 4)

6. What constitutes " bulk repackaging" of pesticides? " Bulk repackaging" means the repackaging of pesticides into refillable containers which are designed and constructed to accommodate the return and refill of greater than 55 gallons or 100 pounds of product, in accordance with EPA's July 11, 1977, Bulk Enforcement Policy, and the Amendment dated March 4, 1991.

7. What constitutes " custom blends" of pesticides? What is a " custom blender?" A custom blender is any establishment which provides the service of mixing registered pesticides to a customer's specifications, specifically, a pesticide pesticide, pesticide fertilizer, or pesticide animal feed mixture. The blend must not be held in inventory, the pesticides used in the blend must bear end use labeling which does not prohibit the use of the pesticide in the blend, and the blend is delivered to the end user with the labeling of the pesticide( s) used in the blend and a statement specifying the composition of the mixture. An establishment where only custom blending activities take place does not have to report production. An establishment that custom blends in addition to other pesticide production activities, must report only the other pesticide production activities, not the custom blending activities.

8. What if I fail to file this production report? Failure to file an initial and annual production report is a violation of FIFRA, and may result in termination of the establishment's registration, civil penalties up to $ 5,500 per violation, and/ or criminal penalties. In addition, it is unlawful to knowingly falsify all or part of any pesticide production information reported on EPA Form 3540 16. ( Section 12( a)( 2)( M) of FIFRA). 1 United States Environmental Protection Agency Instructions for Completing Pesticide Report for Pesticide Producing and Device Producing Establishments  Reporting Year 2001 ( EPA Form 3540 16)

Electronic copies of these instructions and EPA Form 3540 16 can be downloaded from http:// www. epa. gov/ region4/ air/ pesticides/ pestreport. htm GENERAL INSTRUCTIONS 1. Each page of EPA Form 3540 16 has space to enter production for only three products. If you produce more than three products make photocopies of the form as necessary.

2. Complete report by printing in ink or typing.

3. " Produce" means to manufacture, prepare, compound, propagate, or process any pesticide or device or active ingredient used in producing a pesticide. ( Federal Insecticide, Fungicide, and Rodenticide Act ( FIFRA)). " Produce" also means to " manufacture, prepare, propagate, compound or process any pesticide, including any pesticide product pursuant to Section 5 of the Act, any active ingredient or device, or to package, repackage, label, relabel, or otherwise change the container of any pesticide or device." ( EPA regulations at 40 CFR § 167.3)

4. Establishments with Zero Production in 2001. If your establishment did not produce or distribute products subject to this report in 2001 and do not anticipate production or distribution in 2002, but you wish to retain establishment registration: complete Blocks 1 15, write " NO PRODUCTION" in Block 16, and submit the report as directed in the Instructions  Page 4.

5. Closed Establishments ( Out of business/ ceased production) ° Enter all production and distribution information for 2001. If there was none, write " NO PRODUCTION" in Block 16. ° Indicate on the form the firm is no longer in business. ° If you wish to inactivate establishment registration, clearly make such request on the report form.

6. A company official must sign the report in Block 15.

7. For all pages, complete, at the bottom: " This is Page _____ of _____."

8. Producers of Multi use Active Ingredients. Producers of chemicals that are multi use active ingredients, that is, they have both pesticidal and non pesticidal uses, are required to register their establishments and report their production on an annual basis, if the producer has actual or constructive knowledge that the chemical or substance they produce is used or intended for use as an active ingredient in the manufacture of a pesticide. These producers are required to report only the amount of the chemical or substance manufactured and distributed or sold for pesticidal purposes.

9. DO NOT REPORT: ° Production or distribution or sale of products NOT produced by your establishment, e. g., no changes are made to the product formulation, container, or label; ° Products shipped from your supplier directly to your customer; ° Any products produced in previous years which were not distributed or sold in 2001. ° Custom blended products ( See Common Questions and Answers  Question 7) ° Pesticides that are applied by your firm.

10. Submit completed reports as directed on Instructions  Page 4.

REPORT DUE DATE: On or before March 1, 2002, even if there has been no production. Incomplete reports may be returned to the establishment for correction or completion. 2 INSTRUCTIONS  COMPLETING THE REPORT Blocks 1 16. Name and Location of Company Headquarters and Producing Establishment Blocks 1 4. Enter the mailing address of the producing establishment Block 5. Enter name of establishment official signing report ( should match Block 15) Block 6. Enter title of establishment official signing report ( should match Block 15) Block 7. Date report is signed Blocks 8 13. A label showing the establishment SITE address ( including, if applicable, the building or building subdivision specific to the producing establishment) should appear in Blocks 8 13. Block 14. Telephone number of establishment official responsible for the report. Block 15. Signature of establishment official signing report. Block 16. Use this block to report NO PRODUCTION, if this is the case, for 2001.

Block 17  Product Code Enter " 1"  product is registered with EPA Enter " 2"  product registration is pending Enter " 3"  product is an Experimental Use Permit Enter " 4"  product is a pesticide device, an unregistered pesticide, or a Special Local Need ( SLN) registration Block 18  EPA Product Registration No. For Product Code 1  Enter EPA Registration No. ( exactly as it appears on product label) ( See discussion below on reporting production of distributor registrations and products under alternate brand names) For Product Code 2  Enter EPA File Symbol assigned For Product Code 3  Enter the Experimental Use Permit number For Product Code 4  For DEVICES, leave Block 18 blank For UNREGISTERED PESTICIDES, leave Block 18 blank, and attach the chemical formulation of the product, showing the product's active and inert ingredients, their common names, their CAS Registry numbers ( if available), and the percentage, by weight of each ingredient ( must total 100%). Multiple formulations may appear on the same page; clearly identify each by product name. For stand alone SLN REGISTRATIONS, enter the SLN registration number preceding the product name in Block 19. For example, SLN CA 890022. A " stand alone" SLN is one for which there are no uses other than the 24( c) uses.

NOTE: Reporting Distributor Registrations/ Alternate Brand Names. If you produce multiple pesticide products under the same basic EPA registration number ( such as distributor products or alternate brand names): ° Report the total quantities for all distributor products under the basic EPA registration number, and add " and supplementals" following the product name. On a separate paper, list the basic registration number with each distributor company number and brand name, and attach it to the report. ° List the basic registration number of products distributed under alternate brand names, provide product name " and alternate brand names" and report total production.

Block 19  Product Name. List only the most common brand name Block 20  Product Classification 05 Algaecide 02 Fungicide 06 Nematocide 11 Animal Repellent 04 Herbicide 07 Plant Regulator 10 Antifouling Paint 44 Herbicide/ Fungicide 03 Rodenticide 08 Defoliant, Desiccant 01 Insecticide 14 Water Purifier  Point of Use 13 Device 21 Insecticide Fungicide 15 Water Purifier  Small System 09 Disinfectant 16 Multi Use Active Ingredient 12 Other Pesticides ( includes insect ( See General Instruction # 8) repellents and slug baits) 3 Block 21  Product Type. Describe the type of product: Enter 1  Technical material or active ingredient for Manufacturing Use Only Enter 2  End use product; this includes products where the formulation has been blended, diluted, or changed; Enter 3  Repackaged or relabeled ( does not include any blending, dilution or change in the formulation) Enter 4  Device Block 22  Market Sold To Domestic Establishments Enter 1  All product was marketed in the United States Enter 2  Product was marketed both in the United States and exported Enter 3  All product was exported Foreign Establishments Enter 1  Product was marketed in the United States. DO NOT REPORT products that were sold to countries other than the United States.

Block 23  Use Classification Enter 1  Product label states RESTRICTED USE ONLY Enter 2  All other pesticides and devices Block 24  Unit of Measure G = Gallons ( liquid chemical product) P = Pounds ( dry or solid chemical product) L = Liters ( liquid chemical product) K = Kilograms ( dry or solid chemical product) T = Tons ( short ton = 2,000 lbs. or 907.2 kilograms) ( dry or solid chemical product) U = Units ( devices and pesticides that the label does not declare as gallons, pounds, liters, kilograms, or tons)

Block 25  Amount Produced Last Year ( 2001) ° Round all quantities to the nearest whole number Block 26  Amount Distributed/ Sold Last Year ( 2001)  United States ° Enter only those products distributed/ sold which were produced by your establishment, regardless when the product was produced; ° Do not include amounts which are custom blended or custom applied by you; ° Foreign producers should enter only the amount of product or number of devices exported to the United States. ° Round all quantities to the nearest whole number.

Block 27  Amount Distributed/ Sold Last Year ( 2001) to Foreign Markets ( Exported) ° Enter the quantity exported from the United States in 2001, regardless when the product was produced; ° Foreign establishments should leave Block 27 blank; ° Round all quantities to the nearest whole number.

Block 28  Amount ( Estimated) to be Produced in 2002 ° Enter an estimate of the quantity to be produced in 2002. ° Round all quantities to the nearest whole number.

Confidentiality. Under FIFRA Section 7( d) [ 7 U. S. C. § 136e], information reported in Items 25, 26, 27, and 28 of EPA Form 3540 16 will be treated as business confidential, subject to the provisions of FIFRA Section 10 [ 7 U. S. C. § 136h]. You are not required to assert a claim of confidentiality on this information.

If you wish to assert a claim of confidentiality for other information you have provided on this form, you must identify by the box number( s) information for which you are asserting a claim of confidentiality. Information so designated will be disclosed by the EPA only to the extent allowed by, and by means of, the procedures set forth in 40 CFR Part 2. If you do not claim the information as confidential upon submission of the report, it may be made available to the public without further notice to you.

Public Reporting Burden. The time required to complete this report is estimated to average one hour and 26 minutes, per response, including reviewing instructions, searching data sources, gathering and maintaining data needed, and completing review and collection of information. Send comments regarding this burden estimate or other aspects related to this information collection, including suggestions for reducing this burden, to: Director, OP/ ORMI Regulatory Information Division ( 2137), U. S. Environmental Protection 4 Agency, 1200 Pennsylvania Avenue NW, Washington, D. C. 20460, Attention: Desk Officer for EPA, and to the Paperwork Reduction Project, Office of Information and Regulatory Management Affairs, Office of Management and Budget, 725 17th Street NW, Washington, D. C. 20503.

WHERE TO SUBMIT REPORTS DOMESTIC PRODUCERS: Submit reports to the following EPA Regional Office in which your company headquarters is located EPA Regional Offices States/ Terr. Covered EPA Regional Offices States/ Terr. Covered U. S. EPA Region 1 Lee Weller PO Box 8636 Boston, MA 02114 Telephone 617 918 1849 CT, MA ME, NH RI, VT U. S. EPA Region 6 James Redd Pesticides Section ( 6PD P) 1445 Ross Avenue Dallas, TX 75202 2733 Telephone 214 665 7560 AR, LA NM, OK TX U. S. EPA Region 2 David Salkie Pesticides Team ( MS 500), Building 5 2890 Woodbridge Avenue Edison, NJ 08837 3679 Telephone 732 321 6750 NJ, NY PR, VI U. S. EPA Region 7 Lou Banks Pesticides Branch ( WWPD/ PEST) 901 N. 5th Street Kansas City, KS 66101 2798 Telephone 913 551 7125 IA, KS MO, NB U. S. EPA Region 3 Kyla Townsend McIntyre Pesticides Programs ( 3WC32) 1650 Arch Street Philadelphia, PA 19103 2029 Telephone 215 814 2045 DE, DC MD, PA VA, WV U. S. EPA Region 8 Cornelia Maes Enforcement Division ( ENF PT) 999 18th Street, Suite 300 Denver, CO 80202 2466 Telephone 303 312 6049 CO, MT ND, SD UT, WY U. S. EPA Region 4 Jacquelyn Wilkerson AFC Pesticides Section ( APTMD) 61 Forsyth Street, SW Atlanta, GA 30303 8960 Telephone 404 562 9011 AL, FL GA, KY MS, NC SC, TN U. S. EPA Region 9 Glenda Dugan Pesticides Section ( CMD 4 3) 75 Hawthorne Street San Francisco, CA 94105 3901 Telephone 415 947 4204 AZ, CA, HI, NV U. S. EPA Region 5 Gail Muffitt PTES ( DT 8J) 77 W. Jackson Blvd. Chicago, IL 60604 3507 Telephone 312 886 6008 or 312 886 7061 IL, IN MI, MN OH, WI U. S. EPA Region 10 Eva Chun Pesticides Unit ( ECO 084) 1200 Sixth Avenue Seattle, WA 98101 1128 Telephone 206 553 1970 AK, ID OR, WA FOREIGN PRODUCERS: Submit report to the following EPA Washington, D. C. address: 5 US Postal Service Mail Address Carol L. Buckingham US Environmental Protection Agency Agriculture Division ( 2225A) 1200 Pennsylvania Ave., NW Washington, DC 20460 0001 USA Telephone: 202 564 5008 Courier Delivery Address Carol L. Buckingham ( Room 6102) US Environmental Protection Agency Agriculture Division 1200 Pennsylvania Ave., NW Washington, DC 20004 USA E mail: buckingham. carol@ epa. gov NOTE: The Agency does not notify you when your Report is received. To ensure the Agency receives the report, you may wish to send it by certified or registered mail, return receipt requested.


[Federal Register: November 28, 2008 (Volume 73, Number 230)]
[Notices]
[Page 72551-72554]
[DOCID:fr28no08-132]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58992; File No. SR-NASDAQ-2008-088]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Regarding Its Obvious Errors Rule and the Adoption of a Catastrophic
Error Provision

November 21, 2008.
    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 November 19, 2008, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared substantially by Nasdaq.
Nasdaq has designated the proposed rule change as constituting a non-
controversial rule change under Rule 19b-4(f)(6) under the Act,\3\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 C.F.R. 240.19b-4(f)(6).

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

    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \4\ and Rule 19b-4 thereunder,\5\ The
NASDAQ Stock Market LLC (``Nasdaq'') is filing with the Securities and
Exchange Commission (``Commission'') a proposal for the NASDAQ Options
Market (``NOM'') to modify Chapter V, Section 6 (Obvious Errors) of it
options rules to: (1) adopt a catastrophic error provision; and (2)
change the notification period for obvious errors from 15 to 20
minutes.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in [brackets].\6\
---------------------------------------------------------------------------

    \6\ Changes are marked to the rule text that appears in the
electronic Nasdaq Manual found at http://
nasdaqomx.cchwallstreet.com.
---------------------------------------------------------------------------

* * * * *

Chapter V Regulation of Trading on NOM

    Sec. 1-5 No change.
    Sec. 6 Obvious Errors.
    (a) Nasdaq shall either nullify a transaction or adjust the
execution price of a transaction that meets the standards provided in
this Section.
    (b) Definition of Obvious Error. For purposes of this Section only,
an Obvious Error will be deemed to have occurred when:
    (i) the execution price of a transaction is higher or lower than
the Theoretical Price for the series by an amount equal to at least the
amount shown below:

------------------------------------------------------------------------
                                                                Minimum
                      Theoretical price                          amount
------------------------------------------------------------------------
Below $2.....................................................        .25
$2 to $5.....................................................        .40
Above $5 to $10..............................................        .50
Above $10 to $20.............................................        .80
Above $20....................................................       1.00
------------------------------------------------------------------------

    (ii) the trade resulted in an execution price in a series that was,
and for five seconds prior to the execution remained, quoted no bid and
at least one strike price below (for calls) or above (for puts) in the
same class were quoted no bid at the time of the erroneous execution
(in which case the trade shall be nullified). For purposes of this
subparagraph, bids and offers of the parties to the subject trade that
are in any of the series in the same options class shall not be
considered.
    (c) Definition of Theoretical Price. For purposes of this Section
only, the Theoretical Price of an option series is,
    (i) If the series is traded on at least one other options exchange,
the mid-point of the National Best Bid and Offer (``NBBO''), just prior
to the transaction; or
    (ii) If there are no quotes for comparison purposes, as determined
by MarketWatch as defined in Chapter I.
    (d) Obvious Error Procedure. If a party believes that it
participated in a transaction that was the result of an Obvious Error,
it must notify MarketWatch via written or electronic complaint within
[15] 20 minutes of the execution. Absent unusual circumstances, Nasdaq
will not grant relief under this Section unless notification is made
within the prescribed periods of time. A designated employee in Nasdaq
Regulation that is trained in the application of this rule (``Nasdaq
Official'') shall administer the application of this Section.
    (e) Adjust or Bust. A Nasdaq Official will determine whether there
was an Obvious Error as defined above. If it is determined that an
Obvious Error has occurred, MarketWatch shall take one of the actions
listed below. Upon taking final action, MarketWatch shall promptly
notify both parties to the trade electronically or via telephone.
    (i) Where each party to the transaction is an Options Participant,
the execution price of the transaction will be adjusted by the Nasdaq
Official to the prices provided in subparagraphs (A) and (B) below
unless both parties agree to adjust the transaction to a different
price or agree to bust the trade within ten (10) minutes of being
notified by MarketWatch of the Obvious Error.
    (A) Erroneous buy transactions will be adjusted to their
Theoretical Price plus $.15 if the Theoretical Price is under $3, or
plus $.30 if the Theoretical Price is at or above $3.
    (B) Erroneous sell transactions will be adjusted to their
Theoretical Price minus $.15 if the Theoretical Price is under $3, or
minus $.30 if the Theoretical Price is at or above $3.
    (ii) Where at least one party to the Obvious Error is not an
Options Participant, the trade will be nullified unless both parties
agree to an adjustment price for the transaction within 30 minutes of
being notified by MarketWatch of the Obvious Error.
    (iii) Trades meeting the Obvious Errors definition in (b)(ii) above
shall be nullified.
    (iv) Mutual Agreement. The determination as to whether a trade was
automatically executed at an erroneous price may be made by mutual
agreement of the affected parties to a particular transaction. A trade
may be nullified or adjusted on the terms that all parties to a
particular transaction agree.
    (f) Catastrophic Errors
    (i) Definition. For purposes of this Section only, a Catastrophic
Error will be deemed to have occurred when the execution price of a
transaction is higher or lower than the Theoretical Price for the
series by an amount equal to at least the amount shown below:

------------------------------------------------------------------------
                                                                Minimum
                      Theoretical price                          amount
                                                                  ($)
------------------------------------------------------------------------
Below $2.....................................................          1
$2 to $5.....................................................          2
Above $5 to $10..............................................          5
Above $10 to $50.............................................         10
Above $50 to $100............................................         20
Above $100...................................................         30
------------------------------------------------------------------------

    (ii) Catastrophic Error Procedure. If a party believes that it
participated in a transaction that qualifies as a Catastrophic Error,
it must notify MarketWatch via a written or electronic complaint by
8:30 am ET, on the first trading day following the execution. For
transactions in an expiring options series that take place on an
expiration day, a party must notify MarketWatch by 5:00 pm ET that same
day.
    Nasdaq will not grant relief under this Section unless notification
is made within the prescribed periods of time. Relief will not be
granted if MarketWatch has previously rendered a decision with respect
to the transaction in question pursuant to this Section. A Nasdaq
Official, as defined in paragraph (d) above, shall administer the
application of this Section.
    (iii) Adjust or Bust. A Nasdaq Official will determine whether
there was a Catastrophic Error as defined above. If it is determined
that a Catastrophic Error has occurred, whether or not each party to
the transaction is an Options Participant, MarketWatch shall adjust the
execution price of the transaction, unless both parties agree to adjust
the transaction to a different price, to the theoretical price (i) plus
the adjustment value provided below for erroneous buy transactions, and
(ii) minus the adjustment value provided for erroneous sell
transactions:

------------------------------------------------------------------------
                                                                Minimum
                      Theoretical price                          amount
                                                                  ($)
------------------------------------------------------------------------
Below $2.....................................................          1
$2 to $5.....................................................          2
Above $5 to $10..............................................          3
Above $10 to $50.............................................          5
Above $50 to $100............................................          7
Above $100...................................................         10
------------------------------------------------------------------------

Upon taking final action, MarketWatch shall promptly notify both
parties to the trade electronically or via telephone.
    (g) Review by the Market Operations Review Committee (``MORC'')
    (i) A party to a transaction affected by a decision made under this
section may appeal that decision to the MORC. An appeal must be made in
writing, and must be received by Nasdaq within thirty (30) minutes
after the person making the appeal is given the notification of the
determination being appealed. The MORC may review any decision
appealed, including whether a complaint was timely, whether an Obvious
Error or Catastrophic Error occurred, whether the correct Theoretical
Price was used, and whether an adjustment was made at the correct
price.
    (ii) A MORC panel will be comprised minimally of representatives of
one (1) member engaged in Market Making and two (2) industry
representatives not engaged in Market Making. At no time should a
review panel have more than 50% members engaged in Market Making.
    (iii) The MORC, pursuant to the standards set forth in this rule,
shall affirm, modify, or reverse the determination.
    (iv) The decision of the MORC pursuant to an appeal, or a
determination by a Nasdaq Official that is not appealed, shall be final
and binding upon all parties and shall constitute final Nasdaq action
on the matter in issue. Any determination by a Nasdaq Official or the
MORC shall be rendered without prejudice as to the rights of the
parties to the transaction to submit their dispute to arbitration.
    (v) The party initiating the appeal shall be assessed a $500.00 fee
if the MORC upholds the decision of the Nasdaq Official. In addition,
in instances where Nasdaq, on behalf of an Options Participant,
requests a determination by another market center that a transaction is
clearly erroneous, Nasdaq will pass any resulting charges through to
the relevant Options Participant.
    Sec. 7-9 No change.
* * * * *

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

    In its filing with the Commission, Nasdaq 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. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    Nasdaq is proposing to amend NOM's Obvious Errors Rule to adopt a
catastrophic error provision to address egregious trading errors and
thereby help NOM participants better manage their risk. The current
rule governing obvious errors is being amended to define a catastrophic
error and establish procedures for granting relief from trades that
result from a Catastrophic Error, as defined therein. Specifically,
similar to NOM's existing obvious error provision, the proposal defines
a Catastrophic Error by comparing the execution price to the
Theoretical Price; \7\ if they differ by the amount indicated in the
chart in proposed new paragraph (f), the procedures for Catastrophic
Errors in that paragraph can be invoked. Accordingly, the proposal sets
forth objective criteria for determining when a catastrophic error has
occurred. The proposed amounts for catastrophic errors are
significantly higher than the amounts for obvious errors, which Nasdaq
believes should limit the application of the catastrophic error
provision to errors involving significant losses.
---------------------------------------------------------------------------

    \7\ The current definition of Theoretical Price in paragraph (c)
continues to apply.
---------------------------------------------------------------------------

    If a party believes that it participated in a transaction that
qualifies as a Catastrophic Error, it must notify MarketWatch via a
written or electronic complaint by 8:30 a.m. ET, on the first trading
day following the execution. For transactions in an expiring options
series that take place on an expiration day, a party member must notify
MarketWatch by 5 p.m. ET that same day. This is similar to the current
obvious error rule, except the timeframes are increased to reflect the
egregious nature of a catastrophic error; the proposed timeframes are
the same as those of other exchanges.\8\
---------------------------------------------------------------------------

    \8\ See e.g., ISE Rule 720(d)(1) and PHLX Rule 1092(f)(i).
---------------------------------------------------------------------------

    A Nasdaq Official will determine whether there was a Catastrophic
Error as defined above. If it is determined that a Catastrophic Error
has occurred, whether or not each party to the transaction is an
Options Participant, MarketWatch shall adjust the execution price of
the transaction, unless both parties agree to adjust the transaction to
a different price, to a price specified in the rule, which is identical
to the rules of the other exchanges.\9\ The adjustment value is
significantly higher for catastrophic errors than for obvious errors,
in light of the egregious nature of the error.
---------------------------------------------------------------------------

    \9\ See e.g., ISE Rule 720(d)(3) and PHLX Rule 1092(f)(iii).
---------------------------------------------------------------------------

    Under the proposal, relief will not be granted if MarketWatch has
previously rendered a decision with respect to the transaction in
question pursuant to this Section. Catastrophic error decisions are
appealable to the Market Operations Review Committee (``MORC'')
pursuant to renumbered paragraph (g), just like obvious error
decisions. Nasdaq believes that the proposal establishes a specific and
objective process for catastrophic error handling.
    Lastly, Nasdaq proposes to change to notification period for
obvious errors (as opposed to the proposed new catastrophic errors)
from 15 to 20 minutes in order to afford participants additional time
to enter a complaint under the obvious error procedure. The 20-minute
notification period is the same as certain other options exchanges.\10\
---------------------------------------------------------------------------

    \10\ See PHLX Rule 1092(e)(i) respecting member organizations
entering orders from off the floor (the notification period for
specialists and Registered Options Traders remains 15 minutes); see
also ISE Rule 720(b)(1) respecting Electronic Access Members (market
makers have five minutes) and similar provisions in NYSE Arca Rule
6.87(a)(3)(A) and BSE Section 20(d)(i) [sic].
---------------------------------------------------------------------------

2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\11\ in general, and with
Section 6(b)(5) of the Act,\12\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest, because it will allow a longer opportunity to seek
relief from errors that result in large losses.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.

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

    Written comments were neither solicited nor received. However,
Nasdaq received one e-mail in support of the extension of the
notification period for obvious errors to 20 minutes.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
Nasdaq has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \15\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \16\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. Nasdaq requests that
the Commission waive the 30-day operative delay to immediately offer
market participants on Nasdaq the same potential for relief that is
available at other options exchanges for catastrophic errors. The
Exchange argued that the proposed changes should serve to help market
participants seek relief from egregious errors and better manage their
risk. The Commission believes that waiving the 30-day operative delay
\17\ is consistent with the protection of investors and the public
interest. Given that the Exchange's proposed rule change is
substantially similar to the rules of other exchanges previously
approved by the Commission, the proposal does not appear to present any
novel regulatory issues. Therefore, the Commission designates the
proposal operative upon filing.
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2008-088 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2008-088. 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 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, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. 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 publicly available. All
submissions should refer to File Number SR-NASDAQ-2008-088 and should
be submitted on or before December 19, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-28219 Filed 11-26-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: October 23, 2007 (Volume 72, Number 204)]
[Notices]
[Page 60048]
[DOCID:fr23oc07-66]

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SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meeting

    Notice is hereby given, pursuant to the provisions of the
Government in the Sunshine Act, Public Law 94-409, that the Securities
and Exchange Commission will hold the following meeting during the week
of October 22, 2007:
    A Closed Meeting will be held on Thursday, October 25, 2007 at 2
p.m.
    Commissioners, Counsel to the Commissioners, the Secretary to the
Commission, and recording secretaries will attend the Closed Meeting.
Certain staff members who have an interest in the matters may also be
present.
    The General Counsel of the Commission, or his designee, has
certified that, in his opinion, one or more of the exemptions set forth
in 5 U.S.C. 552b(c)(3), (5), (7), (9)(B), and (10) and 17 CFR
200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the
scheduled matters at the Closed Meeting.
    Commissioner Casey, as duty officer, voted to consider the items
listed for the closed meeting in closed session.
    The subject matter of the Closed Meeting scheduled for Thursday,
October 25, 2007 will be:

    Formal orders of investigation;
    Institution and settlement of injunctive actions;
    Institution and settlement of administrative proceedings of an
enforcement nature;
    Resolution of litigation claims; and
    Other matters related to enforcement actions.
    At times, changes in Commission priorities require alterations in
the scheduling of meeting items.
    For further information and to ascertain what, if any, matters have
been added, deleted or postponed, please contact: The Office of the
Secretary at<PHONE_NUMBER>.

    Dated: October 18, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-20830 Filed 10-22-07; 8:45 am]

BILLING CODE 8011-01-P