[Federal Register Volume 75, Number 44 (Monday, March 8, 2010)]
[Notices]
[Pages 10554-10557]
[FR Doc No: 2010-4811]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

Privacy Act of 1974; System of Records Notice

AGENCY: Federal Motor Carrier Safety Administration (FMCSA) Department
of Transportation (DOT).

ACTION: Notice to establish a new system of records.

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SUMMARY: FMCSA proposes to establish a system of records under the
Privacy Act of 1974 (5 U.S.C. 552a) for its Pre-Employment Screening
Program (PSP), as required by 49 U.S.C. 31150. The system of records
will make crash and inspection data about commercial motor vehicle
(CMV) drivers rapidly available to CMV drivers (operator-applicants)
and prospective employers of those drivers (motor carriers), via a
secure Internet site, as an alternative to requiring them to submit a
Freedom of Information Act (FOIA) request or Privacy Act request to
FMCSA for the data.

    Operator-applicants and motor carriers must pay a fee to access
data in PSP, but use of PSP is optional. Motor carriers may continue to
request the information from FMCSA under FOIA, and operator-applicants
may continue to receive their own safety performance data free of
charge by submitting a Privacy Act request to FMCSA.
    The PSP system will be administered by a FMCSA contractor, National
Information Consortium Technologies, LLC (NIC). The PSP contractor will
not be authorized to provide data to any persons other than motor
carriers, for pre-employment screening purposes, and operator-
applicants, as required in section 31150 (b)(3). A data request from
any other person (e.g., a law firm) will be treated as a FOIA request
by FMCSA. FMCSA will perform audits of the PSP contractor to ensure
performance, privacy and security objectives are being met. The PSP
system will only allow operator-applicants to access their own data,
and will only allow motor carriers to access an individual operator-
applicant's data if the motor carrier certifies the data is for pre-
employment screening and that it has obtained the operator-applicant's
written consent. The system of records is more thoroughly detailed
below and in the Privacy Impact Assessment (PIA) that can be found on
the DOT Privacy Web site at http://www.dot.gov/privacy.

DATES: Effective April 7, 2010. Written comments should be submitted on
or before the effective date. FMCSA may publish an amended SORN in
light of any comments received.

ADDRESSES: Send comments to Pam Gosier-Cox, FMCSA Privacy Officer,
FMCSA Office of Information Technology, MC-RI, U.S. Department of
Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590 or
<EMAIL_ADDRESS>
FOR FURTHER INFORMATION CONTACT: For privacy issues please contact: Pam
Gosier-Cox, FMCSA Privacy Officer, FMCSA Office of Information
Technology, MC-RI, U.S. Department of Transportation, 1200 New Jersey
Avenue, SE., Washington, DC 20590 or<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

 I. The PSP Program

    Section 31150 of title 49, U.S. Code (USC), titled ``Safety
performance history screening'' as added by section 4117(a) of the
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU), Public Law 109-59, 119 Stat. 1144, 1728-
1729, August 10, 2005, requires FMCSA to provide persons conducting
pre-employment screening services for the motor carrier industry
electronic with access to the following reports contained in FMCSA's
Motor Carrier Management Information System (MCMIS):
    (1) Commercial motor vehicle accident reports.
    (2) Inspection reports that contain no driver-related safety
violations.
    (3) Serious driver-related safety violation inspection reports.
    FMCSA designed PSP to satisfy the requirements of 49 U.S.C. 31150
and to meet the following performance, privacy and security objectives:
     Provide driver-related MCMIS crash and inspection data
electronically, via a secure Internet site, for a fee, and in a timely
and professional manner;
     Allow operator-applicants to access their own data upon
written or electronic request, and allow motor carriers to access an
operator-applicant's data, for pre-employment screening purposes, with
the operator-applicant's written or electronic consent;
     Maintain, handle, store, and distribute the data in PSP in
accordance with 49 U.S.C. 31150 and applicable laws, regulations and
policies; and
     Provide a redress procedure by which an operator-applicant
can seek to correct inaccurate information in PSP, via the DataQs
system currently maintained by FMCSA.

II. The Privacy Act

    The Privacy Act (5 USC 552a) governs the means by which the United
States Government collects, maintains, and uses personally identifiable
information (PII) in a system of records. A ``system of records'' is a
group of any records under the control of a Federal agency from which
information about individuals is retrieved by name or other personal
identifier.
    The Privacy Act requires each agency to publish in the Federal
Register a system of records notice (SORN) identifying and describing
each system of records the agency maintains, including the purposes for
which the agency uses PII in the system, the routine uses for which the
agency discloses such information outside the agency, and how
individuals to whom a Privacy Act record pertains can exercise their
rights under the Privacy Act (e.g., to determine if the system contains
information about them).

IV. Privacy Impact Assessment

    FMCSA is publishing a Privacy Impact Assessment (PIA) to coincide
with the publication of this SORN. In accordance with 5 USC 552a(r), a
report on the establishment of this system of records has been sent to
Congress and to the Office of Management and Budget.
System Number:
    DOT/FMCSA 007

System Name:
    Pre-Employment Screening Program (PSP).

Security Classification:
    Unclassified, Sensitive.

System Location:
     NIC Primary Data Center
    AT&T Data Center, Ashburn, VA 20147.
     NIC Secondary Data Center
    AT&T Data Center, Allen, TX 75013.

Categories of Individuals Covered by the System of Records:
    PSP will include personally identifiable information (PII)
pertaining to CMV, as defined by 49 CFR 390.5, drivers (referred to
herein as operator-applicants).

Categories of Records in PSP:
    PSP will contain the following categories of records, in separate
databases:
    1. CMV crash and inspection records. Each month, FMCSA will provide
the PSP contractor with a current MCMIS data extract containing the
most recent five (5) years' crash data and the most recent three (3)
years' inspection information. The MCMIS data extract in PSP will
include the following PII data elements, all of which will be
encrypted:
     CMV driver name (last, first, middle initial)
     CMV driver date of birth
     CMV driver license number
     CMV driver license state
    2. Financial transaction records. The PSP system will contain
records of payments processed by the contractor, NIC, to collect fees
charged to motor carriers and operator-applicants for accessing crash
and inspection data in PSP. The financial transaction records will
include the following PII data elements, which will be encrypted (and,
in some cases, truncated):
     Credit card holder name
     Credit card account number
     Account holder address
    Card Verification Value Code (CVV) numbers will be temporarily
captured by the system but will not be retained or stored in PSP.
    3. Access transaction records. The PSP system will contain records
of all access transactions processed over the PSP Web site. Access
transaction records will include the following PII data elements, which
will be encrypted:

     CMV driver name (last, first, middle initial)
     CMV driver date of birth
     CMV driver license number
     CMV driver license State
     CMV driver address.

Authority for Maintenance of the System:
    49 U.S.C. 31150, as added by section 4117 of Public Law 109-59
[Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU)].

Purpose(s):
    Authorized DOT/FMSCA staff and contractor personnel will use the
following PII in PSP for the following purposes:
     To provide system support and maintenance for PSP.
     To make CMV crash and inspection records available to
operator-applicants and motor carriers upon receipt of validated access
requests and fee payments.
     To process credit card payments and collect fees for the
requested access transactions.
     To create a historical record of PSP usage for accounting
and compliance audit purposes.

Routine Uses of Records Maintained in the System, Including Categories
of Users and Purposes of Use:
    The PSP system will share PII outside DOT as follows:
     Authorized motor carriers may access an individual's
operator-applicant's crash and inspection data in PSP with the
operator-applicant's written consent and payment of a fee.
     Validated operator-applicants may access their own crash
and inspection data in PSP upon written request and payment of a fee.
     When an operator-applicant makes a request for his or her
own data from PSP, the FMCSA contractor will request that the operator-
applicant provide his or her full name, date of birth, driver license
number, driver license state and current address to verify the identity
of the operator-applicant and this information will be transmitted to
the Validation Authority of the FMCSA contractor (e.g. Lexis-Nexis) to
verify and validate the individual operator-applicant requesting access
to his or her own inspection and crash data.
     Other possible routine uses of the information, applicable
to all DOT Privacy Act systems of records, are published in the Federal
Register at 65 FR 19476 (April 11, 2000), under ``Prefatory Statement
of General Routine Uses'' (available at http://www.dot.gov/privacy/privacyactnoties/).

Disclosure to Consumer Reporting Agencies:
    None.

Policies and Practices for Storing, Retrieving, Accessing, Retaining,
and Disposing of Records:
Storage:
    Records will be stored in secure database servers, and data will be
backed up on a Storage Area Network (SAN) in encrypted/truncated form.
Any paper records received or required for purposes of processing data
requests will be stored in secure file folders at NIC's Primary Data
Center.

Retrievability:
    CMV crash and inspection records in the PSP database will be
retrieved by using the operator-applicant's last name, license number,
and license state. Additional operator-applicant information (e.g.,
date of birth, first name, and middle initial) will be used to confirm
the accuracy of the search.

Accessibility (Including Safeguards):
    All records in PSP will be protected from unauthorized access
through appropriate administrative, physical and technical safeguards.
Electronic files will be stored in a database secured by password
security, encryption, firewalls, and secured operating systems, to
which only authorized NIC or DOT/FMCSA personnel will have access, on a
need-to-know basis. Paper files will be stored in file cabinets in a
locked file room to which only authorized NIC and DOT/FMCSA personnel
will have access, on a need-to-know basis. All access to the electronic
system and paper files will be logged and monitored. NIC will be
subject to routine audits of the PSP program by FMCSA to ensure
compliance with the Privacy Act, applicable sections of the Fair Credit
Reporting Act and other applicable Federal laws, regulations, or other
requirements.
    Access by external users (operator-applicants and motor carriers)
will be restricted within the system based upon the user's role as an
authorized motor carrier or validated operator-applicant. An authorized
motor carrier and validated operator-applicant is an entity or person
who has been provided a unique user identification and password by NIC
and must use the unique identification and password to access data in
PSP. External users will be able to query the CMV crash and inspection
database only (the financial transaction database and access request
database cannot be externally queried). NIC will provide users with an
advisory statement that authorized motor carriers could be subject to
criminal penalties and other sanctions under 18 U.S.C. 1001 for misuse
of the PSP system.
    In order for a motor carrier to receive an individual operator-
applicant's crash and inspection data, the motor carrier must certify,
for each request, under penalty of perjury, that the request is for
pre-employment purposes only and that written consent of the operator-
applicant has been obtained. Upon completion of certification, the NIC
will send a notification to the motor carrier that the individual
operator-applicant data is available on secure Web site. The motor
carrier will access this individual's information by entering a unique
identification and password. Motor carriers will be required to
maintain each operator-applicant's signed, written consent form for
five (5) years. Motor carriers are subject to random audits from NIC
and/or FMCSA to ensure that written consent of operator-applicants was
obtained.
    The PSP system also allows validated operator-applicants to access
their own crash and inspection data upon written or electronic request.
Upon receipt of an operator-applicant's request, NIC will validate the
identity of the requestor (operator-applicant) by using his or her full
name, date of birth, driver license number, driver license state and
current address against a validation authority.
    All PII data elements will be encrypted in the PSP system, as more
fully described under the heading ``Categories of Records in PSP.''

Retention and Disposal:
    1. CMV crash and inspection records: Pursuant to General Records
Schedule (GRS) 20 (``Electronic Records,'' February 2008, see http://www.archives.gov/records-mgmt/ardor/grs20.html), governing extract
files, each monthly MCMIS extract in PSP is deleted approximately three
(3) months after being superseded by a current MCMIS extract, unless
needed longer for administrative, legal, audit or other operational
purposes.
    2. Financial transaction records: Credit card information is
encrypted/truncated and retained for 30 days.
    3. Access transaction records: PSP transaction records are retained
for a period of five years.

System Manager Contact Information:
    PSP System Manager: Arlene D. Thompson; Office of Information
Technology; Federal Motor Carrier Safety Administration; U.S.
Department of Transportation; 1200 New Jersey Avenue, SE., W65-319;
Washington, DC 20590.

    MCMIS System Manager: Heshmat Ansari, PhD; Division Chief, IT
Development Division; Office of Information Technology; Federal Motor
Carrier Safety Administration; U.S. Department of Transportation; 1200
New Jersey Avenue, SE., W68-330; Washington, DC 20590.
    Freedom of Information Act (FOIA) Office: Federal Motor Carrier
Safety Administration Attn: FOIA Team MC-MMI; DIR Officer, 1200 New
Jersey Avenue, SE., Washington, DC 20590.
    Notification Procedure: Individual operator-applicants wishing to
know if their inspection and crash records appear in this system may
directly access the PSP system or make a request in writing to the PSP
System Manager identified under ``System Manager Contact Information.''
Individual operator-applicants wishing to know if their transaction
records and credit card information appear in this system may make a
written request to the following address:
    NIC Technologies, Inc., 1477 Chain Bridge Road, Suite 101, McLean,
VA 22101.

Record Access Procedures:
    Individual operator-applicants seeking access to information about
them in this system may directly access the PSP system or apply to the
PSP System Manager or the FMCSA FOIA Office identified under ``System
Manager Contact Information.''

Contesting Record Procedures:
    Individuals seeking to contest the content of information about
them in this system should apply to the System Manager for either PSP
or MCMIS by following the same procedures as indicated under
``Notification Procedure.'' Individuals may also submit a data
challenge to DataQs by logging into the DataQs Web site (https://dataqs.fmcsa.dot.gov/login.asp).

Record Source Categories:
    1. CMV crash and inspection records: All commercial driver crash
and inspection data in PSP is received from a monthly MCMIS data
extract. The MCMIS SORN identifies the source(s) of the information in
MCMIS.
    2. Financial transaction records: Credit card information
pertaining to an individual card holder (i.e., operator-applicant) is
obtained directly from the card holder, who is responsible for entering
it accurately on the PSP Web site.
    3. Access transaction records: An audit trail of those entities or
persons that accessed the PSP (i.e. authorized motor carriers or
validated operator-applicants) is automatically created when requests
are initiated and when data is released by NIC.
    These records are internal documents to be used by NIC and FMCSA
for auditing, monitoring and compliance purposes.

Exemptions Claimed for the System:
    None.

    Dated: March 2, 2010.
Habib Azarsina,
Departmental Privacy Officer,<PHONE_NUMBER>.
[FR Doc. 2010-4811 Filed 3-5-10; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register: July 14, 2006 (Volume 71, Number 135)]
[Rules and Regulations]
[Page 40023-40025]
[DOCID:fr14jy06-7]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 81

[EPA-R03-OAR-2005-0480; FRL-8197-1]

Approval and Promulgation of Air Quality Implementation Plans;
West Virginia; Redesignation of the City of Weirton PM-10 Nonattainment
Area to Attainment and Approval of the Maintenance Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving a redesignation request and a State
Implementation Plan (SIP) revision submitted by the State of West
Virginia. This revision requests that EPA redesignate the Weirton
nonattainment area (Weirton Area) to attainment for the national
ambient air quality standards (NAAQS) for particulate matter with an
aerodynamic diameter less than or equal to a nominal 10 micrometers
(PM-10), and concurrently requests approval of a limited maintenance
plan (LMP) as a revision to the West Virginia State Implementation
(SIP). In this action, EPA is approving the State's request to
redesignate the area from nonattainment to attainment, as well as
approving the LMP for the Weirton Area.

DATES: Effective Date: This final rule is effective on August 14, 2006.

ADDRESSES: EPA has established a docket for this action under Docket ID
Number EPA-R03-OAR-2005-0480. All documents in the docket are listed in
the http://www.regulations.gov Web site. Publicly available docket materials

are available either electronically through http://www.regulations.gov or in

hard copy for public inspection during normal business hours at the Air
Protection Division, U.S. Environmental Protection Agency, Region III,
1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State
submittal are available at the West Virginia Department of
Environmental Protection, Division of Air Quality, 601 57th Street,
SE., Charleston, WV 25304.

FOR FURTHER INFORMATION CONTACT: Linda Miller,<PHONE_NUMBER>, or by e-
mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    On May 11, 2006 (71 FR 27440), EPA published a notice of proposed
rulemaking (NPR) for the State of West Virginia. The NPR proposed
approval of the LMP for the Weirton Area in West Virginia and the
State's request to redesignate the area from nonattainment to
attainment. EPA also proposed to determine that, because the Weirton
Area has continued to attain the PM-10 NAAQS, certain attainment
demonstration requirements, along with other related requirements of
the CAA, are not applicable to the Weirton Area. West Virginia
submitted a request to redesignate the Weirton Area to attainment for
PM-10 and a SIP submittal for the related maintenance plan on May 24,
2004.

II. Summary of SIP Revision

    On May 16, 2001 (66 FR 27034), EPA promulgated a final rule
entitled, ``Determination of Attainment of the NAAQS for PM-10 in the
Weirton, West Virginia Nonattainment Area'' finding that the Weirton
PM-10 nonattainment had attained the NAAQS for PM-10 by its applicable
December 31, 2000 attainment date. In order to be redesignated from
nonattainment to attainment, West Virginia requested, in a letter dated
October 14, 2003, that EPA apply its clean data policy to the Weirton
Area. The redesignation request, dated May 24, 2004, included the
associated SIP submittal of the maintenance plan for the Weirton area.
    Other specific requirements of the request for redesignation and
the associated rationale and the rationale for EPA's proposed action
are explained in the NPR and will not be restated here. EPA received
one comment in support of the proposed approval.

III. Final Action

    EPA is approving the PM-10 redesignation request for the Weirton
Area, and also approving the associated limited maintenance plan as a
revision to the West Virginia SIP.

IV. Statutory and Executive Order Reviews

A. General Requirements

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is not a ``significant regulatory action'' and therefore is not
subject to review by the Office of Management and Budget. For this
reason, this action is also not subject to Executive Order 13211,
``Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action
merely approves state law as meeting Federal requirements and imposes
no additional requirements beyond those imposed by state law.
Accordingly, the Administrator certifies that this rule will not have a
significant economic impact on a substantial number of small entities
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because
this rule approves pre-existing requirements under state law and does
not impose any additional enforceable duty beyond that required by
state law, it does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not
have tribal implications because it will not have a substantial direct
effect on one or more Indian tribes, on the relationship between the
Federal Government and Indian tribes, or on the distribution of power
and responsibilities between the Federal Government and Indian tribes,
as specified by Executive Order 13175 (65

FR 67249, November 9, 2000). This action also does not have Federalism
implications because it does not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in Executive Order 13132 (64
FR 43255, August 10, 1999). This action merely approves a state rule
implementing a Federal requirement, and does not alter the relationship
or the distribution of power and responsibilities established in the
Clean Air Act. This rule also is not subject to Executive Order 13045
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997), because it is not economically
significant.
    In reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act. In
this context, in the absence of a prior existing requirement for the
State to use voluntary consensus standards (VCS), EPA has no authority
to disapprove a SIP submission for failure to use VCS. It would thus be
inconsistent with applicable law for EPA, when it reviews a SIP
submission, to use VCS in place of a SIP submission that otherwise
satisfies the provisions of the Clean Air Act. Thus, the requirements
of section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not
impose an information collection burden under the provisions of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

B. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. This rule is not a
``major rule'' as defined by 5 U.S.C. 804(2).

C. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action to approve the redesignation request for
the Weirton nonattainment area and approve the associated maintenance
plan as a revision to the SIP must be filed in the United States Court
of Appeals for the appropriate circuit by September 12, 2006. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements. (See section 307(b)(2).)

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental
relations, Reporting and Recordkeeping requirements, Particulate
matter.

40 CFR Part 81

    Air Pollution Control, National parks, Wilderness areas.

    Dated: July 6, 2006.
William T. Wisniewski,
Acting Regional Administrator, Region III.

0
40 CFR Parts 52 and 81 are amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for 40 CFR part 52 continues to read as
follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart XX--West Virginia

0
2. In Sec.  52.2520, the table in paragraph (e) is amended by adding an
entry for the City of Weirton PM-10 Maintenance Plan at the end of the
table to read as follows:

Sec.  52.2520  Identification of plan.

* * * * *
    (e) * * *

----------------------------------------------------------------------------------------------------------------
                                                            State
    Name of non-regulatory SIP          Applicable        submittal    EPA  approval  date       Additional
             revision                 geographic area        date                                explanation
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
City of Weirton PM-10 Maintenance  Hancock and Brooke        4/24/04  7/14/06 [Insert page  Limited maintenance
 Plan.                              Counties (part)--                  number where the      plan.
                                    the City of Weirton.               document begins].
----------------------------------------------------------------------------------------------------------------

PART 81--[AMENDED]

Subpart C--Section 107 Attainment Status Designations

0
1. The authority citation for Part 81 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

0
2. In Sec.  81.349, the table for ``West Virginia--PM-10'' is amended
by revising the entry for Hancock and Brooke Counties (part): The City
of Weirton to read as follows:

Sec.  81.349  West Virginia.

* * * * *

                                              West Virginia--PM-10
----------------------------------------------------------------------------------------------------------------
                                                      Designation                         Classification
           Designated Area            --------------------------------------------------------------------------
                                            Date                  Type                 Date            Type
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
Hancock and Brooke Counties (part):           9/12/06  Attainment...............
 The City of Weirton.

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *
 [FR Doc. E6-11107 Filed 7-13-06; 8:45 am]

BILLING CODE 6560-50-P


[Federal Register: October 14, 2008 (Volume 73, Number 199)]
[Notices]
[Page 60745-60747]
[DOCID:fr14oc08-101]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58745; File No. SR-NYSEArca-2008-94]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Accelerated Approval of a Proposed Rule Change Amending NYSE Arca
Equities Rules 5.1(b)(14) and 5.2(j)(2) To Permit the Listing of Equity
Linked Notes That Are Linked to Securities Issued by Companies
Registered Under the Investment Company Act of 1940

October 7, 2008.
    On August 25, 2008, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange''), through its wholly owned subsidiary, NYSE Arca Equities,
Inc. (``NYSE Arca Equities''), filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend NYSE Arca Equities Rules
5.1(b)(14) and 5.2(j)(2) to permit the listing of Equity Linked Notes
(``ELNs'') that are linked to securities issued by companies registered
under the Investment Company Act of 1940 (``1940 Act'') \3\ and are
listed on a national securities exchange. The proposed rule change was
published in the Federal Register on September 19, 2008 for a 15-day
comment period.\4\ The Commission received no comments on the proposal.
This order grants approval to the proposed rule change on an
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 80a-1.
    \4\ See Securities Exchange Act Release No. 58518 (September 11,
2008), 73 FR 54446.
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I. Description of the Proposal

    The Exchange proposes to amend NYSE Arca Equities Rules 5.1(b)(14),
the Exchange's definition of ELNs, and NYSE Arca Equities Rule
5.2(j)(2), the Exchange's listing standards for ELNs, to permit the
listing of ELNs that are linked to securities issued by companies
registered under the 1940 Act and are listed on a national securities
exchange.

A. Definition of ELN

    NYSE Arca Equities Rule 5.1(b)(14) currently defines ELNs as notes
that are linked, in whole or in part, to the market performance of up
to thirty common stocks or non-convertible preferred stocks. The
Exchange proposes to amend NYSE Arca Equities Rule 5.1(b)(14) and
define ELNs as notes that are linked, in whole or in part, to

the market performance of up to thirty underlying equity securities
that meet the criteria in NYSE Arca Equities Rule 5.2(j)(2).

B. Securities Underlying ELNs

    NYSE Arca Equities Rule 5.2(j)(2) currently provides minimum
standards applicable to the securities underlying ELNs and the issuers
of such securities. Under NYSE Arca Equities Rule 5.2(j)(2)(C)(ii),
each issuer of an underlying security to which an ELN is to be linked
must be a reporting company under the Exchange Act that is listed on a
national securities exchange. The Exchange proposes to expand this
provision to provide that an issuer of an underlying security to which
an ELN is to be linked may also be a 1940 Act registered investment
company. In addition, the Exchange proposes to further clarify the rule
to state that, in either case, any underlying security to which the ELN
is linked must be listed on a national securities exchange.
    The Exchange further proposes to replace the term ``common stock''
with the term ``shares'' in NYSE Arca Equities Rule 5.2(j)(2)(C)(ii)(2)
to take into account that certain underlying securities, particularly
those that are securities issued by 1940 Act registered investment
companies, are not labeled ``common stock.'' Similarly, in NYSE Arca
Equities Rule 5.2(j)(2)(D)(i), the Exchange proposes to delete the term
``common'' when it qualifies ``shares'' to take into account that
certain underlying securities, particularly those that are securities
issued by 1940 Act registered investment companies, are not labeled
``common shares.'' For purposes of NYSE Arca Equities Rule 5.2(j)(2),
as amended, the term ``shares'' shall encompass common stock, non-
convertible preferred stock, and securities issued by 1940 Act
registered investment companies as eligible underlying securities. As a
result, with respect to NYSE Arca Equities Rule 5.2(j)(2)(C)(ii)(2),
the combined trading volume of each non-U.S. security (a security
issued by a non-U.S. company) and other related non-U.S. securities
occurring in the U.S. market or in markets with which the Exchange has
in place a comprehensive surveillance sharing agreement must represent
(on a share equivalent basis for any American Depositary Shares
(``ADSs'')) at least 50% of the combined worldwide trading volume in
each such non-U.S. security, other related non-U.S. securities, and
other classes of common stock, non-convertible preferred stock, or
securities of 1940 Act registered investment companies related to each
such non-U.S. security, as the case may be, over the six month period
preceding the date of listing. In addition, with respect to NYSE Arca
Equities Rule 5.2(j)(2)(D)(i): (1) An issuance of ELNs relating to any
underlying U.S. security may not exceed five percent of the total
outstanding common stock, non-convertible preferred stock, or
securities of 1940 Act registered investment companies for each such
underlying security, as the case may be; and (2) the issuance of ELNs
relating to any underlying non-U.S. security represented by ADSs,
common stock, non-convertible preferred stock, or securities of 1940
Act registered investment companies, or otherwise, may not exceed: (a)
Two percent of the total shares outstanding of the relevant underlying
security worldwide if at least 20 percent of the worldwide trading
volume in each non-U.S. security and related non-U.S. security occurs
in the U.S. market during the six-month period preceding the date of
listing; or (b) three percent of the total shares outstanding of the
relevant underlying security worldwide if at least 50 percent of the
worldwide trading volume in each non-U.S. security and related non-U.S.
security occurs in the U.S. market during the six-month period
preceding the date of listing; and (c) five percent of the total shares
outstanding of the relevant underlying security worldwide if at least
70 percent of the worldwide trading volume in each non-U.S. security
and related non-U.S. security occurs in the U.S. market during the six-
month period preceding the date of listing.

C. Additional Technical Changes

    Lastly, the Exchange proposes to correct the numbering of NYSE Arca
Equities Rule 5.2(j)(2)(C)(iv) to NYSE Arca Equities Rule
5.2(j)(2)(C)(iii). The Exchange also proposes to change the reference
to the Division of Market Regulation to the Division of Trading and
Markets in NYSE Arca Equities Rule 5.2(j)(2)(D)(i).

II. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Exchange Act \5\ and the rules and regulations thereunder applicable to
a national securities exchange.\6\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Exchange
Act,\7\ which requires, among other things, that the Exchange's rules
be designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to 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.
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    \5\ 15 U.S.C. 78f.
    \6\ In approving this proposed rule change the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
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    With respect to the proposal to expand the listing criteria for
ELNs to encompass notes that are linked to the securities of 1940 Act
registered investment companies, the Commission notes that the proposed
rule requires such securities to be listed and trading on a national
securities exchange. The Commission also notes that the issuers of such
underlying securities must be registered under the 1940 Act and,
pursuant to the disclosure requirements thereunder, financial and other
types of information relating to the registered investment companies
would be readily available for investors and other market participants.
Finally, the Commission notes that the securities issued by 1940 Act
registered investment companies would trade on the same platforms as
equity securities under the Exchange Act and would be subject to the
same Exchange trading rules as equity securities. As such, the
Commission believes that this proposal will benefit investors by
providing investors and other market participants with enhanced
investment options and flexibility, while maintaining sufficient
transparency and minimum standards with respect to the securities
underlying ELNs.
    The Commission also believes that the proposed amendments in NYSE
Arca Equities Rules 5.2(j)(2)(C)(ii)(2) and 5.2(j)(2)(D)(i) to
characterize the word ``shares'' conform with the overall purpose of
the proposed rule change and clarify the application of the proposed
amendments as they relate to the eligibility of securities underlying
ELNs. In addition, the Commission believes that the additional
technical corrections made to NYSE Arca Equities Rule 5.2(j)(2) further
clarify the application of the rule. For the foregoing reasons, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Exchange Act \8\ and the rules and regulations
thereunder applicable to a national securities exchange.
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    \8\ 15 U.S.C. 78f(b)(5).

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III. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of
the Exchange Act,\9\ for approving the proposed rule change prior to
the thirtieth day after the date of publication of the Notice in the
Federal Register. The Commission notes that the proposal is similar to
NYSE Arca Equities Rule 5.2(j)(6)(B)(I), the Exchange's Equity Index-
Linked Securities listing rules, which allow underlying indexes to
include, in whole or in part, on securities issued by certain companies
registered under the 1940 Act and are listed on a national securities
exchange.\10\ The Commission finds that the proposed rule change does
not raise any novel regulatory issues and believes that accelerating
approval of this proposal should benefit investors by creating, without
undue delay, additional competition in the marketplace for ELNs.
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ See Securities Exchange Act Release No. 56879 (December 3,
2007), 72 FR 69271 (December 7, 2007) (SR-NYSEArca-2007-110).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\11\ that the proposed rule change (SR-NYSEArca-2008-94)
be, and it hereby is, approved on an accelerated basis.
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    \11\ 15 U.S.C. 78s(b)(2).
    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-24238 Filed 10-10-08; 8:45 am]

BILLING CODE 8011-01-P