[Federal Register: December 19, 2007 (Volume 72, Number 243)]
[Notices]
[Page 71979-71986]
[DOCID:fr19de07-135]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56955; File No. SR-ISE-2007-101]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Order Granting Approval of Proposed Rule Change and Notice of
Filing and Order Granting Accelerated Approval to Amendment No. 1
Relating to a Corporate Transaction in Which Its Parent, International
Securities Exchange Holdings, Inc., Will Become a Wholly-Owned Indirect
Subsidiary of Eurex Frankfurt AG

December 13, 2007.

I. Introduction

    On November 1, 2007, International Securities Exchange, LLC
(``Exchange'' or ``ISE'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change regarding a corporate transaction
(``Transaction'') in which the ISE's parent, International Securities
Exchange Holdings, Inc. (``Holdings''), would become a wholly-owned,
indirect subsidiary of Eurex Frankfurt AG (``Eurex Frankfurt''). The
proposed rule change was published for comment in the Federal Register
on November 7, 2007.\3\ The Commission has received no comments on the
proposal.
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56733 (November 1,
2007), 72 FR 62885.
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    On December 11, 2007, the Exchange filed Amendment No. 1 to the
proposed rule change.\4 \This order approves the proposed rule change,
grants accelerated approval to Amendment No. 1, and solicits comments
from interested persons on Amendment No. 1.
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    \4\ The text of Amendment No. 1 and Exhibits 5A through 5I,
which set forth certain governing documents and resolutions as
proposed to be amended, are available on the Commission's Web site
(http://www.sec.gov/rules/sro/ise.shtml), at the Commission's Public Reference Room, at the ISE, and on the ISE's Web site (http://

http://www.ise.com).

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    The Commission has reviewed carefully the proposed rule change and
finds that it is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\5\ In particular, the Commission finds that the proposed rule
change is consistent with section 6(b) of the Act,\6\ which, among
other things, requires a national securities exchange to be so
organized and have the capacity to be able to carry out the purposes of
the Act and to enforce compliance by its members and persons associated
with its members with the provisions of the Act, the rules and
regulations thereunder, and the rules of the exchange. Section 6(b) of
the Act also requires that the rules of the exchange be designed to
promote just and equitable principles of trade, 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\ In approving the proposed rule change, the Commission has
considered its impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b).
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A. Accelerated Approval of Amendment No. 1

    The Commission, pursuant to section 19(b)(2) of the Act,\7\ finds
good cause for approving Amendment No. 1 prior to the thirtieth day
after publishing notice of Amendment No. 1 in the Federal Register. In
Amendment No. 1, the ISE proposes to amend the Trust Agreement (as
defined below) \8\ to provide that, if there is a Material Compliance
Event (as described below),\9\ Holdings and U.S. Exchange Holdings,
Inc. (``U.S. Exchange Holdings'') would be required to promptly
transfer to the Trust a majority of capital stock of Holdings that have
the right by its terms to vote in the election of the board of
directors of Holdings (``Holdings Board'') or on other matters (other
than matters affecting the rights, preferences, or privileges of the
said capital stock).\10\ The Commission finds this change to the Trust
Agreement consistent with the Act and that it is designed to facilitate
the Exchange's ability to comply with the requirements of the Act.
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    \7\ 15 U.S.C. 78s(b)(2).
    \8 \ See infra notes 70 to 114 and accompanying text for a
discussion of a Trust proposed in context of this filing.
    \9\ See infra notes 73 to 74 and accompanying text for a
discussion of Material Compliance Event.
    \10\ Trust Agreement, Article IV, Section 4.2(g)(ii).
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    The Exchange also proposes to amend the Certificate of
Incorporation of Holdings (``Holdings Certificate'') to provide that if
a person exceeds Ownership Limit or Voting Limit (both as described
below),\11\ then a majority of capital stock of Holdings that have the
right by its terms to vote in the election of the Holdings Board or on
other matters (other than matters affecting the rights, preferences, or
privileges of the said capital stock) would automatically be
transferred to the Trust.\12\
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    \11\ See infra note 27 and accompanying text for a discussion of
Ownership Limit and Voting Limit.
    \12\ Proposed Holdings Certificate, Article FOURTH, Sections
III(c).
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    Further, the Exchange proposes to amend the Holdings Certificate
with the Certificate of Designation of Series A Preferred Stock
(``Certificate of Designation'').\13\ Specifically, pursuant to the
Certificate of Designation, the Exchange proposes to issue 100,000
shares of Holdings Series A Preferred Stock, par value $.01 per share
(``Holdings Preferred''). The Commission notes that the Exchange
proposes to issue Holdings Preferred to finance, and thereby facilitate
the completion of, the Transaction.
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    \13\ The Certificate of Designation was approved by the
unanimous written consent of the Holdings Board on November 19,
2007.
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    The Exchange represents that Holdings Preferred is not capital
stock of Holdings that have the right by its terms to vote in the
election of the Holdings Board or on other matters (other than matters
affecting the rights, preferences, or privileges of Holdings
Preferred).\14\ Therefore, the Exchange represents that Holdings
Preferred does not affect Ownership Limit or Voting Limit.
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    \14\ Certificate of Designation, Section 5(a).
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    The Certificate of Designation amends the Holdings Certificate to
provide that, for so long as any shares of Holdings Preferred are
outstanding, there shall be a total of three directors on the Holdings
Board.\15\ If and when Holdings files for a reorganization or relief
under bankruptcy law, approves a plan to dissolve or wind up, or fails
to pay dividends of Holdings Preferred in any two consecutive calendar
years, the holders of Holdings Preferred shall be entitled to appoint
two additional directors to the Holdings Board.\16\ However, the
Certificate of Designation also provides that the number of directors
constituting the entire Holdings Board may not be increased until the
board of directors of ISE (``ISE Board'') is notified and such change
is filed with, or filed with and approved by, the Commission under the
Act and rules thereunder.\17\ Furthermore, any change to the
Certificate of Designation must be submitted to the ISE Board. If such
change must be filed with, or filed with and approved by, the
Commission under section 19 of the Act \18\ and the rules thereunder,
then such change shall not be effective until filed with, or filed with
and approved by, the Commission.\19\
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    \15\ Certificate of Designation, Section 7.
    \16\ Certificate of Designation, Section 5(b).
    \17\ Id.
    \18\ 15 U.S.C. 78s.
    \19\ Certificate of Designation, Section 8(c).
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    The Commission believes the changes to the Holdings Certificate are
consistent with the Act and therefore finds good

cause to accelerate approval of these changes prior to the thirtieth
day after publication in the Federal Register. The shares of Holdings
Preferred do not affect Ownership Limit or Voting Limit. Further, in
the event the holders of Holdings Preferred become entitled to appoint
directors to the Holdings Board, the ISE must file this appointment
right with the Commission pursuant to section 19 of the Act \20\ and
the rules thereunder.
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    \20\ 15 U.S.C. 78s.
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    In addition, the Exchange proposes certain clarifying, conforming,
technical, non-material, and non-substantive changes to the Purpose
Section of Form 19b-4, the Holdings Certificate, and the Amended and
Restated Bylaws of Holdings (``Holdings Bylaws''). Further, the
Exchange proposes certain clarifying, conforming, technical, non-
material, and non-substantive changes to Form of German Parent
Corporate Resolutions (``German Resolutions''), Form of Swiss Parent
Corporate Resolutions, and Form of Swiss Parent Association Resolutions
(Form of Swiss Parent Corporate Resolutions and Form of Swiss Parent
Association Resolutions, together referred to herein as ``Swiss
Resolutions,'' and with German Resolutions, ``Resolutions''). Finally,
the Exchange also makes certain clarifying, conforming, technical, non-
material, and non-substantive changes to the Amended and Restated
Certificate of Incorporation of U.S. Exchange Holdings, Inc. (``U.S.
Exchange Holdings Certificate''), the Amended and Restated Bylaws of
U.S. Exchange, Inc. (``U.S. Exchange Holdings Bylaws''), and the Trust
Agreement.
    The changes described in the foregoing paragraph are non-
substantive and technical in nature and are necessary to clarify the
proposal. Therefore, they raise no new or novel issues. The Commission
finds that these changes proposed in Amendment No. 1 are consistent
with the Act. Further, pursuant to section 19(b)(2) of the Act,\21\ the
Commission finds good cause to accelerate approval of these changes
prior to the thirtieth day after publication in the Federal Register,
because they clarify the Exchange's rules, which should facilitate the
Exchange's compliance, and the Commission's ability to ensure
compliance, with such rules and assist members and investors in
understanding the application and scope of the rules.
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    \21\ 15 U.S.C. 78s(b)(2).
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B. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 1, including whether Amendment No. 1
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-ISE-2007-101 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090. All submissions should refer to File Number
SR-ISE-2007-101. 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 ISE. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-ISE-2007-101 and should be submitted on or before
January 9, 2008.

II. Discussion

    The ISE submitted the proposed rule change in connection with a
proposed Transaction in which Holdings would become a wholly-owned,
indirect subsidiary of Eurex Frankfurt. Pursuant to the Agreement and
Plan of Merger, dated April 30, 2007 (``Agreement''), Holdings would
become a wholly-owned subsidiary of U.S. Exchange Holdings, which is a
wholly-owned subsidiary of Eurex Frankfurt. Eurex Frankfurt is a
wholly-owned subsidiary of Eurex Z[uuml]rich AG (``Eurex
Z[uuml]rich''), which in turn is jointly owned by Deutsche B[ouml]rse
AG (``Deutsche B[ouml]rse'') and SWX Swiss Exchange (``SWX''). SWX is
owned by SWX Group, which in turn is owned by Verein SWX Swiss
Exchange.
    Pursuant to the Agreement, the stockholders of Holdings will
receive cash in exchange for their shares in Holdings. The consummation
of the Transaction is subject to satisfaction of certain conditions,
including the approval by the Holdings' stockholders of the Transaction
\22\ and the approval of this rule change by the Commission.
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    \22\ The stockholders of Holdings approved the Transaction at a
special meeting of stockholders held on July 27, 2007.
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A. Corporate Structure

    The ISE, a national securities exchange and a self-regulatory
organization (``SRO''), is organized as a Delaware limited liability
company. The ISE will not make any changes to its governance structure
in connection with the Transaction. Therefore, the ISE will continue to
have a 15-member board of directors, composed of a chief executive
officer, 6 industry directors elected by the members, and 8 non-
industry directors elected by Holdings as the sole member of the
ISE.\23\ Further, the ISE currently intends to have its senior
management remain in place, subject to the previously-announced
retirement of the ISE's chief executive officer, as of January 1, 2008.
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    \23\ Pursuant to the Agreement, on the closing of the
Transaction, all members of the Holdings Board, and all members of
the ISE Board who are also on the Holdings Board, will resign.
Members of the ISE Board who are elected by the ISE members are not
on the Holdings Board and will not resign.
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    The ISE is not proposing any amendments to its trading or
regulatory rules. The ISE members, therefore, will continue to own
``exchange rights'' \24\ and have the same trading and voting rights in
the ISE.
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    \24\ See the ISE's Second Amended and Restated Limited Liability
Agreement, Article VI.
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1. Upstream Owners
    Following the Transaction, U.S. Exchange Holdings will directly own
all of the common stock of Holdings. U.S. Exchange Holdings is a
Delaware corporation and a wholly-owned subsidiary of Eurex Frankfurt.
Eurex Frankfurt is a wholly-owned subsidiary of Eurex Z[uuml]rich,
which in turn is jointly

owned by Deutsche B[ouml]rse and SWX. SWX is owned by SWX Group, which
in turn is owned by Verein SWX Swiss Exchange. Eurex Frankfurt and
Deutsche B[ouml]rse are stock corporations organized under the laws of
the Federal Republic of Germany. Eurex Z[uuml]rich, SWX, and SWX Group
are stock corporations and Verein SWX Swiss Exchange is an association,
all organized under the laws of the Swiss Confederation (Eurex
Frankfurt, Eurex Z[uuml]rich, Deutsche B[ouml]rse, SWX, SWX Group, and
Verein SWX Swiss Exchange, collectively referred to herein as ``non-
U.S. Upstream Owners,'' and together with U.S. Exchange Holdings,
``Upstream Owners''). Therefore, following the Transaction, the non-
U.S. Upstream Owners will indirectly own all of the common stock of
Holdings, the sole member of the ISE, through an intermediary holding
company, U.S. Exchange Holdings. The Transaction represents the first
time that a national securities exchange will be controlled by non-U.S.
entities.
    Section 19(b) of the Act and Rule 19b-4 thereunder require an SRO
to file proposed rule changes with the Commission. Although the
Upstream Owners are not SROs, the Resolutions,\25\ the U.S. Exchange
Holdings Certificate, and the U.S. Exchange Holdings Bylaws are rules
of an exchange if they are stated policies, practices, or
interpretations (as defined in Rule 19b-4 under the Act) of the
exchange, and must therefore be filed with the Commission pursuant to
section 19(b)(4) of the Act and Rule 19b-4 thereunder.\26\ Accordingly,
the Exchange filed the Resolutions, the U.S. Exchange Holdings
Certificate, and the U.S. Exchange Bylaws with the Commission.
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    \25\ The enumeration in the Resolutions is identical in all
Resolutions. Therefore, unless otherwise specified, reference to
certain enumerated resolution referred to herein applies to all
Resolutions.
    \26\ See Section 3(a)(27) of the Act, 15 U.S.C. 78c(a)(27). If
each of the Upstream Owners decides to change its Resolutions or
governing documents, as applicable, each such Upstream Owner must
submit the change to the ISE Board. If the change must be filed
with, or filed with and approved by, the Commission under Section 19
of the Act and the rules thereunder, then the change shall not be
effective until filed with, or filed with and approved by, the
Commission. See Resolution 11, U.S. Exchange Holdings Certificate,
Article SIXTEENTH, and U.S. Exchange Holdings Bylaws, Article VI,
Section 9.
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    The Holdings Certificate currently provides that no person, either
alone or together with its related persons, may own, directly or
indirectly, more than 40% (or 20%, if the person is an Exchange member)
of Holdings capital stock that has the right by its terms to vote in
the election of the Holdings Board or on other matters (other than
matters affecting the rights, preferences, or privileges of the said
capital stock) (``Ownership Limit''). The Holdings Certificate also
provides that no person, either alone or together with its related
persons, may, directly or indirectly, vote or cause the voting of more
than 20% of the Holdings capital stock that has the right by its terms
to vote in the election of the Holdings Board or on other matters
(other than matters affecting the rights, preferences, or privileges of
the said capital stock) (``Voting Limit'').\27\ The ISE is not
proposing to change Ownership Limit or Voting Limit.
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    \27\ Holdings Certificate, Article FOURTH, Section III. The
Commission previously approved Ownership Limit and Voting Limit. See
Securities Exchange Act Release No. 53705 (April 21, 2006) 71 FR
25260 (April 28, 2006) (SR-ISE-2006-04) (reorganization of
International Securities Exchange, Inc. into a holding company
structure).
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    To facilitate compliance with Ownership Limit and Voting Limit, the
Resolutions of the non-U.S. Upstream Owners provide that each non-U.S.
Upstream Owner shall take reasonable steps necessary to cause Holdings
to be in compliance with Ownership Limit and Voting Limit.\28\
Likewise, the U.S. Exchange Holdings Certificate provides that U.S.
Exchange Holdings will take reasonable steps necessary to cause
Holdings to be in compliance with Ownership Limit and Voting Limit.\29\
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    \28\ Resolution 4.
    \29\ U.S. Exchange Holdings Certificate, Article THIRTEENTH.
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    Further, the Resolutions of each of the German Upstream Owners
(i.e., Eurex Frankfurt and Deutsche B[ouml]rse) would require these
entities to notify the ISE Board and the Trust (as described below) if
any person, either alone or together with its related persons, acquires
20%, 25%, 30%, 50%, or 75% or more of the shares of stock in such
company.\30\ Similarly, the Resolutions of each of the Swiss Upstream
Owners (i.e., Eurex Z[uuml]rich, SWX, SWX Group, and Verein SWX Swiss
Exchange) would require these entities to notify the ISE Board and the
Trust if any person, either alone or together with its related persons,
acquires 20%, 33\1/3\%, 45%, 50%, or 66\2/3\% or more of the shares of
stock or membership interest, as applicable, in such company.\31\
Finally, the U.S. Exchange Holdings Certificate provides that U.S.
Exchange Holdings will notify the ISE Board and the Trust if any
person, either alone or together with its related persons, acquire 10%,
15%, 20%, 25%, 30%, 35%, or 40% or more of the shares in U.S. Exchange
Holdings.\32\
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    \30\ German Resolution 4. The calculation of the percentage of
shares would be as determined under Sections 21 and 22 of the German
Securities Trading Act.
    \31\ Swiss Resolution 4. The calculation of the percentage of
shares or membership interest, as applicable, would be as determined
under Section 20 of the Swiss Federal Act on Stock Exchanges and
Securities Trading and Section 9 of the Swiss Federal Banking
Commission's Ordinance on Stock Exchanges and Securities Trading.
    \32\ U.S. Exchange Holdings Certificate, Article THIRTEENTH.
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    The Commission finds the provisions in the Resolutions and the U.S.
Exchange Holdings Certificate, requiring each Upstream Owner to take
reasonable steps necessary to cause Holdings to be in compliance with
Ownership Limit and Voting Limit, consistent with the Act. These
provisions should minimize the potential that a person could improperly
interfere with, or restrict the ability of, the Commission or the ISE
to effectively carry out their regulatory oversight responsibilities
under the Act. Further, the provisions in the Resolutions and the U.S.
Exchange Holdings Certificate requiring notification to the ISE Board
and the Trust upon acquisition of certain ownership percentage of the
Upstream Owners should help facilitate the ability of the ISE to comply
with its responsibilities under the Act.
2. Holdings
    Holdings will become a wholly-owned subsidiary of U.S. Exchange
Holdings. Thus, following the Transaction, Holdings will no longer be
publicly traded.\33\ The Transaction, however, will not affect
Holdings' ownership of the ISE. After the Transaction, Holdings will
continue to be the sole member of the ISE.
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    \33\ The ISE proposes to make certain changes to the Holdings
Certificate and the Holdings Bylaws. Specifically, the ISE proposes
to: (1) Decrease the number of authorized shares of Holdings; (2)
eliminate classified board structure and remove term limits for
directors; (3) eliminate the requirement that there be an executive,
finance and audit, corporate governance, and compensation
committees; (4) decrease the affirmative vote requirement for the
election of chairman and vice chairman; (5) delete the requirement
that chief executive officer not engage in any other occupation
during incumbency; (6) provide that chief executive officer may be
removed by the Holdings Board with or without cause; (7) empower the
Holdings Board to change the Holdings Certificate and the Holdings
Bylaws without the approval of stockholders; and (8) permit taking
of stockholder action without prior notice and by written consent.
The Commission finds these changes consistent with the Act.
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    Section 19(b) of the Act and Rule 19b-4 thereunder require an SRO
to file proposed rule changes with the Commission. Although Holdings is
not an SRO, certain provisions of the Holdings Certificate and the
Holdings Bylaws are rules of an exchange if they are stated policies,
practices, or

interpretations (as defined in Rule 19b-4 of the Act) of the exchange,
and must be filed with the Commission pursuant to section 19(b)(4) of
the Act and Rule 19b-4 thereunder.\34\ Accordingly, the ISE filed the
proposed changes to the Holdings Certificate and the Holdings Bylaws
with the Commission.
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    \34\ See Section 3(a)(27) of the Act, 15 U.S.C. 78c(a)(27). As
under the current Holdings Certificate and Holdings Bylaws any
change to Holdings Certificate or Holdings Bylaws must be submitted
to the ISE Board. If the change must be filed with, or filed with
and approved by, the Commission under Section 19 of the Act and the
rules thereunder, then the change shall not be effective until filed
with, or filed with and approved by, the Commission. This
requirement to submit changes to the ISE Board continues for so long
as Holdings controls, directly or indirectly, the ISE. See current
Holdings Certificate, Article SIXTEENTH, current Holdings Bylaws,
Section 10.1, proposed Holdings Certificate, Article FOURTEENTH, and
proposed Holdings Bylaws, Section 10.1.
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    a. Transfer of Capital Stock to Trust. As stated above, the
Holdings Certificate currently provides that no person, either alone or
together with its related persons, may exceed Ownership Limit or Voting
Limit.\35\ The ISE does not propose to change Ownership Limit or Voting
Limit, but does propose to add a provision in the Holdings Certificate
to provide that, if a person exceeds Ownership Limit or Voting Limit,
then a majority of capital stock of Holdings that have the right by its
terms to vote in the election of the Holdings Board or on other matters
(other than matters affecting the rights, preferences, or privileges of
the said capital stock) would automatically be transferred to the
Trust,\36\ as discussed below.\37\
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    \35\ See supra note 27 and accompanying text.
    \36\ Proposed Holdings Certificate, Article FOURTH, Sections
III(c). If a person were to obtain an ownership or voting interest
in Holdings in excess of the Ownership Limit or Voting Limit,
Holdings capital stock would be transferred to the Trust
automatically by operation of law. See Section 202(c)(4) of the
Delaware General Corporation Law.
    \37\ See infra notes 70 to 114 and accompanying text.
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    The Commission finds these changes to the Holdings Certificate
consistent with the Act. The proposed changes to the Holdings
Certificate should minimize the potential that a person could
improperly interfere with or restrict the ability of the Commission and
the Exchange to effectively carry out their regulatory oversight
responsibilities under the Act.
    b. Ownership of Holdings by Upstream Owners. Additionally, the ISE
proposes to amend the Holdings Bylaws to allow the Upstream Owners to
wholly own and vote all of the common stock of Holdings.\38\ Currently,
the Holdings Certificate provides that the Holdings Board may waive
Ownership Limit and Voting Limit pursuant to an amendment to the
Holdings Bylaws.\39\ In connection with the adoption of such amendment,
the Holdings Board must adopt a resolution determining that the
amendment will not impair the ability of Holdings and the ISE to
discharge the ISE's responsibilities under the Act and the rules and
regulations thereunder, is in the best interests of Holdings, its
stockholders, and the ISE, and will not impair the Commission's ability
to enforce the Act.\40\ Further, the Holdings Board must determine that
in waiving a person's Ownership Limit or Voting Limit such person and
its related persons are not subject to any ``statutory
disqualification'' \41\ and are not Exchange members.
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    \38\ Proposed Holdings Bylaws, Section 11.1.
    \39\ Holdings Certificate, Article FOURTH, Sections III(a)(i)
and III(b)(i). Such amendment to Holdings Bylaws must be filed with
and approved by the Commission under Section 19(b) of the Act and
become effective thereunder.
    \40\ Holdings Certificate, Article FOURTH, Sections III(a)(i)(B)
and III(b)(i).
    \41\ See Section 3(a)(39) of the Act, 15 U.S.C. 78c(a)(39).
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    Pursuant to the Holdings Certificate, the Holdings Board approved
an amendment to the Holdings Bylaws to allow ownership and voting of
all of the common stock of Holdings by the Upstream Owners. The
Holdings Board determined that waiver of Ownership Limit and Voting
Limit with respect to the Upstream Owners will not impair the ability
of Holdings and the ISE to discharge the ISE's responsibilities under
the Act and the rules and regulations thereunder, that such waiver is
in the best interests of Holdings, its stockholders, and the ISE, and
will not impair the Commission's ability to enforce the Act, and that
neither the Upstream Owners nor any of its related persons are subject
to any statutory disqualification or is an Exchange member. Therefore,
the Exchange proposes that the Upstream Owners wholly own and vote all
of the common stock of Holdings upon the consummation of the
Transaction.
    The Commission believes it is consistent with the Act to allow the
Upstream Owners to wholly own and vote all of the common stock of
Holdings. The Exchange represents that neither the Upstream Owners nor
any of its related persons is subject to any statutory disqualification
or is an Exchange member. Moreover, each of the Upstream Owners has
provided that it will take reasonable steps necessary to cause Holdings
to be in compliance with Ownership Limit and Voting Limit. As discussed
below, each of the Upstream Owners will adopt certain provisions
designed to maintain the independence of the ISE's self-regulatory
functions in its Resolutions or governing documents, as applicable.
Accordingly, the Commission believes that the acquisition of ownership
and exercise of voting control of Holdings by the Upstream Owners will
not impair the ability of the Commission or the ISE to discharge their
respective responsibilities under the Act.

B. Relationship of Upstream Owners and the ISE; Jurisdiction Over
Upstream Owners

    Although the Upstream Owners will not carry out regulatory
functions, the activities of each of the Upstream Owners with respect
to the operation of the ISE must be consistent with, and not interfere
with, the ISE's self-regulatory obligations. The Resolutions, the U.S.
Exchange Holdings Certificate, and the U.S. Exchange Holdings Bylaws
include certain provisions that are designed to maintain the
independence of the ISE's self-regulatory functions, enable the ISE to
operate in a manner that complies with the U.S. federal securities
laws, including the objectives and requirements of sections 6(b) and
19(g) of the Act,\42\ and facilitate the ability of the ISE and the
Commission to fulfill their regulatory and oversight obligations under
the Act.
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    \42\ 15 U.S.C. 78f(b) and 15 U.S.C. 78s(g).
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    For example, the Upstream Owners provide that each such Upstream
Owners will comply with the U.S. federal securities laws and the rules
and regulations thereunder and shall cooperate with the Commission and
the ISE.\43\ Also, each board member, officer, and employee of the
Upstream Owners, in discharging his or her responsibilities, shall
comply with the U.S. federal securities laws and the rules and
regulations thereunder, cooperate with the Commission, and cooperate
with the ISE.\44\ In discharging his or her responsibilities as a board
member of the Upstream Owners, each such member must, to the fullest
extent permitted by applicable law, take into consideration the effect
that the actions of the Upstream Owners would have on the ability of
the ISE to carry out its

responsibilities under the Act.\45\ In addition, each of the Upstream
Owners, its board members, officers and employees shall give due regard
to the preservation of the independence of the self-regulatory function
of the ISE.\46\
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    \43\ Resolution 1 and U.S. Exchange Holdings Certificate,
Article ELEVENTH.
    \44\ Resolutions 7(a) and 8(a) and U.S. Exchange Holdings
Certificate, Article TENTH. The Resolutions also provide that each
non-U.S. Upstream Owner will take reasonable steps necessary to
cause each person who becomes a board member of the non-U.S.
Upstream Owner after consummation of the Transaction to agree in
writing to certain matters included in the Resolutions. See
Resolution 7.
    \45\ Resolution 7(f) and U.S. Exchange Holdings Certificate,
Article TENTH.
    \46\ Resolutions 5, 7(d), and 8(d) and U.S. Exchange Holdings
Certificate, Article TWELFTH.
---------------------------------------------------------------------------

    Further, the non-U.S. Upstream Owners (along with their respective
board members, officers, and employees) and U.S. Exchange Holdings
agree to keep confidential, to the fullest extent permitted by
applicable law, all confidential information pertaining to the self-
regulatory function of the ISE, including, but not limited to,
confidential information regarding disciplinary matters, trading data,
trading practices, and audit information, contained in the books and
records of the ISE and not use such information for any commercial \47\
purposes.\48\ In addition, books and records of the non-U.S. Upstream
Owners related to the activities of the ISE will at all times be made
available for, and books and records of U.S. Exchange Holdings will be
subject at all times to, inspection and copying by the Commission and
the ISE.\49\ Books and records of U.S. Exchange Holdings related to the
activities of the ISE will be maintained within the U.S. \50\ Moreover,
for so long as each of the Upstream Owners directly or indirectly
controls the ISE, the books, records, officers, directors (or
equivalent), and employees of each of the Upstream Owners shall be
deemed to be the books, records, officers, directors, and employees of
the ISE.\51\ Finally, for so long as U.S. Exchange Holdings directly or
indirectly controls the ISE, premises of U.S. Exchange Holdings will be
deemed premises of the ISE.\52\
---------------------------------------------------------------------------

    \47\ The Commission believes that any non-regulatory use of such
information would be for a commercial purpose.
    \48\ Resolutions 6, 7(e), and 8(e) and U.S. Exchange Holdings
Certificate, Article FOURTEENTH.
    \49\ Resolution 3 and U.S. Exchange Holdings Certificate,
Article FIFTEENTH.
    \50\ U.S. Exchange Holdings Certificate, Article FIFTEENTH.
    \51\ Resolutions 3 and 8(c) and U.S. Exchange Holdings
Certificate, Article FIFTEENTH.
    \52\ U.S. Exchange Holdings Certificate, Article FIFTEENTH.
---------------------------------------------------------------------------

    To the extent involved in the activities of the ISE, each of the
non-U.S. Upstream Owners, its board members, officers, and employees
irrevocably submit to the jurisdiction of the U.S. federal courts and
the Commission for purposes of any action arising out of, or relating
to, the activities of the ISE.\53\ Likewise, U.S. Exchange Holdings,
its officers and directors, and employees whose principal place of
business and residence is outside of the U.S., to the extent such
directors, officers, or employees are involved in the activities of the
ISE, irrevocably submit to the jurisdiction of the U.S. federal courts
and the Commission for purposes of any action arising out of, or
relating to, the activities of the ISE.\54\
---------------------------------------------------------------------------

    \53\ Resolutions 2, 7(b), and 8(b).
    \54\ U.S. Exchange Holdings Bylaws, Section 16.
---------------------------------------------------------------------------

    Each of the Upstream Owners and Holdings acknowledges that it is
responsible for referring possible violations of the Act, the rules and
regulations thereunder, and ISE rules to the ISE. In addition, the ISE
represents that there will be an explicit agreement among the Upstream
Owners, Holdings, and the ISE to provide adequate funding for the ISE's
regulatory responsibilities.
    Finally, the Resolutions, the U.S. Exchange Holdings Certificate,
and the U.S. Exchange Holdings Bylaws require that any change to the
Resolutions (including any action by the non-U.S. Upstream Owners that
would have the effect of changing the Resolutions), the U.S. Exchange
Holdings Certificate, or the U.S. Exchange Holdings Bylaws must be
submitted to the ISE Board. If such change must be filed with, or filed
with and approved by, the Commission under Section 19 of the Act \55\
and the rules thereunder, then such change shall not be effective until
filed with, or filed with and approved by, the Commission.\56\ This
requirement to submit changes to the ISE Board continues for so long as
the non-U.S. Upstream Owners or U.S. Exchange Holdings, as applicable,
directly or indirectly, control the ISE.
---------------------------------------------------------------------------

    \55\ 15 U.S.C. 78s.
    \56\ Resolution 11, U.S. Exchange Holdings Certificate, Article
SIXTEENTH, and U.S. Exchange Bylaws, Section 9.
---------------------------------------------------------------------------

    With respect to Swiss Upstream Owners, each Swiss Resolutions
provides that, where necessitated by Swiss law, the Swiss Upstream
Owner will provide information related to the activities of the ISE,
including books and records of such owner related to the activities of
the ISE, to the Commission promptly through the Swiss Federal Banking
Commission (``SFBC''). Moreover, oral exchanges between each Swiss
Upstream Owner and the Commission related to the activities of the ISE
will include the participation of the SFBC.\57\
---------------------------------------------------------------------------

    \\ 57 Swiss Resolutions 1, 3(b), 6, 7(a), 7(e), 8(a), 8(e), and
9.
---------------------------------------------------------------------------

    Swiss law designed to protect Swiss sovereignty raises concerns
about the ability of the Swiss Upstream Owners to provide the
Commission with direct access to information, including books and
records, related to the activities of the ISE.\58\ In order not to run
afoul of Swiss law and to facilitate the Transaction, the Commission
and the SFBC have developed a procedure (``Procedure'') under which the
SFBC undertakes to serve as a conduit for unfiltered delivery of books
and records of the Swiss Upstream Owners related to the activities of
the ISE.\59\
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    \58\ See Art. 271 of Swiss penal code, ``Prohibited acts for a
foreign state,'' which states, in part: ``Whoever, without being
authorized, performs acts for a foreign state on Swiss territory
that are reserved to an authority or an official, whoever performs
such acts for a foreign party or another foreign organization,
whoever aids and abets such acts, shall be punished with
imprisonment and, in serious cases, sentenced to the penitentiary.''
    \59\ Application of the Procedure would be limited to issues
arising in the context of the Transaction and the Commission's
oversight of the ISE. Information-sharing and cooperation between
the Commission and the SFBC in securities enforcement matters will
continue to be governed by the letters of cooperation between the
Commission and the SFBC.
---------------------------------------------------------------------------

    Pursuant to the Procedure, where necessitated by Swiss law, if the
Commission or the staff makes a request to any of the Swiss Upstream
Owners for information related to the activities of the ISE, including
books and records related to the activities of the ISE, the SFBC shall
deliver to the Commission or the staff, without delay, any responsive
information provided to the SFBC by the Swiss Upstream Owners. Written
requests for information, including book and records, related to the
activities of the ISE shall be made by the Commission or the staff
directly to the Swiss Upstream Owners, and the SFBC will be copied on
any such requests. Moreover, an SFBC staff member shall participate in
any oral exchanges between the Commission or the staff and any of the
Swiss Upstream Owners.\60\ Notwithstanding this Procedure, the Swiss
Upstream Owners would remain fully responsible for meeting all of their
obligations as owners of a U.S. securities exchange.
---------------------------------------------------------------------------

    \60\ The Procedure is designed to ensure that the delivery of
books and records to the Commission is not delayed. Therefore, the
Commission's requests for books and records would be sent directly
to the Swiss Upstream Owners and would not be subject to filtering
or substantive review by the SFBC. In addition, the SFBC has agreed
to pass to the Commission without delay and without substantive
review materials provided by the Swiss Upstream Owners that are
responsive to the Commission's requests for information.
---------------------------------------------------------------------------

    The Commission finds that these provisions of the Resolutions, the
U.S. Exchange Holdings Certificate, and the U.S. Exchange Holdings
Bylaws are consistent with the Act. These provisions are intended to
assist the ISE

in fulfilling its self-regulatory obligations and in administering and
complying with the requirements of the Act.
    The Commission notes that while the Resolutions do not provide that
books and records of non-U.S. Upstream Owners related to the activities
of the ISE will be maintained within the U.S., such books and records
are deemed to be the books and records of the ISE, and the non-U.S.
Upstream Owners have committed in the Resolutions to make available, at
all times, such books and records for inspection and copying by the
Commission and the ISE.\61\ As discussed below,\62\ the failure of a
non-U.S. Upstream Owner to adhere to this commitment would be a
Material Compliance Event under the Trust, which would require the
Trustees to take certain actions, including (after a Cure Period) the
exercise of a Call Option for the transfer of a majority of capital
stock of Holdings that have the right by its terms to vote in the
election of the Holdings Board or on other matters (other than matters
affecting the rights, preferences, or privileges of the said capital
stock). Because the non-U.S. Upstream Owners lose control over the ISE
if one or more of them fails to make its books and records available to
the Commission and the ISE, there is a strong incentive for them to do
so. Moreover, if a non-U.S. Upstream Owner fails to make its books and
records available to the Commission, the Commission could bring an
action under, among other provisions, section 17 of the Act \63\ and
Rule 17a-1(b) thereunder \64\ against the ISE pursuant to section 19(h)
of the Act.\65\ The Commission believes that the non-U.S. Upstream
Owners' representations and commitments, together with the Trustees'
and the Commission's authority, will allow the ISE to meet its
obligations under section 17 of the Act and the rules thereunder.
---------------------------------------------------------------------------

    \61\ See supra notes 49 and 51 and accompanying text.
    \62\ See infra notes 73 to 74 and 83 to 94 and accompanying
text.
    \63\ 15 U.S.C. 78q.
    \64\ 17 CFR 240.17a-1(b).
    \65\ 15 U.S.C. 78s(h). See also infra notes 67 to 69 and
accompanying text.
---------------------------------------------------------------------------

    The Commission also notes that, for the Swiss Upstream Owners, the
SFBC will serve as a conduit for the delivery of information related to
the activities of the ISE. The Commission's usual practice is to have
direct access to books and records related to the activities of a U.S.
securities exchange. However, subject to the condition that the Swiss
Upstream Owners will promptly deliver such information to the
Commission, coupled with the fact that under ISE rules all trading
records of the ISE are required to be maintained in the U.S.,\66\ the
Commission believes that the provisions of the Swiss Resolutions
related to the Commission's access to books and records through the
SFBC should not result in a level of access materially different from
that agreed to by other entities that control U.S. securities
exchanges.
    Finally, the Commission notes that under section 20(a) of the
Act,\67\ any person with a controlling interest in the ISE shall be
jointly and severally liable with and to the same extent that the ISE
is liable under any provision of the Act, unless the controlling person
acted in good faith and did not directly or indirectly induce the act
or acts constituting the violation or cause of action. In addition,
section 20(e) of the Act \68\ creates aiding and abetting liability for
any person who knowingly provides substantial assistance to another
person in violation of any provision of the Act or rule thereunder.
Further, section 21C of the Act \69\ authorizes the Commission to enter
a cease-and-desist order against any person who has been ``a cause of''
a violation of any provision of the Act through an act or omission that
the person knew or should have known would contribute to the violation.
These provisions are applicable to the dealings of the Upstream Owners
with the ISE.
---------------------------------------------------------------------------

    \66\ ISE Second Amended and Restated Limited Liability
Agreement, Article IV, Section 4.1.
    \67\ 15 U.S.C. 78t(a).
    \68\ 15 U.S.C. 78t(e).
    \69\ 15 U.S.C. 78u-3.
---------------------------------------------------------------------------

C. Trust

    The ISE proposes to implement a Delaware statutory trust
(``Trust''), pursuant to a Trust Agreement (``Trust Agreement'') among
Holdings, U.S. Exchange Holdings, trustees (``Trustees''), and a
Delaware trustee. The Trust would serve two general purposes.\70\
First, as described above,\71\ the ISE proposes that the Trust would
hold capital stock of Holdings in the event that a person obtains
ownership or voting interest in Holdings in excess of Ownership Limit
or Voting Limit.\72\ Second, the ISE proposes to implement the Trust to
hold capital stock of Holdings in the event of a Material Compliance
Event.\73\ A ``Material Compliance Event'' is defined under the Trust
Agreement as any state of facts, development, event, circumstance,
condition, occurrence, or effect that results in the failure of any of
the non-U.S. Upstream Owners to adhere to its respective commitments
under the Resolutions in any material respect.\74\ The Trust holds a
call option (``Call Option'') over Holdings capital stock, which may be
exercised if a Material Compliance Event has occurred and continues to
be in effect.
---------------------------------------------------------------------------

    \70\ The term of the Trust is perpetual, provided that Holdings
controls, directly or indirectly, the ISE. See Trust Agreement,
Article II, Section 2.6.
    \71\ See supra notes 35 to 37 and accompanying text.
    \72\ Trust Agreement, Article IV, Section 4.1.
    \73\ Trust Agreement, Article IV, Section 4.2.
    \74\ Trust Agreement, Article I, Section 1.1. The Trust
Agreement also would provide that the term Material Compliance Event
would apply with respect to the Resolutions of any future upstream
owner of Holdings. See Trust Agreement, Article I, Section 1.1,
definition of ``Affected Affiliate.''
---------------------------------------------------------------------------

    The Trustees shall have exclusive and complete authority to carry
out the Trust purpose.\75\ The Trustees will be persons who are
independent of the Upstream Owners, Holdings, the ISE, and their
affiliates,\76\ are not subject to any statutory disqualification,\77\
are of high repute and have experience and expertise in, or knowledge
of, the securities industry, regulation and/or corporate governance,
are independent to such a degree that they can be entrusted to resist
undue pressures, and are not unacceptable to the Commission staff.\78\
The Trustees would be required under the terms of the Trust Agreement
to vote any capital stock of Holdings held by the Trust consistent with
the public interests of the markets operated by the ISE.\79\
---------------------------------------------------------------------------

    \75\ Trust Agreement, Article III, Section 3.2(a).
    \76\ For a more complete list of the independence requirement,
see Trust Agreement, Article III, Section 3.2(a).
    \77\ See supra note 41.
    \78\ Trust Agreement, Article III, Section 3.2(a).
    \79\ Trust Agreement, Article II, Section 2.3(b).
---------------------------------------------------------------------------

    As discussed above, section 19(b) of the Act and Rule 19b-4
thereunder require an SRO to file a proposed rule change with the
Commission. Although the Trust is not an SRO, certain provisions of the
Trust Agreement are rules of an exchange if they are stated policies,
practice, or interpretations, as defined in Rule 19b-4 under the
Act,\80\ and must therefore be filed with the Commission pursuant to
section 19(b)(4) of the Act \81\ and Rule 19b-4 thereunder.
Accordingly, the Exchange has filed the Trust Agreement with the
Commission.
---------------------------------------------------------------------------

    \80\ 17 CFR 240.19b-4.
    \81\ 15 U.S.C. 78s(b).
---------------------------------------------------------------------------

1. Operation of the Trust
    The Trust will operate pursuant to the Trust Agreement. The ISE
proposes that, pursuant to the Trust Agreement, if a person exceeds
Ownership Limit or Voting Limit then a majority of capital stock of
Holdings that have the right by its terms to vote in the election of
the

Holdings Board or on other matters (other than matters affecting the
rights, preferences, or privileges of the said capital stock) would
automatically be transferred to the Trust.\82\
---------------------------------------------------------------------------

    \82\ Trust Agreement, Article IV, Section 4.1(c). See also
proposed Holdings Certificate, Article FOURTH, Sections III(c).
---------------------------------------------------------------------------

    Further, the Trust Agreement provides that upon becoming aware of
facts, developments, events, circumstances, conditions, occurrences, or
effects that could reasonably be expected to result in the occurrence
of a Material Compliance Event, the Trustees would be required to meet
promptly and, within 5 business days of that meeting, make a
determination of whether or not a Material Compliance Event has
occurred.\83\ After making a determination that a Material Compliance
Event has occurred, and prior to any exercise of the Call Option, the
Trustees would provide written notice to the non-U.S. Upstream Owners
and to the Commission of the occurrence of the Material Compliance
Event, which notice would provide for 60 calendar days in which to
address the Material Compliance Event (``Cure Period'').\84\
---------------------------------------------------------------------------

    \83\ Trust Agreement, Article IV, Section 4.2(b).
    \84\ Trust Agreement, Article IV, Section 4.2(c).
---------------------------------------------------------------------------

    The Trust Agreement provides that, during the Cure Period, the
Trustees would consult with the boards of directors (or equivalent) of
the ISE, Holdings, and the non-U.S. Upstream Owners, and with the
Commission to consider alternatives to the exercise of the Call
Option.\85\ After such consultation, if the Trustees determine that the
Material Compliance Event has not been addressed, they would provide
written notice to the boards of directors (or equivalent) of the ISE,
Holdings, and the non-U.S. Upstream Owners that they have determined to
exercise the Call Option.\86\
---------------------------------------------------------------------------

    \85\ Trust Agreement, Article IV, Section 4.2(d)(i).
    \86\ Trust Agreement, Article IV, Section 4.2(d)(ii).
---------------------------------------------------------------------------

    If the Trust were to exercise the Call Option, it would deliver a
written notice to Holdings and U.S. Exchange Holdings, promptly after
the end of the Cure Period, that the Trust has determined to exercise
the Call Option in accordance with the terms of the Trust
Agreement.\87\ Subsequently, Holdings and U.S. Exchange Holdings would
be required to promptly transfer to the Trust a majority of capital
stock of Holdings that have the right by its terms to vote in the
election of the Holdings Board or on other matters (other than matters
affecting the rights, preferences, or privileges of the said capital
stock).\88\
---------------------------------------------------------------------------

    \87\ Trust Agreement, Article IV, Section 4.2(g)(i).
    \88\ Trust Agreement, Article IV, Section 4.2(g)(ii).
---------------------------------------------------------------------------

    U.S. Exchange Holdings would have the right to reacquire shares of
the capital stock of Holdings held by the Trust.\89\ If shares were
contributed to the Trust because of a violation of Ownership Limit or
Voting Limit, U.S. Exchange Holdings would have the right to reacquire
such shares if the violation of Ownership Limit or Voting Limit, as
applicable, is waived by the Holdings Board and approved by the
Commission or if the violation no longer exists.\90\ Likewise, if
shares were transferred to the Trust because of a Material Compliance
Event, U.S. Exchange Holdings would have the right to reacquire such
shares if the Material Compliance Event is no longer continuing or,
notwithstanding the continuation of a Material Compliance Event, the
Trustees determine that the retention of such shares by the Trust could
not reasonably be expected to address the continuing Material
Compliance Event.\91\
---------------------------------------------------------------------------

    \89\ Trust Agreement, Article IV, Sections 4.1(f) and 4.2(h).
    \90\ For example, the violation of Ownership Limit or Voting
Limit, as applicable, may no longer exist if the person causing the
violation sells his or her interest such that the person no longer
exceeds Ownership Limit or Voting Limit.
    \91\ If the Trustees determine the retention could not
reasonably be expected to address any continuing Material Compliance
Event, such determination would not be effective unless it is filed
with, or filed with and approved by, the Commission under Section 19
of the Act and the rules thereunder. See Trust Agreement, Article
IV, Section 4.2(h)(ii).
---------------------------------------------------------------------------

    Further, if directed by U.S. Exchange Holdings, the Trust would
sell capital stock of Holdings held by the Trust to any person whose
ownership or voting would not violate Ownership Limit or Voting Limit
and who is not a non-U.S. Upstream Owner with respect to which a
Material Compliance Event has occurred and is continuing.\92\ Upon a
sale of such shares, the net proceeds of the sale would be paid to U.S.
Exchange Holdings.\93\ Moreover, while any shares of the capital stock
of Holdings are held by the Trust, U.S. Exchange Holdings, as the Trust
beneficiary, would continue to receive the economic benefit of such
shares.\94\
---------------------------------------------------------------------------

    \92\ Trust Agreement, Article IV, Section 4.3(a).
    \93\ Id.
    \94\ Trust Agreement, Article IV, Section 4.3.
---------------------------------------------------------------------------

2. Relationship of the Trust and the ISE; Jurisdiction Over the Trust
    Although the Trust itself will not carry out regulatory functions,
its activities must be consistent with, and not interfere with, the
ISE's self-regulatory obligations. The Trust Agreement includes certain
provisions that are designed to maintain the independence of the ISE's
self-regulatory functions from the Trust, enable the ISE to operate in
a manner that complies with the U.S. federal securities laws, including
the objectives and requirements of sections 6(b) and 19(g) of the Act,
and facilitate the ability of the ISE and the Commission to fulfill
their regulatory and oversight obligations under the Act.\95\
---------------------------------------------------------------------------

    \95\ Trust Agreement, Articles V, VI, and VIII.
---------------------------------------------------------------------------

    For example, under the Trust Agreement, the Trust shall comply with
the U.S. federal securities laws and the rules and regulations
thereunder, and shall cooperate with the Commission and the ISE.\96\
Also, each Trustee, Delaware trustee, officer, and employee of the
Trust shall comply with the U.S. federal securities laws and the rules
and regulations thereunder, cooperate with the Commission the ISE.\97\
In addition, each Trustee, Delaware trustee, officer, and employee of
the Trust, to the fullest extent permitted by applicable law, shall
take into consideration the effect that the Trust's actions would have
on the ability of Holdings and the ISE to discharge their respective
responsibilities under the Act.\98\ The Trust, Trustees, Delaware
trustee, officers, and employees of the Trust shall give due regard to
the preservation of the independence of the self-regulatory function of
the ISE and shall not take any action that would interfere with the
effectuation of any decision by the ISE Board relating to its
regulatory responsibilities or that would interfere with the ability of
the ISE to carry out its responsibilities under the Act.\99\ The Trust,
Trustees, Delaware trustee, officers, and employees of the Trust whose
principal place of business and residence is outside of the U.S.
irrevocably submit to the jurisdiction of the U.S. federal courts and
the Commission with respect to activities relating to the ISE.\100\
---------------------------------------------------------------------------

    \96\ Trust Agreement, Article V, Section 5.3(a).
    \97\ Trust Agreement, Article V, Section 5.2(a).
    \98\ Trust Agreement, Article V, Section 5.1(a).
    \99\ Trust Agreement, Article V, Section 5.1(b).
    \100\ Trust Agreement, Article V, Section 5.4.
---------------------------------------------------------------------------

    In addition, the Trust's books and records shall be subject at all
times to inspection and copying by the Commission, the ISE (provided
that such books and records are related to the operation or
administration of the ISE), and Holdings.\101\ The Trust's books and
records related to the ISE shall be maintained within the U.S.\102\
Further, for so long as the Trust directly or

indirectly controls the ISE, the books, records, premises, officers,
Trustees, Delaware trustee, and employees of the Trust shall be deemed
to be the books, records, premises, officers, Trustees, Delaware
trustee, and employees of the ISE for purposes of and subject to
oversight pursuant to the Act.\103\ The Trust agrees to keep
confidential, to the fullest extent permitted by applicable law, all
confidential information pertaining to the self-regulatory function of
the ISE (including, without limitation, disciplinary matters, trading
data, trading practices, and audit information) contained in the books
and records of the ISE and not use such information for any commercial
\104\ purposes.\105\
---------------------------------------------------------------------------

    \101\ Trust Agreement, Article VI, Section 6.3.
    \102\ Trust Agreement, Article VI, Section 6.1(b).
    \103\ Id.
    \104\ The Commission believes that any non-regulatory use of
such information would be for a commercial purpose.
    \105\ Trust Agreement, Article VI, Section 6.1(a). The Trust
Agreement states that none of its provisions shall be interpreted so
as to limit or impede (1) the rights of the Commission or the ISE to
have access to and examine such confidential information pursuant to
the U.S. federal securities laws and the rules and regulations
thereunder, or (2) the ability of any Trustees, Delaware trustee,
officers, directors, employees, or agents of Holdings or the Trust
to disclose such confidential information to the Commission or the
ISE. See Trust Agreement, Article VI, Section 6.2.
---------------------------------------------------------------------------

    The Trust Agreement requires that it may only be amended with prior
written approval of the Commission, as and to the extent required under
the Act.\106\ Further, for so long as Holdings or the Trust shall
control, directly or indirectly, the ISE, any changes to the Trust must
be submitted to the ISE Board. If the change must be filed with, or
filed with and approved by, the Commission under section 19 of the Act
\107\ and the rules thereunder, then the change shall not be effective
until filed with, or filed with and approved by, the Commission.\108\
    The Commission finds that the Trust Agreement is designed to enable
the ISE to operate in a manner that complies with the federal
securities laws, including the objectives and requirements of sections
6(b) and 19(g) of the Act,\109\ facilitate the ability of the ISE and
the Commission to fulfill their regulatory and oversight obligations
under the Act,\110\ and are consistent with the provisions other
entities that directly or indirectly own or control an SRO have
instituted and that have been approved by the Commission.\111\ The
Commission finds that the Trust's provisions are consistent with the
Act and that they are designed to facilitate the Exchange's ability to
comply with the requirements of the Act.
---------------------------------------------------------------------------

    \106\ Trust Agreement, Article VIII, Section 8.2.
    \107\ 15 U.S.C. 78s.
    \108\ Trust Agreement, Article VIII, Section 8.2.
    \109\ 15 U.S.C. 78f(b) and 15 U.S.C. 78s(g).
    \110\ Trust Agreement, Articles V, VI, and VIII.
    \111\ See, e.g., Securities Exchange Act Release Nos. 55293
(February 14, 2007), 72 FR 8033 (February 22, 2007) (SR-NYSE-2006-
120) (merger of NYSE Group, Inc. and Euronext N.V.) and 53382
(February 27, 2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77)
(merger of New York Stock Exchange, Inc. and Archipelago Holdings,
Inc.).
---------------------------------------------------------------------------

    Under section 20(a) of the Act,\112\ any person with a controlling
interest in the ISE shall be jointly and severally liable with and to
the same extent that the ISE is liable under any provision of the Act,
unless the controlling person acted in good faith and did not directly
or indirectly induce the act or acts constituting the violation or
cause of action. In addition, section 20(e) of the Act \113\ creates
aiding and abetting liability for any person who knowingly provides
substantial assistance to another person in violation of any provision
of the Act or rule thereunder. Further, section 21C of the Act \114\
authorizes the Commission to enter a cease-and-desist order against any
person who has been ``a cause of'' a violation of any provision of the
Act through an act or omission that the person knew or should have
known would contribute to the violation. These provisions are
applicable to the Trust and all other entities controlling the ISE.
---------------------------------------------------------------------------

    \112\ 15 U.S.C. 78t(a).
    \113\ 15 U.S.C. 78t(e).
    \114\ 15 U.S.C. 78u-3.
---------------------------------------------------------------------------

III. Conclusion

    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange.\115\
---------------------------------------------------------------------------

    \115\ The Commission's approval of the proposed rule change
based on the Exchange's representation that the Resolutions will be
signed by the Upstream Owners before or at the closing of the
Transaction.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to section 19(b)(2) of the Act
\116\ that the proposed rule change (SR-ISE-2007-101) is approved, and
Amendment No. 1 is approved on an accelerated basis.
---------------------------------------------------------------------------

    \116\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\117\
---------------------------------------------------------------------------

    \117\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-24500 Filed 12-18-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 99 (Thursday, May 22, 2014)]
[Rules and Regulations]
[Pages 29324-29327]
[FR Doc No: 2014-11487]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2014-0274; FRL-9910-92-Region 5]

Approval and Promulgation of Air Quality Implementation Plans;
Illinois; Revision to the Chicago 8-Hour Ozone Maintenance Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving
Illinois' March 28, 2014, state implementation plan (SIP) revision to
the 1997 8-hour ozone maintenance plan for the Illinois portion of the
Chicago-Gary-Lake County, Illinois-Indiana area (the Greater Chicago
Area). This SIP revision establishes new Motor Vehicle Emissions
Budgets (MVEB) for volatile organic compounds (VOC) and oxides of
nitrogen (NOX) for the year 2025. EPA is approving the
allocation of a portion of the safety margin for VOC and NOX
in the ozone maintenance plan to the 2025 MVEBs. Total year 2025
emissions of VOC and NOX for the area will remain below the
attainment level required by the transportation conformity regulations.

DATES: This direct final rule is effective July 21, 2014, unless EPA
receives adverse comments by June 23, 2014. If adverse comments are
received, EPA will publish a timely withdrawal of the direct final rule
in the Federal Register informing the public that the rule will not
take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2014-0274, by one of the following methods:
    1. www.regulations.gov: Follow the on-line instructions for
submitting comments.
    2. Email<EMAIL_ADDRESS>    3. Fax:<PHONE_NUMBER>.

    4. Mail: Pamela Blakley, Chief, Control Strategies Section, Air
Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West
Jackson Boulevard, Chicago, Illinois 60604.
    5. Hand Delivery: Pamela Blakley, Chief, Control Strategies
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection
Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Such
deliveries are only accepted during the Regional Office normal hours of
operation, and special arrangements should be made for deliveries of
boxed information. The Regional Office official hours of business are
Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal
holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-
2014-0274. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or email. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going through www.regulations.gov your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Environmental Protection
Agency, Region 5, Air and Radiation Division, 77 West Jackson
Boulevard, Chicago, Illinois 60604. This facility is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays.
We recommend that you telephone Michael Leslie, Environmental Engineer,
at<PHONE_NUMBER> before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Michael Leslie, Environmental
Engineer, Control Strategies Section, Air Programs Branch (AR-18J),
Environmental Protection Agency, Region 5, 77 West Jackson Boulevard,
Chicago, Illinois 60604,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This supplementary information
section is arranged as follows:

I. What is the background for this action?
II. What is a safety margin?
III. How does this action change the Chicago area's ozone
maintenance plan?
IV. What action is EPA taking?
V. Statutory and Executive Order Reviews

I. What is the background for this action?

    On August 13, 2012 (77 FR 48062), EPA approved a request from the
State of Illinois to redesignate the Illinois portion of the Greater
Chicago Area to attainment of the 1997 8-hour ozone national ambient
air quality standard (NAAQS). In addition to approving the ozone
redesignation request, EPA approved the State's plan for maintaining
the 1997 8-hour ozone standard in the Illinois portion of the Greater
Chicago Area through 2025. The ozone maintenance plan established MVEBs
for VOC and NOX for the year 2025 to account for new
transportation planning assumptions.
    MVEBs are the projected levels of controlled emissions from the
transportation sector (mobile sources) that are estimated in the SIP to
provide for maintenance of the ozone standard. The transportation
conformity rule allows the MVEB to be changed as long as the total
level of emissions from all sources remains below the attainment
levels.

II. What is a safety margin?

    A ``safety margin'', as defined in the transportation conformity
rule (40 CFR part 93 subpart A), is the amount by which the total
projected emissions from all sources of a given pollutant are less than
the total emissions that would satisfy the applicable requirement for
reasonable further progress, attainment, or maintenance. The attainment
level of emissions is the level of emissions during one of the years in
which the area met the NAAQS. Table 1 gives detailed information on the
safety margin for the Illinois portion of the Greater Chicago Area.
Table 1 includes a comparison of the VOC and NOX emissions
in the year 2008 (Illinois' attainment year), to the projected
emissions of VOC and NOX in the year 2025. The difference
between the projected emissions in the year 2025 and the actual
emissions in the year 2008 is referred to as the safety margin or the
amount of excess emission reductions.

                     Table 1--Safety Margin for Chicago's 1997 8-Hour Ozone Maintenance Plan
----------------------------------------------------------------------------------------------------------------
                                                                              2025 Projected
                                                          2008 Attainment    year maintenance    Safety margin
                       Pollutant                           year emissions    emissions (tons/      (tons/day)
                                                             (tons/day)            day)
----------------------------------------------------------------------------------------------------------------
VOC....................................................             787.45             611.95             175.60
NOX....................................................             896.76             427.11             469.65
----------------------------------------------------------------------------------------------------------------

    Illinois has requested the allocation of 12 tons/day of the VOC and
25 tons/day of NOX from the safety margins to the MVEBs. The
revised maintenance plan will have a safety margin of 163.6 tons/day of
VOC and 444.65 tons/day of NOX. The 2025 projected
emissions, even with this allocation, will be below the 2008 attainment
year emissions for both VOC and NOX. For this reason, EPA
finds that the allocation of the safety margin to the 2025 MVEBs for
the

Illinois portion of the Greater Chicago Area meets the requirements of
the transportation conformity regulations at 40 CFR part 93, and is
approvable.

III. How does this action change the Chicago area's ozone maintenance
plan?

    This action changes the MVEBs for mobile sources. The maintenance
plan is designed to provide for future growth while still maintaining
the ozone NAAQS. Growth in industries, population, and traffic is
offset by reductions from cleaner cars and other emission reduction
programs. Through the maintenance plan, the State and local agencies
can manage and maintain clean air quality while providing for growth.
    In the submittal, Illinois requested to allocate a portion of the
safely margins for VOC and NOX to the 2025 MVEBs. Table 2
details the updated MVEBs for the 1997 8-hour ozone maintenance plan
for the Illinois portion of the Greater Chicago Area. Table 2 shows the
2025 MVEBs for VOC and NOX (approved by EPA on August 13,
2012), the amount of excess emission reductions or safety margin to be
allocated into the new MVEBs, and the new 2025 MVEBs for VOC and
NOX.

                            Table 2--Chicago 1997 8-Hour Ozone Maintenance Plan MVEBs
----------------------------------------------------------------------------------------------------------------
                                                                   Approved 2025   Safety margin
                            Pollutant                              MVEB  (tons/     allocation     New 2025 MVEB
                                                                       day)         (tons/day)      (tons/day)
----------------------------------------------------------------------------------------------------------------
VOC.............................................................           48.13           12.00           60.13
NOX.............................................................          125.27           25.00          150.27
----------------------------------------------------------------------------------------------------------------

IV. What action is EPA taking?

    EPA is approving a revision to the 1997 8-hour ozone maintenance
plan for the Illinois portion of the Greater Chicago Area. The revision
will change the MVEBs for VOC and NOX that are used for
transportation conformity purposes. The revision will keep the total
emissions for the area at or below the attainment level required by
law. This action will allow State or local agencies to continue to
maintain air quality while providing for transportation growth.
    We are publishing this action without prior proposal because we
view this as a noncontroversial amendment and anticipate no adverse
comments. However, in the proposed rules section of this Federal
Register publication, we are publishing a separate document that will
serve as the proposal to approve the state plan if relevant adverse
written comments are filed. This rule will be effective July 21, 2014
without further notice unless we receive relevant adverse written
comments by June 23, 2014. If we receive such comments, we will
withdraw this action before the effective date by publishing a
subsequent document that will withdraw the final action. All public
comments received will then be addressed in a subsequent final rule
based on the proposed action. EPA will not institute a second comment
period. Any parties interested in commenting on this action should do
so at this time. Please note that if EPA receives adverse comment on an
amendment, paragraph, or section of this rule and if that provision may
be severed from the remainder of the rule, EPA may adopt as final those
provisions of the rule that are not the subject of an adverse comment.
If we do not receive any comments, this action will be effective July
21, 2014.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Clean Air Act
and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely approves state law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     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);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.
    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 action 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. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).

    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by July 21, 2014. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action 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. Parties with objections to this direct final
rule are encouraged to file a comment in response to the parallel
notice of proposed rulemaking for this action published in the proposed
rules section of today's Federal Register, rather than file an
immediate petition for judicial review of this direct final rule, so
that EPA can withdraw this direct final rule and address the comment in
the proposed rulemaking. This action may not be challenged later in
proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Oxides of
Nitrogen, Ozone, Volatile organic compounds, Incorporation by
reference.

    Dated: May 2, 2014.
Susan Hedman,
Regional Administrator, Region 5.

    40 CFR part 52 is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

0
2. Section 52.726 is amended by adding paragraph (oo) to read as
follows:

Sec.  52.726  Control strategy; Ozone.

* * * * *
    (oo) Approval--On March 28, 2014, the State of Illinois submitted a
revision to its State Implementation Plan for the Illinois portion of
the Chicago-Gary-Lake County, Illinois-Indiana area (the Greater
Chicago Area). The submittal established new Motor Vehicle Emissions
Budgets (MVEB) for Volatile Organic Compounds (VOC) and Oxides of
Nitrogen (NOX) for the year 2025. The MVEBs for the Illinois
portion of the Greater Chicago Area are now: 60.13 tons per day of VOC
emissions and 150.27 tons per day of NOX emissions for the
year 2025.

[FR Doc. 2014-11487 Filed 5-21-14; 8:45 am]
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[Federal Register: April 12, 2010 (Volume 75, Number 69)]
[Notices]
[Page 18499-18500]
[DOCID:fr12ap10-52]

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

ENVIRONMENTAL PROTECTION AGENCY

[FRL-9136-3; Docket ID No. EPA-HQ-ORD-2009-0934]

The Effects of Mountaintop Mines and Valley Fills on Aquatic
Ecosystems of the Central Appalachian Coalfields and a Field-Based
Aquatic Life Benchmark for Conductivity in Central Appalachian Streams

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of public comment period.

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

SUMMARY: EPA is announcing a 60-day public comment period for two
related draft documents: (1) ``The Effects of Mountaintop Mines and
Valley Fills on Aquatic Ecosystems of the Central Appalachian
Coalfields'' (EPA/600/R-09/138A) and (2) ``A Field-based Aquatic Life
Benchmark for Conductivity in Central Appalachian Streams'' (EPA/600/R-
10/023A). These reports were developed by the National Center for
Environmental Assessment (NCEA) within EPA's Office of Research and
Development as part of a set of actions taken by EPA to further clarify
and strengthen environmental permitting requirements for Appalachian
mountaintop removal and other surface coal mining projects, in
coordination with Federal and State regulatory agencies (http://
www.epa.gov/owow/wetlands/guidance/mining.html).
    Both documents will be reviewed by an independent review panel
convened by EPA's Science Advisory Board (SAB). The SAB's peer review
meeting, which the public will be able to attend as observers, will be
scheduled at a later date, and announced in the Federal Register. The
public comment period and the SAB meeting are separate processes that
provide opportunities for all interested parties to comment on the
document. EPA intends to forward the public comments that are
submitted, in accordance with this notice, to the SAB review panel
prior to the meeting for their consideration. When finalizing the draft
documents, EPA intends to consider any significant public comments that
it receives in accordance with this notice.
    EPA is releasing these draft documents for the purpose of pre-
dissemination peer review under applicable information quality
guidelines. The documents have not been formally disseminated by EPA.
They do not represent and should not be construed to represent a final
Agency policy or determination; however, the documents reflect EPA's
best interpretation of the available science. The draft documents are
available via the Internet on NCEA's home page under the Recent
Additions and Publications menus at http://www.epa.gov/ncea.

DATES: The 60-day public comment period begins April 12, 2010, and ends
June 11, 2010. Technical comments should be in writing and must be
received by EPA by June 11, 2010.

ADDRESSES: The draft reports, ``The Effects of Mountaintop Mines and
Valley Fills on Aquatic Ecosystems of the Central Appalachian
Coalfields'' and ``A Field-based Aquatic Life Benchmark for
Conductivity in Central Appalachian Streams'' are available primarily
via the Internet on the National Center for Environmental Assessment's
home page under the Recent Additions and Publications menus at http://
www.epa.gov/ncea. A limited number of paper copies are available,
contact the EPA; telephone:<PHONE_NUMBER>; facsimile:<PHONE_NUMBER>. If
you are requesting a paper copy, please provide your name, your mailing
address, and the document titles (1) ``The Effects of Mountaintop Mines
and Valley Fills on Aquatic Ecosystems of the Central Appalachian
Coalfields'' and (2) ``A Field-based Aquatic Life Benchmark for
Conductivity in Central Appalachian Streams.''
    Comments may be submitted electronically via http://
www.regulations.gov, by mail, by facsimile, or by hand delivery/
courier. Please follow the detailed instructions provided in the
SUPPLEMENTARY INFORMATION section of this notice.

FOR FURTHER INFORMATION CONTACT: For information on submitting comments
to the docket, please contact the Office of Environmental Information
Docket; telephone:<PHONE_NUMBER>; facsimile:<PHONE_NUMBER>; or e-mail:
<EMAIL_ADDRESS>For technical information, please leave a message
at<PHONE_NUMBER> or send e-mail to<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    The purpose of the first draft report entitled ``The Effects of
Mountaintop Mines and Valley Fills on Aquatic Ecosystems of the Central
Appalachian Coalfields,'' is to assess the state of the science on the
ecological impacts of Mountaintop Mining and Valley Fill (MTM-VF)
operations on streams in the Central Appalachian Coal Basin. This basin
covers about 12 million acres in West Virginia, Kentucky, Virginia, and
Tennessee. The draft report reviews literature relevant to evaluating
five potential consequences of MTM-VF operations: (1) Impacts on
headwater streams; (2) impacts on downstream water quality; (3) impacts
on stream ecosystems; (4) the cumulative impacts of multiple mining
operations; and (5) effectiveness of mining reclamation and mitigation.
The impacts of MTM-VF operations on cultural and aesthetic resources
are not included in the review. EPA used two primary sources of
information for the evaluation: (1) The peer reviewed, published
literature and (2) the Programmatic Environmental Impact Statement
(PEIS) on Mountaintop Mining/Valley Fills in Appalachia and its
associated appendices prepared in draft in 2003 and finalized in 2005.
    The second draft report entitled, ``A Field-based Aquatic Life
Benchmark for Conductivity in Central Appalachian Streams,'' uses field
data to derive an aquatic life benchmark for conductivity. Conductivity
is a measurement of the salt content of water. The saltier the water,
the more it will conduct electricity. This benchmark value may be
applied to waters in the Appalachian Region that are near neutral or
mildly alkaline in their pH and are influenced by salts of sulfate and
bicarbonate. This benchmark is intended to protect the biological
integrity of waters in the region. It is derived by a method modeled on
the U.S. EPA's standard methodology for deriving water quality
criteria. In particular, the methodology was adapted for use of field
data. Field data were used because sufficient and appropriate
laboratory data were not available and because high quality field data
were available to relate conductivity to effects on biotic communities.
This draft report provides scientific evidence for a conductivity
benchmark in a specific region rather than for the entire United
States.

II. How To Submit Technical Comments to the Docket at http://
www.regulations.gov

    Submit your comments, identified by Docket ID No. EPA-HQ-ORD 2009-
0934, by one of the following methods:
     http://www.regulations.gov: Follow the on-line
instructions for submitting comments.
     E-mail<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER>

     Mail: Office of Environmental Information (OEI) Docket
(Mail Code: 2822T), U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460. The phone number is 202-
566-1752.
     Hand Delivery: The OEI Docket is located in the EPA
Headquarters Docket Center, Room 3334 EPA West Building, 1301
Constitution Ave., NW., Washington, DC. The EPA Docket Center's Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>. Such deliveries are only accepted during
the docket's normal hours of operation, and special arrangements should
be made for deliveries of boxed information.
    If you provide comments by mail or hand delivery, please submit
three copies of the comments. For attachments, provide an index, number
pages consecutively with the comments, and submit an unbound original
and three copies.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-ORD-
2009-0934. Please ensure that your comments are submitted within the
specified comment period. Comments received after the closing date will
be marked ``late,'' and may only be considered if time permits. It is
EPA's policy to include all comments it receives in the public docket
without change and to make the comments available online at http://
www.regulations.gov, including any personal information provided,
unless a comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through http://www.regulations.gov or e-
mail. The http://www.regulations.gov Web site is an ``anonymous
access'' system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment. If you
send an e-mail comment directly to EPA without going through http://
www.regulations.gov, your e-mail address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet. If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment and with any disk or CD-ROM you
submit. If EPA cannot read your comment due to technical difficulties
and cannot contact you for clarification, EPA may not be able to
consider your comment. Electronic files should avoid the use of special
characters, any form of encryption, and be free of any defects or
viruses. For additional information about EPA's public docket, visit
the EPA Docket Center homepage at http://www.epa.gov/epahome/
dockets.htm.
    Docket: Documents in the docket are listed in the http://
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other materials,
such as copyrighted material, are publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the OEI Docket in the
EPA Headquarters Docket Center.

    Dated: April 2, 2010.
Peter W. Preuss,
Director, National Center for Environmental Assessment.
[FR Doc. 2010-8302 Filed 4-9-10; 8:45 am]
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