[Federal Register: November 17, 2008 (Volume 73, Number 222)]
[Notices]
[Page 67909-67916]
[DOCID:fr17no08-101]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58918; File No. SR-ISE-2008-85]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing of Proposed Rule Change Relating to Changes to
the ISE Stock Exchange Governing Documents in Connection with ISE's
Purchase of Equity Interests in Direct Edge Holdings, Inc.

November 7, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is
hereby given that on November 7, 2008, the International Securities
Exchange, LLC (the ``Exchange'' or ``ISE'') filed with the Securities
and Exchange Commission (``SEC'' or ``Commission'') the proposed rule
change as described in Items I, II, and III below, which items have
been prepared by the Exchange. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes, among other things, to merge the ISE Stock
Exchange, LLC (``ISE Stock''), a Delaware limited liability company,
with and into Maple Merger Sub, LLC (``Maple Merger Sub''), a Delaware
limited liability company and a wholly owned subsidiary of Direct Edge
Holdings LLC (``Direct Edge''), with Maple Merger Sub being the
surviving entity. As part of the same transaction, International
Securities Exchange Holdings, Inc. (``ISE Holdings'') will purchase
equity interests in Direct Edge such that after the transactions
contemplated by the

merger and purchase, ISE Holdings will have a 31.54% equity interest in
Direct Edge. Currently, ISE Stock operates a marketplace for the
trading of U.S. cash equities by Equity Electronic Access Members
(``Equity EAMs'') of ISE under the rules of ISE, as a facility, as that
term is defined in Section 3(a)(2) of the Securities Exchange Act of
1934 (``Exchange Act'') \3\ of ISE (the ``Facility''). ISE proposes
that, following the closing of the transaction and the merger of ISE
Stock into Maple Merger Sub, Maple Merger Sub will operate the
Facility.\4\ Maple Merger Sub will be wholly-owned by Direct Edge, a
Delaware limited liability company.
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    \3\ 15 U.S.C. 78c(a)(2).
    \4\ Direct Edge is planning to file two Form 1 Applications to
own and operate two national securities exchanges. If the Commission
approves the Form 1 Applications, the Facility will cease
operations.
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    ISE is a registered national securities exchange under Section 6 of
the Exchange Act and a self-regulatory organization (``SRO''). As a
facility of ISE, the Facility is subject to regulation by ISE and
oversight by the Commission. ISE represents that following the
transactions described above, it will continue to have adequate funds
to discharge all regulatory functions related to the Facility.\5\ ISE
will also enter into a Regulatory Services Agreement with Maple Merger
Sub. In this filing, the Exchange is submitting to the SEC: (i) The
Certificate of Formation and the Limited Liability Company Agreement of
Maple Merger Sub (``LLC Agreement'') which specifically relates to the
control and governance of Maple Merger Sub and helps to ensure that ISE
has the authority over Maple Merger Sub to maintain ISE's
responsibility for all regulatory functions related to the Facility;
(ii) the Third Amended and Restated Limited Liability Company Operating
Agreement of Direct Edge Holdings LLC (``DE Operating Agreement'');
(iii) amendments to the ISE Holdings Certificate of Incorporation and
Bylaws; and (iv) amendments to ISE Rules 312 and 2108. As the primary
purpose of this rule filing is to focus on those provisions that are
directly related to ISE's ability to perform its regulatory
responsibility with respect to the Facility following the transactions
described above, the Exchange's discussion in this filing will be
limited to those relevant provisions of the LLC Agreement and the DE
Operating Agreement. The text of the proposed rule change is available
on the Exchange's Web site http://www.ise.com at the principal office
of the Exchange, and at the Commission's Public Reference Room.
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    \5\ Maple Merger Sub will not be entitled to any revenue
generated in connection with penalties, fines, and regulatory fees
that may be assessed by ISE against Equity EAMs in connection with
trading on ISE Stock. Rather, all regulatory fines, penalties and
fees assessed against and paid by ISE members to ISE in connection
with trading on ISE Stock shall remain with ISE.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The self-regulatory organization has prepared summaries,
set forth in Sections A, B and C below, of the most significant aspects
of such statements.

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

1. Purpose
    The Exchange proposes, among other things, to merge ISE Stock with
and into Maple Merger Sub, a wholly owned subsidiary of Direct Edge,
with Maple Merger Sub being the surviving entity. As part of the same
transaction, ISE Holdings will purchase equity interests in Direct Edge
such that after the transactions contemplated by the merger and
purchase, ISE Holdings will have a 31.54% equity interest in Direct
Edge. Currently, ISE Stock operates the Facility, however, ISE proposes
that, following the closing of the transaction and the merger of ISE
Stock into Maple Merger Sub, Maple Merger Sub will operate the
Facility.
    ISE is an SRO, and as a facility of ISE, the Facility is subject to
regulation by ISE and oversight by the SEC. ISE represents that
following the transactions described above, it will continue to have
adequate funds to discharge all regulatory functions related to the
Facility.\6\ ISE will also enter into a Regulatory Services Agreement
with Maple Merger Sub. In this filing, the Exchange is submitting to
the Commission: (i) The Certificate of Formation and LLC Agreement
which specifically relates to the control and governance of Maple
Merger Sub and helps to ensure that ISE has the authority over Maple
Merger Sub to maintain ISE's responsibility for all regulatory
functions related to the Facility; (ii) the DE Operating Agreement;
(iii) amendments to the ISE Holdings Certificate of Incorporation and
Bylaws; and (iv) amendments to ISE Rules 312 and 2108. As the primary
purpose of this rule filing is to focus on those provisions that are
directly related to ISE's ability to perform its regulatory
responsibility with respect to the Facility following the transactions
described above, the Exchange's discussion in this filing will be
limited to those relevant provisions of the LLC Agreement and the DE
Operating Agreement.
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    \6\ Maple Merger Sub will not be entitled to any revenue
generated in connection with penalties, fines, and regulatory fees
that may be assessed by ISE against Equity EAMs in connection with
trading on ISE Stock. Rather, all regulatory fines, penalties and
fees assessed against and paid by ISE members to ISE in connection
with trading on ISE Stock shall remain with ISE.
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Maple Merger Sub

    As a limited liability company, ownership of Maple Merger Sub is
represented by limited liability membership interests in Maple Merger
Sub. Maple Merger Sub has only one owner, Direct Edge (the ``Sole
Member'').

Governance of Maple Merger Sub

    Pursuant to Section 4.1 of the LLC Agreement, Maple Merger Sub will
be managed by the Sole Member. As noted above, ISE will have regulatory
responsibility over Maple Merger Sub and the Facility. Subject to the
foregoing and the provisions of Section 1.6 as described below, as the
Sole Member, Direct Edge will have the authority to make all decisions
regarding the business of Maple Merger Sub. The Sole Member is
responsible for the control and management of the business of Maple
Merger Sub.
    Under Section 4.1 of the LLC Agreement, subject to the limitations
provided in the LLC Agreement and except as specifically provided
therein, the Sole Member shall have exclusive and complete authority
and discretion to manage the operations and affairs of Maple Merger Sub
and to make all decisions regarding the business of Maple Merger Sub
and shall have the power to act for or bind Maple Merger Sub. Any
action taken by the Sole Member shall constitute the act of and serve
to bind Maple Merger Sub.
    The provisions contained in Section 1.6 of the LLC Agreement ensure
that ISE has the information regarding Maple Merger Sub and the
Facility necessary to carry out its regulatory responsibilities.
Specifically, Section 1.6 provides that, so long as Maple Merger Sub
operates the Facility, in the event that ISE, in its sole discretion,
reasonably and in good

faith, determines that any action, transaction, or aspect of an action
or transaction, is necessary or appropriate for, or interferes with,
the performance or fulfillment of ISE's regulatory functions or its
responsibilities under the Exchange Act or such action, transaction, or
aspect of an action or transaction is specifically required by the SEC,
(i) no such action, transaction, or aspect of an action or transaction
shall be authorized, undertaken or effective, without ISE's prior
approval and (ii) ISE shall have the sole and exclusive right to direct
that any such necessary or appropriate action, as it may reasonably and
in good faith determine in its sole discretion be taken or transaction
be undertaken by or on behalf of Maple Merger Sub without regard to any
other party in any capacity.
    Additionally, Section 1.6(b) provides that ISE shall receive notice
of planned or proposed changes to Maple Merger Sub (but not to include
changes relating solely to one or more of the following: marketing,
administrative matters, personnel matters, social or team-building
events, meetings of members, communications with members, finance,
market research, real property, equipment, furnishings, personal
property, intellectual property, insurance, contracts unrelated to the
operation of the Facility and de minimis items) and the Facility. Any
such changes must be affirmatively approved by ISE prior to
implementation.
    Section 4.1 of the LLC Agreement contains limitations on the
authority of the Sole Member. Specifically, Section 4.1 provides that
notwithstanding any contrary provision of the LLC Agreement, and
subject always to ISE's rights to act under Section 1.6, all actions
taken by the Sole Member shall be governed by and subject to Sections
7.3(a) \7\ and 7.7 of the DE Operating Agreement, which are discussed
in detail below.
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    \7\ Section 7.3(a) of the DE Operating Agreement provides, that
subject to Section 7.3(b), the Board may constitute any officer of
Direct Edge as the Direct Edge's proxy, with power of substitution,
to vote the equity of any subsidiary of Direct Edge and to exercise,
on behalf of Direct Edge, any and all rights and powers incident to
the ownership of that equity, including the authority to execute and
deliver proxies, waivers and consents. Subject to Sections 7.3(b)
and 7.7, in the absence of specific action by the Direct Edge Board,
the Chief Executive Officer shall have authority to represent Direct
Edge and to vote, on behalf of Direct Edge, the equity of other
Persons, both domestic and foreign, held by Direct Edge. Subject to
Sections 7.3(b) and 7.7, the Chief Executive Officer shall also have
the authority to exercise any and all rights incident to the
ownership of that equity, including the authority to execute and
deliver proxies, waivers and consents.
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Voting Limitations of Members

    Under Section 4.4 of the LLC Agreement, no Person \8\ (other than
the Sole Member), either alone or together with its Related Persons,\9\
as of any record date for the determination of members entitled to vote
on any matter, shall be entitled to: (i) Vote or cause the voting of
Common Interests, as defined in the LLC Agreement, beneficially owned
by such Person or its Related Persons, in person or by proxy or through
any voting agreement, plan, or arrangement, to the extent that such
Common Interests represent in the aggregate more than twenty percent
(20%) of voting power of the then-issued and outstanding Common
Interests (such threshold being hereinafter referred to as the ``Voting
Limitation''); or (ii) enter into any voting agreement, plan, or
arrangement that would result in Common Interests beneficially owned by
such Person or its Related Persons, subject to such voting agreement,
plan, or arrangement not being voted on a matter, or any proxy relating
thereto being withheld, where the effect of that voting agreement,
plan, or arrangement would be to enable any Person, alone or together
with its Related Persons, to exceed the Voting Limitation. Maple Merger
Sub shall disregard any such votes purported to be cast in excess of
the Voting Limitation.
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    \8\ ``Person'' means any individual, partnership, limited
liability company, association, corporation, trust, or other entity.
LLC Agreement Section 2.1 ``Definitions''.
    \9\ ``Related Person'' means (i) with respect to any Person, any
executive officer (as defined under Rule 3b-7 under the Exchange
Act), director, general partner, manager or managing member, as
applicable, and all ``affiliates'' and ``associates'' of such Person
(as such terms are defined in Rule 12b-2 under the Exchange Act);
(ii) with respect to any Person constituting an ``Exchange Member''
(as such term is defined in the Constitution of the ISE LLC, a copy
of which will be provided to any member of Maple Merger Sub upon
written request therefore), any broker or dealer with which such
Exchange Member is associated; (iii) with respect to any Person that
is an executive officer (as defined under Rule 3b-7 under the
Exchange Act), director, general partner, manager or managing member
of a company, corporation or similar entity, such company,
corporation or entity, as applicable; and (iv) any two or more
Persons that have any agreement, arrangement or understanding
(whether or not in writing) to act together for the purpose of
acquiring, voting, holding or disposing of Common Interests; and the
term ``beneficially owned'' and derivative or similar words shall
have the meaning set forth in Regulation 13D-G under the Exchange
Act. LLC Agreement Section 2.1 ``Definitions''.
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    The limitations imposed by Section 4.4 may be waived if both the
Sole Member and ISE each consent to expressly permit such waiver of the
Voting Limitation; and such waiver shall have been filed with, and
approved by, the Commission under Section 19(b) of the Exchange Act and
shall have become effective thereunder. In granting a waiver, both the
Sole Member and ISE must have determined that: (i) The exercise of such
voting rights or the entering of such agreement, plan or other
arrangement, as applicable, by such Person, either alone or together
with its Related Persons, will not impair the ability of Maple Merger
Sub and ISE to carry out its functions and responsibilities, including,
but not limited to, under the Exchange Act and is otherwise in the best
interests of the Maple Merger Sub, its Members \10\ and ISE; (ii) such
voting rights by such Person, either alone or together with its Related
Persons, will not impair the ability of the Commission to enforce the
Exchange Act; (iii) neither such Person nor its Related Persons are
subject to any applicable ``statutory disqualification'' (within the
meaning of Section 3(a)(39) of the Exchange Act); and (iv) neither such
Person nor its Related Persons is an ``Exchange Member'' (as such term
is defined in the Constitution of ISE).
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    \10\ ``Member(s)'' means the Sole Member and all Additional
Members admitted pursuant to Section 4.3(a). LLC Agreement Section
2.1 ``Definitions''.
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    By specifically imposing a Voting Limitation on any Person that,
either alone or together with its Related Persons, owns Common
Interests that represent in the aggregate more than twenty percent
(20%) of the voting power then entitled to be cast, ISE is ensuring
that it is in all cases able to maintain proper control over the
exercise of its regulatory function in relation to Maple Merger Sub,
and is not subject to influence that may be adverse to its regulatory
responsibilities from any Person that may control a substantial amount
of the outstanding votes entitled to be cast on any matter. This
provision and other related provisions relating to notice and rule
filing requirements with respect to any Person that acquires certain
Percentage Interest \11\ levels in Maple Merger Sub will serve to
protect the integrity of ISE's self-regulatory responsibilities and the
SEC's oversight responsibilities.
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    \11\ ``Percentage Interest'' shall mean, with respect to any
Member, the ratio of the number of Common Interests held by such
Member to the total of all of the issued and outstanding Common
Interests, expressed as a percentage. LLC Agreement Section 2.1
``Definitions''.
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Ownership Limitations of Members and Changes in Ownership

    Under Section 7.2(a) of the LLC Agreement, no Person (other than
the Sole Member), either alone or together with its Related Persons, at
any time, may own, directly or indirectly, of

record or beneficially, an aggregate amount of Common Interests which
would result in more than twenty percent (20%) Percentage Interest
level in Maple Merger Sub (the ``Concentration Limitation'').
    Section 7.2(b) states that the Concentration Limitation shall apply
to each Person (other than the Sole Member) unless and until: (i) Such
Person shall have delivered to the Sole Member and ISE a notice in
writing, not less than 45 days (or such shorter period as the Sole
Member and ISE shall expressly consent to) prior to the acquisition of
any Common Interests that would cause such Person (either alone or
together with its Related Persons) to exceed the Concentration
Limitation, of such Person's intention to acquire such ownership; (ii)
the Sole Member and ISE shall each have consented to expressly permit
such ownership; and (iii) such waiver shall have been filed with, and
approved by, the SEC under Section 19(b) of the Exchange Act and shall
have become effective thereunder.
    Section 7.2(c) states that in exercising their discretion under
Section 7.2(b), the Sole Member and ISE shall have determined that (i)
such beneficial ownership of Common Interests by such Person, either
alone or together with its Related Persons, will not impair the ability
of the Maple Merger Sub and ISE to carry out its functions and
responsibilities, including but not limited to, under the Exchange Act
and is otherwise in the best interests of the Maple Merger Sub, its
Members and ISE; (ii) such beneficial ownership of Common Interests by
such Person, either alone or together with its Related Persons, will
not impair the ability of the SEC to enforce the Exchange Act; (iii)
neither such Person nor its Related Persons are subject to any
applicable ``statutory disqualification'' (within the meaning of
Section 3(a)(39) of the Exchange Act); and (iv) neither such Person nor
its Related Persons is an ``Exchange Member'' (as such term is defined
in the Constitution of the ISE). In making the determinations referred
to in the immediately preceding sentence, the Sole Member and ISE may
impose such conditions and restrictions on such Person and its Related
Persons owning any Common Interests entitled to vote on any matter as
the Sole Member and ISE may each deem necessary, appropriate or
desirable in furtherance of the objectives of the Exchange Act and the
governance of Maple Merger Sub.
    Beginning after Commission approval of this proposed rule change,
Maple Merger Sub shall provide the Commission with written notice ten
(10) days prior to the closing date of any transaction that results in
a Person's Percentage Interest, alone or together with any Related
Persons, meeting or crossing the threshold level of 5% or the
successive 5% Percentage Interest levels of 10% and 15%.
    ISE believes that these provisions provide the Commission with the
authority to review and subject to public comment any substantial
transfer of ownership that may have the potential to affect ISE's
regulatory responsibilities regarding the Facility.
    ISE believes that these transfer restrictions, together with the
Voting Limitation and Concentration Limitation, are adequately designed
to prohibit any Person, either alone or with its Related Persons, from
having the power to control a substantial number of outstanding votes
entitled to be cast on any matter, and more importantly, that may be
adverse to ISE's regulatory oversight responsibilities. Moreover, ISE
believes that these provisions serve to protect the integrity of ISE's
and the Commission's regulatory oversight responsibilities and allows
the Commission to review the acquisition of substantial ownership or
voting power by any Person.

Regulatory Jurisdiction Over Sole Member

    ISE will regulate Maple Merger Sub as an operator of a facility of
the Exchange. ISE has responsibility under the Exchange Act for the
Facility. The Sole Member of Maple Merger Sub, as owner and operator of
the Facility, will also be subject to the SEC's jurisdiction. In this
regard, Section 10.2 of the LLC Agreement provides that the Sole Member
acknowledges that to the extent that they are related to the business
of Maple Merger Sub or the Facility, the books, records, premises,
officers, directors, agents and employees of the Sole Member shall be
deemed to be the books, records, premises, officers, directors, agents
and employees of ISE for purposes of and subject to oversight pursuant
to the Exchange Act. Furthermore, the books, records, premises,
officers, directors, agents and employees of Maple Merger Sub shall be
deemed to be the books, records, premises, officers, directors, agents
and employees of the ISE for purposes of and subject to oversight
pursuant to the Exchange Act. In addition, the books and records of
Maple Merger Sub will be kept within the U.S.\12\
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    \12\ LLC Agreement, Section 10.2(a).
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    Section 10.3(a) requires that confidential information pertaining
to Maple Merger Sub, the Facility or the self-regulatory function of
ISE (including but not limited to disciplinary matters, trading data,
trading practices and audit information) contained in the books and
records of Maple Merger Sub shall: (i) Not be made available to any
Persons (other than as provided in the next sentence) other than to
those officers, directors, employees and agents of the Maple Merger Sub
that have a reasonable need to know the contents thereof; (ii) be
retained in confidence by the Maple Merger Sub and the officers,
directors, employees and agents of the Maple Merger Sub; and (iii) not
be used for any commercial purposes. Nothing in the LLC Agreement shall
be interpreted as to limit or impede the rights of the Commission to
access and examine such confidential information pursuant to the
federal securities laws and the rules and regulations thereunder, or to
limit or impede the ability of officers, directors, employees or agents
of Maple Merger Sub to disclose such confidential information to the
Commission.\13\
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    \13\ LLC Agreement, Section 10.3.
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    ISE believes that these provisions would help to ensure the Sole
Member and Maple Merger Sub's books and records by the Commission and,
to the extent the Sole Member and Maple Merger Sub's books and records
relate to the operation or administration of the Facility would help
enable the Commission to carry out its regulatory responsibilities
regarding Maple Merger Sub.
    Under Section 10.2(c) of the LLC Agreement, Maple Merger Sub, its
Members, the Facility and officers, directors, agents, and employees of
Maple Merger Sub and its Members irrevocably submit to the jurisdiction
of the U.S. federal courts, the Commission and ISE, for the purposes of
any suit, action or proceeding pursuant to the U.S. federal securities
laws, the rules or regulations thereunder, directly arising out of, or
relating to, Maple Merger Sub or the Facility activities or Section
10.2 of the LLC Agreement (except that such jurisdictions shall also
include Delaware for any such matter relating to the organizational or
internal affairs of Maple Merger Sub), and waives, and agrees not to
assert by way of motion, as a defense or otherwise in any such suit,
action or proceeding, any claims that it is not personally subject to
the jurisdiction of the Commission, that the suit, action or proceeding
is an inconvenient forum or that the venue of the suit, action or
proceeding is improper, or that the subject matter

hereof may not be enforced in or by such courts or agency.
    Under Section 10.2(d) of the LLC Agreement, Maple Merger Sub, its
Members, the Facility and officers, directors, agents, and employees of
Maple Merger Sub and its Members agree to comply with the federal
securities laws and the rules and regulations thereunder and shall
cooperate with ISE pursuant to its regulatory authority and the
provisions of the LLC Agreement and the Commission; and to engage in
conduct that fosters and does not interfere with ISE's ability to
prevent fraudulent and manipulative acts and practices; to promote just
and equitable principles of trade; to foster cooperation and
coordination with Persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities; to remove impediments to and perfect the mechanisms of a
free and open market and a national market system; and, in general, to
protect investors and the public interest.
    Section 10.2(e) provides that Maple Merger Sub and each Member
shall take such action as is necessary to ensure that Maple Merger
Sub's and such Member's officers, directors and employees consent in
writing to the application to them of the applicable provisions of
Section 10.2(b), (c) and (d), as applicable, with respect to their
Maple Merger Sub-related activities.
    The Exchange believes that these provisions will serve as notice to
the Sole Member and Maple Merger Sub that they will be subject to the
jurisdiction of the U.S. federal courts, the Commission and the ISE. It
is imperative that regulatory cooperation is assured from the Sole
Member, Maple Merger Sub and the Facility, regardless of their business
location, country of domicile or other circumstance which the
Commission may deem to have the potential to be adverse to the
regulatory responsibilities and interests of the ISE, the Commission,
or the U.S. federal courts. Accordingly, these provisions ensure that,
should an occasion arise that requires regulatory cooperation or
jurisdictional submission from the Sole Member or Maple Merger Sub;
such party's cooperation will be forthcoming and uncontested.

Fair Representation of Trading Participants, or EAMs

    ISE believes that the Maple Merger Sub company structure assures
the fair representation of ISE Members, its trading participants, in
the selection of its directors and administration of its affairs, and
satisfies Commission requirements in that one or more directors shall
be representative of issuers and investors and not be associated with a
member of the exchange, broker, or dealer.
    In order to exercise trading privileges on ISE Stock, a broker-
dealer must be an approved EAM of ISE. There is only one type of EAM
membership for both options trading on ISE and equities trading on ISE
Stock. When an applicant is approved under ISE rules as an EAM, the
member is issued an EAM Exchange Right. Under the ISE Constitution,
holders of EAM Exchange Rights, or EAMs, have the right to elect two
members (the ``EAM Directors'') of the Board of Directors of ISE (the
``ISE Board''). Nominees for election to the ISE Board to serve as
Industry Directors, including EAM Directors, are currently made by the
Exchange's Nominating Committee, which is not a committee of the ISE
Board, and is comprised of representatives of the holders of each EAM
Exchange Right. ISE Members also may nominate Industry Director
candidates for election to the ISE Board by petition. Accordingly,
since trading participants on ISE Stock must be EAMs, and since EAMs
have the right to elect EAM Directors of the ISE Board, the ISE
believes that ISE Stock trading participants are fairly represented on
the ISE Board.

DE Operating Agreement

    As discussed above, Direct Edge will be the sole owner of Maple
Merger Sub, and Maple Merger Sub will operate the Facility as a
facility of ISE. Because the Facility will be a facility of ISE, ISE
will have regulatory responsibility under the Exchange Act for the
Facility. Because Direct Edge is the sole owner of the operator of the
ISE's Facility, the DE Operating Agreement will include certain
provisions that are designed to preserve the independence of the ISE's
self-regulatory function with respect to the Facility, enable the
Facility to operate in a manner that complies with the federal
securities laws, including the objectives of Section 6(b) and 19(g) of
the Exchange Act and facilitate the ability of the Exchange and the
Commission to fulfill their regulatory and oversight obligations over
the Facility under the Exchange Act.
    For example, Section 7.7 of the DE Operating Agreement which
contains provisions requiring supermajority and majority votes of the
Board of Directors of Direct Edge in connection with certain activities
that could apply to the ISE as the entity with regulatory
responsibility for the Facility, provides that nothing in Section 7.7
will be applicable where the application of the provision would
interfere with the effectuation of any decisions by the ISE Board
relating to its regulatory functions (including disciplinary matters)
or the structure of the market ISE regulates or would interfere with
the ability of ISE to carry out its responsibilities under the Exchange
Act as determined by the ISE Board, which functions or responsibilities
include the ability of the ISE as a self-regulatory organization to
prevent fraudulent and manipulative acts and practices; promote just
and equitable principles of trade; foster cooperation and coordination
with Persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities; remove impediments to and perfect the mechanism of a free
and open market and a national market system; and, in general, protect
investors and the public interest. In addition, Section 7.7(i) provides
that a member of Direct Edge may transfer its ownership interest
without the approval of the Direct Edge Board or any members of Direct
Edge if such transfer is required to comply with the requirements of a
governmental entity or any self-regulatory organization.
    The DE Operating Agreement also includes ownership and voting
limitations. For example, Section 12.1 of the DE Operating Agreement
relates to ownership and voting concentration limitations and provides
that no Person, either alone or together with its Related Persons (as
defined in the DE Operating Agreement): (i) May own, directly or
indirectly, of record or beneficially, equity units of the Sole Member
representing in the aggregate a percentage interest of more than 40%;
(ii) may, if they are a holder of EAM Rights (as defined in the LLC
Agreement), own, directly or indirectly, of record or beneficially,
equity units of the Sole Member representing in the aggregate a
percentage interest of more than 20%; and (iii) may, directly,
indirectly or pursuant to any voting trust, agreement, plan or other
arrangement, vote or cause the voting of equity units or give any
consent or proxy with respect to equity units of the Sole Member
representing a percentage interest of more than 20%, nor may they enter
into any agreement, plan or other arrangement with any other Person,
either alone or together with Related Persons, under circumstances that
would result in the equity units that are subject to such agreement,
plan or other arrangement not being voted on any matter or matters or
any proxy relating thereto being withheld, where the effect of such
agreement, plan or other

arrangement would be to enable any Person, either alone or together
with their Related Persons, to vote, possess the right to vote or cause
the voting of equity units of the Sole Member that would represent a
percentage interest of more than 20%. The concentration limitations set
forth in Section 12.1 of the DE Operating Agreement do not apply to ISE
Holdings for so long as ISE is a wholly owned subsidiary of ISE
Holdings. The limitations set forth in (i) and (iii) above may be
waived by the board of managers of the Sole Member by amendment to the
DE Operating Agreement adopted by the board of managers if, in
connection with the adoption of such amendment, the board adopts a
resolution stating that that the board has determined that the
amendment: (i) Will not impair the ability of ISE to carry out its
functions and responsibilities under the Exchange Act and the rules and
regulations thereunder, (ii) is otherwise in the best interests of the
Sole Member and its members and the Maple Merger Sub; and (iii) will
not impair the ability of the SEC to enforce the Exchange Act and the
rules and regulations thereunder. Such amendment shall not be effective
unless it is filed with and approved by the SEC. In making the
determinations referred to in Section 12.1(b), the board of managers of
the Sole Member may impose on the Person in question and its Related
Persons such conditions and restrictions as it may in its sole
discretion deem necessary, appropriate or desirable in furtherance of
the objectives of the Exchange Act, and the rules under the Exchange
Act, and the governance of the Maple Merger Sub.
    The DE Operating Agreement contains a number of provisions designed
to ensure that ISE has sufficient access to the books and records of
the Sole Member. For example, Section 11.2 of the DE Operating
Agreement relates to access to and preservation of confidentiality of
the books and records and other confidential information and provides
that the books, records, premises, officers, managers, agents and
employees of the Sole Member shall be deemed to be the books, records,
premises, officers, managers, agents and employees of ISE to the extent
that they are related to the operation or administration of Maple
Merger Sub for purposes of and subject to oversight pursuant to the
Exchange Act. Furthermore, for as long as the Sole Member controls,
directly or indirectly, Maple Merger Sub, the books and records, as
well as any confidential information of the Maple Merger Sub relating
to the self regulatory function of the ISE, shall be subject at all
times to inspection and copying by the SEC and ISE provided that such
books and records are related to the operation or administration of
Maple Merger Sub. Section 11.2 of the DE Operating Agreement also
provides for the confidentiality of all books and records of the Maple
Merger Sub that reflect confidential information pertaining to the self
regulatory function of ISE and that such books and records shall not be
used for any non-regulatory purposes.
    The DE Operating Agreement contains a number of provisions
specifically related to the SRO function. For example, Section 14.1 of
the DE Operating Agreement provides that the managers, officers,
employees and agents of the Sole Member shall not take any actions that
would interfere with the effectuation of any decisions by ISE in its
capacity as an SRO relating to its regulatory functions (including
disciplinary matters) or which would interfere with the ability of ISE
in its capacity as an SRO to carry out its responsibilities under the
Exchange Act. Section 14.2 of the DE Operating Agreement provides that
the Sole Member shall cooperate with the SEC and ISE, as applicable,
pursuant to and to the extent of their respective regulatory authority.
The officers, managers, employees and agents of the Sole Member
additionally are deemed to agree to: (i) Comply with the U.S. federal
securities laws and the rules and regulations thereunder and (ii)
cooperate with the SEC and ISE in respect of the SEC's oversight
responsibilities regarding Maple Merger Sub and ISE and the self-
regulatory functions and responsibilities of ISE. Section 14.3 of the
DE Operating Agreement provides that the Sole Member and its officers,
managers, employees and agents, by virtue of their acceptance of such
position, shall be deemed to irrevocably submit to the jurisdiction of
the United States federal courts, the SEC and ISE, as applicable, for
the purposes of any suit, action or proceeding pursuant to the U.S.
federal securities laws and the rules and regulations thereunder
arising out of, or relating to, the activities of Maple Merger Sub, and
by virtue of their acceptance of any such position, shall be deemed to
waive, and agree not to assert by way of motion, as a defense or
otherwise in any such suit, action or proceeding, any claims that it or
they are not personally subject to the jurisdiction of the United
States federal courts, the SEC or ISE that the suit, action or
proceeding is an inconvenient forum or that the venue of the suit,
action or proceeding is improper, or that the subject matter of that
suit, action or proceeding may not be enforced in or by such courts or
agency. The Sole Member and its officers, managers, employees and
agents also agree that they will maintain an agent, in the United
States, for the service of process of a claim arising out of, or
relating to, the activities of Maple Merger Sub, and agree to notify
the other parties hereto of the name and address of such agent.
    Finally, the DE Operating Agreement contains provisions designed to
ensure that any changes to the DE Operating Agreement be first reviewed
by ISE to determine whether such change must be filed with the SEC. For
example, Section 15.2 of the DE Operating Agreement provides that
before any amendment to any provision of the DE Operating Agreement
shall be effective, such amendment shall be submitted to ISE and if ISE
determines that such amendment must be filed with, or filed with and
approved by, the SEC before the amendment may be effective under
Section 19 of the Exchange Act and the rules promulgated under the
Exchange Act or otherwise, then the proposed amendment to the DE
Operating Agreement shall not be effective until filed with, or filed
with and approved by, the SEC, as the case may be.

ISE Holding's Certificate of Incorporation and Bylaws

    The Exchange proposes to amend certain provisions of the
Certificate of Incorporation and Bylaws (together the ``Corporate
Documents'') of ISE Holdings in connection with the contemplated
ownership and operation of two (2) national securities exchanges by
Direct Edge. As a result of ISE Holdings owning a 31.54% equity
interest in Direct Edge and possessing certain contractual rights and
obligations with respect to Direct Edge, ISE Holdings may, in the
future, control, indirectly subsidiary exchanges of Direct Edge.
Accordingly, the Exchange proposes to broaden certain references that
are currently limited to ISE (the sole registered national securities
exchange controlled by ISE Holdings) to cover these two contemplated
Direct Edge subsidiary exchanges. Thus, the Exchange proposes to
replace certain references to ISE with each ``Controlled National
Securities Exchange.'' These references appear in the ownership and
voting limitations sections of the Corporate Documents, as well as
other miscellaneous sections, including, but not limited to, the
confidentiality section, the books and records section,

the compliance with laws section and the amendments section.

ISE Rules

    The Exchange proposes to amend the language in Rule 312 (Limitation
on Affiliation between the Exchange and Members) to reflect that this
provision now covers Maple Merger Sub, as an operator of the Facility.
    Subsequent to the effectuation of the transactions discussed above,
ISE Holdings will have a 31.54% equity interest in Direct Edge, which
wholly owns and operates Direct Edge ECN LLC (``DE ECN'') which
displays its quotes on ISE. DE ECN currently, and will continue to
after the transactions are effected, routes orders into ISE Stock. Due
to the combination of ISE Holdings owning a 31.54% equity interest in
DE ECN's parent company, Direct Edge, and DE ECN routing orders into
ISE Stock, DE ECN will be deemed to be a facility of ISE, as that term
is defined in Section 3(a)(2) of the Exchange Act.
    Further, upon closing of the transaction, ISE and Maple Merger Sub
will be affiliated with DE ECN, which is a member of ISE and a wholly
owned subsidiary of Direct Edge.
    Recognizing that the Commission has previously expressed concern
regarding (1) the potential for conflicts of interest in instances
where an exchange is affiliated with one of its members, and (2) the
potential for informational advantages that could place an affiliated
member of an exchange at a competitive advantage vis-[agrave]-vis the
other non-affiliated members, ISE proposes to amend Rule 312 to permit
the proposed affiliation subject to several conditions and limitations.
    Accordingly, the Exchange is proposing to adopt subsection (b) to
Rule 312 to require that for so long as the Exchange is affiliated with
DE ECN or DE ECN is a facility of the Exchange: \14\ (1) Financial
Industry Regulatory Authority (``FINRA''), a self-regulatory
organization unaffiliated with the Exchange or any of its affiliates,
will carry out oversight and enforcement responsibilities as the
designated examining authority designated by the Commission pursuant to
Rule 17d-1 of the Exchange Act with the responsibility for examining DE
ECN for compliance with applicable financial responsibility rules; (2)
the Exchange shall contract with a non-affiliated self-regulatory
organization to regulate and oversee the activities of DE ECN, pursuant
to Rule 17d-2 under the Exchange Act; (3) the Exchange shall provide
said non-affiliated self-regulatory organization with information
regarding all exception reports, alerts, complaints, trading errors,
cancellations, investigations, and enforcement matters (collectively,
``Exceptions'') in which DE ECN is identified as a participant that has
potentially violated Exchange or SEC rules, in an easily accessible
manner, and said non-affiliated self-regulatory organization shall
provide a report to the Exchange quantifying Exceptions on not less
than a quarterly basis; (4) the Exchange, on behalf of Direct Edge,
shall establish and maintain procedures and internal controls
reasonably designed to ensure that DE ECN does not develop or implement
changes to its systems on the basis of nonpublic information obtained
as a result of its affiliation with the Exchange until such information
is available generally to similarly situated members of the Exchange in
connection with the provision of inbound order routing to the Exchange;
(5) in the event that DE ECN acts as an introducing broker for
subscribers of DE ECN who are not members of the Exchange, then DE
ECN's role as introducing broker is limited to its role as introducing
broker to DE ECN; (6) DE ECN will not engage in any business other than
operating as an ECN and other than acting as an introducing broker as
described above; (7) the affiliation of DE ECN is subject to the
conditions set forth above and is granted on a temporary basis, for not
longer than one year from the date of Commission approval of this
filing.
---------------------------------------------------------------------------

    \14\ E-mail from Joseph W. Ferrarro III, Associated General
Counsel, Exchange, to Heidi Pilpel, Attorney, Division of Trading
and Markets, Commission, dated November 7, 2008.
---------------------------------------------------------------------------

    The Exchange proposes to adopt subsection (c) of ISE Rule 2108
(Order Routing and Route Out Facility) to expand the scope of the rule
to cover DE ECN. Specifically, proposed Rule 2108(c), requires that the
books, records, premises, officers, directors, agents, and employees of
the DE ECN, as a facility of the Exchange, shall be deemed to be the
books, records, premises, officers, directors, agents, and employees of
the Exchange for purposes of and subject to oversight pursuant to the
Exchange Act. The books and records of the DE ECN, as a facility of the
Exchange, shall be subject at all times to inspection and copying by
the Exchange and the Commission.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Exchange Act,\15\ in general,
and with Sections 6(b)(1) and (b)(5) of the Exchange Act,\16\ in
particular, in that the proposal enables the Exchange and the Facility
to be so organized as to have the capacity to be able to carry out the
purposes of the Exchange Act and to comply with and enforce compliance
by members and persons associated with members with provisions of the
Exchange Act, the rules and regulations thereunder, and SRO rules, and
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(1), (5).
---------------------------------------------------------------------------

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

    The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    A. by order approve such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act.

Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (www.sec.gov/
rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2008-85 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2008-85. 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 the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2008-85 and should be
submitted on or before December 8, 2008.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-27157 Filed 11-14-08; 8:45 am]

BILLING CODE 8011-01-P


AGENDA

FIFRA SCIENTIFIC ADVISORY PANEL (SAP)

OPEN MEETING

May 12-15, 2009

FIFRA SAP WEB SITE http://www.epa.gov/scipoly/sap/

OPP Docket Telephone:<PHONE_NUMBER>

Docket Number: EPA-HQ-OPP-2009-0104

U.S. Environmental Protection Agency

Conference Center - Lobby Level

One Potomac Yard (South Bldg.)

2777 S. Crystal Drive, Arlington, VA 22202

Scientific Issues Associated with The Ecological Significance of

Atrazine Effects on Primary Producers in Surface Water Streams in the
Corn

and Sorghum Growing Region of the United States (Part II)

Please note that all times are approximate (see note at end of Agenda).

Tuesday, May 12, 2009

  9:00 A.M.	Opening of Meeting and Administrative Procedures –
Sharlene Matten, Ph.D., Designated Federal Official, Office of Science
Coordination and Policy, EPA

  9:10 A.M. 	Introduction and Identification of Panel Members – Steven
Heeringa, Ph.D., FIFRA Scientific Advisory Panel Chair, Daniel Schlenk,
Ph.D., FIFRA Scientific Advisory Panel Session Chair

  9:20 A.M.	Welcome and Opening Remarks – Steven Bradbury, Ph.D.,
Deputy Director, Office of Pesticide Programs (OPP), EPA

  9:30 A.M.	Goals and Objectives – Donald Brady, Ph.D., Director,
Environmental Fate and Effects Division (EFED), OPP, EPA

  9:40 A.M.	Introduction and Background – Mark Corbin, M.S., Senior
Environmental Scientist, EFED, OPP, EPA

10:10 A.M.	BREAK

10:25 A.M.  	Method for Assessing Ecological Levels of Concerns for
Atrazine Exposures in Freshwater Systems – Russell Erickson, Ph.D.,
Research Chemist, Mid-Continent Ecology Division, Office of Research and
Development, EPA

12:00 P.M.	LUNCH

 1:00  P.M.	Analysis of the AEEMP: Characteristics and Extent of
Watersheds that Exceed the Atrazine LOC – Nelson Thurman, M.S., Senior
Science Advisor, EFED, OPP, EPA

  2:15 P.M.	Examination of an Approach for Translating Plant Assemblage
Toxicity Index Risk Factors into Water Quality Criteria Concentrations
– Charles Delos, M.S., Environmental Scientist, Health and Ecological
Criteria Division (HECD), Office of Science and Technology (OST), Office
of Water (OW), EPA

 2:45 P.M.	BREAK

 3:00 P.M.  	PUBLIC COMMENTS

 5:30 P.M.     ADJOURN

AGENDA

FIFRA SCIENTIFIC ADVISORY PANEL (SAP)

OPEN MEETING

May 12-15, 2009

FIFRA SAP WEB SITE http://www.epa.gov/scipoly/sap/

OPP Docket Telephone:<PHONE_NUMBER>

Docket Number: EPA-HQ-OPP-2009-0104

U.S. Environmental Protection Agency

Conference Center - Lobby Level

One Potomac Yard (South Bldg.)

2777 S. Crystal Drive, Arlington, VA 22202

Scientific Issues Associated with The Ecological Significance of

Atrazine Effects on Primary Producers in Surface Water Streams in the
Corn

and Sorghum Growing Region of the United States (Part II)

Please note that all times are approximate (see note at end of Agenda).

Wednesday, May 13, 2009

  9:00 A.M.	Opening of Meeting and Administrative Procedures

Sharlene Matten, Ph.D., Designated Federal Official, Office of Science
Coordination and Policy, EPA

  9:05 A.M. 	Introduction and Identification of Panel Members

	Daniel Schlenk, Ph.D., FIFRA Scientific Advisory Panel Session Chair

  9:15 A.M.    PUBLIC COMMENTS Cont’d

10:15 A.M.	BREAK

10:30 A.M.	PUBLIC COMMENTS Cont’d

12:00 P.M.	LUNCH

  1:00 P.M. 	CHARGE TO PANEL: Model Effects Index (MEI) (Questions 1-3)

The foundation of the US EPA methodology for specifying levels of
concern (LOCs) for atrazine exposures in natural freshwater systems is
the relationship of atrazine exposure to effects on aquatic plant
community structure and function in microcosm and mesocosm (cosm)
studies.  Comparing effects among the different atrazine exposure
time-series in the cosm studies and extrapolating effects to other
exposure time-series in natural systems requires an effects model that
can be applied to any exposure time-series to provide a consistent,
quantitative index for toxic effects on the plant community (Model
Effects Index, MEI).  MEI values for cosm exposures are used to develop
an LOC for the MEI (LOCMEI) that best discriminates between cosm
exposures with and without significant effects.  MEI values for
exposures in natural systems can then be evaluated relative to this
LOCMEI.

Question 1:  The effects models considered in this document require
effects concentrations (ECs) from single-species plant toxicity tests
with atrazine that are consistent with respect to the nature and
magnitude of the toxic effects.  Reports on and reviews of such tests
provide ECs that vary widely in meaning, so a new review was conducted
and test results were used to develop a compilation of plant specific
growth rate vs. concentration relationships (Section IV.B).  Please
comment on the strengths and limitations of this review and synthesis of
plant toxicity tests for providing toxicity sensitivity distributions
for use in the atrazine assessment methodology.

  2:30 P.M.	BREAK

  2:45 P.M.	CHARGE TO PANEL: QUESTION 2

Question 2:  One source considered for the desired MEI is the
Comprehensive Aquatic Systems Model (CASM), a community simulation
model.  In response to a previous SAP review, this model was modified to
give a more realistic, dynamic simulation of a Midwestern stream
(CASMATZ2).  Sensitivity analyses for this revised model were conducted,
including some additional analyses suggested in the previous SAP review.
 These analyses indicated considerable sensitivity of risk
determinations to the selection of species toxicity parameters and to
various physicochemical variables (Section IV.C).  This indicates that
CASMATZ2 is more suitable for a site-specific, data-intensive assessment
than the generic application that is desired for these atrazine
assessments.  Please comment on the advisability and value of using
CASMATZ2 for generic assessments given these findings and on the nature
and feasibility of additional development efforts that would be needed
to implement this model.

  4:00 P.M.	CHARGE TO PANEL: QUESTION 3

Question 3:  An alternative source considered for the desired MEI was an
index of the severity of toxic impact on a plant assemblage (Plant
Assemblage Toxicity Index, PATI) based directly on single-species plant
toxicity relationships (Section IV.D).  Please comment on the merits and
limitations of this source for the MEI.  Based on the coherence of risk
evaluations between the PATI-based and the CASM-based methodologies, EPA
has concluded that the additional processes included in CASM are not
needed for the assessment methodology and that the PATI-based
methodology should be adopted.  Please comment on the merits of this
conclusion.

  5:30 P.M.	ADJOURN

AGENDA

FIFRA SCIENTIFIC ADVISORY PANEL (SAP)

OPEN MEETING

May 12-15, 2009

FIFRA SAP WEB SITE http://www.epa.gov/scipoly/sap/

OPP Docket Telephone:<PHONE_NUMBER>

Docket Number: EPA-HQ-OPP-2009-0104

U.S. Environmental Protection Agency

Conference Center - Lobby Level

One Potomac Yard (South Bldg.)

2777 S. Crystal Drive, Arlington, VA 22202

Scientific Issues Associated with The Ecological Significance of

Atrazine Effects on Primary Producers in Surface Water Streams in the
Corn

and Sorghum Growing Region of the United States (Part II)

Please note that all times are approximate (see note at end of Agenda).

Thursday, May 14, 2009

  9:00 A.M.	Opening of Meeting and Administrative Procedures

Sharlene Matten, Ph.D., Designated Federal Official, Office of Science
Coordination and Policy, EPA

  9:05 A.M. 	Introduction and Identification of Panel Members

	Daniel Schlenk, Ph.D., FIFRA Scientific Advisory Panel Session Chair

  9:10 A.M. 	Follow-up from Previous Day’s Discussion

	Environmental Fate and Effects Division, Office of Pesticide Programs,
EPA

  9:30 A.M.	CHARGE TO PANEL: Agency’s Watershed Analysis (Questions
4-5)

The Agency identified three sites that exceeded the PATI LOCMEI in
multiple years and six sites that exceeded the LOCMEI in one year
(Section V).  Based on the results of the Agency’s watershed analysis
in Section VI to identify additional sites that might exceed the
atrazine LOC, US EPA proposes two questions for the SAP:

Question 4: Based on an analysis of watershed characteristics of the 40
monitoring sites, the US EPA concluded that the presence of soils that
either have a high runoff potential or are in hydrologic soil group C or
D, and have a shallow layer with a moderately low saturated hydraulic
conductivity best distinguish sites that exceed the LOC in multiple
years from those that do not exceed the LOC.  Please comment on the
merits of the watershed criteria the Agency used to identify watersheds
that might exceed the atrazine LOC.

10:30 A.M.	BREAK

10:45 A.M.	Discussion of Charge Question 4 Cont’d

12:00 P.M.	LUNCH

  1:00 P.M.	CHARGE TO PANEL: QUESTION 5

Question 5: Neither atrazine use intensity or rainfall data (annual or
monthly) correlate positively with watersheds that exceed the LOC. The
Agency noted that the monitoring site selection already focused on areas
with sufficient atrazine use to potentially result in high atrazine
exposures in streams.  Please comment on the Agency’s proposed
approach to establish a minimum criteria for atrazine use intensity (>
0.1 lb ai/A) and rainfall (>23 inches annually).

  2:30 P.M. 	BREAK

  2:45 P.M.  	Panel Discussion

  5:30 P.M.	ADJOURN

Please be advised that agenda times are approximate; when the discussion
for one topic is completed, discussions for the next topic will begin.
For further information, please contact the Designated Federal Official
for this meeting, Sharlene Matten, via telephone:<PHONE_NUMBER>; fax:
(202) 564-8382; or email<EMAIL_ADDRESS>
 PAGE

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