24248 Federal Register / Vol. 65, No. 80 / Tuesday, April 25, 2000 / Notices

20 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3 17 CFR 240.19b–4(f)(6).

4See Securities Exchange Act Release No. 37977

(November 26, 1996), 61 FR 63889 (December 2,

1996.)

5AUTOM is an electronic order routing and

delivery system for option orders.

6See Securities Exchange Act Release No. 35033

(November 30, 1994), 59 FR 63152 (December 7,

1994).

7The program was initially approved in 1994 as

a one year pilot. See Securities Exchange Act

Release No. 34606 (August 26, 1994), 59 FR 45741

(September 2, 1994). It has subsequently been

extended and revised. See Securities Exchange Act

Release Nos. 35028 (November 30, 1994), 59 FR

63151 (December 7, 1994); 35429 (March 1, 1995),

60 FR 12802 (March 8, 1995); 36122 (August 18,

1995), 60 FR 44530 (August 28, 1995); 37254

(August 5, 1996), 61 FR 42080 (August 13, 1996);

38924 (August 11, 1997), 62 FR 44160 (August 19,

1997); 39401 (December 4, 1997), 62 FR 65300

(December 11, 1997); and 40876 (December 31,

1998), 64 FR 1849 (January 12, 1999). The

Commission granted the pilot permanent approval

in July 1999. See Securities Exchange Act Release

No. 41588 (July 1, 1999), 64 FR 37185 (July 9, 1999).

8Pursuant to Rule 1014(g)(i), a controlled account

includes any account controlled by or under

common control with a member broker-dealer.

proposed rule change (SR–Phlx–99–39),

as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.20

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–10258 Filed 4–24–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42699; File No. SR–Phlx–

99–04]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.

Relating to Enhanced Specialists

Participation in Wheel Trades

April 18, 2000.

Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 14,

1999, the Philadelphia Stock Exchange,

Inc. (‘‘Phlx’’ or ‘‘Exchange’’), 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 Phlx. The

proposed rule change was filed by the

Exchange as a ‘‘non-controversial’’ rule

change under Rule 19b–4(f)(6) 3 under

the Act. The Commission is publishing

this notice to solicit comments on the

proposed rule change from interested

persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Phlx proposal amends Options

Floor Procedure Advise F–24, AUTO–X

Contra-Party Participation (The Wheel)

(‘‘Advise F–24’’), as it relates to

Enhanced Specialist Participation in

Wheel trades. Specifically, the proposal

modifies paragraph (e) to state that

where the Enhanced Specialist

Participation of Rule 1014(g)(ii) applies,

the specialist shall receive an enhanced

participation ‘‘substantially equivalent

to twice the number of contracts as

other crowd participants,’’ rather than

‘‘twice the contracts,’’ as the text of

Advise F–24 previously stated.

The proposal retains the provision

that the Enhanced Specialist

Participation on the Wheel requires the

unanimous consent of Wheel

participants, but adds the requirement

that it be approved by the Options

Committee Chairman or his designee.

In addition, the proposal amends

paragraph (e) to clarify that the Wheel

will rotate in increments depending

upon the size of the AUTO–X guarantee,

not the size of each individual AUTO–

X order.4

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

Phlx includes statements concerning the

purpose of and basis for the proposed

rule change and discussed any comment

it received on the proposed rule change.

The text of these statements may be

examined at the places specified in Item

IV below. The Phlx has prepared

summaries, set forth in Section A, B,

and C below, of the most significant

aspects of such statement.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The Wheel is an automated

mechanism for assigning trade

participation among specialists and

Registered Options Traders (‘‘ROTs’’) on

a rotating basis, as contra-side

participants to AUTO–X orders. AUTO–

X is the automatic execution feature of

the Exchange’s Automated Options

Market (‘‘AUTOM’’) system,5 which

provides customers with automatic

execution of eligible option orders at

displayed markets.

The purpose of the Wheel is to

increase the efficiency of order

execution through AUTO–X by

including floor traders in the automated

assignment of contra-parties to

incoming AUTO–X orders. Thus, the

Wheel is intended to make AUTO–X

more efficient, as contra-side

participation is assigned automatically,

and no longer entered manually. The

Exchange’s detailed Wheel provisions

appear as Advise F–24.6

The Enhanced Specialist Participation

is a program whereby an equity or index

option specialist receives an

‘‘enhanced’’ or additional ‘‘split,’’

meaning a higher participation in the

execution of an order.7 The enhanced

parity split applies to: (i) All index

options; (ii) all new option classes

allocated to a specialist during the year;

and (iii) 50% of a specialist’s equity

option issues, which issues are

designated by the specialist and

approved by the Exchange’s Allocation,

Evaluation, and Securities Committee.

The program also permits specialists to

revise the list of eligible equity options

(i.e., the designated equity options for

which the specialist is entitled to

receive the enhanced parity split) on a

quarterly basis. Pursuant to Rule

1014(g)(ii), the enhanced split applies in

those situations where an equity or

index option specialist is on parity with

one or more controlled accounts 8 for

orders involving more than five

contracts.

As of the date this proposed change

to the Wheel allocation was filed, the

enhanced specialist split was defined by

Rule 1014(g)(ii) as follows: when the

specialist was on parity with one

controlled account, the specialist

received 60% of the contracts and the

controlled account received the

remaining 40%. When the specialist

was on parity with two controlled

accounts, the specialist received 40% of

the contracts and each controlled

account received 30%; and when the

specialist was on parity with three or

more controlled accounts, the specialist

was counted as two crowd participants

for purposes of allocating the contracts.

In all of these situations, if a customer

is on parity, the customer could not

receive a lesser allotment than any other

crowd participant, including the

specialist.

In August of 1998, the Phlx amended

Advice F–24 to allow specialists to

receive twice the number of contracts as

other Wheel participants to achieve an

enhanced participation consistent with

the provisions of Phlx Rule 1014(g)(ii).

The enhanced participation was

implemented in the form of an

Federal Register / Vol. 65, No. 80 / Tuesday, April 25, 2000 / Notices 24249

9Although, as described above, Rule 1014(g)(ii))

implements a three-tiered scheme, allocating 60%

or 40% of contracts to the specialist when one or

two other controlled accounts are on parity,

respectively, the thrust of the rule resided in the

‘‘two-for-one’’ allocation of its third tier, applied

when three or more other controlled accounts were

on parity. Due to systems reasons, this two-for-one

enhanced participation was adopted for all trades

assigned by the Wheel, regardless of the number of

participants on parity. See Securities Exchange Act

Release No. 40370 (August 27, 1998), 63 FR 47077

(September 3, 1998). See also infra, note 10.

10The Commission notes that the Exchange filed

a proposed rule change to amend Rule 1014(g)(ii)—

the predicate of Advice F–24—to state that when

the specialist is at parity with three or more

controlled accounts, the enhanced specialist

participation will be 30%, rather than ‘‘two-forone.’’ See Securities Exchange Act Release No.

42161 (November 19, 1999), 64 FR 66958

(November 30, 1999) (File No. SR–Phlx–99–39).

The Commission has today approved this other

proposed rule change. See Securities Exchange Act

Release No. 34–42700, April 18, 2000. The

Commission notes, however, that enhanced

participations provided to specialists for Wheel

trades will continue to be governed by the standard

approved in this Order (i.e., substantially

equivalent to twice the number of contracts as other

crowd participants). The Phlx may consider in the

future whether to propose a further change to

Advice F–24 to apply the new, 30% enhanced

specialist split to Wheel trades, as well. Telephone

conversation between Nandita Yagnik, the Phlx,

and Michael Loftus and Ira Brandriss, Division of

Market Regulation, the Commission, January 6,

2000.

11See Advice F–24(e), which specifies that for

AUTO–X orders consisting of 11 to 25 contracts,

minimum allocations for Wheel participants must

be approximately 5 contracts.

12Attached as Exhibit C to the Phlx’s filing,

which is available for public inspection at the

Commission’s Public Reference Room, is a chart

which shows how the enhanced split will operate

for different size trading crowds and with different

AUTO–X guarantees.

13 15 U.S.C. 78f.

14 15 U.S.C. 78f(5).

15 15 U.S.C. 78s(b)(3)(A).

16 17 CFR 240.19b–4(f)(6).

17 In reviewing this proposal, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

additional sign-on for the specialist on

the Wheel rotation.9

Thereafter, however, the Phlx learned

that due to systems configurations that

could not be altered without significant

programming change, the additional

specialist sign-on did not result in the

specialist receiving twice the number of

contracts. More specifically, the system

was treating the second sign-on like an

ROT sign-on as opposed to that of a

specialist. As a result, because of the

many variables that determine how

contracts are allocated among

participants, the specialist would not

always receive twice the number of

contracts for trade.

Consequently, the Phlx proposed to

amend Advice F–24 to delete the

language stating that the specialist will

receive twice the number of contracts.

Instead, under the new language of the

proposal, the specialist will receive an

enhanced participation that is

substantially equivalent to twice the

number of contracts as other crowd

participants.10 Actual participation will

be determined by a number of factors,

including the number of participants on

the Wheel, and the AUTO–X guarantee

for the particular issue.

The Phlx represents that although

reconfiguring the Wheel to allow a

second specialist sign-on would involve

a significant programming change,

reconfiguring the specialist frequency

and the number of contracts received

per participation can be achieved

without a significant programming

change. Thus, the Phlx’s Regulatory

Services Department (or other Exchange

personnel charged with this function)

will configure specialist Wheel

participation under the proposal on a

crowd-by-crowd basis based upon the

factors above.

The Phlx further represents that it

will monitor these factors and the actual

participation levels on a monthly basis

to ensure that specialist Wheel

enhanced participation in fact remains

at a level substantially equivalent to

twice the number of contracts compared

to other participants on the Wheel.

For example, if there is a specialist

and three ROTs for a particular issue,

and the AUTO–X guarantee is 25

contracts (such that each order will be

allocated 5 contracts to each Wheel

participant),11 Regulatory Services

personnel will configure the Wheel such

that the specialist would participate

after two ROTs (i.e., specialist, first

ROT, second ROT, specialist, third ROT,

first ROT, specialist). At the end of the

trading day, the specialist should

receive an enhanced split approximately

equal to twice the number of contracts

as other Wheel participants.12

Enhanced participation on the Wheel

will continue to be contingent upon

unanimous consent of the Wheel

participants in a particular option issue,

a provision intended to ensure

implementation only where the ROTs

on the Wheel agree that more

participation for the specialist and

hence, less for the ROTs, is fair and

appropriate. The proposal adds a new

clause requiring the approval of the

Chairman of the Options Committee or

his designee.

The proposal also amends the text of

Advice F–24 to clarify that the Wheel

will rotate in increments depending

upon the size of the AUTO–X guarantee,

not the size of each individual AUTO–

X order.

2. Statutory Basis

The Phlx believes that the rule change

is consistent with section 6 of the Act 13

in general, and with section 6(b)(5) of

the Act,14 in particular, which requires

that the Exchange’s rules be designed to

promote just and equitable principles of

trade, prevent fraudulent and

manipulative acts and practices, remove

impediments to and perfect the

mechanism of a free and open market

and a national market system, as well as

protect investors and the public interest.

The purpose of Advice F–24 is to

fairly and efficiently extend the

enhanced specialist split to the Wheel.

In originally adopting the enhanced

specialist split, the Exchange identified

the need to attract new specialist units

as well as retain and encourage current

specialist units to vigorously trade

existing options and aggressively seek

and apply for newly allocated options.

The Phlx believes the proposed rule

change furthers these purposes.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx does not believe that the

proposed rule change will impose any

inappropriate burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments were either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change

The foregoing proposed rule change

has become effective pursuant to section

19(b)(3)(A) of the Act 15 and Rule 19b–

4(f)(6) thereunder 16 because the

proposed rule change (1) Does not

significantly affect the protection of

investors or the public interest; (2) does

not impose any significant burden on

competition; and (3) was to become

operative more than 30 days from the

date on which it was filed, and the Phlx

provided the Commission with written

notice of its intent to file the proposed

rule change at least five days prior to the

filing date.17

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether it is consistent with

the Act. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street, NW., Washington, DC 20549–

0609. Copies of the submission, all

subsequent amendments, all written

24250 Federal Register / Vol. 65, No. 80 / Tuesday, April 25, 2000 / Notices

18 17 CFR 200.30–3(a)(12).

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. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to File No.

SR–Phlx–99–04 and should be

submitted May 16, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.18

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–10259 Filed 4–24–00; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice 3297]

Culturally Significant Objects Imported

for Exhibition Determinations: ‘‘Arms

and Armor of 17th Century Virginia’’

AGENCY: Department of State.

ACTION: Notice.

SUMMARY: Notice is hereby given of the

following determinations: Pursuant to

the authority vested in me by the Act of

October 19, 1965 (79 Stat. 985, 22 U.S.C.

2459), the Foreign Affairs Reform and

Restructuring Act of 1998 (112 Stat.

2681, et seq.), Delegation of Authority

No. 234 of October 1, 1999, and

Delegation of Authority of October 19,

1999, I hereby determine that the object

to be included in the exhibition ‘‘Arms

and Armor of 17th Century Virginia,’’

imported from abroad for the temporary

exhibition without profit within the

United States, is of cultural significance.

This object is imported pursuant to a

loan agreement with a foreign lender. I

also determine that the exhibition or

display of the exhibit object at the

Jamestown Settlement Museum,

Williamsburg, VA from on or about May

1 to October 31, 2000 is in the national

interest. Public Notice of these

Determinations is ordered to be

published in the Federal Register.

FOR FURTHER INFORMATION CONTACT: For

further information, including a list of

exhibit objects, contact Jacqueline

Caldwell, Attorney-Adviser, Office of

the Legal Adviser, U.S. Department of

State (telephone: 202/619–6982). The

address is U.S. Department of State, SA–

44; 301 4th Street, SW., Room 700,

Washington, DC 20547–0001.

Dated: April 18, 2000.

William P. Kiehl,

Acting Assistant Secretary for Educational

and Cultural Affairs, Department of State.

[FR Doc. 00–10284 Filed 4–24–00; 8:45 am]

BILLING CODE 4710–08–U

DEPARTMENT OF STATE

[Public Notice Number 3278]

Notice of Meetings; International

Telecommunication Advisory

Committee (ITAC) and International

Telecommunication Advisory

Committee—Telecommunication

Standardization Sector (ITAC–T)

The Department of State announces

meetings of the U.S. International

Telecommunication Advisory

Committee (ITAC), and the U.S.

International Telecommunication

Advisory Committee—

Telecommunication Standardization

(ITAC–T) National Committee. The

purpose of the Committees is to advise

the Department on policy and technical

issues with respect to the International

Telecommunication Union and

international telecommunication

standardization. Except where noted,

meetings will be held at the Department

of State, 2201 C Street, NW.,

Washington, DC.

The ITAC will meet from 10 to noon

on April 26, 2000, at the Department of

State. The agenda consists of a debrief

of the meeting of the working group on

ITU reform and planning for

preparations for the ITU Council

meeting in July 2000.

The ITAC–T will meet from 9:30 to 4

on April 27, 2000, at the

Telecommunication Industry

Association offices on Wilson

Boulevard, Arlington, VA, and May 17,

2000 (at a location to be determined).

The agendas will both consist of

development of recommendations for

the ITU–T Study Programme for the

next study period, positions on the

alternative approval process, and other

preparations for the June ITU

Telecommunication Sector Advisory

Group (TSAG) and the October World

Telecommunication Sector Assembly

(WTSA). We regret the short notice due

to unanticipated schedule changes for

the ITAC Chairman.

Members of the general public may

attend these meetings. Entrance to the

Department of State is controlled;

people intending to attend any of the

ITAC meetings should send a fax to

(202) 647–7407 not later than 24 hours

before the meeting. This fax should

display the name of the meeting (ITAC

T, or US Study Group A or D, and date

of meeting), your name, social security

number, date of birth, and

organizational affiliation. One of the

following valid photo identifications

will be required for admission: US

driver’s license, passport, US

Government identification card. Enter

from the C Street Lobby; in view of

escorting requirements, nonGovernment attendees should plan to

arrive not less than 15 minutes before

the meeting begins. Actual room

assignments may be determined at the

lobby or by calling the Secretariat at 202

647–0965/2592.

Attendees may join in the

discussions, subject to the instructions

of the Chair. Admission of members will

be limited to seating available.

Dated: April 19, 2000.

Julian E. Minard,

Secretariat to the ITAC–T, Department of

State.

[FR Doc. 00–10272 Filed 4–20–00; 2:33 pm]

BILLING CODE 4710–45–U

DEPARTMENT OF TRANSPORTATION

Applications of Trans Borinquen Air,

Inc. for Issuance of New Certificate

Authority

AGENCY: Department of Transportation.

ACTION: Notice of Order to Show Cause

(Order 2000–4–20); Dockets OST–99–

6173 and OST–00–6777.

SUMMARY: The Department of

Transportation is directing all interested

persons to show cause why it should

not issue orders (1) finding that Trans

Borinquen Air, Inc., fails to meet the

U.S. citizenship requirements of 49

U.S.C. 41102 and 40102(a)(15), and (2)

denying it certificates to engage in

interstate and foreign charter all-cargo

transportation.

DATES: Persons wishing to file

objections should do so no later than

May 3, 2000.

ADDRESSES: Objections and answers to

objections should be filed in Dockets

OST–99–6173 and OST–00–6777 and

addressed to Department of

Transportation Dockets (SVC–124,

Room PL–401), Department of

Transportation, 400 Seventh Street,

SW., Washington, DC 20590 and should

be served upon the parties listed in

Attachment A to the order.

FOR FURTHER INFORMATION CONTACT: Mr.

Galvin Coimbre, Air Carrier Fitness