Federal Register / Vol. 65, No. 100 / Tuesday, May 23, 2000 / Notices 33383

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

2 17 CFR 240.19b–4.

3See May 12, 2000 letter from Kathleen M. Boege,

Associate General Counsel, CHX, to Nancy J.

Sanow, Assistant Director, Division of Market

Regulation, SEC (‘‘Amendment No. 1’’).

Amendment No. 1 states that the subject E-Session

credit will be available through October 1, 2000.

4 15 U.S.C. 78s(b)(3)(A)(ii).

5On October 13, 1999, the Commission approved,

on a pilot basis, the CHX’s proposed rule change

that allowed the CHX to implement an extended

hours trading session. See Securities Exchange Act

Release No. 42004 (October 13, 1999), 64 FR 56548

(October 20, 1999) (SR–CHX–99–16). The E-Session

is currently approved to continue through October

1, 2000. See Securities Exchange Act Release No.

42463 (February 28, 2000), 65 FR 11817 (March 6,

2000) (SR–CHX–00–02).

disclosure, election form,

acknowledgment form, or offering letter,

regarding the offering of the LRR,

including the dates(s) used, and (ii)

Dean Witter will maintain copies of any

other written materials or scripts for

presentations used by registered

representatives regarding the LRR,

including the dates used; (c) records

showing information about each LRR

purchase that occurs, including (i) the

following information to be maintained

by Northbrook: The name of the

Contract owner; the Contract number;

the election form (and separate

acknowledgment form, if any, used to

obtain the Contract owner’s

acknowledgment of the statements

required in Condition No. 1 above),

including the date such election or

acknowledgment form was signed; the

date of birth, address and telephone

number of the Contract owner; the issue

date of the LRR; the amount of the

Contract’s value on that date; and

persistency information relating to the

Contract (date of any subsequent

withdrawals and withdrawal charges

paid); and (ii) the following information

to be maintained by Dean Witter: The

name of the Contract owner, the

Contract number, the registered

representative’s name, CRD number,

firm affiliation, branch office address

and telephone number; the name of the

registered representative’s broker-dealer;

and the amount of commissions paid to

the registered representative that relates

to the LRR; and (d) each of Northbrook

and Dean Witter will maintain logs

showing any Contract owner complaints

received by it about the LRR, state

insurance department inquiries to it

about the LRR, or litigation, arbitration

or other proceedings to which it is a

party regarding the LRR.

5. Applicants will include the

following information on the logs

referred to in Condition No. 4(d) above:

date of complaint or commencement of

proceeding; name and address of the

person making the complaint or

commencing the proceeding; nature of

the complaint or proceeding; and

persons named or involved in the

complaint or proceeding.

6. Applicants will retain (i) the

records specified in Condition Nos. 4(a)

and (d) above for six years from creation

of the record; (ii) the records specified

in Condition No. 4(b) above for six years

after the date of last use; and (iii) the

records specified in Condition No. 4(c)

for five years from the Rider Date. The

records referred to in these conditions

will be prepared and retained, for the

periods specified herein, by Northbrook

and Dean Witter. Nevertheless, upon

request of the Commission or its staff,

Northbrook and Dean Witter shall

coordinate the prompt assembly of such

records for review at a single easily

accessible location.

Conclusion

For the reasons discussed above,

Applicants submit that the LRR offer is

necessary or appropriate in the public

interest and consistent with the

protection of investors and the purposes

fairly intended by the policies and

provisions of the Act. Applicants submit

that the requested order should

therefore be granted.

For the Commission, by the Division

of Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–12865 Filed 5–22–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42784; File No. SR–CHX–

00–12]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change and

Amendment No. 1 by the Chicago

Stock Exchange, Incorporated Relating

to Fees for the E-Session

May 15, 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 May 1,

2000, the Chicago Stock Exchange,

Incorporated (‘‘CHX’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’ or ‘‘SEC’’)

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the Exchange.

On May 15, 2000, the Exchange

amended the proposal. 3 The Exchange

has designated this proposal as one

establishing or changing a due, fee, or

other charge imposed by the CHX under

Section 19(b)(3)(A)(ii) of the Act,4

which renders the proposal effective

upon filing with the Commission. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend its

membership dues and fees schedule (the

‘‘Schedule’’) to provide Exchange

specialists and floor brokers with a

credit of $.25 per trade executed during

the Exchange’s extended hours trading

session (‘‘E-Session’’) 5 through October

1,200. The text of the proposed rule

change is below. Additions are in

italics. Deletions are in brackets.

MEMBERSHIP DUES AND FEES

* * * * *

M. Credits

1. Specialist Credits

Total monthly fees owned by a

specialist to the Exchange will be

reduced (but to no less than zero) by the

application of the following

[transaction] credits:

a. No change.

b. No change.

c. E-Session Credits. A credit of $.25

per trade executed during the E-Session.

This credit shall be available through

October 1, 2000.

2. Floor Broker Credits.

a. No change.

b. No change.

c. E-Session Credits. Total monthly

fees owned by a floor broker to the

Exchange will also be reduced (but to no

less than zero) by the application of an

E-Session Credit. ‘‘E-Session Credit’’

means a credit of $.25 per trade

executed during the E-Session. This

credit shall be available through October

1, 2000.

* * * * *

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

Exchange has prepared summaries, set

forth in Sections A, B, and C below, of

33384 Federal Register / Vol. 65, No. 100 / Tuesday, May 23, 2000 / Notices

6 15 U.S.C. 78f(b)(4).

7 15 U.S.C. 78s(b)(3)(A)(ii).

8 17 CFR 240.19b–4(f)(2).

9The Commission notes that the proposal may

raise questions concerning payment for order flow.

To the extent that it does raise such issues,

exchange members should consider best execution

and disclosure obligations they may have under the

federal securities laws in general, and particularly

under Rules 10b–10 and 11Ac1–3 under the Act. 17

CFR 240.10b–10 and 17 CFR 240.11Ac1–3,

respectively.

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

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

On October 29, 1999, the Exchange

implemented the E-Session, which

permits investors to submit limit orders

for execution until 5:30 p.m., Central

Time. To encourage members to seek

additional order flow during the ESession, the Exchange developed an ESession credit program, necessitating a

change to the Schedule. The proposal

amends the Schedule to provide

Exchange specialists and floor brokers

with a credit of $.25 per trade executed

during the E-Session through October 1,

2000.

2. Statutory Basis

The Exchange believes the proposed

rule change is consistent with Section

6(b)(4) of the Act 6 in that it provides for

the equitable allocation of reasonable

dues, fees and other charges among its

members.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange 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 solicited

or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) of the Act 7 and

subparagraph (f)(2) of Rule 19b–4

thereunder,8 because it involves a due,

fee, or other charge. At any time within

60 days of the filing of the proposed rule

change, the Commission may summarily

abrogate such rule change if it appears

to the Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.9

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposal 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

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 number

SR–CHX–00–12, and should be

submitted by June 13, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–12928 Filed 5–22–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42790; File No. SR–NASD–

00–27]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the National Association of Securities

Dealers, Inc., Amending the Nasdaq

By-Laws and Restated Certificate of

Incorporation

May 16, 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 May 11,

2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its wholly

owned subsidiary The Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’) 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 Nasdaq. 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

Nasdaq is proposing to amend its ByLaws and Restated Certificate of

Incorporation. Additions are italicized,

deletions are bracketed.

By-Laws of the NASDAQ Stock Market,

Inc.

Article I Definitions

When used in these By-Laws, unless

the context otherwise requires, the term:

* * * * *

(i) ‘‘Director’’ means a member of the

Board[, excluding the Chief Executive

Officer of the NASD];

(j) ‘‘Industry Director’’ or ‘‘Industry

member’’ means a Director (excluding

the President or the Chief Executive

Officer) or Nasdaq Listing and Hearing

Review Council or committee member

who (1) is or has served in the prior

three years as an officer, director, or

employee of a broker or dealer,

excluding an outside director or a

director not engaged in the day-to-day

management of a broker or dealer; (2) is

an officer, director (excluding and

outside director), or employee of an

entity that owns more than ten percent

of the equity of a broker or dealer, and

the broker or dealer accounts for more

than five percent of the gross revenues

received by the consolidated entity; (3)

owns more than five percent of the

equity securities of any broker or dealer,

whose investments in brokers or dealers

exceed ten percent of his or her net

worth, or whose ownership interest

otherwise permits him or her to be

engaged in the day-to-day management

of a broker or dealer; (4) provides

professional services to brokers or

dealers, and such services constitute 20

percent or more of the professional

revenues received by the Director or

member or 20 percent or more of the

gross revenues received by the

Director’s or member’s firm or

partnership; (5) provides professional

services to a director, officer, or

employee of a broker, dealer, or

corporation that owns 50 percent or

more of the voting stock of a broker or

dealer, and such services relate to the

director’s, officer’s, or employee’s

professional capacity and constitute 20