40712 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Notices

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

2 17 CFR 240.19b–4.

3See Letter from Ellen Neely, Vice President and

General Counsel, CHX, to Nancy Sanow, Assistant

Director, Division of Market Regulation

(‘‘Division’’), SEC, dated May 4, 2000 (‘‘Amendment

No. 1’’). Amendment No. 1 adds a product

description delivery requirement for certain series

of Investment Company Units (‘‘ICUs’’) and clarifies

the timing for compliance with eligibility criteria

relating to indexes underlying a series of Portfolio

Depository Receipts (‘‘PDRs’’). Amendment No. 1 is

more fully described in Section II below.

4 17 CFR 240.19b–4(e). Rule 19b–4(e) permits selfregulatory organizations (‘‘SROs’’) to list and trade

new derivatives products that comply with existing

SRO trading rules, procedures, surveillance

programs and listing standards, without submitting

a proposed rule change under Section 19(b). See

Securities Exchange Act Release No. 40761

(December 8, 1998), 63 FR 70952 (December 22,

1998).

5See Securities Exchange Act Release No. 37589

(August 21, 1996), 61 FR 44370 (August 28, 1996)

(ICUs) and Securities Exchange Act Release No.

39076 (September 15, 1997), 62 FR 49270

(September 19, 1997) (PDRs).

6See American Stock Exchange (‘‘Amex’’) Rules

1000 (Portfolio Depositary Receipts) and 1000A

(Index Fund Shares).

7See supra note 4.

8Thirteen stocks is the minimum number to

permit qualification as a regulated investment

company under Subchapter M of the Internal

Revenue Code. Under Subchapter M of the Internal

Revenue Code, for a fund to qualify as regulated

investment company the securities of a single issuer

can account for no more than 25% of a fund’s total

assets, and at least 50% of a fund’s total assets must

be comprised of cash (including government

securities) and securities of single issuers whose

securities account for less than 5% of the fund’s

total assets.

9See Amendment No. 1, supra note 3.

10The CHX represents that it understands that the

information described in this section will be

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42975; File No. SR–CHX–

00–14]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change and Amendment No. 1

Thereto by the Chicago Stock

Exchange, Inc. Relating to Generic

Listing Standards Applicable to Listing

Portfolio Depository Receipts and

Investment Company Units Pursuant

to Rule 19b–4(e) under the Securities

Exchange Act of 1934

June 22, 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 3,

2000, the Chicago Stock Exchange, Inc.

(‘‘CHX’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) the proposed

rule change as described in Items I and

II below, which Items have been

prepared by the Exchange. The CHX

filed Amendment No. 1 to the proposed

rule change on May 5, 2000.3 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons and to

approve the proposal, as amended, on

an accelerated basis.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend its

listing standards for Investment

Company Units (‘‘ICUs’’) (CHX Article

XXVIII, Rule 24) and Portfolio

Depositary Receipts (‘‘PDRs’’) (CHX

Article XXVIII, Rule 25) to provide

standards that permit listing and

trading, or trading pursuant to unlisted

trading privileges (‘‘UTP’’), of certain

products pursuant to Rule 19b–4(e)

under the Act.4 The Exchange also

proposes related amendments to CHX

Article XX, Rule 22, its minimum

trading variation rule. The text of the

proposed rule change is available upon

request from the Office of the Secretary,

CHX or the Commission.

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

CHX 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 III below. The Exchange has

prepared summaries, set forth in section

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 currently trades a

number of securities pursuant to UTP

under its listing standards for ICUs and

PDRs.5 These standards, found in CHX

Artlcle XXVIII, Rule 24 and Rule 25, are

similar to those maintained by other

exchanges.6 The Exchange’s proposed

amendments to CHX Article XXVIII,

Rules 24 and 25 would permit it to list

and trade ICUs and PDRs pursuant to

Rule 19b–4(e) under the Act.7 The

Exchange believes that application of

Rule 19b–4(e) to these securities will

further the intent of that rule by

allowing trading to begin in these

securities, subject to the proposed

generic standards, without the need for

notice and comment and Commission

approval. The Exchange believes that

this new procedure has the potential to

reduce time frame for bringing these

securities to market or for trading them

pursuant to UTP.

2. Generic Listing Criteria

The Exchange is proposing to

implement generic listing criteria that

are intended to ensure that a substantial

portion of the weight of an index or

portfolio underlying ICUs or PDRs is

composed of securities with substantial

market capitalization and trading

volume. The proposed amendments to

CHX Rules 24 and 25 provide that the

Exchange may approve for trading

pursuant to Rule 19b–4(e) a series of

ICUs or PDRs if the components that, in

the aggregate, account for at least 90%

of the weight of the underlying index or

portfolio have a minimum market value

of at least $75 million. In addition, the

component stocks representing at least

90% of the weight of the index or

portfolio must have a minimum

monthly trading volume during each of

the last six months of at least 250,000

shares.

Moreover, the most heavily weighted

component stocks in an underlying

index or portfolio cannot together

exceed 25% of the weight of the index

or portfolio, and the five most heavily

weighted component stocks cannot

together exceed 65% of the weight of

the index or portfolio. The index or

portfolio must include a minimum of 13

stocks,8 and all securities in an

underlying index or portfolio must be

listed on a national securities exchange

or The Nasdaq Stock Market (including

The Nasdaq SmallCap Market). Finally,

any series of ICUs or PDRs traded

pursuant to generic standards must meet

these eligibility criteria as the date of

the initial deposit of securities and cash

into the trust or fund.9

Under the proposed amendments to

CHX Rules 24 and 25, the underlying

index or portfolio will be calculated

based on either the market

capitalization, modified market

capitalization, price, equal-dollar or

modified equal-dollar weighting

methodology. In addition, if the index is

maintained by a broker-dealer, the

broker-dealer must erect a ‘‘fire wall’’

around the personnel who have access

to information concerning changes and

adjustments to the index or portfolio,

and the index must be calculated by a

third party who is not a broker-dealer.

The current index value must be

disseminated every 15 seconds over the

Consolidated Tape Association’s

Network B.10 Additionally, the

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Notices 40713

disseminated by or through the primary exchange

or another entity working with that exchange.

11 17 CFR 240.19b–4(e).

12Telephone conversation between Ellen Neely,

Vice President and General Counsel, CHX, and

Melinda Diller, Attorney, Division, SEC, on June 13,

2000.

13 15 U.S.C. 80a–24(d).

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

15 15 U.S.C. 78f(b)(5). 16 15 U.S.C. 78f(b)(5).

Reporting Authority must disseminate

for each series of ICUs or PDRs an

estimate, updated every 15 seconds, of

the value of a share of each series. This

estimate may be based, for example,

upon current information regarding the

required deposit of securities and cash

amount to permit creation of new shares

of the series or upon the index value.

A minimum of 100,000 shares of a

series of ICUs or PDRs must be

outstanding at the time trading begins.

The Exchange represents that it believes

that this minimum number is sufficient

to establish a liquid Exchange market at

the start of trading. The minimum

trading variation for a series of PDRs

must be 1⁄64 of $1.00 and, for ICUs, 1⁄16, 1⁄32 or 1⁄64 of $1.00, as determined by the

Exchange for a specific series.

The Exchange will implement written

surveillance procedures for the PDRs

and the ICUs that it trades pursuant to

Rule 19b–4(e). In addition, the Exchange

will comply with the recordkeeping

requirements of Rule 19b–4(e), and will

file Form 19b–4(e) for each series of

ICUs or PDRs within five business days

of commencement of trading.11

The provisions of CHX Rules 22 et

seq., 24 et seq. or 25 et seq. will apply

to all series of PDRs and ICUs listed

under Rule 19b–4(e). In addition to the

requirements of amended CHX Rules 22,

24 and 25, PDRs and ICUs will be

subject to Exchange procedures and

rules, discussed below, comparable to

those applied to existing PDRs and

ICUs.12

ICUs and PDRs are subject to the

Exchange’s rule relating to trading halts

due to extraordinary market volatility

(CHX Article IX, Rule 10A) and the

Exchange’s rule that provides discretion

to Exchange officials to halt trading in

specific securities under certain

circumstances (CHX Article IX, Rule

10(b)). In exercising the discretion

described in CHX Article IX, Rule 10(b),

appropriate Exchange officials may

consider a variety of factors, including

the extent to which trading is not

occurring in a stock underlying the

index or portfolio and whether other

unusual conditions or circumstances

detrimental to the maintenance of a fair

and orderly market are present.

Further, the Exchange will issue a

Notice to Members for each series to be

listed pursuant to Rule 19b–4(e). The

notice will describe the characteristics

of the securities and will inform

members of any obligation to deliver a

written product description or

prospectus, as applicable, to purchasers

of ICUs or PDRs. In addition, the notice

will inform members of their

responsibilities under Article VIII, Rule

25 (‘‘Business Conduct’’) in connection

with customer transactions in these

securities.

The proposal also requires members

and member organizations to provide

purchasers of a series of ICUs with a

product description of the terms and

characteristics of such securities in a

form prepared by the open-end

management investment company

issuing such securities, not later than

the time a confirmation of the first

transaction is such series is delivered to

the purchaser. This requirement applies

only if the particular series has been

granted relief from the prospectus

delivery requirements of section 24(d)

off the Investment Company Act of

1940.13 Additionally, members and

member organizations are required to

include the product description with

any sales materials relating to a series of

ICUs that are provided to the public.

Any other written materials provided to

customers by a member or member

organization referring to a series of ICUs

must include a statement relating to the

product description, in substantially the

form set forth in the proposed

amendment to CHX Rule 24.

The proposal also provides that a

member or member organization

carrying an omnibus account for a nonmember broker-dealer is required to

inform such non-member that execution

of an order to purchase a series of ICUs

for such account will be deemed to

constitute agreement by the nonmember to make such product

description available to its customers on

the same terms as are directly applicable

to members and member organizations

under the proposed amendment to CHX

Rule 24. Finally, the proposal provides

that a member or member organization

must provide a prospectus for a

particular series of ICUs upon the

customer’s request.

3. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

section 6 of the Act 14 in general, and in

particular, with section 6(b)(5),15 in that

it is designed to promote just and

equitable principles of trade, to remove

impediments to and perfect the

mechanism of a free and open market

and a national market system, and, in

general, to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any burden on competition. The CHX

believes that the proposed rule change

will encourage competition among

markets by allowing more than one

exchange to list and trade the products

described in the proposed rule change

pursuant to Rule 19b–4(e).

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

The Exchange did not receive any

written comments on the proposed rule

change.

III. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change, as amended, is consistent with

the Act. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street, N.W., Washington, D.C. 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 at

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–CHX–00–14 and should be

submitted by July 21, 2000.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

After careful consideration, the

Commission finds that the proposed

rule change is consistent with the

requirements of the Act and the rules

and regulations thereunder applicable to

a national securities exchange, and, in

particular, with the requirements of

section 6(b)(5) of the Act.16 Specifically,

the Commission finds that the CHX

proposal to establish generic standards

40714 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Notices

17 Id. In approving this rule, the Commission

notes that it has considered the proposed rule’s

impact on efficiency, competition, and capital

formation. 15 U.S.C. 78c(f). 18See supra note 5. These listing standards are

similar to those maintained by other exchanges.

See, e.g., Amex Rules 1000 (Portfolio Depositary

Receipts) and 1000A (Index Fund Shares). 19See Securities Exchange Act Release No. 39117

(September 22, 1997), 62 FR 50973 (September 29,

1997) (WEBS); Securities Exchange Act Release No.

40950 (Janary 15, 1999), 64 FR 3730 (January 25,

1999) (Select Sector SPDRs). ‘‘WEBS’’ is a service

mark of Morgan Stanley Group, Inc. ‘‘Select Sector

SPDR’’ is a service mark of The McGraw-Hill

Companies, Inc.

20See Securities Exchange Act Release No. 39076

(September 15, 1997), 62 FR 49270 (September 19,

1997). ‘‘S&P Midcap 400 Index,’’ ‘‘MidCap SPDRs’’

and ‘‘SPDRs’’ are trademarks of The McGraw-Hill

Companies, Inc. 21See Securities Exchange Act Release No. 40761

(December 8, 1998), 63 FR 70952 (December 22,

1998). 22See Securities Exchange Act Release No. 42787

(May 15, 2000), 65 FR 33598 (May 24,

2000)(approving SR–Amex–00–14); Securities

Exchange Act Release No. 42542 (March 17, 2000),

65 FR 16437 (March 28, 2000) (Noticing SR–Amex–

00–14).

to permit the trading of PDRs and ICUs

pursuant to Rule 19b–4(e) furthers the

intent of that rule by facilitating

commencement of trading in these

securities without the need for notice

and comment and Commission approval

under section 19(b) of the Act. Thus, by

establishing generic standards, the

proposal should reduce the Exchange’s

regulatory burden, as well as benefit the

public interest, by enabling the

Exchange to bring qualifying products to

the market mre quickly. Accordingly,

the Commission finds that the

Exchange’s proposal will 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, and, in general, protect

investors and the public interest

consistent with section 6(b)(5) of the

Act.17

In general, ICUs represent an interest

in a registered investment company that

holds securities based on, or

representing an interest in, an index or

portfolio of securities. The Exchange

currently trades a number of securities

pursuant to UTP under its ICU and PDR

listing standards.18 The Commission has

also approved amendments to CHX Rule

24 to permit the trading, pursuant to

UTP, of ICUs based on certain Morgan

Stanley Capital International Indices

(‘‘WEBSSM’’) and nine series of Select

Sector SPDRs SM.19

PDRs represent interests in a unit

investment trust that holds securities

which comprise an index or portfolio.

Each trust is intended to provide

investors with an instrument that

closely tracks the underlying securities

index or portfolio, that trades like a

share of common stock, and that pays

holders a periodic cash payment

proportionate to the dividends paid, on

the underlying portfolio of securities,

less certain expenses, as described in

the applicable trust prospectus. The

Commission has approved rule

proposals that allow the Exchange to

trade, pursuant to UTP, PDRs based on

the Standard and Poor’s 500 Index

(‘‘SPDRs’’) and the S&P MidCap 400

IndexTM (‘‘MidCap SPDRs’’TM.20

Rule 19b–4(e) provides that the listing

and trading of a new derivative

securities product by an SRO shall not

be deemed a proposed rule change,

pursuant to paragraph (c)(1) of Rule

19b–4, if the Commission has approved,

pursuant to section 19(b) of the Act, the

SRO’s trading rules, procedures and

listing standards for the product class

that include the new derivative

securities product and the SRO has a

surveillance program for the product

class.21

As noted above, the Commission has

previously approved CHX Rules 24 et

seq. and 25 et seq. that permit the listing

and trading of ICUs and PDRs. In

approving these securities for trading,

the Commission considered the

structure of these securities, their

usefulness to investors and to the

markets, and the CHX rules that govern

their trading. Moreover, the Exchange

has separately filed proposed rule

changes pursuant to Rule 19b–4 for each

of the series of ICUs or PDRs currently

trading on the Exchange.

The Commission’s approval of the

proposed generic listing standards for

these securities will allow those series

of PDRs and ICUs that satisfy those

standards to start trading under Rule

19b–4(e), without the need for notice

and comment and Commission

approval. The Exchange’s ability to rely

on Rule 19b–4(e) for these products

potentially reduces the time frame for

bringing these securities to the market

or for permitting the trading of these

securities pursuant to UTP, and thus

enhances investors’ opportunities. The

Commission notes that while the

proposal reduces the Exchange’s

regulatory burden, the Commission

maintains regulatory oversight over any

products listed under the generic

standards through regular inspection

oversight.

The Commission previously

concluded that PDRs and ICUs trading

under the existing Exchange rules

would allow investors to: (1) Respond

quickly to market changes through intra

day trading opportunities; (2) engage in

hedging strategies similar to those used

by institutional investors; and (3) reduce

transactions costs for trading a portfolio

of securities.22 The Commission

believes, for the reasons set forth below,

that the product classes that satisfy the

proposed generic standards for PDRs

and ICUs should produce the same

benefits to investors.

The Commission also finds that the

proposal contains adequate rules and

procedures to govern the trading of

PDRs and ICUs under Rule 19b–4(e). All

series of PDRs and ICUs listed under the

generic standards will be subject to the

full panoply of CHX rules and

procedures that now govern the trading

of existing PDRs and ICUs on the

Exchange or pursuant to UTP.

Accordingly, any new series of PDRs

and ICUs listed and traded under Rule

19b–4(e) will be subject to CHX rules

governing the trading of equity

securities, including, among others,

rules and procedures governing trading

halts, disclosures to members,

responsibilities of the specialist,

account opening and customer

suitability requirements, the election of

a stop or limit order, and margin.

In addition, the CHX has developed

specific listing criteria for series of PDRs

or ICUs qualifying for Rule 19b–4(e)

treatment that will help to ensure that

a minimum level of liquidity will exist

to allow for the maintenance of fair and

orderly markets. Specifically, the

proposed generic listing standards

require that a minimum of 100,000

shares of a series of PDRs or ICUs is

outstanding as of the start of trading.

The Commission believes that this

minimum number of securities is

sufficient to establish a liquid Exchange

market at the commencement of trading.

The Commission believes that the

proposed generic listing standards

ensure that the securities composing the

indexes and portfolios underlying the

ICUs and PDRs are well capitalized and

actively traded. These capitalization and

liquidity criteria serve to prevent

fraudulent or manipulative acts and are

therefore consistent with section 6(b)(5)

of the Act.

In addition, as previously noted, all

series of PDRs and ICUs listed or traded

under the generic standards will be

subject to the Exchange’s existing

continuing listing criteria. This

requirement allows the CHX to consider

the suspension of trading and the

delisting of a series if an event occurs

that makes further dealings in such

securities inadvisable. The Commission

believes that this will give the CHX

flexibility to delist PDRs or ICUs if

circumstances warrant such action.

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Notices 40715

23 15 U.S.C. 78f(b)(5).

24 15 U.S.C. 78f(b)(5). 25 15 U.S.C. 78f(b)(5).

26See supra note 22.

27 15 U.S.C. 78s(b)(5).

28 15 U.S.C. 78s(b)(2).

29 17 CFR 200.30–3(a)(12).

Furthermore, the Commission finds

that the Exchange’s proposal to trade

PDRs in minimum fractional increments

of 1⁄64 of $1.00 and ICUs in increments

of 1⁄16, 1⁄32, or 1⁄64 of 1.00 is consistent

with the Act. The Commission believes

that such trading should enhance

market liquidity, and should promote

more accurate pricing, tighter

quotations, and reduced price

fluctuations, all of which benefit the

investor. The Commission also believes

that such trading should allow

customers to receive the best possible

execution of their transactions in the

PDRs or ICUs, thereby protecting

customers and the public interest

consistent with section 6(b)(5) of the

Act.23

The Exchange represents that the

Reporting Authority will disseminate

for each series of PDRs or ICUs an

estimate, updated every 15 seconds, of

the value of a share of each series. The

Exchange further represents that the

information that is reported will be

disseminated by or through the primary

exchange or another entity working with

the exchange, when the CHX trades one

of these products pursuant to UTP. The

Commission believes that the

information the Exchange proposes to

have disseminated will provide

investors with timely and useful

information concerning the value of

each series.

The CHX has developed surveillance

procedures for PDRs and ICUs listed

under the generic standards that

incorporate and rely upon existing CHX

surveillance procedures governing

PDRs, ICUs, and equities. The

Commission believes that these

surveillance procedures are adequate to

address concerns associated with listing

and trading PDRs and ICUs under the

generic standards. Accordingly, the

Commission believes that the rules

governing the trading of such securities

provide adequate safeguards to prevent

manipulative acts and practices and to

protect investors and the public interest,

consistent with section 6(b)(5) of the

Act.24 The Exchange further represents

that it will file Form 19b–4(e) with the

Commission within five business days

of commencement of trading a series

under the generic standards, and will

comply with all Rule 19b–4(e)

recordkeeping requirements.

The Commission also notes that

certain concerns are raised when a

broker-dealer is involved in both the

development and maintenance of a

stock index upon which a product such

as PDRs or ICUs is based. The proposal

requires that, in such circumstances, the

broker-dealer must have procedures in

place to prevent the misuse of material,

non-public information regarding

changes and adjustments to the index

and that the index value be calculated

by a third party who is not a brokerdealer. The Commission believes that

these requirements should help address

concerns raised by a broker-dealer’s

involvement in the management of such

an index.

Finally, the Commission believes that

the Exchange’s proposal will ensure that

investors have information that will

allow them to be adequately apprised of

the terms, characteristics, and risks of

trading PDRs and ICUs. Members and

member organizations will be required

to provide to all purchasers of ICUs or

PDRs a written description of the terms

and characteristics of these securities, to

include their product description in

sales materials provided to customers or

the public, to include a specific

statement relating to the availability of

the description in other types of

materials distributed to customer or the

public, and to provide a copy of the

prospectus, when requested by a

customer. The proposal also requires a

member or member organization

carrying an omnibus account for a nonmember broker-dealer, to notify the nonmember that execution of an order to

purchase an ICU or PDR constitutes an

agreement by the non-member to

provide the product description to its

customers.

The Commission also notes that upon

the initial listing, or trading pursuant to

UTP, of any PDRs or ICUs under the

generic standards, the Exchange will

issue a circular to its members

explaining the unique characteristics

and risks of this particular type of

security. The circular also will note the

Exchange members’ prospectus or

product description delivery

requirements, and highlight the

characteristics of purchases in a

particular series of PDRs or ICUs. The

circular also will inform members of

their responsibilities under CHX Article

VIII, Rule 25 in connection with

customer transactions in these

securities. The Commission believes

that these requirements ensure

adequater disclosure to investor about

the terms and characteristics of a

particular series and is consistent with

section 6(b)(5) of the Act.25

The Commission finds good cause for

approving the proposed rule change, as

amended, prior to the thirtieth day after

the date of publication of notice thereof

in the Federal Register pursuant to

section 19(b)(2) of the Act. The

Commission notes that the proposed

rule change is based on the generic

listing standards in Amex Rule 1000 et

seq. (PDRs) and 1000A et seq. (Index

Fund Shares), which the Commission

previously approved after soliciting

public comment on the proposal

pursuant to section 19(b)(1) of the Act.26

The Commission does not believe that

the proposed rule changes raises novel

regulatory issues that were not

addressed in the Amex filing.

Accordingly, the Commission believes it

is appropriate to permit investors to

benefit from the flexibility afforded by

these new instruments by trading them

as soon as possible. Accordingly, the

Commission finds that there is good

cause, consistent with section 6(b)(5) of

the Act,27 to approve the proposal on an

accelerated basis.

V. Conclusion

It Is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,28 that the

proposed rule change (SR–CHX–00–14)

and Amendment No. 1 thereto, are

hereby approved on an accelerated

basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.29

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–16582 Filed 6–29–00; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice 3351]

Culturally Significant Objects Imported

for Exhibition; Determinations: ‘‘Van

Gogh to Mondrian: Dutch Works on

Paper’’

AGENCY: United States 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 No. 236 of

October 19, 1999, as amended, I hereby

determine that the objects to be

included in the exhibition ‘‘Van Gogh to

Mondrian: Dutch Works on Paper,’’