Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Notices 43571

20 15 U.S.C. 78s(b)(2).

21 17 CFR 200.30–3(a)(12).

1The Commission previously published notice of

the proposed rule change and granted accelerated

approval thereto for periods of 120 days, six months

and six months (Securities Exchange Act Release

No. 37425 (July 11, 1996), 61 FR 37518 (July 18,

1996) (‘‘Release No. 34–37425’’), Securities

Exchange Act Release No. 37957 (November 15,

1996), 61 FR 59267 (November 21, 1997) (‘‘Release

No. 34–37957’’) and Securities Exchange Act

Release No. 38645 (May 15, 1997), 62 FR 28086

(May 22, 1997) (‘‘Release No. 34–38645’’),

respectively.

2Securities Exchange Act Release No. 37107

(April 11, 1996), 61 FR 16948 (April 18, 1996)

(‘‘Release No. 34–37107’’).

3Release No. 34–37425. Release Nos. 34–37107

and 34–37425 published the complete text of the

rule change.

4Release Nos. 34–37957 and 34–38645,

respectively.

5Securities Exchange Act Release No. 38545

(April 24, 1997), 62 FR 25226 (May 8, 1997)

(‘‘Release No. 34–38545’’), the Notice of Filing of a

Proposed Rule Change by the National Association

of Securities Dealers, Inc. to Proposed Changes in

the By-Laws of the NASD, NASD Regulation, Inc.,

The Nasdaq Stock Market, Inc., the Plan of

Allocation and Delegation of Functions by the

NASD to Subsidiaries, Membership Application

Procedures, Disciplinary Proceedings, Other

Proceedings, and Other Conforming Changes

(‘‘Release No. 34–38545’’). The comment period for

Release No. 34–38545 expired on June 6, 1997. SR–

NASD–97–28 is being approved simultaneously

with the instant filing, see Securities Exchange Act

Release No. 38908 (‘‘Release No. 34–38908’’).

6See Letter from Alden S. Adkins, Vice President

and General Counsel, NASD Regulation, to

Katherine A. England, Assistant Director, Division

of Market Regulation, Commission (dated July 11,

1997).

proposed rule change was noticed for

the full comment period and no

comment letters were received.

Accordingly, the Commission believes

that it is consistent with Section

15A(b)(6) of the Act to approve

Amendment No. 3 to the proposal on an

accelerated basis.

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment Nos.

3 and 4 to the rule proposal. Persons

making written submissions should file

six copies thereof with the Secretary,

Securities and Exchange Commission,

450 Fifth Street, NW., Washington, DC

20549. 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 also will be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to File No.

SR–NASD–97–34 and should be

submitted by September 4, 1997.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,20 that the

proposed rule change (SR–NASD–97–

34), as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.21

Jonathan G. Katz,

Secretary.

[FR Doc. 97–21445 Filed 8–13–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38909; File No. SR–NASD–

96–29; Amendment No. 5]

Notice of Filing and Order Granting

Temporary Accelerated Approval

August 7, 1997.

Self-Regulatory Organizations; Notice of

Filing and Order Granting Temporary

Accelerated Approval of Proposed Rule

Change by National Association of Securities

Dealers, Inc. Relating to the Allocation and

Delegation of Authority and Responsibilities

by the National Association of Securities

Dealers, Inc., to NASD Regulation, Inc., and

The Nasdaq Stock Market, Inc.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on August 5, 1997, the

National Association of Securities

Dealers, Inc. (‘‘NASD’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) Amendment No. 5 to

the proposed rule change as described

in Items I, II and III below, which Items

have been prepared by the NASD.1 The

Commission is publishing this notice to

solicit comments on the proposed rule

change as further amended by

Amendment No. 5 from interested

persons and is simultaneously granting

accelerated approval to the proposed

rule change for a period of six months.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The NASD is proposing to amend the

Plan of Allocation and Delegation of

Functions by NASD to Subsidiaries

(‘‘Delegation Plan’’) setting forth the

purpose, function, governance,

procedures and responsibilities of the

NASD, NASD Regulation, Inc. (‘‘NASD

Regulation’’) and The Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’), following the

reorganization of the NASD.

The initial version of the Delegation

Plan (with the implementing provisions

contained in Rule 0130) was originally

filed with the Commission in SR–

NASD–96–16. It was published for

comment and approved by the

Commission on a temporary basis for a

period of 90 days.2 On July 11, 1996, the

Commission issued another release

publishing for comment three changes

to the Delegation Plan and further

approving the Delegation Plan as

amended for a period of 120 days.3 On

November 15, 1996 and May 15, 1997,

the Commission extended temporary

approval of the instant proposed rule

change for two additional six month

periods.4

On April 18, 1997, the NASD filed

SR–NASD–97–28, seeking approval of,

among other matters, certain proposed

amendments to the Delegation Plan.5

The proposed amendments to the

Delegation Plan contained therein were

withdrawn by Amendment No. 3

thereto.6

The NASD hereby files this

Amendment No. 5 to the instant rule

filing, pursuant to Section 19(b)(1) of

the Act and Rule 19b–4 thereunder, to

continue temporary approval of the

Delegation Plan, revised to conform to

the Rules of the Association, as

amended by Release No. 34–38908.

Approval until November 15, 1997, the

remaining effective period of

Amendment No. 4 to the instant rule

filing, is requested. During this interval,

there will be no further amendments to

the Delegation Plan, absent Commission

approval of a corresponding Rule 19b–

4 filing.

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

NASD included statements concerning

the purpose of and basis for the

proposed rule change and discussed any
43572 Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Notices

7The NASD, NASD Regulation and Nasdaq are

collectively referred to herein as the ‘‘Association.’’

The Delegation Plan does not discuss other wholly

owned subsidiary corporations of the NASD, such

as the Securities Dealers Risk Purchasing Group,

Inc. and the Securities Dealers Insurance Co., Ltd.

These and any other wholly owned subsidiaries of

the NASD not described in the Delegation Plan do

not perform any of the Association’s regulatory

functions or the operating functions related to the

operation of Nasdaq. In addition, the Delegation

Plan does not address the NASD’s ownership role

in corporations such as the National Securities

Clearing Corporation or the Depository Trust

Company.

8The National Nominating Committee is

composed of at least six and not more than nine

members equally balanced between Industry and

Non-Industry Committee Members. It is anticipated

that there will be at least three Non-Industry

Members, including at least two Public Committee

Members. 9 15 U.S.C. 70o–3

10The comment letters received in connection

with Release No. 34–38545 did not address the

Delegation Plan.

comments it received on the proposed

rule change. The text of these statements

may be examined at the places specified

in Item V below. The NASD 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 purpose of this Amendment No.

5 is to ensure continued effectiveness of

the Delegation Plan while the

Commission considers whether to grant

permanent approval to the instant

NASD rule filing.

Description of Delegation Plan: The

Delegation Plan is organized in three

principal parts, one for each of the three

major entities that will constitute the

reorganized self-regulatory organization:

the parent corporation, NASD; the

regulatory subsidiary, NASD Regulation;

and the stock market operating

subsidiary, Nasdaq.7 The Delegation

Plan, the contents of which are selfexplanatory, describes the purposes,

functions, governance, procedures and

responsibilities of each of these entities.

The first part of the Delegation Plan

describes the parent corporation, the

NASD. The Delegation Plan sets forth

the purpose and function of the NASD;

the composition of the Board of

Governors, including provisions relating

to the qualifications for Governors,

election procedures, creation of a

National Nominating Committee,8 term

of office, vacancies and removal from

office,; the function, composition and

reporting structure of the Audit

Committee and the Office of Internal

Review; the function and composition

of the Management Compensation

Committee; and the Commission’s

access to and status of officers,

directors, employees, books, records and

premises of the subsidiaries.

The second part of the Delegation

Plan describes the regulatory subsidiary,

NASD Regulation. The Delegation Plan

sets forth the delegation of authority to

NASD Regulation by the NASD; the

purpose, function and authority of

NASD Regulation; the composition of,

and qualifications for members of, the

Board of Directors, including provisions

relating to election procedures; the

function and composition of the

National Business Conduct Committee;

the Board’s procedures for reviewing

disciplinary actions, statutory

disqualification decisions and proposed

rule change recommendations; and the

Board’s procedures for initiating

actions.

The third part of the Delegation Plan

describes the stock market operating

subsidiary, Nasdaq. The Delegation Plan

sets forth the delegation of authority to

Nasdaq; the purpose and function of

Nasdaq; the composition of and

qualifications for members of the Board

of Directors, including provisions

relating to election procedures and the

authority of the Board; the Board’s

procedures for reviewing listing/

delisting decisions, and rule change

recommendations; the Board’s

procedures for initiating actions; the

functions and composition of the

Quality of Markets Committee; and

functions of the Stockwatch

Department.

The Rules of the Association, as

amended by Release No. 34–38908,

include modifications of the time

periods for certain procedures described

in the Delegation Plan. The amendments

to the Delegation Plan proposed by this

Amendment No. 5 conform to these

modifications and further amplify the

delegation of functions and authority to

NASD Regulation.

2. Statutory Basis for the Proposed Rule

Change

The NASD believes that the proposed

rule change as further amended by

Amendment No. 5 is consistent with the

provisions of Section 15A(b)(2) of the

Act 9 in that the terms of the Delegation

Plan will provide for the organization of

the Association in a manner that will

permit the NASD, through its operating

subsidiaries, to carry out the purposes of

the Act, to comply with the Act, and to

enforce compliance by Association

members and persons associated with

members with the Act, the rules and

regulations thereunder, the rules of the

Association and the federal securities

laws.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The NASD does not believe that the

proposed rule change as further

amended by Amendment No. 5 will

result in any burden on competition that

is not necessary or appropriate in

furtherance of the purposes of the Act,

as amended.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments were neither

solicited nor received.10 However, in

connection with the NASD’s publication

for member vote of proposed

amendments to the By-Laws to

implement the Delegation Plan in

Notice 95–101 (December 11, 1995)

(‘‘Notice 95–101’’), attached as Exhibit 2

to proposed rule change SR–NASD–96–

02, the NASD received three comments

which were attached as Exhibit 4 to that

proposed rule change. The NASD’s

statement on the comments received

with respect to notice 95–101 is set forth

in SR–NASD–96–02 and was published

by the Commission in Securities

Exchange Act Release No. 37106 (April

11, 1996), 61 FR 16944 (April 18, 1996).

SR–NASD–96–02 proposed certain of

the By-Law amendments issued for

member vote in Notice 95–101 in order

to permit the reorganization of its Board

of Governors consistent with the

Delegation Plan submitted in SR–

NASD–96–16.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The NASD has requested that the

Commission find good cause pursuant

to Section 19(b)(2) of the Act for

approving the proposed rule change as

further amended by Amendment No. 5

prior to the 30th day after publication in

the Federal Register.

IV. Discussion

The Commission finds that the

proposed rule change as further

amended by Amendment No. 5 is

consistent with the requirements of the

Act and the rules and regulations

thereunder applicable to the NASD and,

in particular, the requirements of

Section 15A of the Act and the rules and

regulations thereunder. The

Commission believes that the proposed

rule change will allow the NASD to
Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Notices 43573

11Release Nos. 34–37425, 34–37957, and 34–

38645, respectively.

12 In approving this rule filing, the Commission

has considered the proposed rule filing’s impact on

efficiency, competition, and capital formation. 15

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

13 17 CFR 200.30–3(a)(12).

carry out the purposes of the Act to

comply with, and enforce compliance

by its members and associated persons

with, the provisions of the Act, the rules

and regulations thereunder, the rules of

the NASD and the federal securities

laws. Furthermore, the amendments are

designed (with amendments to the

Rules of the Association simultaneously

approved in Release No. 34–38908, as

discussed above) to insure a fair

representation of the NASD’s members

in the selection of its directors and

administration of its affairs as well as to

comply with the public and nonindustry participation requirements of

the Act. It is envisioned that these rules

and any subsequent changes that may be

implemented from time-to-time will

enable the NASD to better comply with

the requirements of Section 15A(b)(2) in

particular and the Act in general.

The Commission finds good cause for

approving the proposed rule change

prior to the 30th day after the date of

publication of notice of filing thereof in

that accelerated approval will enhance

the NASD’s ability to carry out its

regulatory obligations under the Act.

The Commission believes that the

proposed rule change is intended to

accomplish certain allocations and

delegations of authority necessary to

reorganize the NASD, and establish as

separate subsidiaries NASD Regulation

and Nasdaq in accordance with the

September 1995 recommendations of

The Select Committee on Structure and

Governance in order to enable the

NASD to meet its regulatory and

business obligations. The Delegation

Plan sets forth the purpose, functions,

governance, procedures, and

responsibilities of the NASD, NASD

Regulation and Nasdaq following the

reorganization of the NASD. The

NASD’s Board of Governors, which has

been reorganized to be consistent with

the proposed rule change, has held

meetings to carry out the business of the

Association. The subsidiaries also have

held meetings of the Board of Directors

of NASD Regulation and Nasdaq in

order to carry out the business of the

subsidiaries during the period in which

the Delegation Plan has been effective.

The instant proposed rule change was

previously published for comment and

approved by the Commission on a

temporary basis for periods of 120 days,

six months, and six months.11 The

second six month approval period is

scheduled to expire on November 15,

1997. No comment letters concerning

the instant proposed rule change were

received by the Commission.

Accordingly, the Commission believes

that accelerating the approval of the

proposed rule change as further

amended by Amendment No. 5 will

benefit members and the public interest

by more fully implementing the

reorganization of the NASD and its

subsidiaries.12

V. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

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. 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 NASD. All

submissions should refer to the file

number in the caption above and should

be submitted by September 4, 1997.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule change SR–NASD–96–29,

as amended by Amendment No. 5, be,

and hereby is, approved through

November 15, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Jonathan G. Katz,

Secretary.

[FR Doc. 97–21446 Filed 8–13–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster #2973]

State of Alabama

As a result of the President’s major

disaster declaration on July 25, 1997, I

find that Baldwin, Choctaw, and Mobile

Counties in the State of Alabama

constitute a disaster area due to

damages caused by storms, flooding,

and high winds which occurred July

17–22, 1997. Applications for loans for

physical damages may be filed until the

close of business on September 23,

1997, and for loans for economic injury

until the close of business on April 28,

1998 at the address listed below or other

locally announced locations: U.S. Small

Business Administration, Disaster Area

2 Office, One Baltimore Place, Suite

300, Atlanta, GA 30308.

In addition, applications for economic

injury loans from small businesses

located in the following contiguous

counties may be filed until the specified

date at the above location: Clarke,

Escambia, Marengo, Monroe, Sumter,

and Washington Counties in Alabama;

Clarke, George, Greene, Jackson,

Lauderdale, and Wayne Counties in

Mississippi; and Escambia County in

Florida.

Percent

Physical Damage:

Homeowners with credit available elsewhere ........................ 8.000

Homeowners without credit available elsewhere ........................ 4.000

Businesses with credit available

elsewhere ................................ 8.000

Businesses and non-profit organizations without credit available elsewhere ........................ 4.000

Others (including non-profit organizations) with credit available

elsewhere ................................ 7.250

For Economic Injury:

Businesses and small agricultural

cooperatives without credit

available elsewhere ................. 4.000

The number assigned to this disaster

for physical damage is 297306. For

economic injury the numbers are

956800 for Alabama; 956900 for

Mississippi; and 957000 for Florida.

(Catalog of Federal Domestic Assistance

Program Nos. 59002 and 59008)

Dated: August 1, 1997.

Bernard Kulik,

Associate Administrator for Disaster

Assistance.

[FR Doc. 97–21509 Filed 8–13–97; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster #2975]

State of Colorado

As a result of the President’s major

disaster declaration on August 1, 1997,

I find that Larimer, Logan, and Morgan

Counties in the State of Colorado

constitute a disaster area due to