44500 Federal Register / Vol. 62, No. 162 / Thursday, August 21, 1997 / Notices

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

2 17 CFR 240.19b–4.

or received, are reasonable and fair and

do not involve overreaching on the part

of any person concerned, the proposed

transaction is consistent with the

policies of the registered investment

company and the general purposes of

the Act. Applicants believe that the

relief requested satisfies the standards of

sections 6(c) and 17(b).

9. Section 17(d) and rule 17d–1

prohibit affiliated persons from

participating in joint arrangements with

a registered investment company unless

authorized by the SEC. In passing on

applications for such orders, rule 17d–

1 provides that the SEC will consider

whether the participation of such

investment company is consistent with

the provisions, policies, and purposes of

the Act and the extent to which such

participation is on a basis different from

or less advantageous than that of other

participants. Applicants acknowledge

that the Plan may be deemed to

constitute a joint arrangement within

the meaning of rule 17d–1. Applicants

state that an Eligible Director will

neither directly nor indirectly receive a

benefit that would otherwise inure to

the Funds or any of their shareholders.

Moreover, applicants note that the

changes in value made to the Deferral

Accounts to reflect the income, gain or

loss with respect to the Designated

Shares will be identical to the changes

in share value experienced by the

shareholders of the Funds during the

same period.

Applicants’ Condition

Applicants agree that any order of the

SEC granting the requested relief will be

subject to the following conditions that,

with respect to the requested relief from

rule 2a–7, any Money Market Fund that

values its assets by the amortized cost

method or penny-rounding method will

buy and hold Designated Shares that

determine the performance of Deferred

Accounts to achieve an exact match

between the liability of any such Fund

to pay compensation deferrals and the

assets that offset that liability.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–22185 Filed 8–20–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38937; File No. SR–CBOE–

97–35]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

Chicago Board Options Exchange, Inc.

Relating to Trading Halts and

Suspensions

August 14, 1997.

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 July 25,

1997, the Chicago Board Options

Exchange, Inc. (‘‘CBOE’’ 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 CBOE. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested parties.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE proposes to amend Rule

6.3 to remove the requirement that a

halt declared by Floor Officials may

continue for only two consecutive

business days and to delete Rule 6.4

regarding the suspension of trading by

the Board of Directors (‘‘Board’’). The

CBOE also proposes to make certain

conforming amendments to Rules 21.12

and 23.8 and to Interpretation .02 of

Rule 21.19.

The text of the proposed rule change

is available at the Office of the

Secretary, the CBOE and at 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

CBOE 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 CBOE 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

The purpose of the proposed rule

change is to amend Rule 6.3 to remove

the requirement that a halt declared by

Floor Officials may continue for only

two consecutive business days, to delete

Rule 6.4 regarding the suspension of

trading by the Board, and to make

certain conforming amendments to

Rules 21.12 and 23.8 and to

Interpretation .02 of Rule 21.19

Pursuant to existing Rule 6.3, any two

Floor Officials may halt trading in any

security in the interests of a fair and

orderly market for a period not in excess

of two consecutive business days.

Pursuant to existing Rule 6.4, the

CBOE’s Board may suspend trading in

any security in the interests of a fair and

orderly market. The Exchange believes

that there is no practical difference

between a halt in trading and a

suspension in trading, except for the

present two-day limit for a halt and the

fact that a halt is declared by two Floor

Officials and a suspension is declared

by the Board. The same factors are

considered by the Board in deciding

whether to ‘‘suspend’’ trading as are

considered by Floor Officials in

deciding whether to ‘‘halt’’ trading.

Rules 6.3 and 6.4 require, however, that

trading may be stopped for more than

two consecutive business days only if

the Board acts to ‘‘suspend’’ trading.

The CBOE believes it is not necessary

to require the Board to decide whether

trading in an options class may be

stopped for more than two days. The

Exchange believes that in practice,

senior exchange officials would be

aware of and would participate in any

decision concerning a halt that

continued in excess of two days. The

Exchange believes this input from

senior exchange officials is sufficient

and that Board participation is not

necessary. The Exchange also believes

that it is unduly cumbersome and often,

impractical, to convene the Board on

short notice just to decide whether

trading in an options class may be

stopped for more than two days.

Pursuant to the proposed rule change,

the duration of a halt declared by two

Floor Officials pursuant to Rule 6.3

would not be limited to a particular

number of days. The proposed rule

change correspondingly would delete

Rule 6.4, so that Board action no longer

would be required before trading in an

options class could be stopped for more

than two consecutive business days.

Instead, Floor Officials would determine

whether to halt trading based upon the
Federal Register / Vol. 62, No. 162 / Thursday, August 21, 1997 / Notices 44501

3See File No. SR–CBOE–97–36.

4 15 U.S.C. 78f(b)(5).

5 17 CFR 200.30–3(a)(12).

1The MSRB filed Amendment No. 1 to the

proposed rule change on August 14, 1997, the

substance of which has been incorporated into the

notice. See letter from Jill C. Finder, Assistant

General Counsel, MSRB, to Katherine A. England,

Assistant Director, Market Regulation, Commission,

dated August 14, 1997.

factors set forth in Rule 6.3, which are

the same factors currently considered by

the Board in a suspension decision. This

proposed approach is consistent with

the procedure for index options under

Rule 24.7, where trading halts or

suspensions do not require action by the

Board.

In addition, the proposed rule change

would make clear that trading may

resume only upon a determination by

two Floor Officials that such a

resumption is in the interests of a fair

and orderly market. The present form of

Rule 6.3(b) allows trading to resume

when two Floor Officials determine

either that the conditions that led to the

halt no longer are present or that a

resumption of trading would serve the

interests of a fair and orderly market.

The Exchange believes that taken

literally, this would enable trading to

resume if the conditions that led to the

halt no longer are present, even if a

resumption of trading would be contrary

to the interests of a fair and orderly

market, an interpretation that would

conflict with the CBOE’s practice and

would be contrary to the policies under

the Act: Accordingly, the Exchange

believes that the proposed rule change

would make clear that: (1) Option

trading may resume after a halt if, and

only if, two Floor Officials determine

that such a resumption would be in the

interests of a fair and orderly market;

and (2) the fact that the conditions

leading to the halt no longer are present

is just one of the factors that Floor

Officials may consider in determining

whether the interests of a fair and

orderly market would be served by a

resumption of trading. The CBOE notes

that the Exchange has proposed similar

changes to Rule 24.7(b), which governs

the resumption of trading after a trading

halt in index options.3

Finally, because of the deletion of

Rule 6.4, the Exchange believes that it

also is necessary to make conforming

deletions of certain non-substantive

references to trading suspensions under

Rule 6.4 that appear in Rule 21.12 and

Interpretation .02 of Rule 21.19

(concerning government securities

options) and in Rule 23.8 (concerning

interest rate option contracts).

The Exchange believes that the

proposed rule change is consistent with

and furthers the objectives of Section

6(b)(5) of the Act 4 in that it is designed

to perfect the mechanism of a free and

open market and to protect investors

and the public interest by enabling

Floor Officials to evaluate and to

consider market conditions and

circumstances and to halt trading for as

long as necessary in the interests of a

fair and orderly market.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

CBOE does not believe that the

proposed rule will impose any 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 with respect to the proposed

rule change.

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 self-regulatory

organization 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.

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

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of all

such filings will also be available for

inspection and copying at the principal

office of CBOE. All submissions should

refer to File No. SR–CBOE–97–35 and

should be submitted by September 11,

1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–22184 Filed 8–20–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38935; File No. SR–MSRB–

97–04]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Municipal Securities Rulemaking

Board Relating to Its Arbitration Code

August 14, 1997.

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 May 22, 1997,1 the

Municipal Securities Rulemaking Board

(‘‘Board’’ or ‘‘MSRB’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which Items have been

prepared by the self-regulatory

organization. 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 Board is filing a proposed rule

change to amend Rule G–35, the Board’s

Arbitration Code. The proposed rule

change would create two sections:

Section 37 would state that the Board

will not accept any new arbitration

claims filed on or after January 1, 1998;

and Section 38 would provide that, as

of January 1, 1998, every bank dealer (as

defined in Rule D–8) shall be subject to

the Code of Arbitration Procedure of the

National Association of Securities

Dealers, Inc. (‘‘NASD’’) for every claim,

dispute or controversy arising out of or

in connection with the municipal

securities activities of the bank dealer

acting in its capacity as such. New

Section 38 would further provide that

each bank dealer shall be subject to, and

shall abide by, the NASD’s Code of

Arbitration Procedure as if the bank

dealer were a ‘‘member’’ of the NASD.