4564 Federal Register / Vol. 62, No. 20 / Thursday, January 30, 1997 / Notices

5 15 U.S.C. 78o–3.

6 15 U.S.C. 78o(b)(6). In finding that the proposed

rule change is in the public interest, the

Commission, consistent with Section 3(f) of the Act,

has taken into consideration the extent to which the

proposal promotes efficiency. 15 U.S.C. 78c(f).

7An overly liberal application of this exemptive

authority by NASD Regulation staff would

eliminate the benefits sought by the NASD when it

proposed the use of standardized forms.

8 15 U.S.C. 78s(b)(2).

9 17 CFR 200.30–3(a)(12).

1Rule 6.52(a) provides in part that ‘‘[o]nly nonbroker/dealer customer orders may be placed with

an Order Book Official pursuant to this Rule.’’ Cf.

SEC Rule 11Ac1–4(a)(6) (equity ‘‘customer limit

orders’’ that must be displayed pursuant to Rule

11Ac–1–4 include those that are ‘‘not for the

account of either a broker or dealer’’) (effective

January 20, 1997).

2Rule 6.87(a) provides: ‘‘Only non-broker/dealer

customer orders are eligible for execution on the

allocation form be modified to provide

additional options for specific treatment

of capital transactions, capital

distributions, sale or refinancing

proceeds, special distributions,

liquidating distributions, and

distributions with respect to terminating

transactions. In another case, an NASD

member stated that modifications to

both the transfer and distribution

allocation forms were necessary to

satisfy certain conditions of purchase

imposed by its limited partnership

secondary transaction department. In

addition, although the Forms were

intended to be used for all purchases,

sales, exchanges, and transfers of

limited partnership interests, many

member firms have developed standard

one page documents for transfers that

are ‘‘not for consideration,’’ such as

transfers related to a change of trustee

or custodian or transfers resulting from

death, divorce, or gift. These previously

developed documents fulfill the same

purpose as the new Standardized

Transfer Forms, i.e., permitting a fast

and efficient transfer of the security.

Finally, other miscellaneous issues

have been raised in connection with the

use of the Forms, including a request to

meet a requirement that each investor

demonstrate U.S. citizenship.

To address this recurring situation,

NASD Regulation has proposed a rule

change that would add a new paragraph

to NASD Rule 11580 that authorizes

NASD Regulation’s Corporate Financing

Department, in response to a member’s

written request, to issue a waiver from

the requirement to use the Forms for

good cause shown. This waiver would

allow the requesting member to modify

the Forms as requested to meet legal or

regulatory requirements or to otherwise

facilitate the transfer of the limited

partnership interests.

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

association, and, in particular, with the

requirements of Section 15A.5

Specifically, the Commission believes

the proposal is consistent with the

Section 15A(b)(6) requirements that the

rules of an association be designed to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, and

processing information with respect to,

and facilitating transactions in

securities, to prevent fraudulent and

manipulative acts and practices, and, in

general, to protect investors and the

public interest.6

The Commission recognizes that there

may be instances where the current

standardized forms may need to be

modified to expedite the transfer of

limited partnership interests due to the

variety of partnership products

available. Therefore, the Commission

believes the proposed rule change will

allow NASD Regulation staff to provide

the flexibility sometimes necessary to

facilitate a more efficient transfer of

limited partnership interests in

particular cases where a rigid ‘‘form

over substance’’ requirement might

hinder the transfer process.

Nevertheless, to ensure the proposed

rule change will not unnecessarily

reduce or eliminate the benefits of

utilizing standardized forms, the

Commission emphasizes that waivers

allowing members to modify the Forms

should be issued only under limited

circumstances. They will be issued

when needed to allow members to meet

legal or regulatory requirements not

sufficiently addressed in the Forms or to

otherwise facilitate the transfer of

limited partnership interests. In

applying this standard, it is important

that waivers not be issued to allow

members to substitute their own forms

or to make wholesale changes to the

Forms, unless otherwise noted.7

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,8 that the

proposed rule change (SR–NASD–96–

42) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–2256 Filed 1–29–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38203; File No. SR–PSE–

96–46]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Pacific Stock Exchange, Inc.

Relating to Foreign Broker-Dealers

January 24, 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 December 16, 1996,

the Pacific Stock Exchange, Inc. (‘‘PSE’’

or ‘‘Exchange’’) 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 PSE. 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 is proposing to amend

its rules to specify that the term

‘‘broker/dealer,’’ as used in PSE Rules

6.52(a), 6.86 and 6.87, includes foreign

broker/dealers. The Exchange is also

proposing to adopt a definition of the

term ‘‘foreign broker/dealer.’’

The text of the proposed rule change

is available at the Office of the

Secretary, the PSE, 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

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

PSE 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

Purpose

PSE Rules 6.52(a), 6.86 and 6.87,

relating to option transactions, currently

distinguish between orders for broker/

dealers and orders for non-broker/

dealers. Under these rules, only nonbroker/dealer customer orders are

eligible to be placed on the public limit

order book,1 to be entered for automatic

execution,2 or to be eligible for a
Federal Register / Vol. 62, No. 20 / Thursday, January 30, 1997 / Notices 4565

Exchange’s Automatic Execution System (’’AutoEx’’).’’

3Rule 6.86(a) provides: ‘‘Each trading crowd is

required to provide a depth of twenty (20) option

contracts for all non-broker/dealer customer orders,

at the bid/offer that is displayed as the

disseminated market quote at the time such orders

are announced or displayed at the trading post

designated for trading the subject option class.’’

4Sections 3(a)(4) and 3(a)(5) of the Securities

Exchange Act of 1934 provide:

‘‘(4) The term ‘broker’ means any person engaged

in the business of effecting transactions in securities

for the account of others, but does not include a

bank.

‘‘(5) The term ‘dealer’ means any person engaged

in the business of buying and selling securities for

his own account, through a broker or otherwise, but

does not include a bank, or any person insofar as

he buys or sells securities for his own account,

either individually or is some fiduciary capacity,

but not as a part of a regular business.’’

5See Securities Exchange Act Release No. 37695

(September 17, 1996), 61 FR 50366 (September 25,

1996) (order approving SR–PSE–96–19).

6 ISG was created in February 1981 to design,

develop and implement a coordinated intermarket

surveillance system among securities markets in the

United States. On July 14, 1983, the exchanges

participating in the ISG entered into an agreement

to coordinate more effectively surveillance and

investigative information sharing agreements in

stock and options markets. In 1989, with the active

participation of the SEC and Commodity Futures

Trading Commission, the ISG created an ‘‘affiliate’’

category for futures exchanges and non-U.S. SROs.

Currently, the ISG is comprised of nine members

and 13 affiliates.

7See generally H. Bloomenthal & S. Wolff,

International Capital Markets and Securities

Regulation (1996).

8SEC Rule 15a–6(b)(3) provides:

‘‘The term ‘foreign broker or dealer’ shall mean

any non-U.S. resident person (including any U.S.

person engaged in business as a broker or dealer

entirely outside the United States, except as

otherwise permitted by this rule) that is not an

office or branch of, or a natural person associated

with, a registered broker or dealer, whose securities

activities, if conducted in the United States, would

be described by the definition of ‘broker’ or ‘dealer’

in sections 3(a)(4) or 3(a)(5) of the Act.’’

guaranteed minimum execution of

twenty contracts on the floor of the

Exchange.3

The purpose of the proposed rule

change is to clarify the meaning of the

term ‘‘broker/dealer,’’ as used in Rules

6.52(a), 6.86 and 6.87, by specifying that

it includes foreign broker/dealers. The

Exchange is also proposing to adopt the

following definition of ‘‘foreign broker/

dealers,’’ to be applicable to PSE Rules

6.52(a), 6.86 and 6.87:

‘‘Foreign Broker/Dealer. The term ‘foreign

broker/dealer’ means any person or entity

that is registered, authorized or licensed by

a foreign governmental agency or foreign

regulatory organization to perform the

function of a broker or dealer in securities,

or both. The terms ‘broker’ and ‘dealer’ mean

the same as set out in Sections 3(a)(4) and

3(a)(5) of the Securities Exchange Act of

1934, provided that a ‘broker’ or ‘dealer’ may

be a bank.’’ 4

In light of the current globalization of

the securities markets, the Exchange

believes that the subject rules should be

applied consistently. In this regard, an

exchange specialist in Canada or

Mexico, for example, should be subject

to the same rules applicable to trading

on the PSE as an exchange specialist in

the United States, and should not have

a competitive advantage over United

States broker/dealers.

The Exchange believes that the

proposed definition is sufficiently

specific to ensure fair enforcement of

the affected rules.5 The question of

whether a person or entity is registered,

authorized or licensed by a foreign

governmental agency or a foreign

regulatory organization to perform the

specified functions, is objective in

nature and easily verifiable—as is

currently the case with determinations

of whether U.S. brokers or dealers are

registered as such with the Commission.

The PSE notes that, as a member of the

Intermarket Surveillance Group

(‘‘ISG’’),6 the Exchange may promptly

obtain from ISG members and affiliates

information on the accounts of persons

or entities entering orders for execution

on the PSE, including whether such

orders have been entered for the account

of a broker or dealer. The Exchange may

also obtain such information from

foreign exchanges or foreign regulatory

authorities with whom the Exchange

has an effective surveillance sharing

agreement or from a foreign exchange or

regulatory authority that is subject to a

memorandum of understanding with the

Commission that would require those

entities to provide such information to

the Exchange upon request.

Based upon its review of the

applicable regulatory structures of

various foreign jurisdictions, the

Exchange believes that the proposed

definition is sufficiently specific to

cover the foreign equivalents of U.S.

brokers and dealers. These foreign

jurisdictions include: Australia, Canada,

the Czech Republic, France, Germany,

Hong Kong, Hungary, Japan,

Luxembourg, Mexico, the Netherlands,

Poland, South Africa, South Korea, the

Slovak Republic, Switzerland, and the

United Kingdom.7

The Exchange also notes that the

proposed definition of ‘‘foreign broker/

dealer’’ contains objective criteria for its

application and is narrower in scope

than the definition of ‘‘foreign broker or

dealer’’ specified in SEC Rule 15a–

6(b)(3).8 In addition, the Exchange

believes the proposed definition is

substantially similar in form and

substance to SEC Rule 17a–7(c)

(definition of nonresident brokers and

dealers) and Exchange Act Sections

3(a)(50) (definition of foreign securities

authority) and 3(a)(52) (definition of

foreign financial regulatory authority).

Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b) of the Act, in general, and

furthers the objectives of Section 6(b)(5)

in particular, in that it is designed to

promote just and equitable principles of

trade, to protect investors and the public

interest, and to prevent unfair

discrimination between customers,

brokers and dealers.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The PSE 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 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. 25049. 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
4566 Federal Register / Vol. 62, No. 20 / Thursday, January 30, 1997 / Notices

9 17 CFR 200.30–3(a)(12).

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

PSE. All submissions should refer to

File No. SR–PSE–96–46 and should be

submitted by February 20, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–2319 Filed 1–29–97; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

White House Commission on Aviation

Safety and Security; Open Meeting

AGENCY: Office of the Secretary (OST),

DOT.

ACTION: Notice of meeting.

SUMMARY: The White House

Commission on Aviation Safety and

Security will hold its final meeting to

discuss aviation safety and security

issues. Part of the meeting is open to the

public and part is not. The meeting was

originally scheduled for January 28,

1997, but a new date has been set.

DATES: The meeting will be held on

Tuesday, January 28, 1997, from 9:00

am–12:00 noon and 2:00 pm to 5:00 pm.

ADDRESSES: The meeting will take place

in the Commerce Department

Auditorium, 14th Street, between

Constitution and Pennsylvania

Avenues, NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Richard K. Pemberton, Administrative

Officer, Room 6210, GSA Headquarters,

18th & F Streets, NW, Washington, DC

20405; telephone 202.501.3863;

telecopier 202.501.6160.

SUPPLEMENTARY INFORMATION: Pursuant

to the Federal Advisory Committee Act

(5 USC Appendix), DOT gives notice of

a meeting of the White House

Commission on Aviation Safety and

Security (‘‘Commission’’). The

Commission was established by the

President to develop advice and

recommendations on ways to improve

the level of civil aviation safety and

security, both domestically and

internationally. The principal purpose

of the meeting on February 11, which

was postponed from its original date of

January 28, is to formulate the

Commission’s final recommendations to

the President.

The portion of the meeting from 9:00

am–12:00 noon, during which the

Commissioners will formulate their

recommendations on measures to

improve aviation security, will be

closed to the public pursuant to the

following exemptions in the

Government in the Sunshine Act, which

apply to public meetings under the

Federal Advisory Committee Act:

Exemption 1: Classified information.

In order properly to formulate their

recommendations, the Commissioners

may need to discuss or refer to

information properly classified in the

interest of national security, which may

not be done in public.

Exemption 3: Information exempted

from public disclosure by some other

statute. Under 49 USC 40119(b), the

Administrator of the Federal Aviation

Administration (FAA) may prohibit

public disclosure of certain categories of

information relating to aviation security,

if disclosure would constitute an

unwarranted invasion of personal

privacy, reveal company confidential

information, or create a risk to the safety

of individuals traveling in inter-or intrastate air transportation. These categories

are described at 14 CFR Part 191. Such

information will be discussed or

referred to at the meeting.

Exemption 4: Company confidential

information. There is competition in the

aviation industry in many forms: among

carriers, among equipment

manufacturers, and among software

manufacturers, among others. Public

discussion of some of these matters

could violate 18 USC 1905, which

makes it a crime to reveal improperly

company confidential information that

has come into the possession of the

Government.

Exemption 9: Premature disclosure

would lead to frustration of proposed

agency action. The final

recommendations of the Commission

have not been formulated; it is possible,

however, that public knowledge of some

of the security recommendations may

frustrate their acceptance and

implementation by the FAA and other

agencies. The Commission is authorized

to protect against this possibility.

Limited seating for the public portion

of the meeting is available on a firstcome, first-served basis. The public may

submit written comments to the

Commission at any time; comments

should be sent to Mr. Pemberton at the

address and telecopier number shown

above.

Issued in Washington, DC, on January 24,

1997.

Nancy E. McFadden,

General Counsel, Department of

Transportation.

[FR Doc. 97–2336 Filed 1–29–97; 8:45 am]

BILLING CODE 4910–62–P

Coast Guard

[CGD08–96–063]

Lower Mississippi River Waterway

Safety Advisory Committee Gaming

Vessel Subcommittee

AGENCY: Coast Guard, DOT.

ACTION: Notice of meeting.

SUMMARY: The Lower Mississippi River

Waterway Safety Advisory Committee’s

Gaming Vessel Subcommittee will meet

to discuss navigation safety matters

affecting the Lower Mississippi River

area. The meeting will be open to the

public.

DATES: The meeting will be held from 10

a.m. to approximately 12 noon on

Tuesday, February 18, 1997.

ADDRESSES: The meeting will be held in

room 1830 of the World Trade Center,

2 Canal Street, New Orleans, Louisiana.

FOR FURTHER INFORMATION CONTACT:

Mr. Monty Ledet, USCG, Administrator,

Lower Mississippi River Waterway

Safety Advisory Committee, c/o

Commander, Eighth Coast Guard

District (oan), Room 1211, Hale Boggs

Federal Building, 501 Magazine Street,

New Orleans, LA 70130–3396,

telephone (504) 589–4686.

SUPPLEMENTARY INFORMATION: Notice of

this meeting is given pursuant to the

Federal Advisory Committee Act, 5

U.S.C. App. 2 section 1 et seq. The

meeting is open to the public. Members

of the public may present written or oral

statements at the meeting. The agenda

for the meeting consists of the following

items:

(1) Introduction of members.

(2) Discussion of emergency

evacuation of gaming vessels.

(3) Presentation of any additional new

items for consideration of the

Committee.

INFORMATION ON SERVICES FOR

INDIVIDUALS WITH DISABILITIES: For

information on facilities or services for

individuals with disabilities or to

request special assistance at the

meeting, contact the Administrator

where listed under ‘‘For Further

Information Contract’’ as soon as

possible.

Dated: January 10, 1997.

T. W. Josiah,

Rear Admiral, U.S. Coast Guard, Commander,

Eighth Coast Guard District.

[FR Doc. 97–2341 Filed 1–29–97; 8:45 am]

BILLING CODE 4910–14–M