Federal Register / Vol. 62, No. 161 / Wednesday, August 20, 1997 / Notices 44299

7 15 U.S.C. 78f(b)(5).

8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4 (1991).

3The Exchange notes that the existing customer

base for FLEX Equity Options includes both

institutional investors, in particular mutual funds,

money managers and insurance companies, and

high net worth individuals who meet the

‘‘sophisticated investor’’ criteria applied to various

clients by Exchange member firms.

The Exchange believes the proposed

rule change is consistent with the

requirements of Section 6(b)(5) of the

Act 7 that an exchange have rules that

are designed to promote just and

equitable principles of trade, and, in

general, to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The proposed rule change does not

impose any burden on competition that

is not necessary or appropriate in

furtherance of the purposes of the Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The Exchange has not solicited, and

does not intend to solicit, comments on

the proposed rule change. The Exchange

has not received any unsolicited written

comments from members or other

interested parties.

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

Interest 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 such

filing will also be available for

inspection and copying at the principal

office of the NYSE. An submissions

should refer to File No. SR–NYSE–97–

23 and should be submitted by

September 10, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–22058 Filed 8–19–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38933; File No. SR–PCX–

97–25]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the Pacific Exchange,

Inc. Relating to the Reduction in

Minimum Size for Closing

Transactions in FLEX Equity Options

August 13, 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 21,

1997, the Pacific Exchange, Inc. (‘‘PCX’’

or ‘‘Exchange’’) filed with the Securities

and Exchange Commission

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

rule change as described in Items I and

II below, which Items have been

prepared by the PCX. The Commission

is publishing this notice to solicit

comments on the proposed rule change

from interested persons and to grant

accelerated approval to the proposed

rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to reduce

from 100 contracts to 25 contracts the

minimum value size of closing

transactions in and exercises of FLEX

Equity Options, and to make a

comparable reduction in the minimum

value size of FLEX Equity Quotes in

response to a Request for Quotes. The

text of the proposed rule change is

available at the Office of the Secretary,

PCX 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

PCX 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 self-regulatory

organization 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 reduce from 100 contracts

to 25 contracts the minimum value size

of closing transactions in and exercises

of FLEX Equity Options, and to make a

comparable reduction in the minimum

value size of FLEX Equity Quotes in

response to a Request for Quotes.

Currently, Rule 8.102(d)(3) imposes a

100 contract minimum on all

transactions in FLEX Equity Options

unless the transaction is for the entire

remaining position in the account. The

Exchange believes that the current

minimum value size of closing and

exercise transactions in FLEX Equity

Options is too large to accommodate the

needs of certain members firms and

their customers.3 These firms may

purchase 100 or more FLEX Equity

Options in an opening transaction for a

single firm account in which more than

one of the firm’s clients have an interest.

If one of these clients wants to redeem

its investment in the account, the firm

likely will want to engage in a closing

or exercise transaction in order to

reduce the account’s position in those

FLEX Equity Options by the number

being redeemed. Thus, if the redeeming

client’s interest is less than 100 FLEX

Equity Options and does not represent

the total remaining position in the

account, Rule 8.102(d)(3), as it stands

presently, prevents the firm from

closing or exercising positions of this

size.

The Exchange believes that the

proposed rule change would remedy the

situation described above, by permitting

an order to close or exercise as few as
44300 Federal Register / Vol. 62, No. 161 / Wednesday, August 20, 1997 / Notices

4The Commission notes that the minimum size

for an opening transaction in a Request for Quotes

is 250 contracts for any FLEX series in which there

is no open interest, and 100 contracts in any

currently opened FLEX series. See PCX Rule

8.102(d)(2) and (3).

5See File No. SR–PCX–97–25.

6 Id.

7 15 U.S.C. 78f(b)(5).

8 15 U.S.C. 78f.

9 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).

10 15 U.S.C. 78f(b)(5).

11See Securities Exchange Act Release No. 36841

(February 14, 1996), 61 FR 6666 (February 21, 1996)

(‘‘Original FLEX Equity Option Approval Order’’).

12See supra note 4.

13See Original FLEX Equity Option Approval

Order, supra note 11.

14The Commission notes that the PCX has

previously committed to providing the Commission

with a report on the usage of FLEX Equity Options

25 FLEX Equity Option contracts. The

corresponding change to Rule

8.102(d)(4), which governs the

minimum size for FLEX Equity Quotas

that may be entered in response to

Request for Quotes, is necessary in order

to provide the liquidity needed to

facilitate the execution of closing orders

between 25 and 99 FLEX Equity Option

contracts that would be permitted by the

proposed amendment to Rule

8.102(d)(3).4

The Exchange represents that it will

issue a circular that (1) describes the

new rule; and (2) reminds all members

and member firms of their continuing

responsibility to ensure that FLEX

Equity Options are utilized only by

sophisticated investors with the

necessary financial resources to sustain

the possible losses arising from

transactions in the requisite FLEX

Equity Options class size.5 The

Exchange also will submit surveillance

procedures for the Commission’s

review.6 The Exchange believes these

procedures will help to ensure that only

such sophisticated investors are

utilizing this product.

The Exchange believes by providing

firms and their customers greater

flexibility to trade FLEX Equity Options

by lowering from 100 to 25 the

minimum number of contracts required

for a closing transaction, for exercises,

and for FLEX Quotes responsive to a

Request for Quotes, the proposed rule

change is consistent with and furthers

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

Act 7 by removing impediments to and

perfecting the mechanism of a free and

open market in securities and other

serving to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The PCX does not believe that the

proposed rule change will impose any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments on the proposed

rule change were neither solicited nor

received.

III. 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 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 in

the Commission’s Public Reference

Room, 450 Fifth Street NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the PCX. All submissions

should refer to File No. SR–PCX–97–25

and should be submitted by September

10, 1997.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Exchange has requested

accelerated effectiveness of this

proposed rule change. The Commission

has reviewed carefully the PCX’s

proposed rule change and believes, for

the reasons set forth below, the proposal

is consistent with the requirements of

Section 6 of the Act,8 and the rules and

regulations thereunder applicable to a

national securities exchange.9

Specifically, the Commission believes

the proposal is consistent with Section

6(b)(5) of the Act 10 because it should

facilitate transactions in securities in

FLEX Equity Options consistent with

investor protection and the public

interest.

The Commission believes that the

Exchange’s proposal to reduce from 100

contracts to 25 contracts the minimum

value size of closing transactions in and

exercise of FLEX Equity Options, and to

make a comparable reduction in the

minimum value size of FLEX Equity

Quotes in response to a Request for

Quotes, reasonably addresses the

Exchange’s desire to meet the demands

of sophisticated investors, portfolio

managers and other institutional

investors who may want to use FLEX

Equity Options, but find the minimum

size requirements for closing

transactions too restrictive for their

investment needs and may therefore

choose to use the over-the-counter

market. As previously noted by the

Commission, the benefits of the

Exchange’s FLEX options market

include, but are not limited to, a

centralized market center, an auction

market with posted transparent market

quotations and transaction reporting,

parameters and procedures for clearance

and settlement, and the guarantee of the

Options Clearing Corporation for all

contracts traded on the Exchange.11

The Commission notes that market

participants wanting to execute an

opening transaction in a particular

series of FLEX Equity Options will

continue to be required to meet the 250

or 100 minimum contract

requirement.12 The Commission

believes that this should help to ensure

that transactions in FLEX Equity

Options remain of substantial size and,

therefore, the product is geared to an

institutional, rather than a retail market.

In originally approving FLEX Equity

Options, the Commission stated that the

minimum value sizes for opening

transactions in FLEX Equity Options are

designed to appeal to institutional

investors and it is unlikely that most

retail investors would be able to engage

in options transactions at that size.13

The Commission further notes that, in

approving the proposal, adequate

surveillance guidelines should be in

place to ensure that only sophisticated

investors with the necessary financial

resources to sustain the possible losses

arising from transactions in the requisite

FLEX Equity Options class size are

utilizing this product. The

Commission’s staff has reviewed the

PCX’s surveillance program and

believes it provides a reasonable

framework in which to monitor such

investor open interest.

The Commission requests, however,

that the Exchange provide a report to

the Commission’s Division of Market

Regulation describing the nature of

investor participation (i.e., retail vs.

institutional) in FLEX Equity Options

for one year from the implementation

date for the rule change.14 If the
Federal Register / Vol. 62, No. 161 / Wednesday, August 20, 1997 / Notices 44301

after the first year of trading. See Original FLEX

Equity Option Approval Order, supra note 11.

Because that report is due to the Commission

shortly and the changes adopted herein could

potentially change the nature of investor

participation, the Commission requests that the

Exchange update its report one year from the

implementation date of this rule change.

15See Securities Exchange Act Release No. 38839

(July 15, 1997), 62 FR 39040 (July 21, 1997) (order

approving File No. SR–CBOE–97–10).

16 15 U.S.C. 78f and 78s(b)(2).

17 15 U.S.C. 78s(b)(2).

18 17 CFR 200.30–3(a)(12).

Exchange determines in the interim that

the proposed rule change has resulted in

a pattern of retail investor participation

in FLEX Equity Options, it should notify

the Commission’s Division of Market

Regulation to determine if the minimum

closing transaction sizes should be

restored to the original levels.

The Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice thereof in the

Federal Register. The Commission notes

that the proposed rule change is

identical to a proposal of the Chicago

Board Options Exchange (‘‘CBOE’’) that

was recently approved by the

Commission.15 Therefore, the

Commission believes that the proposal

raises no new regulatory issues. In

addition, the Commission notes that

public comments were solicited on the

CBOE’s proposal for the full statutory

period and no comments were received.

Finally, as the proposal conforms the

rules of the Exchange’s FLEX Equity

options market to that of another

exchange offering FLEX products, the

Commission believes that the proposed

rule will allow the PCX to compete

more effectively in the FLEX options

market. Based on the above, the

Commission believes that granting

accelerated approval of the proposed

rule change is consistent with Sections

6 and 19(b)(2) of the Act.16

It Is Therefore Ordered, pursuant to

Section 19(b)(2) of the Act,17 that the

proposed rule change (SR–PCX–97–25)

is hereby approved on an accelerated

basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.18

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–22059 Filed 8–19–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Reporting and Recordkeeping

Requirements Under OMB Review

ACTION: Notice of reporting requirements

submitted for review.

SUMMARY: Under the provisions of the

Paperwork Reduction Act (44 U.S.C.

Chapter 35), agencies are required to

submit proposed reporting and

recordkeeping requirements to OMB for

review and approval, and to publish a

notice in the Federal Register notifying

the public that the agency has made

such a submission.

DATES: Comments should be submitted

on or before September 18, 1997. If you

intend to comment but cannot prepare

comments promptly, please advise the

OMB Reviewer and the Agency

Clearance Officer before the deadline.

Copies: Request for clearance (OMB

83–1), supporting statement, and other

documents submitted to OMB for

review may be obtained from the

Agency Clearance Officer. Submit

comments to the Agency Clearance

Officer and the OMB Reviewer.

FOR FURTHER INFORMATION CONTACT:

Agency Clearance Officer: Jacqueline

White, Small Business Administration,

409 3rd Street, S.W., 5th Floor,

Washington, D.C. 20416, Telephone:

(202) 205–6629.

OMB Reviewer: Victoria Wassmer,

Office of Information and Regulatory

Affairs, Office of Management and

Budget, New Executive Office Building,

Washington, D.C. 20503.

Title: Business Information Center

Customer Satisfaction Survey.

Form No: 1916.

Frequency: On Occasion.

Description of Respondents: Small

Business Clients.

Annual Responses: 22,500.

Annual Burden: 225

Dated: August 15, 1997.

Jacqueline White,

Chief, Administrative Information Branch.

[FR Doc. 97–22037 Filed 8–19–97; 8:45 am]

BILLING CODE 8025–01–P

SOCIAL SECURITY ADMINISTRATION

Privacy Act of 1974, as Amended;

Computer Matching Programs (SSA/

States Wage, Unemployment

Compensation (UC) Files—SSA Match

Numbers 1140, 1142)

AGENCY: Social Security Administration

(SSA).

ACTION: Notice of Computer Matching

Programs.

SUMMARY: In accordance with the

provisions of the Privacy Act, this

notice announces a computer matching

program that SSA plans to conduct with

the States.

DATES: SSA will file a report of the

subject matching program with the

Committee on Governmental Affairs of

the Senate, the Committee on

Government Reform and Oversight of

the House of Representatives and the

Office of Information and Regulatory

Affairs, Office of Management and

Budget (OMB). The matching program

will be effective as indicated below.

ADDRESSES: Interested parties may

comment on this notice by either telefax

to (410) 966–2935, or writing to the

Associate Commissioner for Program

Support, 4400 West High Rise Building,

6401 Security Boulevard, Baltimore, MD

21235. All comments received will be

available for public inspection at this

address.

FOR FURTHER INFORMATION CONTACT: The

Associate Commissioner for Program

Support as shown above.

SUPPLEMENTARY INFORMATION:

A. General

The Computer Matching and Privacy

Protection Act of 1988 (Pub. L. 100–

503), amended the Privacy Act (5 U.S.C.

552a) by establishing conditions under

which computer matching involving the

Federal Government could be performed

and adding certain protections for

individuals applying for and receiving

Federal benefits. Section 7201 of the

Omnibus Budget Reconciliation Act of

1990 (Pub. L. 101–508) further amended

the Privacy Act regarding protections for

such individuals. The Privacy Act, as

amended, regulates the use of computer

matching by Federal agencies when

records in a system of records are

matched with other Federal, State, or

local government records. Among other

things, it requires Federal agencies

involved in computer matching

programs to:

(1) Negotiate written agreements with

the other agency or agencies

participating in the matching programs;

(2) Obtain Data Integrity Board

approval of the match agreements;

(3) Furnish detailed reports about

matching programs to Congress and

OMB;

(4) Notify applicants and beneficiaries

that their records are subject to

matching; and

(5) Verify match findings before

reducing, suspending, terminating, or

denying an individual’s benefits or

payments.