1008 Federal Register / Vol. 62, No. 4 / Tuesday, January 7, 1997 / Notices

1 15 U.S.C. § 78s(b)(1).

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 37947

(November 13, 1996), 61 FR 59124. In Amendment

No. 1 to the proposed rule change, submitted on

November 8, 1996, the Exchange replaced the text

of the proposed rule change originally filed with

rule text changed to reflect previously inadvertently

omitted language. See Securities Exchange Act

Release No. 37947 at note 2.

4Letter from David T. Rusoff, Esq., Foley &

Lardner, to Janet W. Russell-Hunter, Special

Counsel, Office of Market Supervision, Division of

Market Regulation, SEC, dated December 23, 1996.

In Amendment No. 2, the CHX amended the

proposed rule change to request an extension of the

pilot through March 1, 1997, rather than a request

for permanent approval of the program, and agreed

to submit additional data regarding the pilot by

January 31, 1997.

5See Securities Exchange Act Release No. 35753

(May 22, 1995), 60 FR 28007.

6See Securities Exchange Act Release No. 36027

(July 27, 1995), 60 FR 39465.

7See Securities Exchange Act Release No. 37491

(July 29, 1996), 61 FR 40690.

8CHX Rule 37 (e)–(f).

9See Securities Exchange Act Release No. 30058

(December 10, 1991), 56 FR 65765.

incurred in connection with the

reorganization were paid by SHIP I after

the reorganization.

7. As of the date of the application,

applicant had no shareholders and no

securities outstanding, and has no debts

or other liabilities outstanding.

Applicant is not a party to any litigation

or administrative hearing. Applicant is

neither engaged, nor proposes to engage,

in any business activities other than

those necessary for the winding up of its

affairs.

8. Applicant filed articles of merger

with the State of Maryland on April 12,

1996, which became effective on April

15, 1996.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–242 Filed 1–6–97; 8:45 am]

BILLING CODE 8010–01–M

Sunshine Act Meeting

Notice is hereby given, pursuant to

the provisions of the Government in the

Sunshine Act, Pub. L. 94–409, that the

Securities and Exchange Commission

will hold the following meeting during

the week of January 6, 1997.

A closed meeting will be held on

Wednesday, January 8, 1997, at 10:00

a.m.

Commissioners, Counsel to the

Commissioners, the Secretary to the

Commission, and recording secretaries

will attend the closed meeting. Certain

staff members who have an interest in

the matters may also be present.

The General Counsel of the

Commission, or his designee, has

certified that, in his opinion, one or

more of the exemptions set forth in 5

U.S.C. 552b(c) (4), (8), (9)(A) and (10)

and 17 CFR 200.402(a) (4), (8), (9)(i) and

(10), permit consideration of the

scheduled matters at the closed meeting.

Commissioner Johnson, as duty

officer, voted to consider the items

listed for the closed meeting in a closed

session.

The subject matter of the closed

meeting scheduled for Wednesday,

January 8, 1997, at 10:00 a.m., will be:

Injunction and settlement of

injunctive actions.

Institution and settlement of

administrative proceedings of an

enforcement nature.

Formal order of investigation.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postponed, please contact: The Office

of the Secretary at (202) 942–7070.

Dated: January 3, 1997.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–441 Filed 1–3–97; 3:53 pm]

BILLING CODE 8010–01–M

[Release No. 34–38098; File No. SR–CHX–

96–26]

Self-Regulatory Organizations;

Chicago Stock Exchange, Inc.; Order

Approving and Notice of Filing and

Order Granting Accelerated Approval

of Amendment No. 2 to Proposed Rule

Change Relating to Enhanced

SuperMAX and Timed Enhanced

SuperMAX

December 30, 1996.

I. Information

On October 9, 1996, the Chicago Stock

Exchange, Incorporated (‘‘CHX’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposal relating to its

SuperMAX system, seeking permanent

approval of the existing pilot program.

The proposed rule change was

published for comment in the Federal

Register on November 20, 1996.3 The

CHX filed an amendment (‘‘Amendment

No. 2’’) to the proposal on December 30,

1996.4 No comments were received on

the proposed rule change. This order

approves the Exchange’s proposal as

amended.

II. Description of the Proposal

On May 22, 1995, the Commission

approved a proposed rule change of the

CHX that allows specialists on the

Exchange, through the Exchange’s MAX

system, to provide order execution

guarantees that are more favorable than

those required under CHX Rule 37(a),

Article XX.5 That approval order

contemplated that the CHX would file

with the Commission specific

modifications to the parameters of MAX

that are required to implement various

options available under this new rule.

On July 27, 1995, the Commission

approved a proposed rule change of the

CHX that implemented two options

available under this new rule.6 These

two new options, Enhanced SuperMAX

and Timed Enhanced SuperMAX, were

approved on a pilot basis until July 31,

1996. The Commission extended the

pilot program until December 31, 1996

and requested that the CHX provide a

report to the Commission, by August 31,

1996,7 describing its experience with

the pilot program. On August 30, 1996,

the CHX submitted a report.

The Exchange, based on its amended

proposal, has requested a further

extension for its Enhanced SuperMAX

and Timed Enhanced SuperMAX pilot

program8 through March 1, 1997. As

stated above, the two options available

in the pilot program are Enhanced

SuperMAX and Timed Enhanced

SuperMAX. Enhanced SuperMAX is

merely a reactivation of the Exchange’s

Enhanced SuperMAX program, a

program originally approved by the

Commission on a pilot basis in 1991.9

The proposed Enhanced SuperMAX

program differs from the original pilot

program approved in 1991 in that it is

available starting at 8:45 a.m. instead of

9:00 a.m. This program also differs from

the Exchange’s SuperMAX program in

that under this program, certain orders

are ‘‘stopped’’ at the consolidated best

bid or offer and are executed with

reference to the next primary market

sale instead of the previous primary

market sale. Timed Enhanced

SuperMAX is a slight variation on the

Enhanced SuperMAX program. It

executes orders in the same manner as

the Enhanced SuperMAX program

except that if there are no executions in

the primary market after the order has

been stopped for a designated time

period, the order is executed at the

stopped price at the end of such period.

Such period, known as a time out

period, is pre-selected by a specialist on

a stock-by-stock basis based on the size

of the order, may be changed by a

specialist no more frequently than once
Federal Register / Vol. 62, No. 4 / Tuesday, January 7, 1997 / Notices 1009

10See Securities Exchange Act Release No. 36027,

supra note 6.

11Telephone conversation between David T.

Rusoff, Esq. Foley & Lardner, and Janet RussellHunter, Special Counsel, Office of Market

Supervision, Division of Market Regulation, SEC,

on December 23, 1996.

12 15 U.S.C. 78s(b)(2).

13 17 CFR 200.20–3(a)(12).

a month, and may be no less than 30

seconds.

III. Discussion

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

Section 6(b)(5) of the Act, in that the

proposal is designed to promote just and

equitable principles of trade, to remove

impediments to and to perfect the

mechanism of a free and open market

and a national market system, and, in

general, to protect investors and the

public interest. Specifically, the

Commission continues to believe that

the pricing and execution procedures of

Enhanced SuperMAX and Timed

Enhanced SuperMAX are consistent

with the maintenance of fair and orderly

auction markets on national securities

exchanges.The Commission asked the

Exchange to monitor the operation of

the systems and determine their

effectiveness and to submit a report to

the Commission describing its

experience with the pilot program.10

While the Exchange submitted a report

on August 30, 1996, the Commission

has requested and the Exchange has

agreed to submit, by January 31, 1997,

certain supplemental data regarding the

pilot program.

The Commission believes that this

additional data and conclusions reached

therefrom will be critical in determining

whether to further extend or

permanently approve the program.

Moreover, extending the effectiveness of

the pilot program until March 1, 1997

will give the Commission an

opportunity to carefully and

comprehensively evaluate the

information provided by the Exchange.

Accordingly, the Commission believes it

is reasonable to extend the Enhanced

SuperMAX and Timed Enhanced

SuperMAX pilot program until March 1,

1997, and to request that the Exchange

submit additional data to the

Commission by January 31, 1997.

Any requests to modify this pilot

program, extend its effectiveness, or to

seek permanent approval for the pilot

program should be submitted to the

Commission by January 31, 1997 as a

proposed rule change pursuant to

Section 19(b) of the Act.

The Commission finds good cause for

approving Amendment No. 2 to the

proposed rule change prior to the

thirtieth day after the date of

publication of notice thereof in the

Federal Register. Amendment No. 2

requests that rather than being approved

on a permanent basis, that the Enhanced

SuperMAX and Timed Enhanced

SuperMAX features of the SuperMAX

system be approved through March 1,

1997, which will permit the pilot

program to remain in effect without

interruption. In addition, the Exchange

has represented that no problems have

arisen and no complaints have been

received concerning the pilot program

since its implementation.11

Accordingly, the Commission believes

there is good cause, consistent with

Sections 6(b)(5) and 19(b)(2) of the Act,

to approve Amendment No. 2 on an

accelerated basis.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment No.

2. 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 at

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 Exchange. All submission

should refer to File No. SR–CHX–96–26

and should be submitted by January 28,

1997.

V. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,12 that the

proposed rule change (SR–CHX–96–26),

as amended, is approved, and

accordingly, that the pilot program is

extended until March 1, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–237 Filed 1–6–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38097; File No. SR–NASD–

96–45]

Self-Regulatory Organizations; Notice

and Immediate Effectiveness of

Proposed Rule Change by National

Association of Securities Dealers, Inc.,

Relating to Small Order Execution

System Tier Size Classifications

December 30, 1996.

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 18, 1996,

the National Association of Securities

Dealers, Inc. (‘‘NASD’’ or ‘‘Association’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’ or ‘‘SEC’’)

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the NASD. 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 NASD is submitting this filing to

effectuate The Nasdaq Stock Market,

Inc.’s (‘‘Nasdaq’’) periodic

reclassification of Nasdaq Market

(‘‘NNM’’) securities into appropriate tier

sizes for purposes of determining the

maximum size order for a particular

security eligible for execution through

Nasdaq’s Small Order Execution System

(‘‘SOES’’) and the minimum quote size

requirements for Nasdaq market makers

in NNM securities. Specifically, under

the proposal, 762 NNM securities will

be reclassified into a different SOES tier

size effective January 2, 1997. Since the

NASD’s proposal is an interpretation of

existing NASD rules, there are no

language changes.

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

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 NASD has

prepared summaries, set forth in

Sections A, B, and C below, of the most

significant aspects of such statements.