Federal Register / Vol. 62, No. 171 / Thursday, September 4, 1997 / Notices 46787

4 15 U.S.C. 78f and 78s(b)(2).

5 15 U.S.C. 78s(b)(2).

6 17 CFR 200.30–3(a)(12).

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

2Quotations and quotation sizes in reported

securities may be entered into the Consolidated

Quotations Service (CQS) through The Nasdaq

Stock Market only by an Association member

registered with it as a CQS market maker. See

NASD rule 6320.

facility to prevent the potential for

manipulation or misuse of specialists’

information regarding which limit

orders are eligible for execution in the

AHT facility.

In the original approval order, the

Commission observed that the pilot

program should assist specialists in

their obligation to minimize temporary

disparity between supply and demand.

Moreover, the Commission agreed with

the Exchange that the pilot program

should benefit investors by providing

additional liquidity to the listed cash

market for derivative securities based

upon well-known market indexes. The

Commission also noted that the

proposed rule change struck a

reasonable balance between the

Exchange’s need to accommodate the

needs of investors by providing

additional liquidity to the listed cash

market for derivative securities based on

market indexes, and the need to prevent

the potential for manipulation or

misuses of information.

The Commission initially approved

the pilot program for one year. The pilot

program has been extended several

times to allow the Exchange and the

Commission to evaluate further whether

there were additional issues that needed

to be addressed. At the Commission’s

request, the Exchange submitted a

report with this rule filing describing

the Exchange’s experience with the pilot

program. According to the report, there

was very limited trading volume in the

AHT for SPDRs, investment trust

securities and Index Fund Shares during

August 1, 1996 to May 30, 1997. Given

the experience Amex has gained

through extended operation and

renewal of the pilot program, the

Commission expects the Amex to

determine, at least two months prior to

expiration of the current pilot, whether

to seek permanent approval of, or

discontinue, the pilot. Should the

Exchange decide to seek permanent

approval of the pilot program, it should

submit another report to the

Commission by May 1, 1998, describing

its experiences with the pilot program.

The Commission believes that there is

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. This

will permit the pilot program to

continue on an uninterrupted basis for

another year, until August 29, 1998. The

Exchange proposes to continue using

the identical procedures contained in

the pilot program as originally

approved. In addition, the rule change

that implemented the pilot program was

published in the Federal Register for

the full comment period and no

comments were received. Accordingly,

the Commission believes that it is

consistent with Sections 6 and 19(b) of

the Act 4 to accelerate approval of the

proposal rule change.

It is therefore, ordered, pursuant to

Section 19(b)(2) of the Act,5 that the

proposed rule change (SR–Amex–97–

28) is hereby approved on an

accelerated basis.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–23392 Filed 9–3–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38985; File No. SR–NASD–

97–53]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to Trading in

Exchange-Listed Securities in the

Third Market

August 27, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

July 28, 1997, the National Association

of Securities Dealers, Inc. (‘‘NASD’’),

through its wholly-owned subsidiary,

The Nasdaq Stock Market, Inc.

(‘‘Nasdaq’’), 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 Nasdaq. 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 proposing to amend

several rules governing the trading in

exchange-listed securities in the overthe-counter market. Specifically, the

NASD is proposing to amend rules of

the NASD to: (1) Codify permissible

uses of computer-generated quote

systems with respect to exchange-listed

securities; (2) eliminate the excess

spread rule for market makers in

exchange-listed securities; (3) reduce

the minimum quotation size applicable

to market makers in exchange-listed

securities to one unit of trading (i.e., 100

shares), regardless of whether the CQS

market maker 2 is displaying a

customer’s limit order or quoting for its

own proprietary account; (4) extend

exemptive provisions of the NASD’s

limit order protection rule applicable to

Nasdaq-listed securities (the ‘‘Manning

Rule’’) to exchange-listed securities; and

(5) reduce from 1000 to 100 the number

of shares that the Computer Assisted

Execution System (‘‘CAES’’) will

execute automatically. Below is the text

of the proposed rule change. Proposed

new language is underlined; proposed

deletions are in brackets.

6330. Obligations of CQS Market Makers

(a) No Change.

(b) [CQS market makers shall be

required to input a minimum quotation

size of 200 or 500 shares in each

reported security (as established and

published from time to time by the

Association) depending on trading

characteristics of the security; provided

that a CQS market maker may input a

quotation size less than such minimum

quotation size to display a limit order in

compliance with SEC Rule 11Ac1–4. A

limit order displayed in a] A CQS

market maker’s quotation [pursuant to

SEC Rule 11Ac1–4] must be for at least

one normal unit of trading [or a multiple

thereof].

[(c) Excess Spreads.

A market maker shall not enter

quotations in CQS securities that exceed

the parameters for maximum allowable

spreads as approved by the

Association’s Board of Governors and

that may be published from time to time

by the Association. The maximum

allowable spreads for CQS securities

shall be 125 percent of the average of

the three (3) narrowest market maker

spreads in each security, which average

spread calculations shall include

quotations from national securities

exchanges (if the number of CQS market

makers in a security plus the number of

national securities exchanges trading

that security is less than three (3), the

maximum allowable spread will be 125

percent of the average spread);

provided, however, that the maximum

allowable spread shall never be less

than 1⁄4 of a point.]

(d) redesignated as paragraph (c)

(d) Computer-Generated Quotations.

(1) General Prohibition—Except as

provided below, this rule prohibits the
46788 Federal Register / Vol. 62, No. 171 / Thursday, September 4, 1997 / Notices

3See Securities Exchange Act Release No.

37619A (September 6, 1997), 61 FR 48290

(September 12, 1997) (‘‘Adopting Release’’). The

Commission adopted Rule 11Ac1–4 (‘‘Limit Order

Display Rule’’) and amendments to Rule 11Ac1–1

(‘‘Quote Rule’’) (collectively ‘‘Order Execution

Rules’’).

4An amendment to the Quote Rule expanded the

quotation requirements of substantial OTC market

makers and exchange specialists to require that they

publicly disseminate continuous two-sided

quotations for any exchange-listed security for

which they account for one percent or more of the

trading volume (commonly referred to as the ‘‘1%

Rule’’). See Adopting Release. While the

amendments to the Quote Rule extended the

quotation requirement to all exchange-listed

securities, the Commission, by exemptive order, has

provided relief from compliance with the 1% Rule,

with respect to non-19c–3 securities, until

September 30, 1997. See Exchange Act Release No.

38870 (July 24, 1997), 62 FR 40732 (July 30, 1997).

Therefore, currently, OTC market makers and

exchange specialists publicly disseminate

quotations only when they are responsible for one

percent or more of the trading volume in a 19c–3

security.

5See Adopting Release at Section III.B.3.c.i.

6 Id.

7 Id.

8 Id.

automatic updating or tracking of inside

quotations in CQS by computergenerated quote systems. This ban is

necessary to offset the negative impact

on the capacity and operation of

Nasdaq systems regarding certain

systems that track changes to the inside

quotation and automatically react by

generating another quote to keep the

market maker’s quote away from the

best market, without any cognizable

human intervention.

(2) Exceptions to the General

Prohibition—Automated updating of

quotations is permitted when: (1) the

update is in response to an execution in

the security by that firm (such as

execution of an order that partially fills

a market maker’s quotation size); (2) it

requires a physical, cognizable entry

(such as a manual entry to the market

maker’s internal system which then

automatically forwards the update to a

Nasdaq system); (3) the update is to

reflect the receipt, execution, or

cancellation of a customer limit order;

(4) it is used to expose a customer’s

market or marketable limit order for

price improvement opportunities; or (5)

it is used to equal or improve either or

both sides of the national best bid or

offer (‘‘NBBO’’), or add size to the

NBBO.

* * * * *

6440. Trading Practices

(a)–(e) No Change

(f)(1) No Change

(f)(2) No Change

(3) The provisions of this paragraph

shall not apply:

(A) No Change

(B) No Change

(C) No Change

(D) to any purchase or sale for which

a member has negotiated specific terms

and conditions applicable to the

acceptance of limit orders that are:

(i) for customer accounts that meet

the definition of an ‘‘institutional

account’’ as that term is defined in Rule

3110(c)(4); or

(ii) for 10,000 shares or more, unless

such orders are less than $100,000 in

value.

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 statutory 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.

Nasdaq has prepared summaries, set

forth in Sections A, B, and C below, of

the most significant aspects of such

statements.

A. Self-Regulatory Organizations’

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In light of the implementation of the

Commission’s Order Execution Rules,3

and the impending implementation of

the ‘‘1% Rule’’ 4 to all exchange-listed

securities, the NASD is proposing the

following amendments to the rules

governing trading in exchange-listed

securities in the over-the-counter

market, the so-called ‘‘third market.’’

a. Permissibility of the Use of Certain

Automated Quotation Generation

Systems

The plan governing the Intermarket

Trading System (‘‘ITS Plan’’) currently

provides that exchange specialists and

CQS market makers may use

‘‘automated quotation tracking

systems,’’ provided that the quotations

generated by such systems are for 100

shares or less (‘‘100-Share Autoquoting

Limitation’’). Despite the ITS Plan’s

allowance of 100-share autoquotes, the

NASD prohibits CQS market makers

from using autoquote systems to effect

automated quote updates or to track the

inside market. In addition, the NASD

requires CQS market makers to maintain

a minimum quotation size of 500 shares,

with the exception of displaying a

customer limit order, which also

effectively prohibits CQS market makers

from autoquoting.

In expanding the 1% Rule, the

Commission recognized that it raised an

issue with respect to the ability of

NASD members to autoquote. The

Commission stated that ‘‘a total

prohibition on the use of computer

generated quotes is not appropriate’’

and that ‘‘[s]uch an approach

excessively limits the use of

sophisticated trading strategies that rely

on automation in the quotation process

for their success, and it also may act as

a competitive disadvantage to market

makers and specialists that would

otherwise rely on technology to meet

their quotation obligations more

efficiently.’’ 5 While the Commission

noted that it ‘‘recognizes traditional

concerns related to the accessibility of

computer generated quotes and the

impact of such quotes on system

capacity, it believes that more can and

should be done in this area.’’ 6 The

Commission stressed that more should

be done particularly ‘‘given the

enhanced quotation obligations that will

be imposed on some market participants

under the revised Quote Rule.’’ 7 The

Commission, therefore, urged the

‘‘NASD, ITS Participants, and other

interested market participants to

develop revised standards that would

permit the use of computer generated

quotes that contribute value to the

market.’’ 8

Accordingly, the NASD is proposing

to explicitly accommodate computergenerated quotations that add value to

the market and do not raise quotation

accessibility concerns or compromise

the capacity or integrity of Nasdaq.

Specifically, the proposed rule change

amends NASD Rule 6330 to permit

computer-generated quotations in

exchange-listed securities that generate

proprietary quotes for 100 shares or

more if such quote systems equal or

improve either or both sides of the

NBBO. For example, if a CQS market

marker utilized a computer-generated

quotation program to match the best

offer (bid) and the market responsible to

the best offer (bid) subsequently

increased (decreased) its offer (bid)

price, the CQS market maker could not

use the program to track such inferior

price. Thus, if the best offer is 201⁄4, a

CQS market maker could use the

program to improve its offer to 201⁄4. If

the market responsible for the 201⁄4 offer

moved to 203⁄8, however, the CQS

market maker could not use the program

to move its offer to 203⁄8.

In addition, the proposed rule change

amends Rule 6330 to permit computergenerated quotations that add size to the

NBBO, or are used to expose a

customer’s market or marketable limit

order for price improvement
Federal Register / Vol. 62, No. 171 / Thursday, September 4, 1997 / Notices 46789

9See NASD IM–4613. Specifically, these three

forms are: (1) Quotations updates in response to an

execution in the security by that firm (such as

execution of an order that partially fills a market

maker’s quotation size); (2) quotation updates that

require a physical entry (such as manual entry to

the market maker’s internal system which then

automatically forwards the update to Nasdaq); and

(3) quotation updates that reflect the receipt,

execution, or cancellation of a customer limit order.

10To the extent that approval of the proposed

amendments to Rule 6330 would result in NASD

rules permitting computer-generated quotations in

CQS securities to a greater degree than that

permitted under Section 8(d)(ii) of the ITS Plan, the

NASD requests that the Commission’s order

approving these amendments to Rule 6330

specifically provide that adherence to Rule 6330

supersedes adherence to Section 8(d)(ii) of the ITS

Plan until such time as the ITS Plan is amended to

contain similar provisions.

11See letter from David E. Shaw, Chairman, D.E.

Shaw & Co., Inc. to Alfred R. Berkeley, III,

President, The Nasdaq Stock Market, dated June 2,

1997, attached as Exhibit 2 (‘‘D.E. Shaw Letter’’).

opportunities. These uses would be in

addition to three other forms of

computer-enhanced quotation

maintenance programs referenced in the

NASD’s Autoquote Policy which are

also being incorporated into Rule 6330

with respect to exchange-listed

securities.9 With the exception of these

types of computer-generated quotation

and maintenance systems, all other

types of computer-generated quotations

would continue to be prohibited. Thus,

market makers could not use computergenerated quotations to track away from

the inside market (‘‘autoquoting

away’’).10

In approving this proposal, the NASD

was fully cognizant of and carefully

considered the views of some industry

participants that prohibiting

autoquoting away would subject CQS

market makers to a competitive

disadvantage vis-a-vis specialists on

regional exchanges.11 The NASD also

considered contrary arguments raised by

some industry participants that

permitting autoquoting away would

undermine the integrity of the third

market and facilitate the generation of

inaccessible market maker quotes. After

considering these views, the NASD

remains concerned with the potential

adverse impacts on market integrity and

Nasdaq system capacity that restricted

autoquoting away could cause.

Specifically, the NASD believes that the

potential increase in the number of OTC

market makers and corresponding quote

changes in the third market due to the

expansion of the 1% Rule, coupled with

more CQS market makers registering

and electing to quote in conjunction

with the SEC’s Limit Order Display

Rule, creates a market environment

where unfettered autoquoting away

would subject Nasdaq systems to

capacity constraints that would

compromise the integrity of The Nasdaq

Stock Market and the protection of

investors. In addition, the NASD is

concerned by the prior experience with

unlimited autoquoting by regional

exchange specialists. Unlimited

autoquoting away from the market

creates ephemeral quotations which can

appear to be at the best price for a few

seconds only to disappear before an

order realistically can be routed to the

quote. In short, the NASD believes that

unlimited computer-generated

quotations would diminish the positive

impact on quotation transparency

obtained from the Commission’s

expansion of the 1% Rule.

The NASD continues to believe that

autoquoting away should not be fostered

as a policy matter. The NASD, however,

is extremely concerned with the

competitive implications on CQS

market makers raised by the prospect

that while they are prohibited from

autoquoting away, specialists on

regional exchanges will continue to do

so. Accordingly, the NASD and Nasdaq

Boards considered alternatives designed

to provide CQS market markers with the

ability to update their quotes in an

efficient and cost effective manner

while minimizing the impact on the

operation and capacity of Nasdaq

systems that collect, process, and

disseminate quotation changes.

Ultimately, as discussed in more detail

below, the NASD voted to eliminate the

excess spread rule applicable to CQS

market makers in conjunction with

prohibiting autoquoting away. The

NASD believes that the elimination of

the excess spread rule for CQS securities

in conjunction with the retention of the

NASD’s ban on autoquoting away is a

prudent, balanced, and rational

approach to the resolution of an issue

critically important to the preservation

of the integrity and efficiency of Nasdaq.

As noted above, the NASD believes that

allowing autoquoting away will have a

profound adverse impact on the quality

of the third market and the operational

soundness of Nasdaq. However, in light

of the competitive implications to CQS

market makers, the NASD proposes to

enhance the quotation flexibility of CQS

market makers by eliminating the excess

spread rule for CQS securities. The

NASD trusts that eliminating the excess

spread rule for CQS securities will

nullify any competitive advantages that

specialists on regional exchanges, who

can autoquote away, may have over CQS

market makers who can not. Thus, as a

policy matter, not a capacity matter, the

NASD believes this to be a compromise

solution that is more beneficial to the

market place than allowing unfettered

computer-generated quotations.

b. Elimination of the Excess Spread Rule

The NASD’s excess spread rule

applicable to CQS securities currently

provides that a CQS market maker shall

not enter a quotation spread in excess of

125 percent of the average of the three

narrowest market marker spreads in

such security, which average spread

calculation shall include quotations

from national securities exchanges.

As discussed above, the analysis of

the proposed elimination of the CQS

excess spread rule was joined with the

NASD’s analysis of whether to permit

autoquoting away. The NASD

determined that the potential adverse

competitive consequences on highly

automated CQS market making firms

who are prohibited from autoquoting

away could be minimized if the excess

spread rule was eliminated.

Specifically, by eliminating the excess

spread rule for CQS securities, the

NASD believes that CQS market makers

will have more flexibility in quoting,

Nasdaq capacity will not be needlessly

consumed by processing voluminous

quote updates away from the market,

and the competitiveness of the third

market will not be compromised.

The NASD continues to believe that

an excess spread rule provides

important benefits for the

competitiveness and integrity of the

market in instances where Nasdaq is the

primary market. On the other hand, in

the third market, where Nasdaq is not

the primary market, the NASD believes

that imposition of an excess spread rule

may unduly hamper Nasdaq’s ability to

compete with the primary market and

other markets because it may constrain

the number of CQS market makers.

Because Nasdaq is not the primary

market for issues traded in the third

market, the NASD does not find it

inconsistent to eliminate the excess

spread rule for exchange-trade securities

while maintaining an excess spread rule

for Nasdaq securities. Accordingly, the

NASD is proposing to eliminate the

excess spread rule for CQS market

makers.

c. Changes to the Minimum Quote Size

Rule for CQS Market Makers

NASD Rule 6330(b) presently

provides that a CQS market maker must

display a minimum quotation size of

500 shares (‘‘500 Share Quote Rule’’),

with the exception of displaying a

customer limit order, which may be for

less than 500 shares.

In an environment where CQS market

makers were the only market

participants who could impact quotes in
46790 Federal Register / Vol. 62, No. 171 / Thursday, September 4, 1997 / Notices

12See Exchange Act Release No. 37663,

September 10, 1996 (61 FR 48725) (order approving

File No. SR–NASD–96–26).

13 Institutional limit orders are orders for

institutional accounts. NASD Rule 3110(c) defines

an institutional account as an account for: (1)

Banks, savings and loan associations, insurance

companies, or registered investment companies; (2)

investment advisers registered under Section 203 of

the Investment Advisers Act of 1940; and (3) any

other entity (whether a natural person, corporation,

partnership, trust, or otherwise) with total assets of

at least $50 million.

the third market, it was believed to be

desirable and appropriate to impose a

minimum quotation size requirement to

ensure an acceptable level of market

liquidity and depth. However, now that

the SEC’s Limit Order Display Rule

permits investors to directly impact

quoted prices in the third market by

having their limit orders displayed

publicly, the NASD believes it is

appropriate to treat CQS market makers

in a manner equivalent to exchange

specialists and not subject them to

minimum quote size requirements. In

sum, the NASD believes the increased

order-driven nature of the third market

brought about the SEC’s Limit Order

Display Rule obviates the justification

for the 500 Share Quote Rule.

Accordingly, the NASD is proposing to

amend the 500 Share Quote Rule to

permit a CQS market maker to post

quotations commensurate with their

own freely-determined trading interest,

provided, however, that the quotations

must be for at least one normal unit of

trading.

d. Modifications to CAES

CAES is an automated system

operated by Nasdaq that allows NASD

members to direct both agency and

principal orders (in stocks in which

they make a market) in exchange-listed

securities to CAES for automated

execution in the third market. All CQS

market makers must be CAES market

makers.

The implementation of the SEC’s

Limit Order Display Rule has

exacerbated a shortcoming in the design

of the current CAES system.

Specifically, while CAES volume is

minimal, CAES permits other CQS

market makers to send preferenced

orders of up to 1,000 shares to a CQS

market maker for automatic execution at

the best bid or offer among CQS market

makers. CAES will execute such orders

regardless of whether the CQS market

maker is at the best bid or offer (‘‘BBO’’),

regardless of whether the quote driving

the BBO is for less than 1,000 shares,

and regardless of whether the CQS

market maker wants to accept

preferenced orders from the order entry

firm or market maker. Thus, since the

implementation of the Order Execution

Rules has required market makers to

display customer limit orders, CQS

market makers are not only obligated to

execute trades up to 1,000 shares at

another market maker’s quote, they

must now also execute trades at

superior-priced limit orders displayed

by any other CQS market maker, even if

such limit orders are only for 100

shares. In addition, because Nasdaq no

longer quotes,12 CAES executes orders

at the best bid or offer price in the third

market instead of the national best bid

or offer (‘‘NBBO’’). As a result, when

there are no CQS market makers at the

NBBO, CAES is providing inferior

executions to customer orders.

In order to facilitate the best

execution of customer orders and not

subject CQS market makers to automatic

executions at prices other than their

posted quotes, the NASD believes it is

imperative that CAES be appropriately

modified. Accordingly, the NASD has

established a two-step process to amend

the operation of CAES—one a shortterm solution and the other a long-term

solution.

In the short term, and as part of the

instant filing, the NASD is proposing to

amend the operation of CAES so that it

automatically executes orders up to 100

shares instead of 1,000 shares. This

eliminates much of a market maker’s

exposure, although it does not

completely address the core deficiencies

with CAES noted above.

As a long-term solution, the NASD

plans a future proposal to amend the

operation of CAES so that: (1) It only

accepts priced orders; and (2) orders

will only be executed against a market

maker if the market maker’s quote is

equal to or better than the price of the

order (i.e., if a market maker’s bid was

20 it would be obligated to execute

orders to sell priced equal to 20 or

below).

e. Modifications to the Limit Order

Protection Rule Applicable to COS

Securities

NASD Rule 6440 provides that no

member shall trade ahead of a customer

limit order. Unlike the limit order

protection rule applicable to Nasdaq

securities (the ‘‘Manning Rule’’),

however, the limit order rule applicable

to CQS securities does not on its face

permit a member to negotiate special

terms and conditions with a customer

that would enable the firm to trade

ahead of, or at the same price as, the

limit order price. Specifically, under the

Manning Rule, member firms may

attach terms and conditions with

respect to the handling of limit orders

that are either: (1) For institutional

accounts; 13 or (2) limit orders that are

for 10,000 shares or greater, regardless

of whether they are for institutional

accounts, provided that the order is

$100,000 or more in value.

The NASD believes there is no basis

to differentiate between limit orders in

Nasdaq securities and limit orders in

exchange-listed securities with respect

to the protections afforded under NASD

rules. Accordingly, the NASD is

proposing to extend the ‘‘terms and

conditions’’ language of the Manning

Rule to the CQS limit order protection

rule.

The NASD believes that the proposed

rule change is consistent with the

provisions of Sections 11A(a)(1)(D),

11A(a)(2) and 15A(b)(6) of the Act.

Section 11A(a)(1)(D) of the Act states

that the linking of all markets for

qualified securities through

communications and data processing

facilities will foster efficiency, enhance

competition, increase the information

available to brokers, dealers and

investors, facilitate the offsetting of

investor’s orders and contribute to best

execution of such orders, and

subsection (a)(2) thereunder directs the

Commission to facilitate the

establishment of a national market

system for qualified securities. Section

15A(b)(6) requires that the rules of a

national securities association be

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, processing

information with respect to, and

facilitating transactions in securities, to

remove impediments to and perfect the

mechanism of a free and open market

and a national market system and in

general to protect investors and the

public interest. The proposed rule

change will enhance the national market

system for exchange-listed securities

and will further the implementation of

the Commission’s Order Execution

Rules with respect to exchange-listed

securities, thereby benefitting all market

participants and investors.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq does not believe that the

proposed rule change will result in any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, as amended.
Federal Register / Vol. 62, No. 171 / Thursday, September 4, 1997 / Notices 46791

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.

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

Room, 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 NASD. All submissions

should refer to the file number in the

caption above and should be submitted

by September 25, 1997.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–23391 Filed 9–3–97; 8:45 am]

BILLING CODE 8010–01–M

TENNESSEE VALLEY AUTHORITY

Sunshine Act Meeting

AGENCY HOLDING THE MEETING: Tennessee

Valley Authority (Meeting No. 1497).

TIME AND DATE: 9 a.m. (CDT), September

8, 1997.

PLACE: Glasgow Electric Plant Board

Building Auditorium, 100 Mallory

Drive, Glasgow, Kentucky.

STATUS: Open.

AGENDA: Approval of minutes of meeting

held on August 5, 1997.

New Business

A—Budget and Financing

A1. Approval of short-term borrowing

from the Treasury.

A2. Delegation of authority to the

Treasurer, or the designee of such

officer, to enter into a new fiscal agency

agreement with the Federal Reserve

Banks and any amendments thereto that

the Chief Financial Officer may

approve.

B—Purchase Awards

B1. Increase in amount of blanket

purchase order with ABB Power T&D

Company, Inc.

E—Real Property Transactions

E1. Abandonment of easement rights

requested by the Electric Power Board of

Chattanooga, affecting 1.3 acres of Tract

No. VR–26, in exchange for identical

rights on a relocated right-of-way.

E2. Sale of permanent easement for

Trade Center/Conferencing Center

Development, affecting approximately

2.34 acres of land in Hamilton County,

Tennessee (Tract No. XCOFC–3E).

E3. Amendment to the Chickamauga

Reservoir Land Management Plan to

remove a 1.34-acre portion of Tract No.

XCR–44PT from the plan and grant of a

permanent easement for a fire station to

the City of Soddy Daisy for the same

area on Chickamauga Lake (Tract No.

XTCR–191B) in Hamilton County,

Tennessee.

E4. Amendment to the Kentucky

Reservoir Land Management Plan to

change the allocated use from public

recreation, historic preservation, and

trails to commercial recreation for

approximately 20 acres of Tract No.

XGIR–175PT and authorization of a 19-

year commercial recreation lease for

marina development in Humphreys

County, Tennessee (Tract No. XGIR–

931L).

E5. Amendment to the Kentucky

Reservoir Land Management Plan to

change the allocated use from public

recreation to commercial recreation for

approximately 27.5 acres of Tract No.

XGIR–24PT and authorization of a 19-

year commercial recreation lease to

Riverwood Campgrounds in Marshall

County, Kentucky (Tract No. XGIR–

927L).

E6. Abandonment of certain easement

rights and modification of a restrictive

covenant affecting approximately 0.119

acre of land on Boone Lake (a portion

of Tract No. BR–198F) in Sullivan

County, Tennessee.

E7. Grant of a 25-year public

recreation easement to Meigs County,

Tennessee, affecting approximately 28.6

acres of land on Chickamauga Lake

(Tract No. XTCR–188RE) to develop a

memorial park.

E8. Grant of permanent easement for

public recreation, historical

interpretation, and environmental

education to the Town of Triana,

Alabama, affecting approximately 0.4

acre of land on Wheeler Lake (Tract No.

XTWR–106RE) in Madison County,

Alabama.

E9. Grant of permanent easement to

the State of Tennessee, affecting

approximately 0.14 acre of land on Tims

Ford Lake (Tract No. XTTMFR–12H), for

highway improvements where U.S.

Highway 41A crosses Hessey Branch in

Franklin County, Tennessee.

Unclassified

F1. Approval to file condemnation

cases in connection with the following

power transmission lines: Alpha-Center

Point, Murray County, Georgia;

Freeport-Miller, DeSoto County,

Mississippi; Lowndes-Kerr McGee and

Lowndes-Columbus No. 2, Lowndes

County, Mississippi; Walker-Fuller,

Gordon County, Georgia; and ColbertTupelo Tap to Belmont, Tishomingo

County, Mississippi.

F2. TVA contribution at the rate of

4.04 percent of members’ payroll to the

TVA Retirement System for Fiscal Year

1998.

Information Items

1. Delegation of authority to the

Senior Vice President of Procurement,

or such officer’s designee, to enter into

a uranium procurement contract with

Power Resources, Inc.

2. Appointment of Wallace T.

Tanksley, Senior Vice President, Human

Resources, as the TVA Designated

Agency Safety and Health Official.

3. Amendments to resolutions

adopted on October 24, 1995, relating to

the sale of Tennessee Valley Authority

Bonds.

4. Approval for submission of a

proposal with Tata Electric Companies

to the Tamil Nadu Electricity Board in

India for refurbishment of fossil

generating units.

5. Approval to purchase

subbituminous coal under Requisition

35 for Allen and Shawnee Fossil Plants.

6. Delegation of authority to the Vice

President of Fuel Supply and