48692 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Notices

12Rule 11b–1 under the Act, 17 CFR 240.11b–1

and NYSE Rule 104.

13 17 CFR 240.11b–1(a)(2).

14See 1987 Report, February 1988 at xvii, 4–1.

15See 1987 Report, 4–23 to 4–24 and 4–26, to 4–

27. Generally, ‘‘upstairs firms,’’ or block trading

desks of large broker dealers (as opposed to

specialists and other traders on the NYSE Floor),

can, at times, provide an additional source of

liquidity for NYSE-listed issues through their

trading activities. During the 1987 market break,

however, particularly on October 19, 1987, very

little buying was effected by upstairs firms, forcing

specialists to be the contra-side to large blocks of

stock.

16See 1987 Report at 4–58.

17See Market Analysis of October 13 and 16, 1989

(‘‘1989 Analysis’’) at 3–4 and 33–44.

18See 1987 Report at 4–8 and 1989 Report at 23–

26.

19A specialist’s dealer responsibilities consist of

‘‘affirmative’’ and ‘‘negative’’ obligations. In

accordance with their affirmative obligations,

specialists are obligated to trade for their own

accounts to minimize order disparities and

contribute to continuity and deputy in the market.

Conversely, pursuant to their negative obligations,

specialists are precluded from trading for their own

accounts unless such dealing is necessary for the

maintenance of a fair and orderly market. In view

of these obligations, the price trend in a security

should be determined not by specialist trading but

by the movements of the incoming orders that

initiate these trades.

20The Commission notes that Rule 104.10(5)(i)

currently only requires floor official approval for

purchases or sales at a price equal to the last sale

price when all or substantially all the stock offered/

bid on the limit order book represents all or

substantially all the stock offered/bid in the market.

Moreover, the rule currently does not require floor

official approval of such transactions if they are

effected in ‘‘less active markets’’ where they are an

essential part of a proper course of dealings and

where the amount of stock involved and the price

change, if any, are normal in relation to the market.

21 In addition, NYSE Rule 104.10(5)(i) clearly

requires that covered transactions must be

reasonably necessary to render the specialist’s

position adequate to such needs.

22Section 19(g) of the Act requires every selfregulatory organization to comply with, and enforce

compliance with, the Act, the rules thereunder and

its own rules.

23 17 CFR 200.30–3(a)(12).

providing stability, liquidity and

continuity in the Exchange’s auction

market. Recognizing the importance of

the specialist in the auction market, the

Act and NYSE Rules impose stringent

obligations upon specialists.12 Primary

among these obligations are the

requirements to maintain fair and

orderly markets and to restrict specialist

dealings to those that are ‘‘reasonably

necessary’’ in order to maintain a fair

and orderly market.13

The importance of specialist

performance to the quality of markets

was highlighted during the 1987 and

1989 market breaks. In The October

1987 Market Break Report (‘‘1987

Report’’), the Division examined

specialist performance on the NYSE on

October 19 and 20, 1987.14 The Division

found that, during periods of the

greatest volatility in 1987, particularly

on October 19, 1987, NYSE specialists

had to act as the primary, or sometimes

the only, buyers for many of the

specialty stocks because of the lack of

buying interest by upstairs firms.15 The

increased volume of order flow, coupled

with the lack of participation on the part

of the upstairs firms, resulted in NYSE

specialists having to take large dealer

positions.16 Although many NYSE

specialists appeared to perform well

under the adverse conditions, specialist

performance during this period varied

widely.

The Division also examined NYSE

specialist performance during the

volatile conditions of October 13 and

16, 1989. The Division found that

specialist performance during that time

was similar in many respects to

specialist performance during the 1987

market break.17 Specifically, the

Division found that, during these two

periods of extreme market volatility,

specialists were confronted with

extraordinary order imbalances that

required unprecedented capital

commitments.18 As in October 1987,

specialists as a whole on October 13,

1989 were substantial buyer in the face

of heavy selling pressure, although

performance varied among specialists.

Both the 1987 Report and the 1989

Analysis reaffirmed the importance of

specialist participation in countering

market trends during periods of market

volatility. At the same time, the reports

emphasized the importance the

Commission placed on the NYSE’s

ability to ensure that all specialists

comply with their affirmative and

negative market making obligations

during such periods.19

The Commission recognizes that

market conditions may exist at times

where it is necessary or desirable to

provide specialists with additional

flexibility in establishing or increasing a

position in order to facilitate their

ability to maintain fair and orderly

markets, particularly during unusual

market conditions. Accordingly, the

Commission believes that it is

appropriate for the NYSE to remove

those provisions of Rule 104.10(5)(i)

that require floor official approval for

certain specialist purchases on zerominus ticks and specialist sales on zeroplus ticks.20 The proposed changes may

allow specialists, during periods of

market volatility, to keep any general

price movements orderly, thereby

furthering the maintenance of fair and

orderly markets consistent with

Sections 6 and 11 of the Act. The

Commission emphasizes, however, that

the expanded flexibility afforded to

specialists by the proposal merely

obviates the current required floor

official approval for the affected

transactions and does not reflect that all

specialist purchases on zero-minus ticks

and sales on zero-plus ticks are

appropriate. Notably, specialists remain

subject to their ‘‘negative obligations,’’

specifically, the requirement that

specialists are precluded from trading

for their own account unless such

dealing is necessary for the maintenance

of a fair and orderly market.21

Finally, the Commission believes that

the NYSE’s established surveillance

procedures and criteria should allow the

Exchange to monitor specialist

compliance with NYSE Rule

104.10(5)(i). More specifically, the

Commission expects the NYSE to

monitor carefully compliance with the

procedures of NYSE Rule 104 as

required under Section 19(g) of the

Act.22

For the foregoing reasons, the

Commission finds that the NYSE’s

proposal to permit specialists to engage

in certain types of transactions by

removing existing restrictions that

currently limit specialists when

establishing or increasing a position in

their specialty stocks is consistent with

the requirements of the Act and the

rules and regulations thereunder.

It is therefore ordered, pursuant to

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

proposed rule change (SR–NYSE–10), as

amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.23

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–24543 Filed 9–15–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Declaration of Disaster #2965: State of

Michigan, Amendment #2

In accordance with information

received from the Federal Emergency

Management Agency dated September

4, 1997, the above-numbered

Declaration is hereby amended to

extend the deadline for filing

applications for physical damage as a

result of this disaster to September 23,

1997.

All other information remains the

same, i.e., the deadline for filing

applications for economic injury is

April 13, 1998.

(Catalog of Federal Domestic Assistance

Program Nos. 59002 and 59008.)
Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Notices 48693

Dated: September 8, 1997.

Bernard Kulik,

Associate Administrator for Disaster

Assistance.

[FR Doc. 97–24510 Filed 9–15–97; 8:45 am]

BILLING CODE 8025–01–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

[CGD 97–061]

National Offshore Safety Advisory

Committee

AGENCY: Coast Guard, DOT.

ACTION: Notice of meeting.

SUMMARY: The National Offshore Safety

Advisory Committee (NOSAC) will meet

to discuss various issues relating to

offshore safety. The meeting will be

open to the public.

DATES: The meeting of NOSAC will be

held on Thursday, October 23, 1997

from 8:30 a.m. to 2:30 p.m. Written

material and requests to make oral

presentations should reach the Coast

Guard on or before October 9, 1997.

ADDRESSES: The NOSAC meeting will be

held at Transocean Offshore Inc., 4

Greenway Plaza, Room C100, Houston,

Texas. Written material and requests to

make oral presentations should be sent

to Captain R.L. Skewes, Commandant

(G–MSO), U.S. Coast Guard

Headquarters, 2100 Second Street SW.,

Washington, DC 20593–0001.

FOR FURTHER INFORMATION CONTACT:

Captain R.L. Skewes, Executive Director

of NOSAC, or Mr. Jim Magill, Assistant

to the Executive Director, telephone

(202) 267–0214, fax (202) 267–4570.

SUPPLEMENTARY INFORMATION: Notice of

this meeting is given pursuant to the

Federal Advisory Committee Act, 5

U.S.C., App. 2.

Agenda of Meeting

The agenda includes the following:

(1) Introduction and swearing-in of

new members.

(2) Progress report from the

Prevention Through People

Subcommittee.

(3) Progress report from the

Subcommittee on Pipeline. Free

Anchorages for Mobile Offshore Drilling

Units (MODUs), Liftboats and Vessels.

(4) Status report on revision of 33 CFR

Subchapter ‘‘N’’, Outer Continental

Shelf Regulations.

(5) Status report on the Final Rule of

46 CFR Subchapter ‘‘L’’ on Offshore

Supply Vessels (OSVs) and Liftboats.

(6) Report on issues concerning the

International Maritime Organization

(IMO) and the International

Organization of Standardization (ISO).

(7) Status report from Safety

Regulatory Reform Subcommittee.

(8) Report from subcommittee on Big

‘‘L’’ OSVs, Crew Boats, Alternate

Tonnage and Licensing of OSVs.

Procedural

The meeting is open to the public. At

the Chairperson’s discretion, members

of the public may make oral

presentations during the meeting. If you

would like to make an oral presentation

at the meeting, please notify the

Executive Director no later than October

9, 1997. Written material for

distribution at the meeting should reach

the Coast Guard no later than October 9,

1997. If you would like a copy of your

material distributed to each member of

the Committee or Subcommittee in

advance of the meeting, please submit

25 copies to the Executive Director no

later than October 9, 1997.

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 Assistant to the

Executive Director as soon as possible.

Dated: September 10, 1997.

Joseph J. Angelo,

Director of Standards, Marine Safety and

Environmental Protection.

[FR Doc. 97–24571 Filed 9–15–97; 8:45 am]

BILLING CODE 4910–14–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. 28895]

Airport Privatization Pilot Program:

Application Procedures

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of final application

procedures.

SUMMARY: Section 149 of the Federal

Aviation Authorization Act of 1996

establishes an airport privatization pilot

program, and authorizes the Department

of Transportation to grant exemptions

from certain Federal statutory and

regulatory requirements for up to five

airport privatization projects. A request

for participation in the airport

privatization pilot program will be

initiated by the filing of either a

preliminary or final application for

exemption with the FAA. This

statement identifies the issues the

Department will consider in granting

exemptions and approving the transfer

of a public use airport under the

program; it also describes the

application procedures to be used by

interested public airport sponsors and

private parties to apply for an

exemption under the program.

DATES: This policy is effective on

publication. With exception noted

below, preliminary and final

applications for exemption will be

accepted or after December 1, 1997, and

will be handled on a first-come firstserved basis until the limits of section

47134 are reached. An otherwise

qualifying preliminary or final

application for exemption will be

accepted before December 1, 1997, if the

sponsor has issued, on or before the date

of publication of this notice, a formal

solicitation or request for proposals for

the sale or lease of an airport. All

applications will be evaluated in the

order of receipt.

FOR FURTHER INFORMATION CONTACT:

Benedict D. Castellano Manager, (202–

267–8728) or Kevin C. Willis (202–267–

8741) Airport Safety and Compliance

Branch, AAS–310, Federal Aviation

Administration, 800 Independence Ave.

SW., Washington, DC 20591,

SUPPLEMENTARY INFORMATION:

Introduction and Background

This notice of application procedures

to be used by applicants for an airport

privatization project is being published

pursuant to section 149 of the Federal

Aviation Administration Authorization

Act of 1996, Public Law 104–264

(October 9, 1996) (1996 Reauthorization

Act), which adds a new section 47134

to Title 49 of the U.S. Code. Section

47134 authorizes the Secretary of

Transportation, and through delegation,

the FAA Administrator, to exempt a

sponsor of a public use airport that has

received Federal assistance, from certain

Federal requirements in connection

with the privatization of the airport by

sale or lease to a private party.

Specifically, the Administrator may

exempt the sponsor from all or part of

the requirements to use airport revenues

for airport-related purposes, to pay back

a portion of Federal grants upon the sale

of an airport, and to return airport

property deeded by the Federal

Government upon transfer of the airport.

The Administrator is also authorized to

exempt the private purchaser or lessee

from the requirement to use all airport

revenues for airport-related purposes, to

the extent necessary to permit the

purchaser or lessee to earn

compensation from the operations of the

airport.