Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51497

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

2 17 CFR 240.19b–4.

being approved by the shareholders of

the applicable Fund.

5. When a Portfolio Manager change

is proposed for a Fund with an

Affiliated Portfolio Manager, the Trust’s

Trustees, including a majority of the

Independent Trustees, will make a

separate finding, reflected in the Trust’s

board minutes, that the change is in the

best interests of the Fund and its

shareholders and does not involve a

conflict of interest from which the

Adviser or the Affiliated Portfolio

Manager derives an inappropriate

advantage.

6. Within 90 days of the hiring of any

new Portfolio Manager, shareholders

will be furnished relevant information

about a new Portfolio Manager that

would be contained in a proxy

statement, including any change in such

disclosure caused by the addition of a

new Portfolio Manager. The Adviser

will meet this condition by providing

shareholders, within 90 days of the

hiring of a Portfolio Manager, an

informal information statement meeting

the requirements of Regulation 14C and

Schedule 14C of the Securities

Exchange Act of 1934 (‘‘Exchange Act’’).

The information statement will also

meet the relevant requirements of

Schedule 14A of the Exchange Act.

7. The Adviser will provide general

management services to each Fund,

including overall supervisory

responsibility for the general

management and investment of each

Fund’s portfolio, and subject to review

and approval by the Trustees, will: (i)

Set the Fund’s overall investment

strategies; (ii) select Portfolio Managers;

(iii) when appropriate, recommend to

the Fund’s Board of Trustees the

allocation and reallocation of a Fund’s

assets among multiple Portfolio

Managers; (iv) monitor and evaluate the

performance of Portfolio Managers; and

(v) ensure that the Portfolio Managers

comply with the Board’s investment

objectives, policies, and restrictions.

8. No Trustee or officer of the Trust

or director or officer of the Adviser will

own directly or indirectly (other than

through a pooled investment vehicle

that is not controlled by that Trustee,

director or officer) any interest in a

Portfolio Manager except for (i)

Ownership of interests in the Adviser or

any entity that controls, is controlled by,

or is under common control with the

Adviser; or (ii) ownership of less than

1 percent of the outstanding securities

of any class or debt or equity of a

publicly-traded company that is either a

Portfolio Manager or an entity that

controls, is controlled by or is under

common control with a Portfolio

Manager.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–25990 Filed 9–30–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39129; File No. SR–NYSE–

97–16]

Self-Regulatory Organizations; New

York Stock Exchange, Inc.; Notice of

Filing and Order Granting Accelerated

Approval of Proposed Rule Change

Relating to Amendments to NYSE Rule

79A

September 25, 1997.

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

Securities Exchange Act of 1934

(‘‘Exchange Act’’) 1 and Rule 19b–4

thereunder,2 notice is hereby given that

on August 28, 1997, the New York Stock

Exchange, Inc. (‘‘NYSE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

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

the proposed rule change as described

in items I and II below, which Items

have been prepared by the Exchange.

The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

persons and is approving the proposal

on an accelerated basis.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change consists of

amendments to Exchange rule 79A to

conform with requirements for display

of customer limit orders as contained in

Rule 11Ac1–4 under the Exchange Act.

The text of the proposed rule change is

as follows. (Additions are italicized;

deletions are bracketed.)

* * * * *

NYSE Rule 79A

Miscellaneous Requirements on Stock

and Bond Market Procedures

.10 Request to make better bid or

offer. When any [member] Floor broker

does not bid or offer at the limit of an

order which is better than the currently

quoted price in the security and is

requested by his principal to bid or offer

at such limit, he shall do so.

.15 With respect to limit orders

received by specialists, each specialist

shall publish immediately (i.e., as soon

as practicable, which under normal

market conditions means no later than

30 seconds from time of receipt) a bid

or offer that reflects:

(i) the price and full size of each

customer limit order that is at a price

that would improve the specialist’s bid

or offer in such security; and

(ii) the full size of each limit order

that

(A) is priced equal to the specialist’s

bid or offer for such security;

(B) is priced equal to the national best

bid or offer; and

(C) represents more than a de minimis

change (i.e., more than 10 percent) in

relation to the size associated with the

Exchange’s bid or offer.

The requirements with respect to

specialists’ display of limit orders shall

not apply to any customer limit order

that is:

(1) executed upon receipt of the order;

(2) placed by a customer who

expressly requests, either at the time the

order is placed or prior thereto pursuant

to an individually negotiated agreement

with respect to such customer’s orders,

that the order not be displayed;

(3) an odd-lot order;

(4) delivered immediately upon

receipt to an exchange or associationsponsored system or an electronic

communications network that complies

with the requirements of Securities and

Exchange Commission Rule 11Ac1–1

(c)(5)(ii) under the Securities Exchange

Act with respect to that order;

(5) delivered immediately upon

receipt to another exchange member or

over-the-counter market maker that

complies with the requirements of

Securities and Exchange Commission

Rule 11Ac1–4 under the Securities

Exchange Act with respect to that order;

(6) an ‘‘all or none’’ order;

(7) a limit order to buy at a price

significantly above the current offer or a

limit order to sell at a price significantly

below the current bid that is handled in

compliance with Exchange procedures

regarding such orders, (‘‘too marketable

limit orders’’); or

(8) an order that is handled in

compliance with Exchange procedures

regarding block crosses at significant

premiums or discounts from the last

sale.

* * * * *

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
51498 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

3See Securities Exchange Act Release No.

37619A (September 6, 1996), 61 FR 48290

(September 12, 1996).

4See letter from Richard Lindsey, Director,

Division of Market Regulation, SEC to James E.

Buck, Senior Vice President and Secretary, NYSE,

dated January 17, 1997. The letter provided noaction relief for a specialist that does not display

a limit order while complying with Exchange

procedures for ‘‘too marketable’’ limit orders or for

block crosses at significant premiums or discounts

from the last sale.

5 In an August 28, 1997, letter from James E. Buck,

Senior Vice President and Secretary, NYSE, to

Kathy England, Assistant Director, Market

Regulation, the Exchange stated that Rule 79A.10

refers to ‘‘the limit of an order which is better than

the currently quoted price’’ since the procedures for

representing an order whose limit is equal to the

currently quoted price are covered by Exchange

Rules 70 and 123A.42. These rules provide that

when a bid or offer is clearly established, no bid

or offer at an inferior price shall be made, and

require a broker to use due diligence to execute a

limit order at its limit price, or at a better price, if

available under Exchange procedures. (Emphasis in

original.)

6The Exchange is not including the exception for

block orders contained in Rule 11Ac1–4(c)(4).

7 A ‘‘too-marketable’’ limit order is an order to

buy at a price much higher than the offer, or an

order to sell at a price much lower than the bid.

When such an order is received, the specialist may

execute the order at the market or may seek price

confirmation. (See memorandum from Market

Surveillance Division, NYSE, to Specialists dated

April 15, 1996.)

8 Issued as NYSE Information Memo 94–32

(August 9, 1994). See Securities Exchange Act

Release No. 34303 (July 1, 1994) and File No. SR–

NYSE–93–48. 9 17 CFR 240.11Ac1–4.

proposed rule change. The text of these

statements may be examined at the

places specified in Item III below and is

set forth in Sections A, B, and C below.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The Commission has recently adopted

requirements (the ‘‘Order Execution

Rules’’) for specialists to display

immediately the price and full size of

customer limit orders that would

improve the bid or offer in a security.3

The term ‘‘immediately’’ means as soon

as practicable, which under normal

market conditions requires display no

later than 30 seconds after receiving

such orders. The proposed amendments

to NYSE Rule 79A would make the rule

consistent with the order execution

requirements of Rule 11Ac1–4 under the

Exchange Act, as well as incorporate

certain Commission interpretations of

the Rule.4

Rule 79A.10 would be amended to

apply only to Floor brokers rather than

to all members. This would require

brokers to represent an order at its limit

when requested to do so by the

customer, while continuing to allow

brokers to use brokerage judgment in

representing an order for a customer. A

new section would be added to Rule

79A which would apply only to

specialists. Rule 79A.15 would provide

that, upon receipt of a customer limit

order, a specialist must ‘‘immediately’’

(i.e., as soon as practicable, which under

normal market conditions means within

30 seconds from time to receipt) publish

a bid or offer that reflects:

(i) The price and full size of the order,

if it is at a price that would improve the

bid or offer in the subject security;5 and

(ii) The full size of the order, if it is

priced at the same price as the current

bid or offer in the subject security, and

the current bid or offer is equal to the

national best bid or offer. The specialist

would not, however, be required to add

size to the prevailing bid or offer if the

size of the customer’s limit order

represents a de minimis increase (i.e.,

10% or less) over the size of the

prevailing bid or offer.

Requrements for specialists to display

customer limit orders would not apply

to the following:6

(i) An order that is executed upon

receipt;

(ii) An order placed by a customer

who has requested (either on an orderby-order basis or respectively) that the

order not be displayed;

(iii) An odd-lot order;

(iv) An order that is immediately

delivered to an exchange or associationsponsored system, or electronic

communications network (‘‘ECN’’) that

complies with the ECN display

alternative of the Quote Rule (Rule

11Ac1–1(c)(5)(ii);

(v) An order that is immediately

delivered to another exchange member

or OTC market maker that complies

with the Limit Order Display Rule (Rule

11Ac1–4);

(vi) an ‘‘all or none’’ order;

(vii) a ‘‘too-marketable’’ limit order 7;

or,

(viii) an order that is handled in

compliance with Exchange procedures

regarding block crosses at significant

premiums or discounts from the last

sale.8

2. Statutory Basis

The basis under the Exchange Act for

the proposed rule change is the

requirement under Section 6(b)(5) of the

Exchange Act that an Exchange have

rules that are designed to promote just

and equitable principles of trade, to

remove impediments to, and perfect the

mechanism of a free and open market

and, in general, to protect investors and

the public interest. The Exchange

believes that this rule change will

accomplish these ends by facilitating

increased transparency in the market,

thus providing the public with better

information on which to base

investment decisions.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange 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 Exchange Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The Exchange has neither solicited

nor received written comments on the

proposed rule change.

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 N.W.,

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 in 450 Fifth Street, N.W.,

Washington, DC 20549.

Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to file number

SR–NYSE–97–16 and should be

submitted by [insert date 21 days from

date of publication].

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission believes that the

proposed rule change is consistent with

Section 6(b)(5) of the Exchange Act and

the rules and regulations thereunder

applicable to an exchange and with

Section 11A of the Exchange Act. The

proposal will make the NYSE’s limit

order display rule consistent with the

Commission’s Limit Order Display Rule

(‘‘Display Rule’’),9 thereby furthering

the investor protection and market
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51499

10The Display Rule, which requires the display

of customer limit orders priced better than a market

maker or specialist’s quote, and adopted

amendments to the Quote Rule to enhance the

quality of published quotations for securities, and

competition and pricing efficiency in U.S. securities

markets. These rules (collectively, ‘‘Order Handling

Rules’’) were designed to address growing concerns

about the handling of customer orders for securities.

See Securities Exchange Act Release No. 37619A

(September 6, 1996), 61 FR 48290 (September 12,

1996) (‘‘Adopting Release’’). See also Securities

Exchange Act Release Nos. 38110 (January 2, 1997),

62 FR 1279 (January 9, 1997) (order revising the

effective date of the Order Execution Rules to

January 13, 1997); and 38139 (January 8, 1997)

(order revising the effective date of the Order

Execution Rules until January 20, 1997).

11The NYSE proposal requires that specialists

publish certain bids or offers ‘‘immediately (i.e., as

soon as practicable, which under normal market

conditions means no later than 30 seconds from

time of receipt).’’ The Commission notes that some

industry participants have developed automated

systems to ensure that customer limit orders are

displayed no later than 30 seconds from receipt.

Users of such systems, however, should use caution

when relying on these systems for compliance.

While ‘‘default’’ systems that ensure display no

later than 30 seconds after receipt in situations

where a market maker or specialist cannot

otherwise attend to an order are not inappropriate,

market makers or specialists that routinely allow

such a system to display customer limit orders at

the 30th second after receipt would not be deemed

to be in compliance with the Display Rule. The

Display Rule requires immediate display. See Letter

from Richard Lindsey, Director, Division of Market

Regulation, SEC to James F. Duffy, Executive Vice

President and General Counsel, American Stock

Exchange, dated April 1, 1997. 12 17 CFR 200.30–3(a)(12).

transparency objectives of the Order

handling Rules.10 In adopting the Order

Handling Rules, the Commission

increased investor protection by

ensuring that customer limit orders

were immediately displayed in the

markets and by providing investors

information about and access to

superior prices that specialists and

market makers displayed in ECNs.

Although the Order handling Rules

supersede existing NYSE rules, the

proposed rule change will help provide

consistency among Commission and

NYSE rules.11 Consequently, the

proposed changes submitted by the

NYSE will help remove impediments to

the operation of a free and open market

and a national market system, enhance

the protection of investors and the

public interest, and produce fair and

informative quotations.

The Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of filing thereof

in the Federal Register in order to

ensure consistency between NYSE rules

and the Order Handling Rules.

It is therefore ordered, pursuant to

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

that the proposed rule change (SR–

NYSE–97–16) be, and hereby is,

approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–25991 Filed 9–30–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Interest Rates

The Small Business Administration

publishes an interest rate called the

optional ‘‘peg’’ rate (13 CFR 120.214) on

a quarterly basis. This rate is a weighted

average cost of money to the

government for maturities similar to the

average SBA direct loan. This rate may

be used as a base rate for guaranteed

fluctuating interest rate SBA loans. This

rate will be 63⁄8 percent for the October–

December quarter of FY 98.

Pursuant to 13 CFR 120.932, the

maximum legal interest rate for a

commercial loan which funds any

portion of the cost of a project (see 13

CFR 120.801) shall be the greater of 6%

over the New York prime rate of the

limitation established by the

constitution or laws of a given State.

The initial rate for a fixed rate loan shall

be the legal rate for the term of the loan.

LeAnn Oliver,

Acting Associate Administrator for Financial

Assistance.

[FR Doc. 97–26027 Filed 9–30–97; 8:45 am]

BILLING CODE 8025–01–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Fitness Determination of Austin

Express, Inc.

AGENCY: Department of Transportation.

ACTION: Notice of Commuter Air Carrier

Fitness Determination—Order 97–9–25,

Order to Show Cause.

SUMMARY: The Department of

Transportation is proposing to find

Austin Express, Inc., fit, willing, and

able to provide commuter air service

under 49 U.S.C. 41738.

RESPONSES: All interested persons

wishing to respond to the Department of

Transportation’s tentative fitness

determination should file their

responses with the Air Carrier Fitness

Division, X–56, Department of

Transportation, 400 Seventh Street,

SW., Room 6401, Washington, DC

20590, and serve them on all persons

listed in Attachment A to the order.

Responses shall be filed no later than

October 8, 1997.

FOR FURTHER INFORMATION CONTACT:

Carol Woods, Air Carrier Fitness

Division (X–56, Room 6401), U.S.

Department of Transportation, 400

Seventh Street, SW., Washington, DC

20590, (202) 366–2340.

Dated: September 23, 1997.

Patrick V. Murphy,

Deputy Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 97–25906 Filed 9–30–97; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF TRANSPORTATION

[Docket 37554]

Notice of Order Adjusting the Standard

Foreign Fare Level Index

Section 41509(e) of Title 49 of the

United States Code requires that the

Department, as successor to the Civil

Aeronautics Board, establish a Standard

Foreign Fare Level (SFFL) by adjusting

the SFFL base periodically by

percentage changes in actual operating

costs per available seat-mile (ASM).

Order 80–2–69 established the first

interim SFFL, and Order 97–7–32

established the currently effective twomonth SFFL applicable through

September 30, 1997.

In establishing the SFFL for the twomonth period beginning October 1,

1997, we have projected non-fuel costs

based on the year ended June 30, 1997

data, and have determined fuel prices

on the basis of the latest available

experienced monthly fuel cost levels as

reported to the Department.

By Order 97–9–32 fares may be

increased by the following adjustment

factors over the October 1979 level:

Atlantic—1.3355

Latin America—1.3927

Pacific—1.4779

For further information contact: Keith

A. Shangraw (202) 366–2439.

By the Department of Transportation:

Dated September 25, 1997.

Patrick V. Murphy,

Deputy Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 97–25979 Filed 9–30–97; 8:45 am]

BILLING CODE 4910–62–P