Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices 53673

4 17 CFR 200.20–3(a)(12). 1 15 U.S.C. § 78s(b)(1)(1988).

2See Securities Exchange Act Release No. 29812

(October 11, 1991), 56 FR 52082 (October 17, 1991)

(order approving File No. SR–NASD–90–33) (‘‘Pilot

Approval Order’’).

3See Securities Exchange Act Release No. 33037

(October 8, 1993), 58 FR 53752 (October 18, 1993)

(order approving File No. SR–NASD–93–50)

(extending the pilot operation of the Service for two

years through October 11, 1995).

4See Securities Exchange Act Release No. 36359

(October 11, 1995), 60 FR 53820 (October 17, 1995)

(order approving File No. SR–NASD–95–46)

(extending the pilot operation of the Service for two

years through October 11, 1997).

5Regardless of the opening time chosen by the

Service market maker, the Service market marker is

required to fulfill all of the obligations of a Service

market maker from that time (i.e., 3:30 a.m., 5:30

a.m., or 7:30 a.m. ET) until the European Session

closes at 9:00 a.m. ET. See Securities Exchange Act

Release No. 32471 (June 16, 1993), 58 FR (June 22,

1993) (order approving File No. SR–NASD–92–54).

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments were either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the 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 the 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. In

addition, the Commission encourages

commenters to consider whether: (1)

The acceptance of cash or its equivalent

should be permitted in any

circumstance; (2) there are presently

adequate safeguards against the

solicitation of gratuities; and (3) all

offers of gratuities, whether accepted or

not, should be recorded in a timely

manner by the employee, and such

records should be maintained by his

employer. 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

Room. 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 No.

SR–CBOE–97–51 and should be

submitted by November 5, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27282 Filed 10–14–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39216; File No. SR-NASD–

97–72]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the National

Association of Securities Dealers, Inc.,

Relating to Extension of the Nasdaq

International Service Pilot Program

October 7, 1997.

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

Securities Exchange Act of 1934

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

September 30, 1997, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) 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 selfregulatory organization. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested parties and

approving this proposal on an

accelerated basis.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The NASD proposes to extent for one

year, until October 9, 1998: (1) The pilot

term of the Nasdaq International Service

(‘‘Service’’); and (2) the effectiveness of

certain rules (‘‘International Rules’’) that

are unique to the Service. The proposal

does not entail any modification of the

International Rules. The present

authorization for the Service and the

International Rules expires on October

11, 1997.

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.

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The NASD proposes to extend for one

year, until October 9, 1998, the pilot

operation of the Service and the

effectiveness of the International Rules

governing broker-dealers’ access to and

use of the Service. The existing pilot

operation of the Service and the

International Rules was originally

authorized by the Commission in

October 1991 2 and the Service was

launched on January 20, 1992. The pilot

has since been extended 3 and is set to

expire on October 11, 1997.4

The Service supports an early trading

session running from 3:30 a.m. to 9:00

a.m. Eastern Time (‘‘ET’’) on each U.S.

business day (‘‘European Session’’) that

overlaps the business hours of the

London financial markets. Participation

in the Service is voluntary and is open

to any authorized NASD member firm or

its approved broker-dealer affiliate in

the U.K. A member participates as a

Service market maker either by staffing

its trading facilities in the U.S. or the

facilities of its approved affiliate during

the European Session. The Service also

has a variable opening feature that

permits Service market makers to elect

to participate starting from 3:30 a.m.,

5:30 a.m., or 7:30 a.m. ET. The election

is required to be made on a security-bysecurity basis at the time a firm registers

with the NASD as a Service market

maker.5 At present, there are no Service

market makers participating in the

Service.

As noted above, the NASD is seeking

to extend the pilot term for one year.

During this period, the NASD will

continue to evaluate the Service’s

operation and consider possible

enhancements to the Service to broaden
53674 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices

6Assuming that the pilot term is extended, the

NASD will continue to supply the Commission

with the statistical report prescribed in the initial

Pilot Approval Order for the Service at six-month

intervals.

7The NASD continues to be responsible for

supplying the Commission with the statistical

reports prescribed in the initial Pilot Approval

Order at six-month intervals. However, the

supporting documentation is no longer required,

unless otherwise requested by the Commission.

8 15 U.S.C. § 78f(b)(2) (1988).

9 17 CFR 200.30–3(a)(12).

market marker participation. The NASD

views the Service as a significant

experiment in expanding potential

opportunities for international trading

via systems operated by the Nasdaq

Stock Market, Inc. (‘‘Nasdaq’’).

Accordingly, The NASD believes that

this pilot operation warrants an

extension to permit possible

enhancements that will increase the

Service’s utility and attractiveness to the

investment community.6 The NASD

believes it is extremely important to

preserve this facility and the

opportunities it provides, especially in

light of the increasingly global nature of

the securities markets and the trend of

cross-border transactions generally.

In addition, the Service serves an

invaluable role as a critical early

warning mechanism in the context of

significant changes involving Nasdaq

software and hardware systems.

Specifically, because the Service

operates in the early morning hours

prior to the opening of trading in the

domestic session of Nasdaq, the Service

has provided for the early detection of

systems or communications problems

when Nasdaq implements these systems

changes.

The NASD believes that the proposed

rule change is consistent with Sections

11A(a)(1) (B) and (C) and 15A(b)(6) of

the Act. Subsections (B) and (C) of

Section 11A(a)(1) set forth the

Congressional goals of achieving more

efficient and effective market

operations, broader availability of

information with respect to quotations

for securities, and the execution of

investor orders in the best market

through the use of advanced data

processing and communications

techniques. Section 15A(b)(6) requires,

among other things, that the NASD’s

rules be designed to prevent fraudulent

and manipulative acts and practices, to

promote just and equitable principals of

trade, and to foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, processing

information with respect to, and

facilitating transactions in securities.

The NASD believes that the proposed

extension of the Service and the

International Rules is fully consistent

with these statutory provisions.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The NASD believes that the proposed

rule change will not result in 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

Comments were neither solicited nor

received.

III. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The NASD has requested that the

proposed rule change be given

accelerated effectiveness pursuant to

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

operation of the pilot program for the

Service may continue on an

uninterrupted basis. In addition, as

noted above, the NASD’s proposal

entails no modification to the

International Rules or the Service,

which previously were subject to the

full notice comment period required by

Section 19(b) of the Act when they were

approved originally by the Commission.

Accordingly, the NASD believes good

cause exists to extend the effectiveness

of the pilot program for the Service on

an accelerated basis.

The Commission finds that the

proposed rule change is consistent with

sections 11A(a)(1) (B) and (C) and

15A(b)(6) of the Act. Sections 11A(a)(1)

(B) and (C) of the act set forth the

Congressional goals of achieving more

efficient and effective market

operations, broader availability of

information with respect to quotations

for securities, and the execution of

investor orders in the best market

through the use of advanced data

processing and communications

techniques. Section 15A(b)(6) requires,

among other things, that the NASD’s

rules be designed to prevent fraudulent

and manipulative acts and practices, to

promote just and equitable principals of

trade, and to foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, processing

information with respect to, and

facilitating transactions in securities.

The Commission continues to view

the Service as a significant experiment

in expanding potential opportunities for

international trading via systems

operated by Nasdaq. Although there are

no market makers participating

currently in the Service, the NASD

plans to reevaluate the Service’s

operation and consider possible

enhancements to the Service to broaden

market maker participation. In addition,

the NASD has stated that the Service

has played a valuable role by providing

for the early detection of systems or

communications problems when

Nasdaq implements significant changes

in its hardware and software systems.

Accordingly, the Commission believes

that the pilot program warrants an

extension to permit possible

enhancements that will increase the

Service’s utility to the investment

community.7 The NASD must file any

changes to the operation of the Service

with the Commission pursuant to

Section 19(b)(2) of the Act.

The Commission finds good cause for

approving the proposed rule change

prior to the 30th day after the date of

publication of notice of filing thereof in

order to ensure the continuous

operation of the Service through

October 9, 1998. The current

authorization for the Service expires on

October 11, 1997.

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, 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 at

the Commission’s Public Reference

Room. Copies of the filing will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to File No.

SR–NASD–97–72 and should be

submitted by November 5, 1997.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,8 that the

proposed rule change (SR–NASD–97–

72) is approved through October 9,

1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27280 Filed 10–14–97; 8:45 am]

BILLING CODE 8010–01–M