Federal Register / Vol. 62, No. 184 / Tuesday, September 23, 1997 / Notices 49719

5 17 CFR 200.30–3(a)(12).

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

2 15 U.S.C. 78q–1.

3Securities Exchange Act Release No. 35038

(December 1, 1994), 59 FR 63652 (Concept Release

discussing direct registration).

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

submissions, 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 with held 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. Copies of the filing will also be

available for inspection and copying at

the Board’s principal offices. All

submissions should refer to File No.

SR–MSRB–97–5 and should be

submitted by October 14, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–25217 Filed 9–22–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No: 34–39082; File No. SR–NASD–

97–51]

Self-Regulatory Organizations;

National Association of Securities

Dealers, Inc.; Notice of Filing of

Proposed Rule Change Regarding the

Transfer of Securities of Issuers Listed

on the Nasdaq Stock Market That Are

Held Pursuant to a Direct Registration

Program

September 16, 1997.

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

Securities Exchange Act of 1934

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

July 16, 1997, The Nasdaq Stock Market,

Inc. (‘‘Nasdaq’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which items have been

prepared primarily by Nasdaq. The

Commission is publishing this notice to

solicit comments from interested

persons on the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

Nasdaq is proposing to amend Rules

4200, 4310, 4320, and 4460 of the

National Association of Securities

Dealers, Inc. (‘‘NASD’’) to require

Nasdaq issuers that elect to offer a direct

registration program to shareholders to

participate in an electronic link, either

directly or through the issuer’s transfer

agent, with a securities depository

registered under Section 17A of the

Act.2

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

Nasdaq 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. Nasdaq 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 purpose of the proposed rule

change is to facilitate the clearance and

settlement of securities held in bookentry form in the context of recent

developments concerning the direct

registration concept. Over the past

twelve years, regulators, representatives

of private industry, and the transfer

agent community have worked together

to explore alternatives to maintaining

ownership interest in securities without

certificates. In 1990, the Commission

held a Roundtable on Clearance and

Settlement to discuss recommendations

of the Group of Thirty U.S. Working

Committee which, among other things,

discussed ways in which investors

could obtain benefits of a direct

registration system (‘‘DRS’’). The

Commission has been promoting the

DRS concept, and in 1994 requested that

the industry work to develop DRS in

order to provide investors with

additional options to holding their

securities in certificate form.3 A basic

structure for DRS has been developed

and agreed to by a joint committee of

representatives of the Securities

Industry Association, the Securities

Transfer Association, the Corporate

Transfer Agents Association, and

registered securities depositories.

The concept of DRS is modeled after

systems used in dividend reinvestment

and stock purchase programs, which are

currently offered by many issuers or

transfer agents. It is being considered by

issuers in connection with the move to

a faster settlement cycle and reflects

investor trends away from physical

certificates. DRS promotes investor

choice, while encouraging efficient

clearance and settlement procedures.

Specifically, DRS offers shareholders

the ability to: (1) receive an account

statement instead of a negotiable

certificate; (2) get a certificate upon

demand; and (3) direct the book-entry

transfer of the underlying position to a

broker-dealer upon request.

A key component of DRS has been the

initiation of an electronic

communication system linking issuers

or their transfer agents with registered

securities depositories. Assuming an

issuer and its transfer agent elect to offer

direct registration services, this link

would permit a broker-dealer to deliver

to a transfer agent a customer’s request

that the securities be registered on the

books of the issuer in book-entry form.

Such a system also will allow the

transfer agent to send an electronic

acknowledgment to the broker-dealer

that the securities have been registered

in the customer’s name on the books of

the issuer in book-entry form. thus, DRS

helps promote efficiencies in the

prompt and accurate clearance and

settlement of securities transactions by

providing individual investors that do

not want to have broker-dealers hold

their securities for them in street name

the option of holding in book-entry form

on the books of the issuers and most

importantly, the ability to subsequently

have such positions transferred

electronically to banks or broker-dealers

in connection with the sales or

disposition of the securities.

Recently, The Depository Trust Co.

(‘‘DTC’’) received Commission approval

to establish the procedures and the

necessary electronic link to implement

DRS. Under this system, an investor will

have the right at any time to transfer its

DRS position from the issuer to a

broker-dealer through the facilities of

DTC in order to sell or pledge the

security. Alternatively, an investor will

have the right at any time to request a

certificate. Under DTC’s rule change, to

participate in DRS, a transfer agent
49720 Federal Register / Vol. 62, No. 184 / Tuesday, September 23, 1997 / Notices

4According to DTC, a party wishing to open a

Limited Participant account must (1) be registered

as a transfer agent with the SEC; (2) participate as

a transfer agent in DTC’s Fast Automated Securities

Transfer (‘‘FAST’’) program; (3) provide Direct Mail

Service on transfers; and (4) communicate with

DTC through a computer-to-computer interface

using DTC’s CCF platforms.

DTC charges a DRS Limited Participant an

account holder fee of $225 per month regardless of

the number of DRS eligible issues for which the

Limited Participant is participating. In addition,

DTC charges $.045 per transaction. DTC

participants also will be charged $0.45 per

transaction. In addition, when a DTC participant

instructs a transfer agent to establish a DRS account

for a shareholder and the transfer agent

subsequently mails a transaction advice to the

shareholder confirming that such an account has

been established at the transfer agent, the transfer

agent’s fee of $0.55 for mailing and handling the

DRS transactions advice will be charged to the DTC

participant directly by DTC. This fee is periodically

remitted to the transfer agent.

5 15 U.S.C. 78o–3. 6 17 CFR 200.30–3(a)(12).

would need to become a ‘‘DRS Limited

Participant’’ at DTC.4

Therefore, Nasdaq is proposing to

amend its rules to establish a

qualification requirement for all

securities to be included in Nasdaq that

if the issuer establishes a direct

registration program it shall participate

in an electronic link with a securities

depository in order to facilitate the

electronic transfer of interests held

pursuant to the direct registration

program. This link is permitted by the

proposed rule to be direct or through the

issuer’s transfer agent.

Nasdaq believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(6) of the

Act 5 in that it fosters cooperation and

coordination with persons engaged in

the clearing and settling of transactions

in securities, and in general, protects

investors and the public interest. The

proposed rule change ensures that there

is a quick and efficient means for

financial intermediaries, such as brokerdealers and banks, to transfer these

interests on behalf of shareholders. In

addition, Nasdaq believes the proposed

rule change is consistent with Section

17A which sets forth Congress’ findings

that the prompt and accurate clearance

and settlement of securities transactions

are necessary for the protection of

investors. In particular, the proposed

rule change is consistent with Section

17A(a)(1) in that it takes advantage of

new date processing and

communications techniques and linked

or coordinated facilities, and thus

provides for more efficient, effective,

and safe procedures for the clearance

and settlement of securities

transactions.

(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.

(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 thirty-five 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

ninety 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 Nasdaq 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

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of Nasdaq. All submissions

should refer to File No. SR–NASD–97–

51 and should be submitted by October

14, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–25216 Filed 9–22–97; 8:45 am]

BILLING CODE 8010–01–M

OFFICE OF THE UNITED STATES

TRADE REPRESENTATIVE

1997–98 Allocations of the Tariff-Rate

Quotas for Raw Cane Sugar, Refined

Sugar, and Sugar Containing Products

AGENCY: Office of the United States

Trade Representative.

ACTION: Notice.

SUMMARY: The Office of the United

States Trade Representative (USTR) is

providing notice of the country-bycountry allocations of the in-quota

quantity of the tariff-rate quotas for

imported raw cane sugar, refined sugar,

and sugar containing products for the

period that begins October 1, 1997 and

ends September 30, 1998.

EFFECTIVE DATE: October 1, 1997.

ADDRESSES: Inquiries may be mailed or

delivered to Audrae Erickson, Senior

Economist, Office of Agricultural Affairs

(Room 421), Office of the United States

Trade Representative, 600 17th Street,

NW., Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT:

Audrae Erickson, Office of Agricultural

Affairs, 202–395–6127.

SUPPLEMENTARY INFORMATION: Pursuant

to Additional U.S. Note 5 to chapter 17

of the Harmonized Tariff Schedule of

the United States (HTS), the United

States maintains tariff-rate quotas for

imports of raw cane and refined sugar.

Pursuant to additional U.S. Note 8 to

Chapter 17 of the Harmonized Tariff

Schedule, the United States also

maintains a tariff-rate quota for certain

sugar-containing products.

Section 404(d)(3) of the Uruguay

Round Agreements Act (19 U.S.C.

3601(d)(3)) authorizes the President to

allocate the in-quota quantity of a tariffrate quota for any agricultural product

among supplying countries or customs

areas. The President delegated this

authority to the United States Trade

Representative under paragraph (3) of

Presidential Proclamation No. 6763 (60

FR 1007).

The in-quota quantity of the raw cane

tariff-rate quota for the period October 1,

1997–September 30, 1998, has been

established by the Secretary of

Agriculture at 1,200,000 metric tons,

raw value (1,322,773 short tons). This

quantity is being allocated to the

following countries in metric tons, raw

value: