Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices 54147

1 15 U.S.C. § 78s(b)(1).

2 17 CFR 240.19b–4.

3The PACE Quote consists of the best bid/offer

among the American, Boston, Cincinnati, Chicago,

New York, Pacific and Philadelphia Stock

Exchanges as well as the Intermarket Trading

System/Computer Assisted Execution System

(‘‘ITS/CAES’’). See PACE Rule.

believe that the requested relief meets

this standard.

5. Applicants note that the terms and

timing of the Transaction were

determined by First Union and Signet

and arose primarily out of business

considerations beyond the scope of the

Act and unrelated to the Fund and the

Subadviser, including the time needed

to obtain federal and state banking

approvals for the Transaction.

Applicants submit that it is in the best

interests of shareholders of the Fund to

avoid any interruption in services to the

Fund, to allow sufficient time for the

consideration and return of proxies, and

to hold a shareholders meeting.

6. Applicants submit that the scope

and quality of services provided to the

Fund during the Interim Period will not

be diminished. During the Interim

Period, the Subadviser would operate

under the New Agreement, which

would be substantively the same as the

Existing Agreement, except for its

effective date. Applicants submit that if

the personnel providing material

services pursuant to the New Agreement

change materially, the Subadviser will

apprise and consult with the Fund’s

board of trustees to assure that the board

(including a majority of the Independent

Trustees) is satisfied that the services

provided by the Subadviser will not be

diminished in scope or quality.

Accordingly, the Fund should receive,

during the Interim Period, the same

subadvisory services, provided in the

manner, at the same fee levels as the

Fund received before the Transaction.

7. Applicants contend that the best

interests of shareholders of the Fund

would be served if the Subadviser

receives fees for its services during the

Interim Period. Applicants state that the

fees are essential to maintaining the

subadviser’s ability to provide services

to the Fund. In addition, the fees to be

paid during the Interim Period will be

unchanged from the fees paid under the

Existing Agreements, which have been

approved by the shareholders of each

respective Portfolio.

Applicants’ Conditions

Applicants agree as conditions to the

issuance of the exemptive order

requested by the application that:

1. The New Agreement will have

substantially the same terms and

conditions as the Existing Agreement,

except for its effective date.

2. Fees earned by the Subadviser in

respect of the New Agreement during

the Interim Period will be maintained in

an interest-bearing escrow account, and

amounts in the account (including

interest earned on such paid fees) will

be paid (a) to the Subadviser in

accordance with the New Agreement,

after the requisite shareholder approvals

are obtained, or (b) to the respective

Portfolio, in the absence of shareholder

approval with respect to such Portfolio.

3. The Fund will hold a meeting of

shareholders to vote on approval of the

New Agreement on or before the 120th

day following the termination of the

Existing Agreement (but in no event

later than April 30, 1998).

4. Either First Union or the

Subadviser will bear the costs of

preparing and filing the application, and

costs relating to the solicitation of

shareholder approval of the Fund

necessitated by the Transaction.

5. The Subadviser will take all

appropriate steps so that the scope and

quality of advisory and other services

provided to the Fund during the Interim

Period will be at least equivalent, in the

judgment of the Independent Trustees,

to the scope and quality of services

previously provided. If personnel

providing material services during the

Interim Period change materially, the

Subadviser will apprise and consult

with the board to assure that the board,

including a majority of the Independent

Trustees of the Fund, are satisfied that

the services provided will not be

diminished in scope or quality.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27594 Filed 10–16–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Meeting

‘‘FEDERAL REGISTER’’ CITATION OF

PREVIOUS ANNOUNCEMENT: [62 FR 53040,

October 10, 1997].

STATUS: Closed Meeting.

PLACE: 450 Fifth Street, N.W.,

Washington, D.C.

DATE PREVIOUSLY ANNOUNCED: October 7,

1997.

CHANGE IN THE MEETING: Time Change/

Deletions.

The closed meeting scheduled for

Tuesday, October 14, 1997, at 11:00 a.m.

was changed to Tuesday, October 14,

1997, at 2:00 p.m. and the following

items were not considered:

Institution of injunctive actions.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postponed, please contact: The Office

of the Secretary (202) 942–7070.

Dated: October 15, 1997.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–27755 Filed 10–15–97; 3:43 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39225; File No. SR–Phlx–

97–32]

Self-Regulatory Organizations;

Philadelphia Stock Exchange, Inc.;

Order Granting Approval to Proposed

Rule Change Respecting the Public

Order Exposure System for PACE

Orders

I. Introduction

On June 30, 1997, the Philadelphia

Stock Exchange, Inc. (‘‘Phlx’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change to

extend the duration of its automatic

execution system order exposure time

period for eligible orders from the

current 15 seconds to 30 seconds.

The proposed rule change was

published for comment in Securities

Exchange Act Release No. 38864 (July

23, 1997), 62 FR 40882 (July 30, 1997).

No comments were received on the

proposal. This order approves the

proposed rule change.

II. Description

The operation of the Philadelphia

Stock Exchange Automatic

Communication and Execution

(‘‘PACE’’) System is governed by Phlx

Rule 229 (‘‘PACE Rule’’). The PACE

System is the Exchange’s automatic

order routing and executing system for

securities on its equity trading floor.

With respect to market orders entered

into PACE, Supplementary Material .05

to the PACE Rule provides that, in 1⁄8

point markets or greater, round-lot

market orders up to 500 shares and

partial round-lot (‘‘PRL’’) market orders

up to 599 shares (i.e., orders that

combine a round-lot with an odd-lot

order) are stopped at the PACE Quote 3
54148 Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices

4See Supplementary Material .05 to the PACE

Rule.

5Securities Exchange Act Release No. 35283

(January 26, 1995), 60 FR 6333 (February 1, 1995)

(File No. SR–Phlx–94–58).

6The Exchange has represented that by its

oversight, this change was not filed with the SEC

as a proposed rule change prior to its

implementation pursuant to Section 19(b) of the Act

and Rule 19b–4 thereunder. The Exchange contends

that upon the discovery of this oversight in the

course of drafting changes to the PACE Rule, the

change was promptly filed with the SEC. See

Securities Exchange Act Release No. 37479 (July 25,

1996), 61 FR 40276 (August 1, 1996) (File No. SR–

Phlx–96–25). The Exchange has re-filed this change

as a separate proposed rule change due to the

withdrawal of File No. SR–Phlx–96–25. The

Exchange represents that, to date, it has not

distributed marketing material reflecting an order

exposure window of 30 seconds.

The Commission notes that Section 19(b) of the

Act provides that each self-regulatory organization

is required to file any proposed rule change with

the Commission and that no proposed rule change

shall take effect unless approved by the

Commission or otherwise permitted in accordance

with its provisions.

7 In addition, the Exchange previously had stated

its reasoning behind the expansion of the POES

window to 30 seconds in an amendment letter

respecting File No. SR–Phlx–96–25. See Letter from

Gerald D. O’Connell, Senior Vice President, Phlx,

to Jennifer Choi, Attorney, SEC, dated July 19, 1996.

Specifically, the Exchange stated that the FPC

recognized that 15 seconds was often too short of

a time period for the specialist to act. In this regard,

specialists has informed the Exchange that by the

time they noticed an order was stopped, it had been

automatically executed. The Exchange further

stated that its decision to expand the POES window

to 30 seconds ‘‘is rooted in the logical principle that

more time means more opportunity for price

improvement.’’ Id.

8 15 U.S.C. § 78f(b).

9 In approving the proposed rule change, the

Commission notes that it has considered the

proposed rule’s impact on efficiency, competition,

and capital formation. 15 U.S.C. § 78c(f).

10BSE Rules, Ch. XXXIII, Section 3(c); CHX

Rules, Art. XX, Rule 37(b)(6); and Securities

Exchange Act Release No. 27727 (February 22,

1990), 55 FR 7396 (March 1, 1990) (order approving

amendment of order exposure feature to PCX’s P/

COAST automatic execution system). See also CSE

Rule 11.9(o)(2) (requires exposure of any

unexecuted portion of any market or marketable

limit order not fully executed pursuant to the CSE’s

public agency guarantee). In addition, the CSE has

adopted a price improvement policy that requires

preferencing dealers either to: (1) expose eligible

customer orders on the Exchange for a minimum of

30 seconds in greater than minimum variation

markets; or (2) immediately execute the order at an

improved price. CSE Rule 11.9(u), Interpretation

and Policy .01.

11See Securities Exchange Act Release No. 27727,

supra note 10 (order reducing CHX and PCX order

exposure time periods from 30 to 15 seconds). See

also Securities Exchange Act Release No. 28667

(November 30, 1990), 55 FR 50624 (December 7,

1990) (order approving change in order exposure

time from 30 to 15 seconds in CSE Rule 11.9(o)(2).

12See Securities Exchange Act Release No. 27727,

supra note 9.

at the time of their entry into PACE

(‘‘Stop Price’’) in the Public Order

Execution System (‘‘POES’’). In

addition, market orders for more than

599 shares that a specialist voluntarily

has agreed to execute automatically also

are entitled to participate in POES.4

Supplementary Material .05 to the

PACE Rule states that the purpose of

stopping eligible market orders in POES

is to allow such orders to receive an

opportunity for price improvement.

Supplementary Material .05 further

states that if a stopped order is not

executed within the applicable order

exposure time period, or ‘‘window,’’ the

order will be automatically executed at

the Stop Price.

Upon its adoption in early 1995,

POES utilizes a 15 second order

exposure window.5 Following Phlx

Floor Procedure Committee (‘‘FPC’’)

approval in December 1995, however,

the Exchange increased the duration of

the POES window from 15 to 30

seconds.6 At this time, the Exchange

proposes to codify the 30 second time

period into Supplementary Material .05,

which currently reflects a 15 second

window. The Exchange has represented

that it believes that extending the POES

window to 30 seconds enables the

specialist to better gauge the market and

thus, improves the likelihood of price

improvement. Moreover, the Exchange

stated that it has learned, in its two

years of experience with POES, that

additional time is needed for a

meaningful opportunity for price

improvement to be afforded to such

orders. In this regard, the Exchange

represented that the 30 second window

better enables the specialist to locate

between-the-market interest and probe

other market centers.7

III. Discussion

For the reasons discussed below, the

Commission finds that the proposed

rule change is consistent with the

requirements of the Act and the rules

and regulations thereunder applicable to

a national securities exchange, and, in

particular, with the requirements of

Section 6(b).8 In particular, the

Commission believes the proposal is

consistent with the Section 6(b)(5)

requirements that the rules of an

exchange be designed to prevent

fraudulent and manipulative acts and

practices, to promote just and equitable

principles of trade, 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.9

As stated in the previous section, the

purpose of the proposed rule change is

to amend Supplementary Paragraph .05

to the PACE Rule in order to increase

the duration of the Exchange’s POES

order exposure window from 15 to 30

seconds. Each regional exchange has

incorporated an order exposure feature

similar to POES into its automatic order

execution system.10 Initially, the

Chicago Stock Exchange (‘‘CHX’’) and

the Pacific Exchange (‘‘PCX’’) had

adopted 30 second order exposure

windows into their rules. The CHX and

PCX, however, amended their rules in

1990 to reduce the duration of their

order exposure windows from 30 to 15

seconds.11

In the order approving the CHX and

PCX proposals, the Commission

acknowledged that any decrease in the

duration of an order exposure window

would have an adverse effect on price

improvement opportunities available to

eligible orders, while having a positive

effect on the timeliness of the execution

of such orders.12 The Commission’s

analysis of the appropriateness of these

proposals therefore required a balancing

of their positive and negative effects.

The Exchange’s current proposal to

increase the duration of the POES

window requires that a similar analysis

be undertaken; namely, balancing the

proposal’s potential positive effect on

price improvement opportunities for

customers orders against any negative

effect that it may have on the timeliness

of customer order execution. In this

regard, based upon the Exchange’s

representations of its experience with

POES, the system’s functionalities, and

the realities of competition for order

flow between markets, the Commission

believes that the Exchange’s proposal

strikes an appropriate balance in that

the positive effects of increased order

exposure time should offset any

negative effects on the efficiency of

order execution.

With regard to opportunities for price

improvement, the Commission notes

that, as stated above, the Exchange has

had experience with both 15 and 30

second order exposure windows. The

Exchange has represented that this

experience has indicated that a 15

second window often was insufficient to

allow the specialist to attempt price

improvement at all, while the additional

time afforded by a 30 second window

provided specialists with a more

meaningful opportunity to do so. In

light of the Exchange’s experience, and

absent any empirical evidence to the

contrary, the Commission believes that

the proposal is appropriate in that the

increase in order exposure time should

result in a concomitant, and beneficial,

increase in the price improvement

opportunities afforded by Phlx

specialists to customer orders that are

eligible for POES.
Federal Register / Vol. 62, No. 200 / Friday, October 17, 1997 / Notices 54149

13 15 U.S.C. § 78s(b)(2).

14 17 CFR 200.30–3(a)(12).

Moreover, the Commission believes

that the proposal should have a limited

impact on the timeliness of order

executions on the Phlx. In this regard,

the Commission notes that under the

proposal a specialist will maintain the

ability to execute manually an order

residing on POES prior to the expiration

of the POES window. Accordingly, if

the specialist determines that price

improvement is unlikely to occur, the

specialist may execute the order at the

Stop Price prior to the end of the 30

second period. In addition, the effect of

the proposal on the overall timeliness of

Phlx executions is further limited by the

fact that the POES window only is

applicable to certain market orders and

then only in 1⁄8 point markets or greater.

Finally, the Commission believes that

the competition between Phlx

specialists and other markets for order

flow should provide a continuing

incentive for specialists to execute

customer orders promptly, thereby

serving to further alleviate any potential

adverse impact that the proposal may

have on the provision of timely

executions of customer orders.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,13 that the

proposed rule change (SR–Phlx–97–32)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27544 Filed 10–16–97; 8:45 am]

BILLING CODE 8010–01–M

STATE DEPARTMENT

[Public Notice No. 2615]

Overseas Security Advisory Council

(OSAC) Meeting Notice; Closed

Meeting

The Department of State announces a

meeting of the U.S. State Department—

Overseas Security Advisory Council on

November 4, 5, and 6, at the U.S.

Department of State, Washington, D.C.

Pursuant to Section 10(d) of the Federal

Advisory Committee Act and 5 U.S.C.

552b(c) (1) and (4), it has been

determined the meeting will be closed

to the public. Matters relative to

classified national security information

as well as privileged commercial

information will be discussed. The

agenda calls for the discussion of

classified and corporate proprietary/

security information as well as private

sector physical and procedural security

policies and protective programs at

sensitive U.S. Government and private

sector locations overseas.

For more information contact Nick

Proctor, Overseas Security Advisory

Council, Department of State,

Washington, D. C. 20522–1003, phone:

202–663–0869.

Dated: September 26, 1997.

Gregorie W. Bujac,

Director of the Diplomatic Security Service.

[FR Doc. 97–27538 Filed 10–15–97; 8:45 am]

BILLING CODE 4710–24–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Reports, Forms and Record Keeping

Requirements; Agency Information

Collection Activity Under OMB Review

AGENCY: Office of the Secretary, DOT.

ACTION: Notice.

SUMMARY: In compliance with the

Paperwork Reduction Act 1995 (44

U.S.C. Chapter 35), this notice

announces that the Information

Collection Request (ICR) abstracted

below has been forwarded to the Office

of Management and Budget (OMB) for

review and comment. The ICR describes

the nature of the information collection

and its expected burden. The Federal

Register Notice with a 60-day comment

period soliciting comments on the

following collection of information was

published on October 29,1996 (61 FR

55835–55836) and a Notice of Final

Determination was published on June

10, 1997 (62 FR 31655–31661).

DATES: Comments must be submitted on

or before November 17, 1997.

FOR FURTHER INFORMATION CONTACT:

For information about the submission to

OMB, Form OMB 83–I, including

supporting statements for this collection

contact the US DOT Dockets, Room PL

401, Department of Transportation, 400

Seventh Street, SW., Washington, DC

20590, 1–800–647–5527. For Technical

issues in the submission: Mr. Robert F.

Schultz, Jr., Office of Motor Carrier

Research and Standards, (202) 366–

2718, Federal Highway Administration,

Department of Transportation, 400

Seventh Street, SW., Washington, DC

20590. Office hours are from 7:45 a.m.

to 4:15 p.m., E.T., Monday through

Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Federal Highway Administration

(FHWA)

Title: Motor Carrier Regulatory Relief

and Safety Demonstration Project.

OMB Number: 2125–0575.

Type of Request: Reinstatement,

without change, of a previously

approved collection for which approval

has expired.

Affected Public: Motor Carriers

operating commercial motor vehicles

with a gross vehicle weight rating

between 10,001 and 26,000 pounds in

interstate commerce.

Abstract: The National Highway

System Designation Act of 1995

(Payable–59, 109 Stat. 568) was signed

by the President on November 28, 1995.

Section 344 of the Act requires FHWA

to implement a pilot program under

which motor carriers operating

commercial motor vehicles (CMS) with

a gross vehicle weight rating between

10,001 and 26,000 pounds in interstate

commerce may qualify for exemption

from certain Federal Motor Carrier

Safety Regulations (FMCSRS) (49 CFR

part 325 et seq.). The Act directs the

FHWA to establish criteria for

admission to the pilot, and to monitor

the performance of those participating

in the pilot. Section 344 also states that

‘‘[the Secretary] shall complete the

review [of the pilot program] by the last

day of the 3-year period beginning on

the date of the enactment of this

paragraph [November 28, 1995]. [On

November 28, 1998] the Secretary shall,

after notice and an opportunity for

public comment, grant such exemptions

or modify or repeal existing regulations

to the extent appropriate.’’ By this

language, Congress has directed the

FHWA in explicit terms. The agency is

bound not to just conduct and evaluate

the pilot, but to grant exemptions, and

modify or repeal regulations,

immediately upon its conclusion, save

only the time necessary to solicit public

comment. On August 28, 1996, the

agency published a notice for this

collection, providing a proposed plan

for this Project, soliciting public

comment on the proposed Project, and

referring to the agency’s intent to

request emergency processing. On

October 29, 1996, the FHWA published

a Supplemental Notice seeking public

comment on the specific issue of

whether the rules of the Project would

preempt conflicting laws of the States.

In February 1997, OMB granted

emergency approval to the collection

requirements of this Project until

August 31, 1997. On June 10, 1997 the

agency published a Notice of Final

Determination on the Project, providing