Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices 53041

4The Exchange has separately filed for an

increase in the position and exercise limits for OEX

in SR–CBOE–97–11 (noticed in Securities Exchange

Act Release No. 38525 (April 18, 1997), 62 FR

20046 (April 24, 1997). In the event that SR–CBOE–

97–11 is approved by the Commission prior to this

filing, the Exchange would seek a doubling of those

higher limits. 5 15 U.S.C. 78f(b)(5).

6 17 CFR 200.30–3(a)(12)

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

2Securities Exchange Act Release No. 38923

(August 11, 1997), 62 FR 44025.

3For a detailed description of the valued

securities program, refer to Securities Exchange Act

Continued

split’’ of the Index. The change will be

instituted after Commission approval of

this proposed rule change. This change

will result in a doubling of the OEX

contracts outstanding, such that for each

OEX contract held, the holder will

receive two contracts at the reduced

value, with a strike price of one-half of

the original strike price. For instance,

the holder of an OEX 930 call will

receive two OEX 465 calls. The trading

symbol will remain as OEX (plus any

necessary wrap symbols).

In addition to the strike price being

reduced by one-half, the CBOE proposes

to double the position and exercise

limits applicable to the OEX from

25,000 to 50,000.4 The Exchange

believes this increase in the position

and exercise limits is justified because

the reduction in the divisor would

result in each contract overlying only

one-half of the value of a current OEX

contract. Consequently, the revised

position and exercise limits would be

equivalent to the current levels in terms

of the value of the Index.

The CBOE will announce the effective

date of the change by way of an

Exchange circular to the membership,

which will also describe the change to

the strike prices and the position and

exercise limits.

The Exchange expects the proposed

changes to attract additional customer

business in OEX in those series in

which retail customers are most

interested in trading. For example, a

September 930 (at the money) call

option series currently trades at

approximately $2600 per contract. With

the Index split, the same option series

(once adjusted), with all else remaining

equal, would trade at approximately

$1300 per contract. The Exchange

believes the proposed change will

permit some investors to trade these

options who have otherwise been priced

out of the market due to the recent

market surge. The Exchange believes

that OEX options provide an important

opportunity for investors to hedge and

speculate upon the market risk

associated with the stocks comprising

this broad-based widely followed Index.

By reducing the value of the Index,

investors will be able to utilize this

trading vehicle, while extending a

smaller outlay of capital. The Exchange

believes this should attract additional

investors, and, in turn, create a more

active and liquid trading environment.

The Exchange believes that reducing

the value of the Index does not raise

manipulation concerns and will not

cause adverse market impact because

the Exchange will continue to employ

the same surveillance procedures and

has proposed an orderly procedure to

achieve the Index split, including

adequate prior notice to market

participants.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

and furthers the objectives of Section

6(b)(5) of the Act,5 in that it is designed

to perfect the mechanisms of a free and

open market and to protect investors

and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The CBOE does not believe that the

proposed rule change will impose any

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 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

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 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. 25049. 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. 25049. Copies of such

filing will also be available for

inspection and copying at the principal

office of the CBOE. All submissions

should refer to File No. SR–CBOE–97–

48 and should be submitted by October

31, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–26901 Filed 10–9–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39201; File No. SR–OCC–

97–09]

Self-Regulatory Organizations; The

Options Clearing Corporation; Order

Approving a Proposed Rule Change

Seeking To Amend the Valuation Rate

Applied to Equity Securities and

Corporate Debt Deposited as Margin

Collateral

October 3, 1997.

On May 21, 1997, The Options

Clearing Corporation (‘‘OCC’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) a

proposed rule change (File No. SR–

OCC–97–09) pursuant to Section

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

of 1934 (‘‘Act’’).1 Notice of the proposal

was published in the Federal Register

on August 18, 1997.2 No comment

letters were received. For the reasons

discussed below, the Commission is

approving the proposed rule change.

I. Description

OCC currently operates a program to

accept deposits of equity securities and

corporate debt as margin collateral

(‘‘valued securities program’’) under its

rule 604(d).3 The proposed rule change
53042 Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices

Release Nos. 33893 (April 14, 1994), 59 FR 18427

[File No. SR–OCC–92–13] (order granting

accelerated approval to proposed rule change) and

31169 (September 10, 1992), 57 FR 43041 [File No.

SR–OCC–92–13] (notice of filing of proposed rule

change).

4 17 CFR 240.11Aa2–1.

5An issue that is suspended from trading in its

primary market, or subject to special margin

requirements under the rules of its primary market

because of volatility, lack of liquidity or similar

characteristics may not be deposited with OCC.

OCC Rule 604(d)(1).

6 15 U.S.C. 78q–1(b)(3)(F).

7OCC financial safeguards include, for example,

the valued securities program’s eligibility standards

for equity and corporate debt securities and OCC’s

authority to collect intraday margin calls as needed. 28 7 CFR 200.30–3(a)(12).

amends OCC Rule 604(d)(1) to increase

the valuation rate that OCC applies to

equity and corporate debt securities

deposited with OCC under the valued

securities program from 60 percent to 70

percent.

OCC Rule 604(d) permits OCC’s

clearing members to deposit as margin

collateral common and preferred stock

and corporate bonds which meet certain

standards. Common and preferred stock

must have a market value of greater than

$10 per share and must either be (i)

traded on a national securities exchange

and have last sale reports collected and

disseminated pursuant to a consolidated

transaction reporting plan or (ii) traded

in the over-the-counter market and

designated as National Market System

Securities pursuant to Commission Rule

11Aa2–1.4 Corporate bonds must (i) be

listed on a national securities exchange

and not be in default, (ii) have a current

market value that is readily

determinable on a daily basis, and (iii)

be rated in one of the four highest rating

categories by a nationally recognized

statistical rating organization.5

II. Discussion

Section 17A(b)(3)(F) of the Act 6

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds in

its custody or control or for which it is

responsible. The Commission believes

that the effective functioning of the

valued securities program since its

inception in 1985 and OCC’s various

financial safeguards and risk monitoring

systems, taken as a whole,7 suggest that

an increase from 60 percent to 70

percent in the valuation rate for debt

and equity securities deposited as

margin collateral should not detract

from OCC’s ability to safeguard funds

and securities in its custody or control

or for which it is responsible.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of the

Act and in particular with the

requirements of Section 17A 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 (File No. SR–

OCC–97–09) be, and hereby is,

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–26902 Filed 10–9–97; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice No. 2611]

Shipping Coordinating Committee;

Subcommittee on Ocean Dumping;

Notice of Meeting

The Subcommittee on Ocean

Dumping of the Shipping Coordinating

Committee will hold an open meeting

on October 21, 1997 from 1:30 pm to

3:30 pm to obtain public comment on

the issues to be addressed at the October

27–31, 1997 Nineteenth Consultative

Meeting of the Contracting Parties to the

London Convention, which is the global

international treaty regulating ocean

dumping. The meeting will also review

the results of the Twentieth Scientific

Group Meeting of the London

Convention held in May 1997.

The meeting will be held at

Environmental Protection Agency

offices located at the Fairchild Building,

499 South Capitol Street SW,

Washington, DC 20003, Room 709.

Interested members of the public are

invited to attend, up to the capacity of

the room.

For further information, please contact Mr.

John Lishman, Chief, Marine Pollution

Control Branch, telephone (202) 260–1952.

Dated: September 25, 1997.

Russell A. LaMantia,

Chairman, Shipping Coordinating Committee.

[FR Doc. 97–26970 Filed 10–9–97; 8:45 am]

BILLING CODE 4710–07–M

TENNESSEE VALLEY AUTHORITY

Privacy Act of 1974; System of

Records

AGENCY: Tennessee Valley Authority.

ACTION: Amendment of systems of

records to include new categories of

individuals and new routine uses.

SUMMARY: In accordance with the

Privacy Act (5 U.S.C. 552a(e)(4)), the

Tennessee Valley Authority (TVA) is

issuing notice of our intent to amend the

systems of records entitled TVA–2

‘‘Personnel Files—TVA’’ and TVA–11

‘‘Payroll Records—TVA’’ to include new

categories of individuals for TVA–2 and

new routine uses for TVA–2 and TVA–

11. We invite public comment on this

publication.

EFFECTIVE DATE: The changes will

become effective as proposed, on

November 10, 1997, unless comments

which would warrant our preventing

the changes from taking effect are

received on or before 30 days from the

date of this notice.

ADDRESSES: Interested individuals may

comment on this publication by writing

to Wilma H. McCauley, Privacy Act

Officer, Tennessee Valley Authority,

1101 Market Street (WR 4Q),

Chattanooga, Tennessee 37402–2801.

All comments received will be available

for public inspection at that address.

FOR FURTHER INFORMATION CONTACT:

Wilma H. McCauley, (423) 751–2523.

SUPPLEMENTARY INFORMATION:

Discussion of Proposed Additions to

Routine Use

Pursuant to the Pub. L. 104–193, the

Personal Responsibility and Work

Opportunity Reconciliation Act of 1996,

TVA will disclose data from its

Personnel Files and Payroll Records to

the Office of Child Support

Enforcement, Administration for

Children and Families, Department of

Health and Human Services for use in

its Federal Parent Locator System

(FPLS) and Federal Tax Offset System,

DHHS/OCSE No. 09–90–0074.

Information on this system was last

published at 61 FR 38754, July 25, 1996.

FPLS is a computerized network

through which States may request

location information from Federal and

State agencies to find non-custodial

parents and/or their employers for

purposes of establishing paternity and

securing support.

Effective October 1, 1997, the FPLS

will be enlarged to include the National

Directory of New Hires, a database

containing information on employees

commencing employment, quarterly

wage data on private and public sector

employees, and information on

unemployment compensation benefits.

Effective October 1, 1998, the FPLS will

be expanded to include a Federal Case

Registry. The Federal Case Registry will

contain abstracts on all participants

involved in child support enforcement

cases. When the Federal Case Registry is

instituted, its files will be matched on