Federal Register / Vol. 62, No. 221 / Monday, November 17, 1997 / Notices 61419

5The Exchange notes that the XII firm facilitation

exemption is in addition to the standard limit and

other exemptions under Exchange rules,

commentaries and policies.

6To qualify for inclusion in XII, stocks must be

held by a minimum of 200 of the reporting

institutions filing Section 23(f) reports and must

have traded at least 7 million shares in each of the

two preceding calendar quarters. 1 15 U.S.C. 78f(b)(5). 8 17 CFR 200.30–3(a)(12).

a result of existing XII position limits

causing XII users to use other less

restrictive products and over-thecounter products in order to meet their

hedging needs.

The Exchange believes that increasing

the position and exercise limits for XII

options to 100,000 contracts will allow

increased institutional use of XII and

allow it to be more competitive with

alternative products. In addition, an

increase in XII position and exercise

limits will benefit not only the

beneficiaries of assets managed by

various institutions, but also the

marketplace in general through

increased liquidity.

Increasing the XII firm facilitation

exemption from 100,000 contracts to

400,000 contracts in necessary to

accommodate the needs of investors as

well as market participants and should

not substantially increase concerns

regarding the potential for manipulation

and other trading abuses.5 In addition,

the proposed ruled change will further

enhance the potential depth and

liquidity of the options market as well

as the underlying markets by providing

Exchange members greater flexibility in

executing large customer orders, while

the Exchange’s existing safeguards

applicable to current facilitation

exemptions continue to serve to

minimize any potential disruption or

manipulation concerns.

These proposed changes are intended

to result in little or no attendant risk to

the marketplace as XII is composed of

seventy-five of the most widely-held

stocks in institutional portfolios that

have a market value of more than one

hundred million in investment funds.6

Thus the component issues are

extremely liquid and the overall index

less volatile than individual stocks.

Lastly, XII options are European-style

and therefore can only be exercised at

expiration.

To enhance its ability to monitor

unhedged positions, the Amex will add

a reporting requirement (new

Commentary .03 to Exchange Rule

904C) for accounts having a position in

excess of 45,000 a.m.-settled, Europeanstyle XII option contracts on the sameside of the market. Specifically, new

Commentary .03 to Exchange Rule 904C

states that if a member or member

organization, other than an Exchange

Specialist or Registered Options Trader,

maintains a position in excess of 45,000

a.m.-settled, European-style XII option

contracts on the same-side of the market

on behalf of its own account or for the

account of a customer, it must report

information as to whether those

positions are hedged and provide

documentation as to how such contracts

are hedged, in the manner and form

required by the Exchange. In addition,

to address the Commission’s concerns

with respect to the ability of the

Exchange to monitor customer accounts

that maintain large unhedged positions,

the Amex will add a margin and

clearing firm requirement. Pursuant to

new Commentary. 04 to Exchange Rule

904C, whenever the Exchange

determines that additional margin is

warranted in light of the risks associated

with an under-hedged option position

in excess of 45,000 contracts, the

Exchange may impose additional

margin upon the account maintaining

such under-hedged position, or assess

capital charges upon the clearing firm

carrying the account to the extent of any

margin deficiency resulting from the

higher margin requirement.

2. Statutory Basis

The Exchange represents that the

proposed rule change is consistent with

Section 6(b)(5) of the Act 7 in that it is

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

facilitating transactions in securities,

and to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate 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 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.

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–Amex–97–44 and should be

submitted by December 8, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–30131 Filed 11–14–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39308; File No. SR–CBOE–

97–40]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Incorporated Relating to the ‘‘Terms

and Conditions of an Order’’ for

Purposes of the Exchange’s Rules on

Solicited Trades and Crossed Trades

November 6, 1997.

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

Securities Exchange Act of 1934
61420 Federal Register / Vol. 62, No. 221 / Monday, November 17, 1997 / Notices

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

2 17 CFR 240.19b–4.

3See letter from Stephanie Mullins, Attorney,

CBOE to David S. Sieradzki, Attorney, SEC dated

October 31, 1997 (‘‘Amendment No. 1’’).

Amendment No. 1 changes the item to be defined

from the word ‘‘terms’’ to the phrase ‘‘terms and

conditions.’’ In addition, Amendment No. 1 makes

several non-substantive changes that clarify the

proposal. 4 15 U.S.C. 78f(b). 5 17 C.F.R. 200.30–3(a)(12).

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on August

25, 1997, the Chicago Board Options

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

filed with the Securities and Exchange

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

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the selfregulatory organization. On October 31,

1997, the Exchange submitted

Amendment No. 1 to the Proposal.3 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend its

rules governing solicited orders and

‘‘crossing’’ orders by adding to each rule

an interpretation which will define and

clarify the phrase ‘‘terms and

conditions’’ as used in each rule. The

text of the proposed rule change is

available at the Office of the Secretary,

CBOE and at the Commission.

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

self-regulatory organization 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 self-regulatory organization 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

1. Purpose

The purpose of the proposed rule

change is to define and clarify the

meaning of the phrases ‘‘terms and

conditions’’ of an order as used in

Exchange Rules 6.9 and 6.74. Pursuant

to Rule 6.9, Solicited Transactions, a

member or member organization

representing an order respecting an

option traded on the Exchange (an

‘‘original order’’), including a spread,

combination, or straddle order as

defined in Rule 6.53 and a stock-option

order as defined in Rule 1.1(ii), may

solicit a member or member

organization or a non-member customer

or broker-dealer (the ‘‘solicited person’’)

to transact in-person or by order (a

‘‘solicited order’’) with the original

order.

Pursuant to Rule 6.74(b), a floor

broker may effect a cross of a customer

order and a facilitation order subject to

satisfaction of certain conditions

including disclosure on an order ticket

for the public customer order which is

subject to facilitation, all of the terms of

such order, including any contingency

involving, and all related transactions

in, either options or underlying or

related securities. A facilitation order is

defined in Rule 6.53(m) as an order

which is only to be executed in whole

or in part in a cross transaction with an

order for a public customer of the

member organization and which is

clearly designated as a facilitation order.

The rules relating to both facilitation

‘‘solicited’’ and ‘‘crossing’’ transactions

are designed to ensure that all market

participants have an equal opportunity

to participate in trades, fostering the

objective of open outcry in a

competitive market. The proposed rule

amendment defines what is meant by

the phrase ‘‘terms and conditions’’ as

used in these two rules: the volume; the

price; any contingencies; and any

components related to the order.

Components are related stock, options,

futures or any other instruments or

interests. A contingency order is a limit

or market order to buy or sell that is

contingent upon a condition being

satisfied while the order is at the post.

Contingent orders include: Market-iftouched orders; market-on-close-orders;

stop (stop-loss) orders; and stop-limit

orders.

The Exchange believes that the

proposed Interpretations will enable

those who solicit and those who wish to

effect ‘‘facilitation’’ crosses to

understand and abide by their

disclosure obligations. In addition, the

proposed change will aid in achieving

uniformity with regard to trading crowd

expectations, as well as to the type and

amount of information disclosed on

crossed and solicited orders.

2. Statutory Basis

The Exchange represents that the

proposed rule change is consistent with

Section 6(b)(5) of the Act 4 in that it is

designed to prevent fraudulent and

manipulative acts and practices and to

perfect the mechanism of a free and

open market.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate 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 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.

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–97–40 and should be

submitted by December 8, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5
Federal Register / Vol. 62, No. 221 / Monday, November 17, 1997 / Notices 61421

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–30054 Filed 11–14–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Revocation of License of Small

Business Investment Company;

Intercontinental Capital Funding Corp.

Pursuant to the authority granted to

the United States Small Business

Administration by the Final Order of the

United States District Court for the

Southern District of New York, dated

September 17, 1997, the United States

Small Business Administration hereby

revokes the license of Intercontinental

Capital Funding Corporation, a New

York corporation, to function as a small

business investment company under the

Small Business Investment Company

License No. 02/02–5421 issued to

Intercontinental Capital Funding

Corporation on September 30, 1981 and

said license is hereby declared null and

void as of November 5, 1997.

United States Small Business

Administration.

Dated: November 5, 1997.

Don A. Christensen,

Associate Administrator for Investment.

[FR Doc. 97–30087 Filed 11–14–97; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

Revocation of License of Small

Business Investment Company; New

England MESBIC, Inc.

Pursuant to the authority granted to

the United States Small Business

Administration by the Final Order of the

United States District Court for the

District of New Hampshire, dated

September 10, 1997, the United States

Small Business Administration hereby

revokes the license of New England

MESBIC, Inc., a Massachusetts, to

function as a small business investment

company under the Small Business

Investment Company License No.

01/01–5318 issued to New England

MESBIC, Inc. on October 26, 1982 and

said license is hereby declared null and

void as of November 5, 1997.

United States Small Business

Administration.

Dated: November 5, 1997.

Don A. Christensen,

Associate Administrator for Investment.

[FR Doc. 97–30088 Filed 11–14–97; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

[License No. 02/02–5386]

Pan Pac Capital Corporation; Notice of

License Surrender

Notice is hereby given thatPan Pac

Capital Corporation (‘‘Pan Pac’’), 121

East Industry Court, Deer Park, New

York 11729, has surrendered its license

to operate as a small business

investment company under the Small

Business Investment Act of 1958, as

amended (‘‘the Act’’). Pan Pac was

licensed by the Small Business

Administration on June 12, 1980.

Under the authority vested by the Act

and pursuant to the regulations

promulgated thereunder, the surrender

of the license was accepted on

September 30, 1997, and accordingly,

all rights, privileges, and franchises

derived therefrom have been

terminated.

(Catalog of Federal Domestic Assistance

Program No. 59.011, Small Business

Investment Companies)

Dated: November 5, 1997.

Don A. Christensen,

Associate Administrator for Investment.

[FR Doc. 97–30089 Filed 11–14–97; 8:45 am]

BILLING CODE 8025–01–M

SMALL BUSINESS ADMINISTRATION

Southeastern States Regional Fairness

Board Public Hearing

The Southeastern States Regional

Fairness Board will hold a public

meeting on Monday, November 17,

1997, at 1:00 p.m., at the Charlotte

Chamber of Commerce, 330 S. Tryon

Street, Charlotte, North Carolina 28202,

to inform the small business community

of the existence of a regulatory

enforcement oversight process and of

SBA’s desire to collect information

regarding businesses’ experience with

regulatory enforcement actions, and to

discuss such matters as may be

presented by members, staff of the U.S.

Small Business Administration, or

others present.

For further information, please

contact Gary P. Peele at (312) 353–0880.

Dated: November 7, 1997.

Eugene Carlson,

Associate Administrator, Office of

Communications and Public Liaison.

[FR Doc. 97–30090 Filed 11–14–97; 8:45 am]

BILLING CODE 8025–01–P–M

DEPARTMENT OF STATE

Office of Defense Trade Controls

[Public Notice No. 2624]

Notifications to the Congress of

Proposed Export Licenses

AGENCY: Department of State.

ACTION: Notice.

SUMMARY: Notice is hereby given that

the Department of State has forwarded

the attached Notifications of Proposed

Export Licenses to the Congress on the

dates shown on the attachments

pursuant to section 36(c) and in

compliance with section 36(e) of the

Arms Export Control Act (22 U.S.C.

§ 2776).

EFFECTIVE DATE: As shown on each

letter.

FOR FURTHER INFORMATION CONTACT:

Mr. William J. Lowell, Director, Office

of Defense Trade Controls, Bureau of

Political-Military Affairs, Department of

State ((703) 875–6644).

SUPPLEMENTARY INFORMATION: Section

38(e) of the Arms Export Control Act

mandates that notifications to the

Congress pursuant to section 36(c) must

be published in the Federal Register

when they are transmitted to Congress

or as soon thereafter as practicable.

Dated: October 30, 1997.

William J. Lowell,

Director, Office of Defense Trade Controls.

United States Department of State

Washington, D.C. 20520

October 21, 1997.

Dear Mr. Speaker: Pursuant to section 36(c)

of the Arms Export Control Act, I am

transmitting herewith certification of a

proposed license for the export of defense

articles or defense services sold under a

contract in the amount $50,000,000 or more.

The transaction described in the attached

certification involves the export of 40 Solid

Strap-on Boosters for integration into

Mitsubishi’s H–IIA launch Vehicle for use in

the Japanese space program.

The United States Government is prepared

to license the export of these items having

taken into account political, military,

economic, human rights, and arms control

considerations.

More detailed information is contained in

the formal certification which, though,

unclassified, contains business information

submitted to the Department of State by the

applicant, publication of which cause

competitive harm to the United States firm

concerned.

Sincerely,

Barbara Larkin,

Assistant Secretary, Legislative Affairs.

Enclosure: Transmittal No. DTC–121–97

The Honorable Newt Gingrich, Speaker of the

House of Representatives.