56222 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

12The expiration date of a FLEX Option may not

fall on a day that is on, or within two business days,

of the expiration date of a non-FLEX option.

13See supra note 5.

14The Exchange is not proposing to trade

reduced-value LEAPS on the Dow Taiwan Index.

15Telephone conversation on October 8, 1997

between Michael Pierson, Senior Attorney, PCX,

and Deborah Flynn, Attorney, Division of Market

Regulation, Commission.

16 In approving this rule, the Commission notes

that it has considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

17 15 U.S.C. 78f(b)(5).

18Pursuant to Section 6(b)(5) of the Act, the

Commission must predicate approval of any new

securities product upon a finding that the

introduction of such product is in the public

interest. Such a finding would be difficult with

respect to a product that served no hedging or other

economic function, because any benefits that might

be derived by market participants likely would be

outweighed by the potential for manipulation,

diminished public confidence in the integrity of the

markets, and other valid regulatory concerns.

19The Commission believes that the proposal to

trade FLEX Options on the Taiwan Index should

also encourage fair competition by allowing the

Exchange to compete with the growing OTC market

in customized index options to address the

demands of sophisticated portfolio managers and

other institutional investors who are increasingly

relying on the OTC market to satisfy their hedging

needs.

20See supra note 11.

21 Id.

22 15 U.S.C. 78s(b)(2).

23 17 CFR 200.30–3(a)(12).

(3) Expiration date;12 (4) option type

(put, call, or spread); and (5) form of

settlement (A.M., P.M. or average).

These terms are identical to the terms

that can be designated for the previously

approved PCX FLEX Index Options.13

The Exchange also proposes to list

and trade full-value LEAPS, pursuant to

PCX Rule 6.4(d), on the Index.14 LEAPS

on the Index will allow the PCX to list

options series with expirations of up to

three years from the date of issuance.

For LEAPS, the underlying value would

be computed by using the same levels

as proposed for the Index options.15

III. Discussion

After careful review, 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.16 Specifically, the

Commission believes the proposal is

consistent with the requirements of

Section 6(b)(5) of the Act 17 because

trading of FLEX Options and LEAPS on

the Taiwan Index will serve to protect

investors, promote the public interest,

and help to remove impediments to a

free and open securities market. The

Commission also believes that the

trading of FLEX Options and LEAPS on

the Index will provide investors with

more flexibility in hedging the risks

associated with holding some or all of

the securities underlying the Index.18 By

broadening the hedging and investment

opportunities of investors, the

Commission believes that the trading of

FLEX Options and LEAPS on the Index

will serve to protect investors, promote

the public interest, and contribute to the

maintenance of fair and orderly markets.

In particular, as noted above, FLEX

Options on the Index will allow

investors to customize certain terms,

including size, term to expiration,

exercise style, exercise price, and

exercise settlement value.19 LEAPS

should also benefit investors by

allowing them to hedge positions on the

Index on a longer term basis through

investment in one options series, rather

than having to roll shorter term

expirations into new series to remain

hedged on a longer basis.

The Commission notes that the

Taiwan Index was thoroughly reviewed

recently in connection with the

Exchange’s proposal to list and trade

standardized, non-FLEX options based

on the Index.20 At that time, the

Commission found that the Exchange

had adequately addressed the

Commission’s concerns arising from

issues relating to the design and

structure of the Index, customer

protection and surveillance. The

Commission’s findings relied on several

factors, including the large

capitalizations, substantial trading

volume, wide diversity of the

component stocks in the Taiwan Index

and the size of the market underlying

the Index.21

The Commission believes that it is

reasonable for the Exchange to allow

trading in FLEX Options and LEAPS

based on this Index given that, to the

Commission’s knowledge, there have

been no significant, adverse changes to

the Index to date that would change the

Commission’s initial findings approving

the trading of options on the Index. For

the foregoing reasons, the Commission

finds that the PCX’s proposal to trade

FLEX Options and LEAPS based on the

Taiwan index is consistent with the

requirements of the Act and the rules

and regulations thereunder.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,22 that the

proposed rule change (SR–PCX–97–22)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.23

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–28568 Filed 10–28–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Reporting and Recordkeeping

Requirements Under OMB Review

ACTION: Notice of Reporting

Requirements Submitted for Review.

SUMMARY: Under the provisions of the

Paperwork Reduction Act (44 U.S.C.

Chapter 35), agencies are required to

submit proposed reporting and

recordkeeping requirements to OMB for

review and approval, and to publish a

notice in the Federal Register notifying

the public that the agency has made

such a submission.

DATES: Comments should be submitted

on or before November 28, 1997. If you

intend to comment but cannot prepare

comments promptly, please advise the

OMB Reviewer and the Agency

Clearance Officer before the deadline.

COPIES: Request for clearance (OMB 83–

1), supporting statement, and other

documents submitted to OMB for

review may be obtained from the

Agency Clearance Officer. Submit

comments to the Agency Clearance

Officer and the OMB Reviewer.

FOR FURTHER INFORMATION CONTACT:

Agency Clearance Officer: Jacqueline

White, Small Business Administration

409 3RD Street, S.W., 5th Floor,

Washington, D.C. 20416, Telephone:

(202) 205–6629.

OMB Reviewer: Victoria Wassmer,

Office of Information and Regulatory,

Affairs Office of Management and

Budget, New Executive Office Building,

Washington, D.C. 20503.

Title: Procurement Automated Source

System (PASS).

Form No’s: SBA Forms 1062 and

1395.

Frequency: On Occasion.

Description of Respondents: Small

Business Interested in Federal

Procurement Opportunities.

Annual Responses: 242,000.

Annual Burden: 47,333.

Jacqueline White,

Chief, Administrative Information Branch.

[FR Doc. 97–28677 Filed 10–28–97; 8:45 am]

BILLING CODE 8025–01–P