Federal Register / Vol. 62, No. 229 / Friday, November 28, 1997 / Notices 63405

4 15 U.S.C. 78f(b)(5).

5 17 CFR 200.30–3(a)(12).

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

2Securities Exchange Act Release No. 39066

(September 12, 1997), 62 FR 49280.

3 Interdealer broker netting members already have

a $5 million cap per loss event on their liability for

loss allocation.

4 15 U.S.C. 78q–1(b)(3)(F).

5 15 U.S.C. 78q–1(b)(3)(D).

proposed rule change is to permit a floor

broker or market maker to clear the post

in cabinet securities by phone. The bids

and offers made to clear the post by

phone will be audibly announced at the

cabinet post through a speaker system

maintained by the Exchange. This new

policy will be effective for a six-month

pilot period to permit the Exchange to

determine the effectiveness of the new

policy before implementing it on a

permanent basis.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b)(5) 4 of the

Act 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 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. 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 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–CHX–97–28 and should be

submitted by December 19, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–31240 Filed 11–26–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39340; File No. SR–GSCC–

97–05]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Order Approving a

Proposed Rule Change to Modify the

Loss Allocation Process

November 21, 1997.

On July 8, 1997, the Government

Securities Clearing Corporation

(‘‘GSCC’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

a proposed rule change (File No. SR–

GSCC–97–05) pursuant to Section

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

of 1934 (‘‘Act’’).1 On July 23, 1997,

GSCC filed with the Commission an

amendment to the proposed rule

change. Notice of the proposal was

published in the Federal Register on

September 19, 1997.2 No comment

letters were received. For the reasons

discussed below, the Commission is

approving the proposed rule change.

I. Description

Generally, if a GSCC member were to

default, after liquidating the defaulting

member’s positions and applying its

collateral deposited with GSCC, GSCC

would allocate any loss that it did not

absorb from its own capital among

members pro rata based on the extent of

their recent activity with the defaulting

member. In order to determine which

members will be subject to loss

allocation, GSCC would look at trading

authority that was entered into GSCC’s

netting system during as many days as

is necessary to reach a level of activity

that is equal to or greater than five times

the dollar value of the liquidated

positions.

Pursuant to this proposed rule

change, GSCC is limiting the amount to

which any netting member that is not an

interdealer broker is liable for loss

allocation arising from blind brokered

activity.3 The new cap per loss event is

equal to the lesser of $5 million or five

percent of the total loss amount arising

from blind brokered activity that is

allocated to members that are not

interdealer brokers as a group. To the

extent that this cap is applicable, any

amounts not collected from individual

netting members will be reallocated to

the entire netting membership pro rata

based on each member’s average daily

clearing fund deposit requirement over

the twelve month period prior to the

insolvency.

GSCC states that the $5 million cap is

intended to provide to all members the

same level of protection that interdealer

broker members currently have for blind

brokered activity. The 5% limit is

intended to ensure that no single

member will be liable for an amount of

loss for blind brokered activity that is

significantly greater than the amount of

loss allocated to other dealer members.

II. Discussion

Section 17A(b)(3)(F) 4 of the Act

provides that the rules of a clearing

agency must be designed to assure the

safeguarding of securities and funds in

the custody or control of the clearing

agency or for which it is responsible,

and Section 17A(b)(3)(D) 5 of the Act

provides that the rules of a clearing

agency must provide for equitable

allocation of charges among its

participants. Prior to the rule change,

nonbroker members could be assessed

for the entire loss resulting from blind

brokered transactions even though they

did not have any control or knowledge

of their counterparty. Because in

brokered transactions, dealers cannot

select their counterparty, these members

may not be able to limit their losses

resulting from the counterparty’s

default. The rule change limits the

member’s liability but still provides the

member with an incentive to minimize

the risk of loss. Therefore, the

Commission believes that the rule
63406 Federal Register / Vol. 62, No. 229 / Friday, November 28, 1997 / Notices

6 17 CFR 200.30–3(a)(12).

change is consistent with a clearing

agency’s obligation to provide for

equitable allocation of charges among its

participants.

In addition, by spreading any losses

resulting from a member default among

a wider segment of GSCC’s members,

the rule change should decrease the

likelihood that any one member will be

disproportionately affected. Thus, the

proposal may make it easier for GSCC to

collect such funds should the need ever

arise. Therefore, the Commission

believes that this rule will enhance

GSCC’s ability to safeguard securities

and funds.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of

Sections 17A(b)(3)(F) and 17A(b)(3)(D)

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–

GSCC–97–05) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–31153 Filed 11–26–97; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Reports, Forms and Recordkeeping

Requirements; Agency Information

Collection Activity Under OMB Review

AGENCY: Office of the Secretary, DOT.

ACTION: Notice.

SUMMARY: In compliance with the

Paperwork Reduction Act of 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 September 8, 1997 [62 FR

47235].

DATES: Comments must be submitted on

or before December 29, 1997.

FOR FURTHER INFORMATION CONTACT: Mr.

Crawford Ellerbe, 202/366–2643, Office

of Maritime Labor, Training and Safety,

Maritime Administration, MAR–250,

Room 7302, Department of

Transportation, 400 Seventh Street,

SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Maritime Administration

Title: U.S. Merchant Marine Academy

Application for Admission and PreCandidate Application.

OMB Number: 2133–0010.

Type of Request: Extension of a

currently approved collection.

Affected Public: Individuals desiring

to become students at the U.S. Merchant

Marine Academy.

Abstract: This collection consists of

form KP–3–4 (Pre-Candidate

Application), and KP–2–65 (U.S.

Merchant Marine Academy Application

for Admission). These forms are

completed by individuals wishing to be

admitted as students to the U.S.

Merchant Marine Academy and are

reviewed by staff members of the

Academy.

Estimated Annual Burden Hours:

12,500.

Number of Respondents: 2,500.

Needs and Users: The collected

information is necessary to perform the

reviews required in order to permit

payment of Maintenance and Repair

subsidy.

ADDRESSES: Send comments to the

Office of Information and Regulatory

Affairs, Office of Management and

Budget, 725–17th Street, NW.,

Washington, DC 20503, Attention DOT

Desk Officer. Comments are invited on:

Whether the proposed collection of

information is necessary for the proper

performance of the functions of the

Department, including whether the

information will have practical utility;

the accuracy of the Department’s

estimate of the burden of the proposed

information collection; ways to enhance

the quality, utility and clarity of the

information to be collected; and ways to

minimize the burden of the collection of

information on respondents, including

the use of automated collection

techniques or other forms of information

technology.

Issued in Washington, DC, on November

20, 1997.

Vanester M. Williams,

Clerance Officer, United States Department

of Transportation.

[FR Doc. 97–31302 Filed 11–26–97; 8:45 am]

BILLING CODE 4910–62–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Agency Information Collection

Activity: Proposed Collection

Comment Request

AGENCY: Department of Transportation,

Federal Aviation Administration (DOT/

FAA).

ACTION: Notice.

SUMMARY: In compliance with the

Paperwork Reduction Act of 1995 (44

U.S.C. 3501 et seq.) this notice

announces that the information

collection request described below will

be forwarded to the Office of

Management and Budget (OMB) for

review and comment. This notice

describes the paperwork burden

associated with this rule and allows for

a 60-day comment period. The

following information describes the

nature of the information collection and

its expected burden.

Although the May 17, 1988, proposed

rule provided a 150-day comment

period and the final rule is based on the

comments received, paperwork

reduction and recordkeeping were not

addressed in that document. Therefore,

as required by section 3507(d) of the

Paperwork Reduction Act of 1995, the

FAA has submitted a copy of the final

rule to OMB for its review of these

information collection requirements.

DATES: Submit any comments to OMB

and FAA by January 27, 1998.

SUPPLEMENTARY INFORMATION:

Title: Retrofit of Improved Seats in Air

Carrier Transport Category Airplanes.

Collection of Information: Only air

carrier operators that wish to continue

to operate aircraft equipped with older,

approved seats that are in partial

compliance with newer dynamic seat

requirements must submit an

application and supporting data to the

FAA. The information needs to be

submitted only once, within four years

of the effective date of the final rule.

The FAA estimates 100 applications

will be submitted per year for four

years, with 425 hours of reporting

burden per application and an annual

reporting burden of 42,500 hours for

each of the four years. The total cost to

respondents is estimated to be $850,000

per year for 2 years; this figure is

derived by multiplying 42,500 × $20.00

per hour. Cost estimates were obtained

from applicants. After four years, there

will no longer be application/reporting

requirements.

Organizations and individuals

desiring to submit comments on the