62652 Federal Register / Vol. 62, No. 226 / Monday, November 24, 1997 / Notices

11 17 CFR 200.30–3(a)(12).

1Advice G–2 does not contain a fine schedule.

Accordingly, the proposal does not affect the

Exchange’s minor rule violation enforcement and

reporting plan.

2PHLX Rule 1047A(b) allows specialists to

conduct a rotation in accordance with PHLX Rule

1047, Commentary .01 (b) and (c).

3See also CBOE Rule 6.2, Interpretation .03

(closing rotation for expiring index options is not

ordinarily employed).

4A trading rotation is a series of brief time

periods during which bids, offers and transactions

in only specified series can be made.

5See Securities Exchange Act Release No. 35742

(May 19, 1995), 60 FR 28188 (May 30, 1995) (order

approving File No. SR–CBOE–95–04) )‘‘CBOE

Approval Order’’).

56), including Amendment No. 1, is

approved on an accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–30721 Filed 11–21–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39332; File No. SR–PHLX–

97–52]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.,

Relating to Options Trading Rotations

November 17, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on October 23, 1997,

the Philadelphia Stock Exchange, Inc.

(‘‘PHLX’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I, II,

and III below, which Items have been

prepared by the self-regulatory

organization. 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

Pursuant to Rule 19b–4 of the Act, the

PHLX proposes to amend PHLX Rule

1047, ‘‘Trading Rotations, Halts and

Suspensions,’’ to (1) Emphasize that

opening rotations are conducted daily;

(2) replace references to ‘‘the Exchange’’

with references to ‘‘two Floor Officials

and a Market Regulation officer’’

throughout PHLX Rule 1047; (3) delete

references in PHLX Rule 1047,

Commentary .01 (a) and (d) to puts and

calls trading on the same security; (4)

define modified, reverse and shotgun

rotations in PHLX Rule 1047,

Commentary .01(b); (5) require reverse

rotations where there is a heavy influx

of orders, unless exempted by two Floor

Officials with the concurrence of a

PHLX Market Regulation officer; (6)

require that two Floor Officials, with the

concurrence of a PHLX Market

Regulation officer, approve second and

subsequent rotations; (7) provide that,

with the approval of two Floor Officials

and the concurrence of a PHLX Market

Regulation officer, modified rotations

(other than a reverse or shotgun

rotation) can be employed where there

is a delayed opening, halt or suspension

in trading or other unusual market

conditions; and (8) regarding closing

rotations at expiration, add ‘‘or at an

earlier time, with the concurrence of a

Market Regulation officer,’’ to allow the

closing rotation at expiration to begin

other than after the option normally

ceases trading (4:02 p.m.).

The PHLX proposes to make

comparable changes to PHLX Rule

1047A, ‘‘Trading Rotations, Halts or

Reopenings,’’ regarding index options,

and to Floor Procedure Advice

(‘‘Advice’’) G–2, ‘‘Trading Rotations,

Halts or Reopenings.’’ 1 Because PHLX

Rule 1047A(b) refers directly to PHLX

Rule 1047, Commentary .01,2 most of

the above-described amendments will

apply to index options trading. For

PHLX Rule 1047A(a)(ii), (c), (d), and (f),

and for the corresponding paragraphs of

Advice G–2, the PHLX proposes to

replace references to ‘‘the Exchange’’

with references to ‘‘two Floor Officials

and a Market Regulation officer.’’ Under

PHLX Rule 1047A(e), closing rotations

for expiring index options are not

required, nor are they prohibited.3

The text of the proposed rule change

is available at the Office of the

Secretary, PHLX, 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

PHLX Rule 1047 governs options

trading rotations 4 (including opening

rotations), delayed openings, halts or

suspensions in trading, reopenings and

closing rotations. Trading rotations are

intended to produce fair and orderly

markets by fairly setting opening prices,

taking into account orders and bids/

offers on the book and in the trading

crowd. The Exchange has considered

the types of opening rotations that

should be permitted or required in order

to reduce the length of option openings,

especially in unusual circumstances,

and to prevent subsequent rotations.

The purpose of the proposed rule

change is to improve the efficiency of

option openings. PHLX Rule 1047A is

the corresponding rule governing index

options trading.

First, the Exchange proposes to

amend PHLX Rule 1047(a) to emphasize

that opening rotations are conducted

daily, as opposed to closing rotations,

which are conducted only at expiration.

This change is designed to clarify PHLX

Rule 1047(a).

Second, the Exchange proposes to

replace ‘‘the Exchange’’ with ‘‘two Floor

Officials and a Market Regulation

officer’’ throughout PHLX Rule 1047.

This term originated in a comparable

rule of the American Stock Exchange,

but lacks specificity and does not reflect

that, in reality, the approval of two

Floor Officials is received. The

Exchange believes that trading rotations

present the types of issues and need for

prompt determinations that are

particularly suited for Floor Official

approval.5 The purpose of adding an

Exchange officer is to trigger proper

notification of the approval and further

encourage prompt openings. It should

also enable Exchange staff to better

monitor the conditions giving rise to

rotation-related Floor Official approval.

Third, the Exchange proposes to

delete references in PHLX Rule 1047,

Commentary .01(a) and (d) to puts and

calls trading on the same security. The

purpose of this change is to recognize

that almost without exception, both puts

and calls trade respecting all Exchange

options, such that the preface ‘‘if’’ is

confusing. The remainder of

Commentary .01(a) states that the
Federal Register / Vol. 62, No. 226 / Monday, November 24, 1997 / Notices 62653

6PHLX Rule 1047, Commenary .01(a) describes a

regular trading rotation as opening the series with

the nearest expiration, proceeding to the next most

distant expiration, and so forth, until all series have

been opened.

7See also CBOE Rule 6.2, Interpretation .04

(allowing for abbreviated rotations).

8See CBOE rule 6.2, Interpretation .03 (requiring

a closing rotation for each series of individual stock

options on the last business day prior to expiration,

commencing at the later of 3:10 p.m. Chicago time

or after a closing price of the stock in its primary

market is established).

9See Securities Exchange Act Release No. 29869

(October 28, 1991), 56 FR 56537 (November 5, 1991)

(order approving File No. SR–PHLX–91–04).

10See CBOE Approval Order, supra note 5.

Specialist shall determine which type of

option should open first, and may

alternate the opening of put series and

call series or may open all series of one

type before opening any series of the

other type, depending on current market

conditions. The proposal adds the

language ‘‘except as provided below’’ to

emphasize that PHLX Rule 1047.01(b),

for example, contains exceptions to

these normal rotation procedures.

Fourth, the Exchange proposes to

define modified rotations in

Commentary .01(b) to include reverse

and shotgun rotations. Currently,

Commentary .01(b) defines a modified

rotation as an opening rotation where

each option series opens in the same

manner and sequence as during a

regular trading rotation,6 but is

permitted to freely trade once all option

series with the same expiration month

have been opened. The proposal is

intended to correct PHLX Rule 1047 to

reflect that this description refers to a

type of modified rotation, a shotgun

rotation. Further, the PHLX proposes to

add a definition of a reverse rotation,

stating that it involves opening the

series with the most distant expiration

first, proceeding to the next nearest

expiration, and so forth, ending with the

nearest expiration, until all series have

been opened. Thus, the proposal is

designed to update PHLX Rule 1047 to

define rotations more thoroughly.

Fifth, the Exchange proposes to

amend PHLX Rule 1047, Commentary

.01(b)(ii) to require reverse rotations

where there is a heavy influx of orders,

unless exempted by two Floor Officials

with the concurrence of a PHLX Market

Regulation officer. Because a reverse

rotation opens the most distant

expiration first, it is intended to help

decrease the number of rotations and

result in more prompt openings.

Specifically, most order flow and open

interest is generally in the nearest

months, such that starting with the

nearest months and ending with the

most distant often results in opening

free trading with the most active months

(the nearest) being outdated, which, in

turn creates the need for subsequent

rotations to update those first-rotated

months. For purposes of this provision,

a heavy influx of orders will be

determined on a case-by-case basis, in

light of order flow through the PHLX’s

Automated Options Market (‘‘AUTOM’’)

system, the number of floor brokers in

the trading crowd indicating handheld

orders for the opening, and the number

of orders placed on the book, relative to

normal conditions for that option.

Sixth, the Exchange proposes to

amend PHLX Rule 1047, Commentary

.01(b)(ii) to require that two Floor

Officials, with the concurrence of a

PHLX Market Regulation officer,

approve second and subsequent

rotations to ensure that they occur only

when warranted, because of the

additional delay in opening free trading.

Subsequent rotations are conducted in

situations, including the influx of nearmonth order flow described above,

where the rotation was so timeconsuming that certain series, such as

those earlier in the rotation, become

inundated with additional order flow or

become priced incorrectly, as the

underlying stock price changes.

Currently, PHLX Rule 1047 does not

refer to or prohibit more than one

rotation. The purpose of this change is

to expressly permit additional rotations,

but to require Floor Official approval to

ensure proper and limited use.

Seventh, the PHLX proposes to amend

PHLX Rule 1047, Commentary .01(b) to

provide that modified rotations (other

than a reverse or shotgun) can be

employed where there is a delayed

opening, halt or suspension in trading

or other unusual market conditions,

with the approval of two Floor Officials

and the concurrence of a PHLX Market

Regulation officer. This is intended to

facilitate a prompt opening by

permitting, although not requiring, a

modified rotation in response to certain

market conditions. Floor Officials’

approval should ensure that expedited

rotations are employed where

warranted. Specialists could thus

conduct rotations other than those

defined in PHLX Rule 1047 (shotgun

and reverse rotations), which may be

appropriate in certain situations.7

Lastly, the Exchange proposes to

amend the provision regarding equity

option closing rotations at expiration.

PHLX Rule 1047, Commentary .01(d)

provides that when the PHLX’s Options

Committee decides to conduct a closing

rotation on the trading day prior to

expiration in an equity option for which

the underlying did not trade, the

rotation must commence as immediately

as practicable following the time at

which the option normally ceases free

trading (4:02 p.m.). The proposal adds

‘‘or at an earlier time, with the

concurrence of a Market Regulation

officer,’’ similar to other option

exchanges,8 which have conducted such

rotations during the trading day. In

certain situations, such as where an

underlying stock has not traded for a

length of time, where there is little

likelihood that such stock will reopen

that day, it would be more orderly to

conduct the closing rotation during the

trading day. The time after the close of

trading is particularly hectic, due to that

confirmation of all trading activity and

the preparation of exercise decisions,

among other things. The Exchange notes

that notification of such an earlier

rotation would take place, in accordance

with this provision.

According to the PHLX, the

Commission previously has

acknowledged the importance of prompt

and efficient openings, which decrease

the amount of time required to obtain

market quotes and allow free trading to

commence as quickly as possible after

the opening.9 This, in turn, should

allow market participants to engage in

option strategies promptly after opening

and also should facilitate the prompt

execution of customer orders. Further,

the Commission has acknowledged that

permitting Floor Officials to authorize

deviations from normal operating

procedures may be appropriate, because

it facilitates a prompt response to

market conditions.10 The current

proposal is intended to promote prompt

and efficient openings by updating

PHLX rules 1047 and 1047A, and

Advice G–2.

For these reasons, the PHLX believes

that the proposal is consistent with

Section 6 of the Act, in general, and in

particular, with Section 6(b)(5), in that

it is designed 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, as well as

to protect investors and the public

interest, by improving the efficiency of

option openings.

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.
62654 Federal Register / Vol. 62, No. 226 / Monday, November 24, 1997 / Notices

11 17 CFR 200.30–3(a)(12).

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

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the PHLX. All submissions

should refer to File No. SR–PHLX–97–

52 and should be submitted by

December 15, 1997.

For the Commission, by the Division of

Market Regulations, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–30720 Filed 11–21–97; 8:45 am]

BILLING CODE 8010–01–M

SOCIAL SECURITY ADMINISTRATION

Information Collection Activities:

Proposed Collection Requests and

Comment Requests

This notice lists information

collection packages that will require

submission to the Office of Management

and Budget (OMB), as well as

information collection packages

submitted to OMB for clearance, in

compliance with Pub. L. 104–13

effective October 1, 1995, The

Paperwork Reduction Act of 1995.

I. The information collection(s) listed

below require(s) extension(s) of the

current OMB approval(s) or are

proposed new collection(s):

1. Application for Child’s Insurance

Benefits—0960–0010. The information

collected on Form SSA–4-BK is used to

entitle children of living and deceased

workers to Social Security benefits. The

respondents are children of living or

deceased workers.

Number of Respondents: 1,740,000.

Frequency of Response: 1.

Average Burden Per Response: 10.5 or

15.5 minutes (depending on the type of

claim).

Estimated Average Burden: 372,417

hours.

2. Notice Regarding Substitution of

Party Upon Death of Claimant—0960–

0288. The information collected on

Form HA–539 is used to advise

claimants of their statutory right to a

hearing and of a decision by the Social

Security Administration (SSA) on who,

if anyone, should become a substitute

party for the deceased, as provided for

in the Social Security Act. The

respondents are individuals requesting

hearings on behalf of deceased

claimants on Social Security benefits

issues.

Number of Respondents: 35,451.

Frequency of Response: 1.

Average Burden Per Response: 5

minutes.

Estimated Average Burden: 2,954

hours.

3. Certificate of Responsibility for

Welfare and Care of Child Not in

Applicant’s Custody—0960–0019. SSA

uses the information collected on Form

SSA–781 to decide if ‘‘in care’’

requirements are met by noncustodial

parent(s) (or the spouse of a parent),

who is filing for benefits based on

having a child in care. The respondents

are noncustodial wage earners whose

entitlement to benefits depends upon

having an entitled child in care.

Number of Respondents: 14,000.

Frequency of Response: 1.

Average Burden Per Response: 10

minutes.

Estimated Average Burden: 2,333

hours.

4. Report of Function—Child—0960–

0542. The information collected on

Forms SSA–3375, 3376, 3377, 3378, and

3379 will be used by SSA to help

determine if a child claiming

Supplemental Security Income

disability benefits under title XVI is

disabled. The respondents are parents or

guardians who file for such benefits on

behalf of a child.

Number of Respondents: 500,000.

Frequency of Response: 1.

Average Burden Per Response: 20

minutes.

Estimated Annual Burden: 166,667

hours.

5. Payee Interview, SSA–835;

Beneficiary Interview, SSA–836;

Custodian Interview, SSA–837—0960-

NEW. SSA is proposing a three-tier

review process of the representative

payee program. As part of this review

process, SSA is proposing to conduct

interviews with a sample of

beneficiaries and their representative

payees. The information will be used to

assess the effectiveness of the

representative payee program.

SSA–

835

SSA–

836

SSA–

837

Number of

Respondents .......... 2,000 1,000 380

Frequency of

Response 1 1 1

Average Burden Per

Response

(minutes) .. 30 20 10

Estimated

Annual

Burden

(hours) ..... 1,000 333 63

Written comments and

recommendations regarding the

information collection(s) should be sent

within 60 days from the date of this

publication, directly to the SSA Reports

Clearance Officer at the following

address: Social Security Administration,

DCFAM, Attn: Nicholas E. Tagliareni,

6401 Security Blvd., 1–A–21 Operations

Bldg., Baltimore, MD 21235.

In addition to your comments on the

accuracy of the agency’s burden

estimate, we are soliciting comments on

the need for the information; its

practical utility; ways to enhance its

quality, utility and clarity; and on ways

to minimize burden on respondents,

including the use of automated

collection techniques or other forms of

information technology.

II. The information collection(s) listed

below have been submitted to OMB: