63402 Federal Register / Vol. 62, No. 229 / Friday, November 28, 1997 / Notices

By direction of the Board:

John J. Toner,

Executive Secretary, National Labor Relations

Board.

[FR Doc. 97–31397 Filed 11-25-97; 12:27 pm]

BILLING CODE 7545–01–M

OFFICE OF PERSONNEL

MANAGEMENT

Submission for OMB Review;

Comment Request for Review of a

Revised and Expiring Information

Collection; Forms RI 38–117, 38–118,

and 37–22

AGENCY: Office of Personnel

Management.

ACTION: Notice.

SUMMARY: In accordance with the

Paperwork Reduction Act of 1995 (Pub.

L. 104–13, May 22, 1995), this notice

announces that the Office of Personnel

Management has submitted to the Office

of Management and Budget a request for

review of a revised & expiring

information collection. RI 38–117,

Rollover Election, is used to collect

information from each payee affected by

a change in the tax code (Pub. L. 102–

318) so that OPM can make payment in

accordance with the wishes of the

payee. RI 38–118, Rollover Information,

explains the election. RI 37–22, Special

Tax Notice Regarding Rollovers,

provides more detailed information.

Approximately 6,000 RI 38–117 forms

will be completed annually. We

estimate it takes approximately 30

minutes to complete the form. The

annual burden is 3,000 hours.

For copies of this proposal, contact

Jim Farron on (202) 418–3208, or E-mail

to jmfarron@opm.gov.

DATES: Comments on this proposal

should be received within on or before

December 29, 1997.

ADDRESSES: Send or deliver comments

to:

Lorraine E. Dettman, Chief, Operations

Support Division, Retirement and

Insurance Service, U.S. Office of

Personnel Management, 1900 E Street,

NW, Room 3349, Washington, DC

20415, and

Joseph Lackey, OPM Desk Officer,

Office of Information & Regulatory

Affairs, Office of Management &

Budget, New Executive Office

Building, NW, Room 10235,

Washington, DC 20503.

FOR INFORMATION REGARDING

ADMINISTRATIVE COORDINATION—CONTACT:

Mary Beth Smith-Toomey, Budget &

Administrative Services Division, (202)

606–0623.

Janice R. Lachance,

Acting Director.

[FR Doc. 97–31167 Filed 11–26–97; 8:45 am]

BILLING CODE 6325–01–P

RAILROAD RETIREMENT BOARD

Agency Forms Submitted for OMB

Review

SUMMARY: In accordance with the

Paperwork Reduction Act of 1995 (44

U.S.C. Chapter 35), the Railroad

Retirement Board (RRB) has submitted

the following proposal(s) for the

collection of information to the Office of

Management and Budget for review and

approval.

SUMMARY OF PROPOSAL(S):

(1) Collection title: Application to Act

as Representative Payee.

(2) Form(s) submitted: AA–5, G–478.

(3) OMB Number: 3220–0052.

(4) Expiration date of current OMB

clearance: 2/28/1998.

(5) Type of request: Extension of a

currently approved collection.

(6) Respondents: Individuals or

households.

(7) Estimated annual number of

respondents: 20,300.

(8) Total annual responses: 20,300.

(9) Total annual reporting hours:

16,350.

(10) Collection description: Section 12

of the Railroad Retirement Act provides

for the payment of benefits to a

representative payee when an employee,

spouse or survivor annuitant is

incompetent or a minor. The collection

obtains information used by the

Railroad Retirement Board for selection

of a representative payee and

verification of an annuitant’s ability to

manage payments.

ADDITIONAL INFORMATION OR COMMENTS:

Copies of the forms and supporting

documents can be obtained from Chuck

Mierzwa, the agency clearance officer

(312–751–3363). Comments regarding

the information collection should be

addressed to Ronald J. Hodapp, Railroad

Retirement Board, 844 North Rush

Street, Chicago, Illinois 60611–2092 and

the OMB reviewer, Laura Oliven (202–

395–7316), Office of Management and

Budget, Room 10230, New Executive

Office Building, Washington, D.C.

20503.

Chuck Mierzwa,

Clearance Officer.

[FR Doc. 97–31168 Filed 11–26–97; 8:45 am]

BILLING CODE 7905–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel No. IC–22899; 812–10568]

Bank Austria AG and Bank Austria

Mortgage Corp.; Notice of Application

November 20, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under section 6(c) of the

Investment Company Act of 1940 (the

‘‘Act’’) granting relief from all

provisions of the Act.

SUMMARY OF APPLICATION: Bank Austria

AG, acting through its New York Branch

(‘‘Bank Austria’’), and Bank Austria

Mortgage Corp. (‘‘Mortgage Corp.’’)

request an order exempting Mortgage

Corp., a real estate investment trust,

from all provisions of the Act to permit

Mortgage Corp. to hold certain real

estate related assets of Bank Austria in

order to obtain a more favorable tax

treatment on the earnings from these

assets.

FILING DATES: The application was filed

on March 12, 1997. Applicants have

agreed to file an amendment during the

notice period, the substance of which is

incorporated in this notice.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m., on

December 16, 1997, and should be

accompanied by proof of service on the

applicants, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicants, 565 Fifth Avenue, New

York, New York 10017.

FOR FURTHER INFORMATION CONTACT:

Brian T. Hourihan, Senior Counsel, at

(202) 942–0526, or Mary Kay Frech,

Branch Chief, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee from the SEC’s

Public Reference Branch, 450 Fifth
Federal Register / Vol. 62, No. 229 / Friday, November 28, 1997 / Notices 63403

1Bank Austria’s Grand Cayman Branch is

managed from New York.

2Approximately 90% of the real estate related

assets currently have an AAA rating or are

securities issued by the United States government.

The assets will consist of approximately $800

million (or 80%) of Government securities (largely

U.S. Treasury Notes and securities issued by the

Federal National Mortgage Association, the Federal

Home Loan Mortgage Corp., the Government

National Mortgage Association, and a small number

of securities issued by the Student Loan Marketing

Association). The remainder of the assets will

consist mostly of collateralized mortgage

obligations issued by privately-sponsored

securitization vehicles. Bank Austria expects that in

the future 80% or more of Mortgage Corp.’s assets

will be of comparable quality.

3See 26 U.S.C. 856(a)(5) 1996.

Street, N.W., Washington, D.C. 20549

(tel. (202) 942–8090).

Applicants’ Representations

1. Bank Austria is the largest bank in

Austria, where its shares are publicly

traded. Among its largest shareholders

are Anteilsverwaltung-Zentralsparkasse,

a mutual savings bank holding company

affiliated with the municipal

government of the City of Vienna,

Austria, which holds 45% of the voting

shares and the Republic of Austria,

which holds 18.9% of the voting shares

indirectly through a subsidiary. Bank

Austria is exempt from the provisions of

the Act under rule 3a–6.

2. Mortgage Corp. is a Delaware

corporation that has not begun business

activities and has not yet issued any

stock. When stock is issued, Bank

Austria will be the sole holder of

Mortgage Corp.’s common stock and

Mortgage Corp. will be a wholly-owned

subsidiary of Bank Austria.

3. Currently, Bank Austria’s New York

and Grand Cayman Branches (together,

the ‘‘New York Branch’’) 1 own a

substantial amount of real estate related

assets, the earnings from which are

subject to United States federal, New

York state, and New York City income

taxation. In order to obtain more

favorable tax treatment for the earnings

from the real estate related assets, Bank

Austria would operate Mortgage Corp.

as a real estate investment trust

(‘‘REIT’’) for purposes of the Internal

Revenue Code of 1986, as amended

(‘‘IRC’’). To organize and capitalize

Mortgage Corp., Bank Austria will

acquire 100 shares of common stock and

109 shares of non-voting preferred stock

(with a liquidation preference of $1,000

per share and a right to receive a

cumulative dividend of 9 percent per

year) (‘‘Preferred Shares’’) from

Mortgage Corp., with an aggregate value

of $50 million. Thereafter, Mortgage

Corp. will issue commercial paper,

which will be fully guaranteed by Bank

Austria, and use the proceeds to acquire

approximately $1 billion of real estate

related assets from the New York

Branch.2 The liquidation preference of

the Preferred Shares will be de minimis

compared to the net capital of Mortgage

Corp. The New York Branch will

continue to administer the transferred

assets pursuant to a service contract.

Bank Austria may, from time to time,

make loans with a maximum aggregate

outstanding principal amount of

approximately $50 million in order to

assist Mortgage Corp. in the

management of its cash flow.

4. In order for Mortgage Corp. to

qualify as a REIT under Section 856 of

the IRC, its shares must be beneficially

held by 100 or more persons.3 Bank

Austria therefore will transfer the

Preferred Shares to no more than 109

employees of the New York Branch and

the head office in Vienna, Austria, as a

bonus. Mortgage Corp. will have 110

shareholders: 109 employees of Bank

Austria will each hold one Preferred

Share and Bank Austria will hold all the

shares of common stock. No employee

of Bank Austria will (i) receive more

than one Preferred Share; (ii) deliver

money or other property in return for

his or her Preferred Share; or (iii) suffer

a reduction of his or her other

compensation or benefits as a result of

the receipt of a Preferred Share. Because

under the IRC, the preferred stock of a

REIT must be freely transferable, the

holders of Preferred Shares generally

cannot be prevented from selling their

Shares. Bank Austria will offer to buy

from each holder his or her Preferred

Share when his or her employment with

Bank Austria terminates. A similar offer

to buy also will be made when a

shareholder receives a bona fide offer

from someone who is not an employee

of Bank Austria. In each case, if the offer

to purchase is accepted, Bank Austria

will purchase the Preferred Share at its

appraised value. To the extent advisable

in connection with the 100-shareholder

requirement for REITs under the IRC,

any Preferred Shares acquired in this

manner by Bank Austria will, from time

to time, be transferred as a bonus on the

same terms described above to

employees who do not then hold any

Preferred Shares. Mortgage Corp. will

maintain its own stock ledger and will

not (i) register any purported transfer of

a share of preferred stock to any person

(other than Bank Austria) who already

is a registered owner of a share or (ii)

register a share of preferred stock in

more than one name.

Applicants’ Legal Analysis

1. Section 3(a)(1)(C) of the Act defines

an ‘‘investment company’’ to include

any issuer which is engaged or proposes

to engage in the business of investing,

reinvesting, owning, holding, or trading

in securities, and owns or proposes to

acquire investment securities having a

value exceeding 40 percent of the value

of the issuer’s total assets (exclusive of

Government securities and cash items)

on an unconsolidated basis. Under

section 3(a)(2) of the Act, ‘‘investment

securities’’ include all securities except

Government securities and those issued

by majority-owned subsidiaries or

employees’ securities companies.

Applicants state that, upon commencing

operations, approximately 100% of

Mortgage Corp.’s future assets

(approximately $275 million), exclusive

of Government securities and cash

items, will consist of investment

securities. Therefore, Mortgage Corp.

may be deemed to be an investment

company under section 3(a)(1)(C) of the

Act.

2. Section 3(c)(5)(C) of the Act excepts

from the definition of investment

company any person who is not engaged

in the business of issuing redeemable

securities and who is primarily engaged

in purchasing or otherwise acquiring

mortgages and other liens on and

interests in real estate. Applicants state

that this exception is unavailable to

them because all or almost all of the

assets to be held by Mortgagee Corp.

would constitute partial-pool

certificates which do not qualify as

‘‘interests in real estate’’ under section

3(c)(5)(C) of the Act.

3. Applicants state that Mortgage

Corp. will be a wholly-owned

subsidiary of Bank Austria, which is a

foreign bank that is exempt from the

provisions of the Act under rule 3a–6.

Applicants also state that Mortgage

Corp. will be organized for the purpose

of holding certain real estate related

assets of the New York Branch of Bank

Austria. Moreover, applicants state that

Preferred Shares of Mortgage Corp. will

be given to a limited number of Bank

Austria’s employees as a bonus, at no

cost, solely for the purpose of enabling

Mortgage Corp. to rely on the REIT

provisions under the IRC.

4. Section 6(c) of the Act provides that

the SEC may exempt any person,

security, or transaction from any

provision of the Act if and to the extent

that such exemption is necessary or

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act.

5. Applicants request an exemption

under section 6(c) from all provisions of

the Act. Applicants assert that

exempting Mortgage Corp. from the Act
63404 Federal Register / Vol. 62, No. 229 / Friday, November 28, 1997 / Notices

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

2See Securities Exchange Act Release No. 39337

(November 19, 1997) granting immediate

effectiveness to SR–CHX–97–30.

3Securities Exchange Act Release No. 33806

(March 23, 1994) 59 FR 15248 (Notice of Filing and

Immediate Effectiveness of File No. SR–CHX–94–

03); Securities Exchange Act Release No. 17766

(May 8, 1981) 46 FR 25745 (Order approving SR–

MSE–81–3 and SR–MSE–81–5); and Securities

Exchange Act Release No. 28638 (November 30,

1990) 55 FR 49731 (Order approving SR–MSE–

90–7).

is appropriate in the public interest

because allowing Bank Austria to utilize

a REIT to hold its real estate related

assets in the United States will, under

the IRC, allow the head office of Bank

Austria to treat the earnings on those

assets as not being effectively connected

with a United States trade or business

and to be taxed on those earnings on a

pass-through basis, which will render

Bank Austria’s United States operations

more efficient and less costly. In

addition, applicants note that specific

provisions of New York state tax law

also provide more beneficial tax

treatment to REITs than to certain other

kinds of entities, including banks.

Applicants believe that the combined

effect of the treatment of REITs under

the IRC and New York state tax law will

lower their cost of doing business in the

United States and encourage Bank

Austria to continue investing in the

United States, and perhaps expand its

investment activities. Applicants state

that the tax-treatment which Bank

Austria seeks for its investments in the

United States is generally available to

REITs and no public interest is served

by requiring Bank Austria to hold

certain of its assets in its New York

Branch rather than in a separate

subsidiary.

6. Applicants submit that exempting

Mortgage Corp. from the Act is

consistent with the protection of

investors. Applicants claim that the

proposed use of Mortgage Corp. to

restructure the manner in which Bank

Austria holds its United States real

estate related assets will not subject

investors to any of the abuses addressed

by the Act. Applicants state that all of

Mortgage Corp.’s common stock will be

owned by Bank Austria and that

Preferred Shares will be given to a

limited number of employees as a bonus

in order to enable Mortgage Corp. to rely

on the REIT provisions of the IRC. It is

anticipated that there will be fewer than

100 holders of Preferred Shares who are

residents of the United States.

7. Applicants submit that granting

Mortgage Corp. the requested exemption

is consistent with the policies and

provisions of the Act. Applicants note

that although the Act deals with

companies which invest and reinvest in

securities, it contains exemptions for

some entities which would otherwise

come within its purview, in particular

entities that are wholly-owned

subsidiaries of companies that are

themselves exempt from the Act and

through which exempt companies

conduct their activities and entities that

invest in real estate.

Applicants’ Conditions

Applicants agree that any order of the

Commission granting the requested

relief will be subject to the following

conditions:

1. Mortgage Corp. will operate as a

REIT and its investments will be limited

to those permitted for a REIT under the

IRC.

2. Mortgage Corp. will issue no

securities other than shares of common

stock to be held by Bank Austria,

Preferred Shares to be given at no cost

from time to time to employees of Bank

Austria solely when necessary or

advisable for maintaining a number of

shareholders sufficient to rely on the

REIT provisions of the IRC, commercial

paper to finance or refinance any of its

investments, and a credit agreement

with Bank Austria in the approximate

amount of $50,000,000. No participants

in or syndication of the credit agreement

will be made.

3. No employee will own more than

one Preferred Share. Bank Austria will

offer to buy at their appraised value

Preferred Shares from its employees

under the circumstances described in

the application. Mortgage Corp. also

will not permit there to be more than

109 holders of Preferred Shares at any

time.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary

[FR Doc. 97–31152 Filed 11–26–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39341; File No. SR–CHX–

97–28]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Stock Exchange,

Incorporated Amending the

Exchange’s Clearing the Post Policy

for Cabinet Securities

November 21, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

October 23, 1997, the Chicago Stock

Exchange, Incorporated (‘‘CHX’’ or the

‘‘Exchange’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I, II, 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

The Exchange proposes, for a sixmonth pilot period, to amend

interpretation and policy .02 of Rule 10

of Article XX and amend Rule 11 of

Article XX relating to clearing the post

for cabinet securities. The text of the

proposed rule change is available at the

Office of the Secretary, the CHX, 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 period 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 amend the Exchange’s

existing clearing the post policy for

cabinet securities for a six-month pilot

period. The clearing the post policy is

contained in interpretation and policy

.02 of CHX Article XX, Rule 10.2 The

Exchange’s clearing the post policies

were previously contained in several

Notices to Members which had been

approved by the Commission.3 These

Notices to Members, and their

corresponding Approval Orders, explain

the Exchange’s clearing the post

requirements.

In general, the clearing the post policy

requires a floor broker or market maker

to clear the post by his or her physical

presence at the post. The purpose of this