64612 Federal Register / Vol. 62, No. 235 / Monday, December 8, 1997 / Notices

2 17 CFR 200.30–3(a)(29).

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

2A copy of DTC’s proposed call lottery

procedures is attached as Exhibit A to DTC’s

proposed rule change, which is available for

inspection and copying at the Commission’s Public

Reference room or through DTC.

3The Commission has modified the text of the

summaries prepared by DTC.

4For a discussion of DTC’s call lottery process,

refer to Securities Exchange Act Release Nos. 21523

(November 27, 1984), 49 FR 47352 (File No. SR–

DTC–84–09) (filing and immediate effectiveness of

proposed rule change); 30552 (April 2, 1992) 57 FR

12352 (File No. SR–DTC–90–02) (order temporarily

approving a proposed rule change by the DTC

relating to the establishment of a procedure to recall

certain deliveries which have created short

positions as a result of call lotteries); 35034

(November 30, 1994) 59 FR 63396 (File Nos. SR–

DTC–94–08 and SR–DTC–94–09) (order granting

temporary approval of proposed rule changes to

establish procedures to recall certain deliveries

which have created short positions as a result of

call lotteries and rejected deposits); and 36651

(December 28, 1995) 61 FR 429 (File No. SR–DTC

95–21) (order granting accelerated permanent

approval of a proposed rule change concerning

short position reclamation procedures).

5The terms of certain issues allows the issuer to

call part of the outstanding security for redemption

at certain times during the issue’s life. This type of

security is referred to as a callable security. Callable

securities are either preferred stock or bonds which

the issuer is permitted or required to redeem before

the stated maturity. Generally when an issuer calls

a security, the issuer’s trustee publishes notice that

the issue has been called or in the case of registered

securities, mails notice to the registered holders.

6The call publication date is the date on which

the issuer gives notice of the redemption.

allocation of revenues on the basis of a

75% allocation to the basic accounting

center and 25% to the index option

accounting center. Because OPRA has

not yet unbundled the index option

service and has no current plans to do

so, there is no specified portion of the

system revenues derived from the index

option service. When OPRA adopted the

fixed allocations several years ago, the

allocations reflected the relative market

share at the time. However, the volume

of index options has decreased relative

to that of equity options, so that the

current allocation formula no longer

reflects the relative market share of

index and equity options. Therefore, the

amendment proposes to replace the

existing allocation formula with a

formula that is expressly based on

current relative market share, so that as

relative market share changes from time

to time, it will no longer be necessary

to amend the OPRA Plan in order to

maintain a fair and appropriate

allocation of these revenues. The

proposed Plan amendment will change

the allocations from a fixed basis to a

relative market share basis until such

time as OPRA might impose separate

charges for access to information and

facilities pertaining to index option

securities.

II. Solicitation of Comments

Pursuant to Rule 11Aa3–2(c)(3), the

amendment is effective upon filing with

the Commission. The Commission may

summarily abrogate the amendment

within 60 days of its filing and require

refiling and approval of the amendment

by Commission order pursuant to Rule

11Aa3–2(c)(2), if it appears to the

Commission that such action is

necessary or appropriate in the public

interest; for the protection of investors

and the maintenance of fair and orderly

markets; to remove impediments to, and

perfect the mechanisms of, a National

Market System; or otherwise in

furtherance of the purposes of the

Exchange Act.

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 NW.,

Washington, DC 20549. Copies of the

submission, all subsequent

amendments, and 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 withheld from the public in

accordance with the provisions of 5

U.S.C. 552, will be available for

inspection and copying in the

Commission’s Public Reference Room.

Copies of the filing will also be available

at the principal offices of OPRA. All

submissions should refer to File No.

SR–OPRA–97–5 and should be

submitted by December 29, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.2

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–31960 Filed 12–5–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39373; File No. SR–DTC–

97–14]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing of a Proposed Rule Change

Relating to Revisions to the

Procedures for Running Call Lotteries

on Issues of Book Entry Only

Securities

November 28, 1997.

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

Securities Exchange Act of 1934

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

July 2, 1997, The Depository Trust

Company (‘‘DTC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change (File No. SR–DTC–97–14) as

described in Items I, II, and III below,

which items have been prepared

primarily by DTC. 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 purpose of the proposed rule

change is to amend DTC’s procedures

for running call lotteries for book-entry

only (‘‘BEO’’) issues of securities. Under

the revisions, DTC will run lotteries

using its participants’ positions as of the

close of business on the day DTC

announces the lottery instead of the call

publication date.2

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

DTC 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 place specified

in Item IV below. DTC has prepared

summaries, set forth in sections A, B,

and C below, of the most significant

aspects of such statements.3

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed rule

change is to revise DTC’s call lottery

procedures for BEO securities.4

Currently, DTC’s call lottery process

allocates partially called securities 5

among participants having positions in

the called securities based on the

participants’ positions on the call

publication date.6 Under the proposed

rule change, DTC will run the call

lotteries using participants’ positions as

of the close of business on the day DTC

announces the call lottery. The

proposed rule change does not set forth

any other amendments to DTC’s call

lottery procedures.

DTC believes that changing its

procedures solely for BEO securities

will reduce the number of short

positions without any adverse impact to
Federal Register / Vol. 62, No. 235 / Monday, December 8, 1997 / Notices 64613

7Letter from Brad F. Lesowitz, President,

Reorganization Division, Inc., Securities Industry

Association to Donald F. Donahue, Executive Vice

President, DTC (April 4, 1997). A copy of the letter

is attached as Exhibit C to DTC’s proposed rule

change, which is available for inspection and

copying at the Commission’s Public Reference room

or through DTC. 8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

its participants because DTC believes

that the publication date is less relevant

to BEO securities than other types of

securities. According to DTC, issuers of

BEO securities generally do not publish

partial call notices. Instead, the issuers

inform DTC of the call notice because

DTC is the securities’ holder of record.

DTC will then notify its participants.

While an issuer may inform DTC of a

publication date, DTC believes that this

is done only for purposes of DTC’s

lottery and that the date has no real

significance. As a result of the expected

fewer short positions, DTC believes that

its participants will save on depository

charges which are 130 percent of the

current market value of short positions.

DTC’s participants also will save on the

costs associated with reconciling short

positions and the costs associated with

purchasing securities to cover short

positions.

DTC believes that the proposed rule

change is consistent with the

requirements of the Section 17A(b)(3)(F)

of the Act and the rules and regulations

thereunder because it promotes

efficiencies in the prompt and accurate

clearance and settlement of securities

transactions.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impose any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

DTC has solicited participant

comments on the proposed rule change.

It has taken into account participant

responses to earlier proposed

alternatives to revising the call lottery

procedures in developing this rule

change. The Reorganization Division

Inc. of the Securities Industry

Association wrote DTC to express its

support for revising the call lottery

procedures for BEO securities.7

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five 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 ninety 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 DTC 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

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 in

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 DTC. All submissions should

refer to the file number SR–DTC–97–14

and should be submitted by December

29, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–31962 Filed 12–5–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39368; File No. SR–NYSE–

97–32]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the New

York Stock Exchange, Inc. Relating to

Extension of the Pilot for Allocation

Policy and Procedures

November 26, 1997.

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

Securities Exchange Act of 1934

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

notice is hereby given that on November

26, 1997, the New York Stock Exchange,

Inc. (‘‘NYSE’’ 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. 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 proposed rule change extends the

effectiveness of the pilot program

relating to the Exchange’s Allocation

Policy and Procedures until January 16,

1998. The text of the proposed rule

change is available at the Office of the

Secretary, the NYSE, 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 extend the effectiveness of

a pilot program relating to the

Exchange’s Allocation Policy and

Procedures. The Exchange’s Allocation

Policy and Procedures are intended: (1)

To ensure that securities are allocated in

an equitable and fair manner and that

all specialist units have a fair

opportunity for allocations based on

established criteria and procedures; (2)

to provide an incentive for ongoing

enhancement of performance by

specialist units; (3) to provide the best

possible match between specialist unit

and security; and (4) to contribute to the

strength of the specialist system.