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BEO securities generally do not publish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.
64614 Federal Register / Vol. 62, No. 235 / Monday, December 8, 1997 / Notices

3See Securities Exchange Act Release No. 38372

(March 7, 1997), 62 FR 13421 (March 21, 1997)

(notice of filing and immediate effectiveness of File

No. SR–NYSE–97–04).

4See Securities Exchange Act Release No. 39206,

62 FR 53679 (October 15, 1997) (order approving

File No. SR–NYSE–97–27).

5See Securities Exchange Act Release No. 39288

(October 30, 1997), 62 FR 60297 (November 7, 1997)

(noticing File No. SR–NYSE–97–30).

6 15 U.S.C. 78f(b)(5).

7 15 U.S.C. 78s(b)(3)(A).

8 17 CFR 240.19b–4(e)(6).

9 17 CFR 240.19b–4(e)(6)(iii). 10 17 CFR 200.30–3(a)(12).

The Exchange recently implemented,

on a pilot basis, a revised Allocation

Policy and Procedures to amend the

procedures by which the Exchange

selects a specialist for newly listing

companies.3 The Exchange’s pilot

program provides listing companies

with two options, either: (1) to have

their specialist unit selected by the

Allocation Committee according to

existing allocation criteria, with

company input permitted in the form of

a ‘‘generic letter’’ which may describe

desired general characteristics of a

specialist unit, but may not mention

particular units or describe

characteristics that would be applicable

to a readily identifiable specialist unit;

or (2) to make the final selection of a

specialist unit from among three to five

units selected by the Allocation

Committee, with a generic letter from

the company describing desired

specialist unit characteristics permitted,

as in (1) above. In the case of both

options, if a generic letter is submitted,

the letter would be distributed to all

specialist units along with allocation

data sheets (‘‘green sheets’’).

On October 6, 1997, the Commission

approved an extension of the pilot

program until November 28, 1997 to

continue to study its effects.4 On

October 20, 1997, the NYSE requested

that the Commission grant permanent

approval of the Allocation Policy and

Procedures, as amended.5 The proposed

amendments relate to sections of the

policy dealing with listing company

input, spin-offs and related companies.

Subsequently, Commission staff

determined that the Commission

required more time to consider the

Exchange’s request to make permanent

the amendments to the Allocation

Policy and Procedures. Therefore, at the

request of Commission staff, the

Exchange proposes to extend the

Allocation Policy and Procedures pilot

program until January 16, 1998.

2. Statutory Basis

The NYSE believes the proposed rule

change is consistent with the

requirements of Section 6(b)(5) of the

Act 6 that an Exchange have rules that

are designed to promote just and

equitable principles of trade, to remove

impediments and to perfect the

mechanism of a free and open market

and a national market system and, in

general, to protect investors and the

public interest. The Exchange believes

that extending the effectiveness of the

Allocation Policy and Procedures until

January 16, 1998 is consistent with

these objectives in that they enable the

Exchange to further enhance the process

by which stocks are allocated between

specialist units to ensure fairness and

equal opportunity in the process.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange 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

The Exchange has neither solicited

nor received written comments on the

proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The Commission finds that the

proposed rule change has become

effective pursuant to Section 19(b)(3)(A)

of the Act 7 and Rule 19b–4(e)(6) 8

thereunder because it does not

significantly affect the protection of

investors or the public interest and does

not impose any significant burden on

competition. The Exchange requests that

the Commission waive the provision in

Rule 19b–4(e)(6)(iii) 9 requiring written

notice of the NYSE’s intent to file the

proposed rule change at least five days

prior to the filing date. The Commission

grants the Exchange’s request to waive

the prefiling requirement because the

proposed merely continues an existing

pilot program for a limited duration.

A proposed rule change filed under

Rule 19b–4(e) does not become

operative prior to thirty days after the

date of filing or such shorter time as the

Commission may designate if such

action is consistent with the protection

of investors and the public interest. At

any time within 60 days of the filing of

the proposed rule change, the

Commission may summarily abrogate

such rule change if it appears to the

Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

The Commission finds good cause for

the proposed rule change to become

operative prior to the thirtieth day after

the date of the filing, November 26,

1997. The Commission notes that

accelerating the operative date of the

proposed rule change will enable the

Exchange to continue its Allocation

Policy and Procedures pilot program on

an uninterrupted basis. The

Commission further notes that it has

previously solicited comments on the

pilot program and no comments were

received. Further, the extension of the

existing pilot is of limited duration,

only until January 16, 1998. For the

foregoing reasons, the proposed rule

change will become operative on

November 28, 1997.

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, NW.,

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

Room, 450 Fifth Street, NW,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the NYSE. All submissions

should refer to File No. SR–NYSE–97–

32 and should be submitted by

December 29, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32027 Filed 12–5–97; 8:45 am]

BILLING CODE 8010–01–M