Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices 65719

January 1, 1998. (The rules governing

the applicable percentages for ‘‘partial’’

RPU plans are described in § 4006.5(g)

of the premium rates regulation.)

For plans for which the applicable

percentage is 85 percent, the assumed

interest rate to be used in determining

variable-rate premiums for premium

payment years beginning in December

1997 is 5.19 percent (i.e., 85 percent of

the 6.11 percent yield figure for

November 1997).

The following table lists the assumed

interest rates to be used in determining

variable-rate premiums for premium

payment years beginning between

January 1997 and December 1997. The

rates for July through December 1997 in

the table reflect an applicable

percentage of 85 percent and thus apply

only to non-RPU plans. However, the

rates for months before July 1997, which

reflect an applicable percentage of 80

percent, apply to RPU (and ‘‘partial’’

RPU) plans as well as to non-RPU plans.

For premium payment years

beginning in

The assumed interest rate

is

January 1997 ............................ 5.24

February 1997 .......................... 5.46

March 1997 ............................... 5.35

April 1997 .................................. 5.54

May 1997 .................................. 5.67

June 1997 ................................. 5.55

July 1997 .................................. 5.75

August 1997 .............................. 5.53

September 1997 ....................... 5.59

October 1997 ............................ 5.53

November 1997 ........................ 5.38

December 1997 ........................ 5.19

For premium payment years

beginning in December 1997, the

assumed interest rate to be used in

determining variable-rate premiums for

RPU plans (determined using an

applicable percentage of 80 percent) is

4.89 percent. For ‘‘partial’’ RPU plans,

the assumed interest rates to be used in

determining variable-rate premiums can

be computed by applying the rules in

§ 4006.5(g) of the premium rates

regulation. The PBGC’s premium

payment instruction booklet also

describes these rules and provides a

worksheet for computing the assumed

rate.

Multiemployer Plan Valuations

Following Mass Withdrawal

The PBGC’s regulation on Duties of

Plan Sponsor Following Mass

Withdrawal (29 CFR part 4281)

prescribes the use of interest

assumptions under the PBGC’s

regulation on Allocation of Assets in

Single-employer Plans (29 CFR part

4044). The interest assumptions

applicable to valuation dates in January

1998 under part 4044 are contained in

an amendment to part 4044 published

elsewhere in today’s Federal Register.

Tables showing the assumptions

applicable to prior periods are codified

in appendix B to 29 CFR part 4044.

Issued in Washington, DC, on this 10th day

of December 1997.

David M. Strauss,

Executive Director, Pension Benefit Guaranty

Corporation.

[FR Doc. 97–32733 Filed 12–12–97; 8:45 am]

BILLING CODE 7708–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IA–1685/803–112]

Interactive Data Corporation; Notice of

Application

December 9, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Advisers Act of 1940 (‘‘Advisers Act’’).

APPLICANT: Interactive Data Corporation

(‘‘Interactive Data’’).

RELEVANT ADVISERS ACT SECTIONS:

Exemption requested under section

203A(c) from section 203A(a).

SUMMARY OF APPLICATION: Applicant

requests an order to permit it to register

with the SEC as an investment adviser.

Filing Dates: The application was

filed on May 20, 1997, and amended on

September 22, 1997 and October 7,

1997.

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 applicant with a

copy of the request, personally or by

mail. Hearing requests should be

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

January 5, 1998, and should be

accompanied by proof of service on

applicant, 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 may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 5th Street,

NW., Washington, DC 20549. Applicant,

Interactive Data Corporation, 22 Crosby

Drive, Bedford, Massachusetts 01730.

FOR FURTHER INFORMATION CONTACT:

Lori Price, Senior Counsel, at (202) 942–

0531, or Jennifer S. Choi, Special

Counsel, at (202) 942–0716 (Division of

Investment Management, Task Force on

Investment Adviser Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is a Delaware

corporation and a wholly-owned

subsidiary of Pearson Longman Inc., a

Delaware corporation, the sole

shareholder of which is Pearson Inc., a

Delaware corporation. The shareholders

of Pearson Inc. are Pearson Overseas

Holdings Limited, a United Kingdom

company, and Pearson Capital Company

LLC, a Delaware limited liability

company. The ultimate parent of

Pearson Overseas Holding Limited and

Pearson Capital Company LLC is

Pearson plc, a publicly-traded United

Kingdom company.

2. Applicant maintains its principal

office and place of business in

Massachusetts where applicant’s

corporate headquarters and its president

and financial and legal officers are

located. Applicant, however, only

conducts its domestic securities pricing

business in New York. Applicant is

currently registered as an investment

adviser in New York. Applicant was

registered with the SEC as an

investment adviser until July 8, 1997.

3. Applicant provides global

securities pricing and related financial

data in computer-readable form.

Applicant’s data covers over 3.1 million

individual issues of debt and equity

securities and includes (i) daily closing

prices (including end-of-day quotes and

evaluations), market data, money market

and foreign exchange rates, index values

and related data, available after the

markets close around the world; (ii)

most recent descriptive data and terms

and conditions data; (iii) most recent

announcements (including

capitalization changes, dividends,

reorganization information, and called

bonds); and (iv) historical price,

announcement, descriptive,

fundamental, earnings estimates, and

economic and related data.

4. With regard to certain fixed income

issues for which no continuous trading

market exists, applicant creates prices

using sophisticated proprietary models

and methodologies, descriptive terms

and conditions databases, broker quotes

and quality control programs to generate

evaluations that are independent

(‘‘Fixed Income Pricing Service’’). These

prices are provided in computer-
65720 Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices

1 15 U.S.C. 80b–3a(a)(1).

2 15 U.S.C. 80b–3a(a)(2).

3S. Rep. No. 293, 104th Cong. 2d Sess. 4 (1996)

[hereinafter Senate Report].

4 Id.

5 15 U.S.C. 80b–3a(c).

6Senate Report, supra note 3, at 5.

7 Id.

readable form to applicant’s clients

throughout the country.

5. The clients for applicant’s Fixed

Income Pricing Service include over

3,300 separate organizations, located

throughout the country and abroad,

including major banks, mutual funds,

fund custodians, unit investment trusts,

brokerage firms and investment

management firms. In North America,

applicant’s clients include forty-seven

of the largest fifty banks, forty-three of

the largest fifty brokerage firms, forty of

the largest fifty mutual fund sponsors,

thirty-four of the largest fifty insurance

companies and forty-nine of the largest

fifty money management firms.

Applicant has a small number of natural

person clients who receive its prices.

Applicant believes these clients account

for less than 10% of applicant’s total

number of clients receiving the Fixed

Income Pricing Service, and only

.0559% of applicant’s revenue for the

Fixed Income Pricing Service is

attributable to fees paid by clients who

are natural persons.

6. Applicant submits that it provides

security-level data to institutional

clients who service customers on a

national level. Applicant states that its

clients use the data for purposes as

varied as brokerage and trust

accounting, trust operations, net asset

value calculations, portfolio

management and accounting, regulatory

requirements, and investment analysis

and research.

7. Applicant has approximately 470

employees, all of whom are involved in

collecting, reviewing, evaluating, and

overseeing delivery of the financial data

that applicant delivers to its clients.

Applicant’s Legal Analysis

1. On October 11, 1996, the National

Securities Markets Improvement Act of

1996 was enacted. Title III of the Act,

the Investment Advisers Supervision

Coordination Act (‘‘Coordination Act’’),

added new section 203A to the Advisers

Act. Under section 203A(a)(1),1 an

investment adviser that is regulated or

required to be regulated as an

investment adviser in the state in which

it maintains its principal office and

place of business is prohibited from

registering with the SEC unless the

investment adviser (i) has assets under

management of not less than $25

million or (ii) is an adviser to an

investment company registered under

the Investment Company Act of 1940

(‘‘Investment Company Act’’). Section

203A(a)(2) defines the phrase ‘‘assets

under management’’ as the ‘‘securities

portfolios with respect to which an

investment adviser provides continuous

and regular supervisory or management

services.’’ 2

2. Applicant submits that Congress

determined that the states should be

responsible for regulating investment

advisers ‘‘whose activities are likely to

be concentrated in their home state,’’

and ‘‘[l]arger advisers, with national

businesses’’ should be regulated by the

SEC and ‘‘be subject to national rules.’’ 3

Applicant notes that Congress chose an

assets under management requirement

as a rough proxy that would divide

responsibilities between the SEC and

the states on the theory that investment

advisers managing $25 million or more

in assets are likely to be national

investment advisers that should be

subject to the national rules of the SEC,

while investment advisers managing

less than $25 million in assets are likely

to be smaller investment advisers that

should be subject to the local rules of

the various states.4

3. Section 203A(c) of the Advisers Act

authorizes the SEC to permit an

investment adviser to register with the

SEC if prohibiting registration would be

‘‘unfair, a burden on interstate

commerce, or otherwise inconsistent

with the purposes of [section 203A].’’ 5

4. Applicant states that Congress

recognized that the assets under

management requirement does not

precisely differentiate national

investment advisers from local

investment advisers, and that some

national investment advisers may not

qualify for registration with the SEC

under the test formulated by Congress.

Applicant states that Congress noted

that ‘‘the definition of ‘assets under

management’ . . . may, in some cases,

exclude firms with a national or

multistate practice from being able to

register with the SEC.’’ 6

5. Applicant states that Congress

directed the SEC to use its exemptive

authority to remedy any unfairness,

burdens or inconsistencies caused by

the assets under management

requirement and to address situations

where investment advisers with a

‘‘national or multistate practice’’ are

otherwise prohibited from registering

with the SEC.7

6. Applicant states that it does not

have $25 million or more in assets

under management. Applicant submits

that it does not actively manage any

client securities portfolios, either on a

discretionary or non-discretionary basis,

or provide ‘‘continuous and regular

supervisory or management services’’

with respect to client accounts.

Applicants also states that it does not

act as an investment adviser to an

investment company registered as such

under the Investment Company Act.

Applicant further states that it does not

qualify for exemption from the

prohibition on SEC registration as

provided in rule 203A–2 under the

Advisers Act.

7. Applicant submits that, for the

reasons discussed below, it engages in a

large, national investment advisory

business of the type contemplated by

Congress when it directed the SEC to

use its exemptive authority under

section 203A(c). Applicant asserts that,

because of the wide variety of

overwhelmingly institutional clients to

which applicant provides its Fixed

Income Pricing Service, applicant

believes its services are the type of

activities Congress contemplated in

enacting section 203A. Applicant argues

that it would be inconsistent with the

purposes of section 203A to prohibit

applicant from registering with the SEC

because more than 90% of applicant’s

clients are institutions whose securities

transactions affect the national

securities markets.

8. Applicant states that, like the

investment advisers to registered

investment companies, the nationally

recognized statistical rating

organizations (‘‘NRSROs’’), and the

pension consultants exempted from the

prohibition on SEC registration,

applicant performs services that

significantly affect the national

securities markets and billions of dollars

in assets under management. Applicant

states that its providing of the Fixed

Income Pricing Service has a direct

effect on billions of dollars of assets

under management at the nation’s

investment companies, investment

advises, broker-dealers, insurance

companies, banks, trust companies, and

other institutional investors. For

example, open end investment

companies use applicant’s fixed income

securities prices to compute net asset

value on a daily basis, broker-dealers

use applicant’s prices to value securities

pledged in margin accounts, and private

money managers use prices supplied by

applicant for portfolio valuation

statements.

9. Applicant states that Congress

exempted investment advisers to

investment companies (regardless of

assets under management) from the

prohibition on SEC registration because

Congress recognized these entities had
Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices 65721

8Rules Implementing Amendments to the

Investment Advisers Act of 1940, Investment

Advisers Act Release No. 1601 (Dec. 20, 1996), 61

FR 68480 at Section II.D.1 (release proposing rules

to implement amendments to the Advisers Act).

9The exempted pension consultants are those

that provide investment advice to employee benefit

plans with respect to assets having an aggregate

value of at least $50 million during the pension

consultant’s last fiscal year. See id. at Section II.D.2.

significant effects on the national

securities markets.

10. Applicant submits that the SEC

also has exempted NRSROs because the

SEC determined that their activities

have a significant effect on the national

securities markets and the operations of

the federal securities laws.8 Applicant

also notes that certain pension

consultants are exempt from the

prohibition on SEC registration because

the SEC determined that their activities

have a direct effect on the management

of billions of dollars of pension plan

assets and thereby substantially affect

national securities markets.9 Applicant

states that the SEC determined to

exempt these advisers because of its

belief that it would be inconsistent with

the purposes of the Coordination Act for

these advisers to be regulated by the

states rather than by the SEC.

11. Applicant believes that New York

should have little or no interest in

regulating applicant because the

majority of its clients for the Fixed

Income Pricing Service are institutional

clients. Applicant asserts that its client

base for the Fixed Income Pricing

Service is overwhelmingly institutional;

less than 10% of applicant’s total

number of clients for the Fixed Income

Pricing Service are natural persons.

Applicant states that it would be

inconsistent with the purposes of

section 203A for a state to regulate

investment advisers whose activities

involve little or no traditional state

interest. Applicant submit that there is

no strong state interest in regulating

investment advises with a

predominately national, institutional

client base.

12. Applicant states that, although the

Coordination Act generally preempted

state law with respect to SEC-registered

advisers, Congress preserved state law

with respect to certain of their

supervised persons referred to as

‘‘investment adviser representatives.’’

Applicant notes that under the SEC

definition, only investment adviser

representatives who work principally

with natural person clients rather than

institutional clients are subject to state

regulation. Applicant states that this

definition recognizes that, consistent

with the Coordination Act, the primary

interest of the states is not in

institutional clients but in maintaining

oversight of representatives with a retail

clientele.

13. Applicant states that if it were to

be regulated by New York, rather than

by the SEC, it would mean that a single

state would be charged with protecting

the interests of applicants’s clients and

of the clients’ customers located in all

fifty states. Applicant further maintains

that regulation by New York could

result in regulation with an eye

primarily to the interests of the state

rather than the interests of applicant’s

clients and such clients’ customers

throughout the country. Applicant

asserts that the nature of its activities in

valuing securities lends itself to

supervision and examination by one

regulatory body whose focus is national

rather than local.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32652 Filed 12–12–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22930/812–10836]

MLX Corporation; Notice of

Application

December 9, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under sections 6(c) and 6(e) of the

Investment Company Act of 1940 (the

‘‘Act’’).

SUMMARY OF APPLICATION: Applicant

requests an order under sections 6(c)

and 6(e) of the Act that would exempt

it from all of the provisions of the Act

except sections 9, 17(a) (modified as

discussed in the application), 17(d)

(modified as discussed in the

application), 17(e), 17(f) (modified as

discussed in the application), and 36

through 53 and the rules and regulations

under the Act until the earlier of the

date of the pending merger of applicant

with Morton Metalcraft Holding Co., or

June 30, 1998.

FILING DATE: The application was filed

on October 27, 1997 and amended on

December 3, 1997. Applicant has agreed

to file an additional amendment, the

substance of which is incorporated in

this notice, during the notice period.

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 applicant 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 29, 1997, and should be

accompanied by proof of service on

applicant, 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, NW., Washington, DC 20549.

MLX Corporation, 1000 Center Place,

Norcross, Georgia 30093.

FOR FURTHER INFORMATION CONTACT:

Deepak T. Pai, Staff Attorney, at (202)

942–0574, or Nadya B. Roytblat,

Assistant Director, 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 at the SEC’s

Public Reference Branch, 450 Fifth

Street, NW., Washington, DC 20549 (tel.

202–942–8090).

Applicant’s Representation

1. MLX Corporation (‘‘MLX’’) was

formed in 1984 as part of the

reorganization of McLouth Steel

Company (‘‘McLouth’’), a maker of steel

products that filed for bankruptcy in

1982. Under the terms of the

organization, McLouth was renamed

‘‘MLX Corporation’’ and McLouth

shares were exchanged for new MLX

shares. As part of the reorganization,

McLouth’s operating business was sold

to a separate entity. MLX’s sole

remaining asset is the net operating

losses generated by McLouth’s

unprofitable operations. These net

operating losses are still available to

offset future taxable income from

operations and are one of MLX’s most

important assets. MLX has

approximately 8,500 shareholders.

2. In 1985, MLX acquired S.K.

Wellman Limited, Inc. (‘‘Wellman’’), a

company engaged in the design and

manufacture of high energy friction

materials used primarily in aircraft

brakes and heavy equipment brakes,

transmissions, and clutches (the

‘‘Wellman Business’’). From 1985

through 1987, MLX consummated

various other acquisitions that

complemented the Wellman Business

(the ‘‘Wellman Acquisitions’’). In

addition to the Wellman Acquisitions,

in 1986, 1987, and 1988, MLX acquired