65112 Federal Register / Vol. 62, No. 237 / Wednesday, December 10, 1997 / Notices

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

Allocation Fund will be permitted to

remove Fund assets from the fixed

Contract at any time, without the

imposition of a sales charge or market

value adjustment. Second, Applicants

submit that the proposed transactions

will be consistent with the policies of

each Asset Allocation Fund. Finally,

Applicants argue that the proposed

arrangements do not involve

overreaching or self-dealing and are

consistent with the general purposes of

the Act.

Conditions For Relief

Applicants agree that the order

granting the requested relief shall be

subject to the following conditions:

1. Each Asset Allocation Fund and

each Affiliated Underlying Fund will be

part of the same ‘‘group of investment

companies’’ as that term is defined in

Section 12(d)(1)(G)(ii) of the Act.

2(a). In the case of an Underlying

Fund that is not a feeder fund in a

‘‘masterfeeder’’ structure, no Underlying

Fund will acquire securities of any other

investment company in excess of the

limits contained in Section 12(d)(1)(A)

of the Act, except to the extent that such

Underlying Fund (a) receives securities

of another investment company as a

dividend or as a result of a plan of

reorganization of a company (other than

a plan devised for the purpose of

evading Section 12(d)(1) of the Act); or

(b) acquires (or is deemed to have

acquired) securities of another

investment company pursuant to

exemptive relief from the Commission

permitting such Underlying Fund to (i)

acquire securities of one or more

affiliated investment companies for

short-term cash management purposes;

or (ii) engage in interfund borrowing

and lending transactions.

2(b). No Underlying Fund that is a

feeder fund in a ‘‘master-feeder’’

structure will acquire securities of any

other investment company except in

conformity with Section 12(d)(1)(E) of

the Act. No master fund in such a

structure shall acquire securities of any

other investment company in excess of

the limits contained in Section

12(d)(1)(A) of the Act, except to the

extent that such master fund (a) receives

securities of another investment

company as a dividend or as a result of

a plan of reorganization of a company

(other than a plan devised for the

purpose of evading Section 12(d)(1) of

the Act); or (b) acquires (or is deemed

to have acquired) securities of another

investment company pursuant to

exemptive relief from the Commission

permitting such master fund to (i)

acquire securities of one or more

affiliated investment companies for

short-term cash management purposes;

or (ii) engage in interfund borrowing

and lending transactions.

3. No sales load will be charged at the

Asset Allocation Fund level or at the

Underlying Fund level, including any

Unaffiliated Underlying Fund that is a

feeder in a ‘‘master-feeder’’ structure or

any master fund in such a structure.

Sales charges or service fees as defined

in Section 2830 of the Conduct Rules of

the NASD, if any, will only be charged

at either the Asset Allocation Fund level

or at the Underlying Fund level, but not

both. In a situation where an Asset

Allocation Fund invests in a feeder

fund, the Applicants agree to limit sales

charges or service fees to only one level,

at the feeder fund, the master fund, or

the Asset Allocation Fund level.

4. Before approving any advisory

contract pursuant to Section 15 of the

Act, the Board of Trustees of an Asset

Allocation Fund, including a majority of

the Trustees who are not ‘‘interested

persons’’ as defined in Section 2(a)(19)

of the Act, will find that the advisor fees

charged under such contract, if any, are

based on services provided that are in

addition to, rather than duplicative of,

services provided under the advisory

contract of any Underlying Fund in

which the Asset Allocation Funds may

invest. This finding, and the basis upon

which the finding was made, will be

recorded fully in the minute books of

such Asset Allocation Fund.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32311 Filed 12–9–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39392; File No. SR–Amex–

97–38]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange, Inc.

Relating to the Exchange’s Warrant

Listing Guidelines

December 3, 1997.

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

Securities Exchange Act of 1934,1 notice

is hereby given that on October 22,

1997, the American Stock Exchange,

Inc. (‘‘Amex’’ or ‘‘Exchange’’) filed with

the Securities Exchange 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 American Stock Exchange, Inc.

proposes to amend its Company Guide

to revise its warrant listing guidelines.

The text of the proposed rule change is

available at the Office of the Secretary,

the Amex 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 section

A, B and C below, of the most

significant aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and the

Statutory Basis for, the Proposed Rule

Change

1. Purpose

Section 105 of the Amex Company

Guide provides that the Exchange will

not list warrants unless the underlying

common stock is listed on either the

Amex or the New York Stock Exchange

and further provides that the Exchange

will evaluate the warrant issuer’s listing

eligibility using the same financial and

distribution guidelines as are applied to

the listing of common stock. The

Exchange believes that those criteria are

unnecessarily high when applied to the

listing of warrants. Warrants do not

represent a new type of direct claim

upon a company’s assets or otherwise

expose a company to financial risk.

Accordingly, the original listing

financial guidelines for common stock

are not relevant to the listing of warrants

and the Exchange proposes instead to

list a warrant issue so long as the

Company is in good standing on either

the Amex or the NYSE, i.e., above the

continued listing guidelines (a similar

change was previously made to the

Exchange’s guidelines with respect to

the listing of debt securities).

Similarly, the original listing

distribution guidelines for common

stocks (either 1,000,000 shares/warrant
Federal Register / Vol. 62, No. 237 / Wednesday, December 10, 1997 / Notices 65113

2 15 U.S.C. 78f(b).

3 15 U.S.C. 78f(b)(5). 4 17 CFR 200.30–3(a)(12).

1On November 19, 1997, the Exchange submitted

Amendment No. 1 to the filing. See letter from

Adam W. Gurwitz, Vice President and Secretary,

CSE, to Marie Ito, Special Counsel, Division of

Market Regulation, Commission, dated November

19, 1997.

2 ‘‘CTA Network B’’ is commonly known as Tape

B, and is defined in the Consolidated Tape

Association Plan as ‘‘the [Consolidated Tape]

System as utilized to make available ‘CTA Network

B information’ (that is, last sale price information

related to Network B Eligible Securities).’’ The

Consolidated Tape Association Plan further defines

‘‘Network B Eligible Securities’’ to mean securities

‘‘admitted to dealings on the [American Stock

Exchange], [Boston Stock Exchange], [Chicago

Board Options Exchange], [Chicago Stock

Exchange], CSE, [Pacific Exchange], [Philadelphia

Stock Exchange] or on any other exchange, but not

also admitted to dealings on [the New York Stock

Exchange].’’ CTA Plan, at 1–3.

with at least 400 holders or 500,000

shares/warrants with at least 800

holders) are too high when applied to

warrants since warrants are a derivative

security and their price discovery is less

dependent upon such a high level of

liquidity. Nonetheless, the Exchange

recognizes that a minimum level of

liquidity is necessary in an auction

market environment. The Exchange

presently lists a preferred stock issued

by an Amex or NYSE listed company

provided that there are at least 100,000

shares outstanding and believes that this

would also be an appropriate guideline

for the listing of warrants. The Exchange

also recognizes that for a specialist to

continue to provide an auction market

some minimal level of public float is

necessary. Thus, the Amex is proposing

that a warrant issue would become

subject to delisting if its public float fell

below 50,000. This too is the same

guideline as is applied to preferred

stock issues. These changes will provide

the Exchange with greater flexibility in

listing warrant issues and the Amex

believes that the expanded opportunity

for side-by-side trading of stocks and

warrants will prove beneficial to the

shareholders of exchange listed

companies.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b) 2 of the Act in general and

furthers the objectives of Section

6(b)(5) 3 in particular in that it is

designed to promote just and equitable

principles of trade, remove

impediments to a free and open market

and a national market system, and

protect investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The proposed rule change will impose

no burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 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

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 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 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

Room in Washington, D.C. Copies of

such filing will also be available for

inspection and copying at the principal

office of the Amex. All submissions

should refer to the file number in the

caption above and should be submitted

by December 31, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32231 Filed 12–9–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39395; File No. SR–CSE–

97–12]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by The

Cincinnati Stock Exchange, Inc.,

Relating to Transaction Credits

December 3, 1997.

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

Securities Exchange Act of 1934, 15

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

hereby given that on November 13,

1997, The Cincinnati Stock Exchange,

Incorporated (‘‘CSE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II and III below, which Items

have been prepared by the CSE.1 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 to amend its

schedule of fees in order to provide a

transaction credit for Tape B

transactions.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 the

CSE 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 CSE has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

parts of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The Exchange is implementing a

credit for transactions in all Tape B

securities in order to create an incentive

for members to trade such securities on

the Exchange. The Exchange believes

the credit is a logical next step in its

efforts to remain the low-cost provider

of exchange services in the National

Market System. Members will be

credited on a pro rata basis, based upon

the percentage of tape B transaction

market share captured by the Exchange