Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices 65727

5Rules Implementing Amendments to the

Investment Advisers Act of 1940, Investment

Advisers Act Release No. 1601 (Dec. 20, 1996), 62

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

to implement amendments to the Advisers Act).

6 Id. at Section II.D.2.

activities have a significant effect on the

national securities markets, thereby

making them appropriate candidates for

federal registration under the

conceptual framework established by

the Coordination Act.5

8. Applicant states that the SEC also

exempted from the prohibition on

Federal registration pension consultants

who provide investment advice to plans

with assets having an aggregate value of

at least $50 million. Applicant states

that, like NRSROs, pension consultants

do not exercise direct investment

discretion over client portfolios, but

their advice affects the management of

billions of dollars of assets.6 Applicant

states that the SEC concluded that it

would be inconsistent with the

purposes of the Coordination Act for

pension consultants to be regulated by

the states rather than the federal

government because of their effect on

national markets.

9. Applicant also asserts that the

states should have little or no interest in

regulating applicant, which has a

majority of institutional clients. Less

than one-tenth of one percent of

applicant’s clients are individual

investors. Applicant submits that the

primary interest of the states is not in

the protection of institutional clients.

10. Applicant states that, although the

Coordination Act generally preempts

state law with respect to SEC-registered

advisers and their supervised persons, it

does permit states to license, register or

otherwise qualify any ‘‘investment

adviser representative’’ who has a place

of business within the state. Applicant

asserts that the Commission, in defining

investment adviser representative,

determined that states should not

regulate either those supervised persons

who service a predominantly

institutional clientele or those who

render only impersonal services.

Applicant believes that, by expanding

the class of advisers who qualify for

federal registration and restricting the

class of supervised persons subject to

state control, the SEC effectuated

Congress’ intent to limit state regulation

to activities that have a primarily

localized effect and that institutional

advisory activities be regulated by the

federal government.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32653 Filed 12–12–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39411; File No. SR–Amex–

97–40]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange, Inc.

Relating to Proposed Revisions to the

Exchange’s Policy Regarding the Use

of Wireless Data Communications

Devices

December 8, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on October 29, 1997,

the American Stock Exchange, Inc.

(‘‘Amex’’ 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 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 is proposing to amend

its policy regarding the use of wireless

data communications devices on the

trading floor. 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

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 Exchange has undertaken to build

an infrastructure (‘‘Infrastructure’’) to

support wireless data communications

on the Trading Floor by members and

Exchange staff. On September 26, 1996,

the Commission approved various rule

changes and a policy regarding the use

of wireless data communications

devices on the Trading Floor (the

‘‘Wireless Communications Policy’’).

The Exchange developed the Wireless

Communications Policy based upon a

design for the Infrastructure that called

for all wireless data transmissions to

pass through a gateway (‘‘Gateway’’).

This would have permitted the

Exchange to make a record of all

wireless communications and to

unilaterally ‘‘throttle’’ all, or selected,

member communications in the event

that such transmissions used a

disproportionate amount of the

available radio frequency or threatened

to exceed available radio frequency

capacity.

In late 1996, the Exchange reviewed

the design of the Infrastructure. During

this review, the Exchange determined

that there was no immediate need for

throttling and that it was unclear when

it might become necessary. The

Exchange concluded that since there

was no need for throttling, there was no

need for a Gateway and that, if and

when necessary, throttling could be

accomplished by the member firms

without a Gateway. As a result of this

review, the Exchange determined that

since the Gateway was unnecessary,

costly for both the Exchange and its

members, and difficult to develop and

implement, the Exchange would build

the Infrastructure without a Gateway.

The Exchange, accordingly, is now

proposing to modify the Wireless

Communications Policy to reflect the

redesign of the Infrastructure to

eliminate the Gateway.

As noted above, the Gateway would

have permitted the Exchange to record

all wireless communications. This

would have created a data base at the

Exchange that would have largely

duplicated records already maintained

by member firms pursuant to SEC and

Exchange rules. The elimination of the

Gateway will eliminate this duplicative

data base. The revised Wireless

Communications Policy, accordingly,

will state that members that have

developed wireless technology will be

responsible for maintaining such

records as may be required by Exchange
65728 Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices

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

2 15 U.S.C. 78f(b)(5).

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

2The Commission has modified parts of these

statements.

rules and policies and federal securities

laws as in effect from time to time. The

elimination of the record keeping

capabilities of the Gateway will not

cause any diminution of the Exchange’s

surveillance capabilities as the

Exchange will retain the same access to

member books and records that it

currently possesses.

With respect to ‘‘throttling,’’ the

Revised Wireless Communications

Policy states that the Exchange’s staff

may request members to reduce radio

traffic if and when required because a

particular user is using more than its

fair share of radio frequency capacity or

overall usage in reaching its maximum.

Members will be obligated to comply

immediately with any such request and

their ability to send wireless

communications may be immediately

terminated if they fail to comply with

such a directive. The Exchange also

proposes some further changes to the

Wireless Communications Policy to

enhance it in light of the Exchange’s

experience with wireless technology

since the Policy was first adopted.

These proposed changes include a

requirement that members using

wireless technology maintain a record of

orders and quotes initiated on the Floor

and transmitted to other markets, a

statement that members do not acquire

a property interest in their assigned

band width, a requirement that affiliates

be treated as a single entity for purposes

of band width assignment and a

reduction in the number of hand held

terminals that the system is able to

support in view of anticipated demand

for this capacity.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b) of the Act 1 in general and

furthers the objectives of Section

6(b)(5) 2 in particular in that it is

designed to prevent fraudulent acts and

practices, promote just and equitable

principles of trade, remove

impediments to and perfect the

mechanisms of a free and open market,

and, in general, protect investors and

the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate 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 either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the 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 the 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 at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to File No.

SR–Amex–97–40 and should be

submitted by January 5, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32650 Filed 12–12–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39416; File No. SR–NSCC–

97–10]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing of a

Proposed Rule Change Establishing a

New Category of Fund Member for

Investment Advisers in Mutual Fund

Services

December 9, 1997.

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

Securities Exchange Act of 1934

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

August 25, 1997, the National Securities

Clearing Corporation (‘‘NSCC’’) 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 primarily by NSCC.

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 will establish a

new category of fund member in NSCC’s

mutual fund services (‘‘MFS’’) for

registered investment advisers.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NSCC 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. NSCC has prepared

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

and (C) below, of the most significant

aspects of such statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

NSCC’s MFS is designed to enable

NSCC members to process and to settle

on an automated basis mutual fund

purchase and redemption orders and to

transmit registration instructions.

Currently, NSCC’s rules and procedures

permit two categories of fund member

in MFS: (1) principal underwriters