Federal Register / Vol. 62, No. 237 / Wednesday, December 10, 1997 / Notices 65117

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

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

2 17 CFR 240.19b–4.

• Supplementary Material .40 discusses

the interplay between Rule 500 and the

issuer’s application to the SEC to withdraw

the security from listing. Pursuant to

Commission Rule 12d2–2(d) under the

Exchange Act, an issuer may apply to

withdraw the security from listing after

complying with the requirements of the Rule.

With respect to the delisting of stock, the

proposed date of delisting in the application

to the Commission must be the same date

specified in the notice to shareholders. The

issuer must contemporaneously send to the

Exchange a copy of the application submitted

to the Commission.

• Supplementary Material .50 parallels a

provision in Rule 499 (governing Exchangeinitiated delistings), which provides that,

when reviewing the listing status of one class

of securities, the Exchange will review the

appropriateness of the continued listing of

other classes of the issuer’s securities. Factors

the Exchange will consider in such a review

under Rule 500 include, but are not limited

to, the pricing relationship between the

securities being delisted and the other

security, and the ability of the Exchange to

make a market in the remaining securities.

For example, it is unlikely the Exchange

would delist the common stock of an issuer

that delists bonds. On the other hand, it is

likely that the Exchange would delist the

warrants of an issuer that delists its common

stock.

2. Statutory Basis

The Exchange believes the proposed

rule change, as amended, is consistent

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

of the Act,5 which requires that the rules

of the Exchange be designed to prevent

fraudulent and manipulative acts and

practices, to promote just and equitable

principles of trade, and, in general, to

protect investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes that the

proposal does not 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 not solicited, and

does not intend to solicit, comments on

this proposed rule change. The

Exchange has not received any

unsolicited written comments from

members or other interested parties.

However, in a process initiated at the

beginning of May 1997, the Exchange

did consult with a number of its Board

and advisory committees, pension funds

and other constituents in developing the

Rule. The NYSE represents that these

constituents overwhelmingly supported

the revision of existing Rule 500, rather

than its elimination.

According to the NYSE, the most

controversial issue among the

constituents was whether the

requirement for a shareholder vote

should be maintained, albeit with a

simple majority vote. The great majority

of those surveyed viewed delisting as a

matter within the purview of the

business judgment of a company’s board

of directors. These constituents believed

that the Exchange could address the

concerns underlying the desire for a

shareholder vote by requiring (1) a

higher-than-normal board vote, (2) the

concurrence of independent directors,

and (3) provision to shareholders of

notice of a proposed delisting.

The Exchange believes that the text of

the Rule reflects the reconciliation and

incorporation of the comments and

suggestions that the exchange received

from these constituents.

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 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. In

addition to any other issues that the

public may wish to address, the

Commission specifically requests

comments on the following questions:

Are the shareholder notification

procedures required under the terms of

the proposal necessary to the delisting

process?

What are the costs involved with

complying with the requisite

shareholder notifications?

Will issuers’ costs arising from the

requisite shareholder notification create

a disincentive to delist from the

Exchange?

Is there an acceptable alternative

means to providing shareholder

notification, such as through media

publication?

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

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 the NYSE. All submissions

should refer to File No. SR–NYSE–97–

31 and should be submitted by

December 31, 1997.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32229 Filed 12–9–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39393; File No. SR–Phlx–

97–51]

Self-Regulation Organizations; Filing

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.

Relating to the Allocation of Options

Trades

December 3, 1997.

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

Securities Exchange Act of 1934

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

notice is hereby given that on October

22, 1997, the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’ 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 Phlx, pursuant to Rule 19b–4 of

the Act, proposes to provide that the

seller or largest participant to an option

transaction is responsible for allocating

an executed trade. Specifically, the
65118 Federal Register / Vol. 62, No. 237 / Wednesday, December 10, 1997 / Notices

3The seller has the responsibility only when

there are two parties to a trade. When there are

multiple participants, the largest participant is

responsible for allocating the trade.

4See Phlx Rule 1063.

5See note 3, supra.

6See e.g., Securities Exchange Act Release No.

33512 (January 24, 1994) 59 FR 4759 (February 1,

1994).

7Securities Exchange Act Release No. 29580

(August 16, 1991) 56 FR 41876 (August 23, 1991).

8 Id.

9The Phlx’s minor rule plan, codified in Phlx

Rule 970, contains floor procedure advices, such as

Advice F–2, with accompanying fine schedules.

Rule 19d–1(c)(2) authorizes national securities

exchanges to adopt minor rule violation plans for

summary discipline and abbreviated reporting; Rule

19d–1(c)(1) requires prompt filing with the

Commission of any final disciplinary actions.

However, minor rule violations not exceeding

$2,500 are deemed not final, thereby permitting

periodic, as opposed to immediate, reporting.

Exchange proposes to amend two Floor

Procedure Advices (‘‘Advices’’): F–2,

Allocation, Time Stamping, Matching

and Access to Matched Trades; and F–

12, Responsibility for Assigning

Participation.

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

Phlx 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 Phlx 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

a. Advice F–2

Currently, Advice F–2 states that it is

the duty of the largest participant in an

options transaction to both match and

time stamp the order tickets involved.

There is currently no specific provision

for who allocates options trades among

trade participants. The purpose of the

proposed rule change to Advice F–2 is

to assign the responsibility or properly

allocating option trades to the largest

participant (or seller)3 involved in the

trade. Violations of this new

responsibility will be subject to the

existing fine schedule accompanying

Advice F–2. Paragraphs (b) concerning

ticket preservation and (c) concerning

member access to matched trades, of

Advice F–2, remain unchanged.

Trade allocation includes the

determination, based on existing rules,

policies and practices, as to who is

considered to be on a bid/offer, who

participants in a trade and for what size.

The Exchange believes that permitting

the largest participant, which normally

will be the Floor Broker who represents

the original order in the trading crowd,

to allocate trade participation should

render the process more efficient and

therefore accelerate execution reporting.

As previously stated, existing

Exchange rules do not clearly address

the process of, or parties responsible for,

ensuring proper options trade

allocation. The practice in most options

crowds is that specialists announce

trade splits by saying to the trading

crowd, ‘‘You did 10, you did 5,’’ etc.

This practice may differ, especially

where a specialist unit is not involved

in a trade, or where a great deal of

trading and quote activity renders

specialist allocating trades impractical.

In these situations, Floor Brokers have

assisted in this function, consistent with

their duty to match and time stamp the

trade, as well as their duty to ensure the

best execution of orders.4

In determining how to assign this

responsibility, the current duty of the

largest participant (or seller) to match

and time stamp the trade was decisive

in determining who allocates option

trades. Extending this responsibility to

the largest participant (or seller)5 is a

logical extension of the current

requirements of Advice F–2. In adopting

and amending this Advice, the intent

has been to facilitate prompt and

accurate trade reporting.6

b. Advice F–12.

The purpose of the proposed rule

change to Advice F–12 is to extend its

requirements regarding how trades are

allocated to the equity/index options

floor. Currently, Advice F–12 only

applies to foreign currency options

trading. In addition, Advice F–12 is

proposed to be amended to only detain

in the crowd actual trade participants

and simplify ticket submission

requirements.

Specifically, Advice F–12 requires

that trade participants: (a) Must confirm

and immediately inform the largest

participant of their contra-side

participation; (b) should not leave the

crowd absent such confirmation; (c)

should not submit tickets absent

participation; and (d) must handle

disputes properly. The Phlx believes

that the extension of Advice F–12 to

equity/index options trading should

improve the certainty of trade allocation

and maintain order during the

allocation process. This is consistent

with the original intent of Advice F–12

to facilitate the orderly operation of the

option floor, especially for trades

involving a number of market

participants.7

The Phlx also believes that the

proposed amendments to Advice F–12

will bolster its effectiveness in

controlling the trade allocation process.

Under the proposed amendments, no

one who has participated in the trade

would be allowed to leave the crowd

until the level of his/her participation in

the trade has been confirmed by the

largest participant. Previously, this

obligation also applied to those who

believed they may have participated in

a trade. This change is intended to

require only those who actually

participated in a trade to remain in the

trading crowd to confirm their

participation in the trade. The Phlx

states that the language concerning

belief was difficult to administer and

did not capture violations necessary to

improve the post-trade process.

Further, Advice F–12 currently

provides that no person in the crowd

shall submit a ticket for matching on a

trade when that person has or should

have grounds to believe that he is not

due participation in the trade. The Phlx

asserts that by deleting the reference to

‘‘belief,’’ the proposal is designed to

simplify trade ticket submission, and as

a result, establish the practice that a

person who did not participate in a

trade should not submit a ticket. Thus,

a violation of Advice F–12 may result

from submitting a ticket where no

participation is due, even though the

participant believed he/she participated.

As cited by the Commission in the

original approval of Advice F–12, it is

reasonable to require trade participants

to notify other parties of their

participation levels and to resolve those

levels at such time.8 The Exchange

believes the proposed amendments are

consistent with those goals, because

they continue to facilitate the prompt

determination of participation levels.

Advice F–12 currently contains a fine

schedule, which is proposed to apply to

the entire options floor. The proposal

thus amends the Exchange’s minor rule

violation enforcement and reporting

plan (‘‘minor rule plan’’),9 by amending

the text of both Advices, as well as by

extending the application of Advice F–

12 to the equity/index options floor. The

complete text of the proposed rule

change may be examined at the places

specified in Item IV below.

2. Basis

For these reasons, the proposed rule

change is consistent with Section 6 of
Federal Register / Vol. 62, No. 237 / Wednesday, December 10, 1997 / Notices 65119

10 17 CFR 200.30–3(a)(12).

the Act in general, and in particular,

with Section 6(b)(5), in that it is

designed to promote just and equitable

principles of trade, prevent fraudulent

and manipulative acts and practices, as

well as to protect investors and the

public interest, by facilitating prompt

and accurate trade processing and

reporting.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx 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 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 or such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which the Phlx consents, the

Commission will:

(A) By order approve such proposed

rule change, or,

(B) Institute proceedings to determine

whether the proposed rule change

should 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, NW,

Washington, DC 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, NW,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Phlx. All submissions

should refer to File No. SR–Phlx–97–51

and should be submitted by December

31, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32309 Filed 12–9–97; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice 2660]

Bureau of Oceans and International

Environmental and Scientific Affairs;

United States Man and the Biosphere

Program: Request for Proposals for

the Tropical Ecosystems Directorate

The Tropical Ecosystems Directorate

(TED) of the U.S. Man and the

Biosphere Program (U.S. MAB)

announces a call for proposals to

support applied research on the

management, harvesting, utilization and

marketing of tropical forest resources,

both timber and nontimber, in the trinational Mayan forest of Mexico, Belize

and Guatemala.

A small number of grants of $1000 to

$3500 US each, will be awarded in

1998. Persons interested in applying for

these grants are encouraged to first

obtain a copy of the TED core project

description from the U.S. MAB

Secretariat (Roger E. Soles), OES/ETC/

MAB, U.S. Department of State,

Washington, D.C. 20522–4401. Tel.

(202) 776–8318, Fax. (202) 776–8367.

Funding Objectives

U.S. MAB/TED funding should assist

research teams to add a national

researcher to their effort as well as to:

better integrate conservation and

sustainable development; add a

particular discipline to an ongoing

research project; or explore the

application of ongoing site-specific

research to an additional site in the

Maya Tri-National region. U.S. MAB/

TED funding will not be provided for

planning purposes.

Focal Issues

The TED recognizes that strategies to

sustainably conserve the Mayan forest

must address the needs of the rural

communities that live in the forest and

use its wild resources. Lack of an

adequate knowledge base on the ecology

and management of these resource

species, nondestructive harvesting

methods, and appropriate marketing

and commercialization of these

products has negative impacts on the

forest, on the resource base, and on local

economies. For this reason we continue

to invest in the development of new

knowledge in these fields through small

grants. In order to ensure that this new

knowledge will be integrated into

ongoing resource management and

utilization activities, and to enhance

local capacity to continue to produce

new information as it is needed, our

applied research program focuses on the

integration of students or recent

graduates (at the Bachelor or Master

level), from the three countries into

relevant projects led by respected

researchers in these fields and linked

with NGO’s, and preferably local

communities, in the region.

Content Requirements and Deadlines

for Proposals

Persons interested should submit a

one to two page proposal by February

27, 1998. Each proposal should have: a

title page, a one page synopsis of the

existing research project, up to five

pages detailing the proposed use of U.S.

MAB/TED funds that would be

complementary to the TED core

program, and a one-page budget with

justification.

The U.S. MAB/TED will make final

decisions by April 6, 1998.

No funds are available for

institutional overhead. Only direct costs

can be supported.

Funds will be committed to the

managing institutions identified in the

proposals during May 1998.

Evaluation and Review Process

Because of limited available funding,

U.S. MAB/TED will give the greatest

preference to those proposals that

directly complement the objectives of

the directorate’s core program.

Proposals will be evaluated for the

intrinsic merit of the research or

activity, its policy relevance,

applicability to promoting sustainable

use of tropical forest resources in the

Maya Tri-National Region, and the

quality and demonstrated productivity

of the principals.

Principals will receive from the U.S.

MAB Secretariat copies of all U.S. MAB/

TED review evaluations of their

proposal and a written notification of

the directorate’s decision on their

project.

Submission of Proposals

Proposals may be submitted in

Spanish or English to U.S. MAB

Secretariat, OES/ETC/MAB, Room 107,

SA–44C, U.S. Department of State,

Washington, DC 20522–4401.