Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Notices 65467

4The Commission has modified the text of the

summaries prepared by Philadep.

5The closing date tentatively has been scheduled

for December 15, 1997, but may be rescheduled by

mutual consent of the parties. The actual closing

date will be inserted into the amended rules.

6 15 U.S.C. 78q–1(b)(3)(F).

7 15 U.S.C. 78q–1(b)(3)(F).

8 17 CFR 200.30–3(a)(12).

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

II. Self-Regulatory Organization’s

Statements Regarding the Proposed

Rule Change

In its filing with the Commission,

Philadep 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.

Philadep has prepared summaries, set

forth in sections (A), (B) and (C) below,

of the most significant aspects of these

statements.4

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In accordance with the Order,

Philadep will amend Philadep Rule 29,

entitled ‘‘Unclaimed Dividends and

Other Distributions,’’ and Philadep Rule

2, Section 1(e), which governs the

retention of any unclaimed dividend or

other distribution. The Order provides

that within forty-five (45) days of the

entry of the Order, Philadep shall file

with the Commission:

A proposed rule change amending Rule 2,

Section 1(e), Rule 29, Section 3 and the

procedures thereunder, to provide that

Philadep shall diligently research each

unclaimed dividend or other distribution

received after the Closing Date with a value

greater than $500. Any such unclaimed

dividend or other distribution with a value

of $500 or less shall continue to be treated

in accordance with Rule 29 (i.e., Philadep

can take it into income after five (5) years).

All unclaimed dividends and other

distributions subject to Rule 29 shall be held

and invested in accordance with Philadep’s

Participants’ Fund Rule 4. No unclaimed

dividends or distributions received after the

Closing Date in excess of $500 shall be taken

into income.

In their current form, both Philadep

Rule 2, Section 1(e), and Philadep Rule

29, Section 3, provide that (i) any

dividends or distributions outstanding

and unclaimed after five years from the

date of such dividend or distribution

shall be taken into income by Philadep

and (ii) the participant shall waive any

claim to any such dividend or

distribution except as Philadep

otherwise may provide in accordance

with its by-laws and rules. Rule 2 and

Rule 29 will be amended to provide that

Philadep may not retain any unclaimed

dividends or distributions in excess of

$500 that are paid and received after the

closing date.5 Also under the proposed

rule change, Philadep will amend Rule

29, Section 1, to provide that Philadep

shall diligently research any unclaimed

dividend or distribution with a value

greater than $500 that is received after

the effective date of the amendments.

No changes to Philadep’s rules will be

made with respect to unclaimed

dividends or distributions received

prior to the closing.

Finally, Philadep is amending Rule 29

by adding a new Section 3 that will

require that all unclaimed dividends

and distributions that are subject to Rule

29, but as yet not taken into income by

Philadep in accordance with Rule 29, be

held and invested pursuant to the same

procedures as set forth in Philadep

Participants’ Fund Rule 4.

Philadep believes the proposed rule

change is consistent with the

requirements of Section 17A(b)(3)(F) of

the Act 6 and the rules and regulations

thereunder because the amendments

contemplated by the proposed rule

change will better assure the

safeguarding of securities and funds in

the custody or control of Philadep or for

which Philadep is responsible.

Furthermore, Philadep believes the

amendments are consistent with the

undertakings set forth in the Order.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

Philadep does not believe that the

proposed rule change will impose any

burden on competition not necessary or

appropriate in furtherance of the

purpose of the Act.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments were neither

solicited nor received with respect to

the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(F) of the Act 7

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds in

its custody or control or for which it is

responsible. The Commission believes

that the proposed rule change is

consistent with this obligation because

it will increase the likelihood that

unclaimed dividends and distributions

will be returned to their owners.

The Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after the

publication of notice of the filing.

Approving prior to the thirtieth day

after publication of notice will allow

Philadep to implement the undertakings

set forth in the Order immediately

which should benefit the owners of

unclaimed dividends and distributions.

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 also will be available for

inspection and copying at the principal

office of SCCP. All submissions should

refer to File No. SR–Philadep–97–05

and should be submitted by January 2,

1998.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.8

Jonathan G. Katz,

Secretary.

[FR Doc. 97–32528 Filed 12–11–95; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39404; File No. SR–Phlx–

97–42]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.,

Relating to the Responsibility to

Represent Orders to the Trading

Crowd

December 4, 1997.

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

Securities Exchange Act of 1034

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

August 25, 1997, the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
65468 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Notices

2 17 CFR 240.19b–4.

3The Phlx’s minor rule plan, codified in Phlx

Rule 970, contains floor procedure advice, such as

Advice C–7, 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.

4Securities Exchange Act Release No. 24309

(April 7, 1987), 52 FR 11894 (April 13, 1987) (SR–

Phlx–86–49).

5Prior to the adoption of a minor rule plan, this

requirement appeared in Phlx Rule 1014.06.

Securities Exchange Act Release No. 23296 (June 4,

1986), 51 FR 21430 (June 12, 1987)(SR–Phlx–86–

11).

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 Exchange, pursuant to Rule 19b–

4 of the Act,2 proposes to amend Floor

Procedure Advice (‘‘Advice’’) C–7,

Responsibility to Represent Orders to

the Trading Crowd, to adopt a new

paragraph (b) in order to specify a Floor

Broker’s responsibility to be loud and

audible and positioned to be heard by

a majority of the trading crowd.

Currently, Advice C–7 states that once

an option order has been received on

the floor, it must be represented to the

trading crowd before it may be

represented away from the crowd. This

paragraph would be designated as

paragraph (a). Proposed paragraph (b)

would state that a Floor Broker must be

loud and audible when requesting a

market and/or representing an order in

the trading crowd. Further, a Floor

Broker must make reasonable efforts to

position himself in the trading crowd to

be heard by the majority of the trading

crowd.

A fine schedule, pursuant to the

Exchange’s minor rule violation

enforcement and reporting plan (‘‘minor

rule plan’’),3 is proposed to be levied for

minor violations of proposed paragraph

(b). Specifically, violations will be

subject to the following fine schedule,

which will be implemented on a oneyear running calendar basis: 1st

Occurrence—$100; 2nd Occurrence—

$250; 3rd Occurrence and Thereafter—

Sanction is discretionary with Business

Conduct Committee (‘‘BCC’’). This fine

schedule is proposed to be adopted into,

and thus amend, the Exchange’s minor

rule plan. Instances not deemed minor,

as with all floor procedure advices

subject to the minor rule plan, would be

forwarded to the BCC. Violations of

paragraph (a) would continue to be

referred to the BCC, as no fine schedule

applies. However, language indicating

that such matters are subject to review

by the BCC is proposed to be added. The

proposal would take effect upon notice

to the membership. The complete text of

the proposed rule change is available at

the Office of the Secretary, the Phlx, 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 maybe 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

The purpose of the amendment is to

codify the long-standing practice of

requiring, in order to promote just and

equitable principles of trade, that Floor

Brokers be heard by the trading crowd.

Advice C–7 was adopted in 1987,4 and

was designed to ensure that brokered

orders receive the maximum interaction

with orders competing for the other side

of the trade, before they may be

represented away from the crowd. This,

in turn, improves the functioning of the

auction market and the quality of

customers executions. Similarly, the

proposed loud and audible and crowd

positioning requirements are intended

to promote maximum interaction with

other interest in the crowd, by

improving the likelihood that Floor

Brokers are heard and facilitating price

discovery.

Currently, the loud and audible

requirement is rooted in Rule 110,

which requires bids and offers to be

made in an audible tone of voice, as

well as Rule 707, Just and Equitable

Principles of Trade, which prohibits

members and member organizations

from engaging in conduct inconsistent

with just and equitable principles of

trade. Floor Brokers are also required to

utilize due diligence in representing

orders, pursuant to Rules 155 and 1063.

Specifically, Floor Brokers are

responsible for using due diligence to

execute an order at the best price

available, which implies complete

crowd interaction. Proposed paragraph

(a) would apply to Floor Brokers

requesting a market (quoting) as well as

representing a market, including

bidding, offering, canceling, executing

and inquiring as to the status of orders

or bids/offers.

Similarly, the requirement that Floor

Brokers position themselves so as to be

heard by a majority of the trading crowd

is also rooted in Rules 707, 155 and

1063, and is also intended to maximize

order interaction. Crowd location, in

busy situations, is especially important

in fulfilling due diligence and best

execution obligations. The Exchange

notes that the proposal’s intent is

similar to that of Rule 1063(a) and

Advice C–1, which require that a Floor

Broker, prior to executing an order,

ascertain that at least one Registered

Options Principal (‘‘ROT’’) is present in

the trading crowd.5 ROT presence is

intended to confirm pricing, prevent

errors, and witness specialist-Floor

Broker activity. The proposal should

also promote an orderly environment,

where Floor Brokers choose their crowd

positioning centrally to comply with the

requirement, and prevent unnecessary

roughness and disorderly behavior by

crowd participants attempting to hear a

Floor Broker.

The proposed rule change is designed

to preserve and enhance auction market

principles and the process of

representing orders by open outcry,

which is integral to exchange options

trading.

As stated previously, the proposal

should ensure that Floor Brokers are

heard. This, in turn, should help

prevent errors by allowing verification

of market quotes and orders by other

crowd participants. As with paragraph

(a), proposed paragraph (b) should

prevent fraudulent and manipulative

activity. The Exchange believes that

expressly codifying these requirements

into an Advice should help deter such

activity, due to the potential imposition

of fines for minor infractions, and

should help encourage crowd vigilance

for proper vocalization and wrongful

activity.

The Exchange believes that the

proposal is appropriately codified into

Advice C–7, which deals with Floor

Broker responsibilities, and, more

specifically, with representing orders in

the trading crowd. Furthermore, the

Exchange believes that the new
Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Notices 65469

6 17 CFR 200.30–3(a)(12).

1Articles S21 and S22 of the international Radio

Regulations, as agreed by the 1997 World

Radiocommunication Conference.

requirement is appropriate for the minor

rule plan, because it involves actions

that are objective and easily verifiable.

The reference in the fine schedule to

infractions of paragraph (a) being

referred to the BCC is intended to

bolster the distinction between

provisions subject to fines and those

referred directly to BCC; it does not

imply that violations of paragraph (a)

cannot result in fines or disciplinary

action.

For these reasons, the proposed rule

change is consistent with Section 6 of

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 maximizing order

interaction and thus improving the

functioning of the auction market,

including price discovery and liquidity,

and the quality of customer executions.

The proposal is also consistent with

Sections 6(b)(1) and (6), which require,

respectively, that the Exchange have the

capacity to enforce compliance with its

rules and that members be appropriately

disciplined.

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 it 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 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, NW.,

Washington, D.C. 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–97–42

and should be submitted within January

2, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Jonathan G. Katz,

Secretary.

[FR Doc. 97–32484 Filed 12–11–97; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

United States International

Telecommunications Advisory

Committee (ITAC),

Radiocommunication Sector (ITAC–R)

Joint Task Group 4–9–11 Meeting

Notice

The Department of State announces

the formation of U.S. Joint Task Group

4–9–11 (JTG 4–9–11), under the

Radiocommunication Sector of the U.S.

International Telecommunication

Advisory Committee. This Joint Task

Group is the focal point within the

United States to prepare for meetings of

the corresponding international JTG 4–

9–11 which was recently formed at the

ITU–R Chairman/Vice Chairman

meeting November 25 and 28, 1997. The

JTG is to conduct studies and prepare a

report for the next Conference

Preparatory Meeting (CPM–99). The

report will be based on the results of

studies, in accordance with Resolutions

COM5–18, COM5–19 and COM5–23 of

the 1997 World Radiocommunication

Conference, that are associated with

items 1.13.1 and 1.13.2 of the agenda for

WRC–99. These agenda items are:

1.13.1—review and, if appropriate,

revise the power limits appearing in 1

Articles S21 and S22 in relation to the

sharing conditions among non-GSO,

GSO FSS, GSO BSS, space sciences and

terrestrial services, to ensure the

feasibility of these power limits and that

these limits do not impose undue

constraints on the development of these

systems and services; and

1.13.2—consider the inclusion of

limits similar to those in Article S21

and S22 in other frequency bands, or

other regulatory approaches to be

applied in relation to sharing situations.

Chairman of the U.S. Joint Task Group

4–9–11 is Mr. Harry Ng of the Federal

Communications Commission. Mr. Hg

may be reached at telephone 202–418–

0752.

The initial organizational meeting of

U.S. JTG 4–9–11 will be held on

December 18, 1997 at 9:30 a.m. at the

Department of State in Room 1912.

Members of the General Public may

attend this meeting and join in the

discussions, subject to the instructions

of the Chair. Admittance of public

members will be limited to the seating

available. In this regard, entrance to the

Department of State is controlled.

Persons intending to attend the

meeting should send a fax to (202) 647–

7407 not later than 24 hours before the

meeting. On this fax, please include the

name of the meeting, your name, social

security number, date of birth and

organization. One of the following valid

photo identifications will be required

for admittance: U.S. driver’s license

with your picture on it, U.S. passport,

or a U.S. Government identification

(company ID’s are no longer accepted by

Diplomatic Security). Enter from the ‘C’

Street Main Lobby.

Subsequent meetings will be held at

the FCC, 2000 M Street, NW,

Washington, D.C., in Room 110 on

January 7, 1998 at 9:30 a.m. and on

February 4, 1998 at a time and location

to be determined.

Dated: December 9, 1997.

John T. Gilsenan,

Acting Chairman, U.S. ITAC for

Radiocommunications Section.

[FR Doc. 97–32597 Filed 12–10–97; 9:05 am]

BILLING CODE 4710–45–M