6468 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations

Date llllllllllllllllll

(b) For articles imported by NASA to

implement international programs of

NASA to which NASA will take title, or

which remain the property of foreign

entities under such programs, no entry

is required pursuant to U.S. note 1 to

HTSUS subchapter VIII of chapter 98.

For such articles, the following

certification shall be used:

Articles for Use in an International Program

of the National Aeronautics and Space

Administration

Item 9808.00.80, Harmonized Tariff Schedule

of the United States

Program: llllllllllllllll

Foreign Owner(s) (if applicable): lllll

In accordance with subheading 9808.00.80

and U.S. note 1 to subchapter VIII of chapter

98, Harmonized Tariff Schedule of the

United States, I hereby certify that the abovedescribed shipment is being brought into the

customs territory of the United States as part

of an international program of the National

Aeronautics and Space Administration

(NASA). No CF 7501 entry is required for this

shipment. All articles contained in this

shipment are, and shall remain, the property

of NASA or of the foreign entities identified

above. Except for articles consumed in the

execution of the above-described Program,

none of these articles will be made available

for sale or other disposition to persons or

institutions not directly involved in the

Program identified above.

Name llllllllllllllllll

Date llllllllllllllllll

(c) A blanket certificate for a series of

imports under a specific NASA

international program or procurement is

authorized but shall require written

verification by a NASA official

designated by a Director of a receiving

NASA Installation that the articles

received meet the conditions of the

certificate. The blanket certificate shall

be in the form of the certifications set

forth in paragraphs (a) or (b) of this

section, as appropriate, but shall

include the following paragraph at the

end thereof:

Before this certification is used to obtain

duty-free entry of these articles, a cognizant

NASA official at the receiving NASA

Installation, who is designated by the

Installation Director, shall verify in writing

that specifically identified articles to be

entered on a particular date are the articles

described in this certificate or its

attachments. This verification and this

certification shall be presented to the U.S.

Customs Service at the time entry for the

particular articles is sought.

Name llllllllllllllllll

Date llllllllllllllllll

With respect to articles represented to

be: procurements by NASA; or imports

to implement international programs of

NASA to which NASA will take title, or

foreign-owned articles for use in a

NASA international program, the NASA

official issuing the blanket certificate

shall review the proposed articles and

approve their eligibility for duty-free

entry. A description of these articles

shall either be referred to in the blanket

certificate and provided in Form CF

7501 (Entry Summary) for procurements

or attached to the certificate for imports

to implement NASA international

programs, as appropriate.

§ 1217.105 Procedures.

(a) Requests for certification shall be

forwarded to an appropriate NASA

official or designee as provided for in

§ 1217.103 of this part.

(b) Each request for certification shall

be accompanied by:

(1) A proposed certificate as provided

for in § 1217.104 of this part;

(2) The information and

documentation required by 19 CFR

10.102(a), including invoice

documentation or a description of

covered articles; and

(3) The anticipated date of entry of

entry and port of entry for each article.

If the article is to be transported in bond

from the port of arrival to another port

of entry in the United States, identify

both ports.

(c) The signed certificate and its

attachment(s) will be forwarded to the

NASA Installation responsible for dutyfree entry of the materials, unless issued

at such Installation by an authorized

official in accordance with § 1217.103(c)

of this part. These documents shall be

presented to an appropriated Customs

official at the port(s) of entry. The

procedures specified in 19 CFR 10.102

will be followed by the NASA

Installation in obtaining duty-free entry

at the Customs port(s) of entry. The

NASA Installation should ensure that, at

the time the articles are to be released

after Customs entry, the custody of the

imported articles is transferred directly

from the carrier or from the U.S.

Customs Service to the NASA

Installation, its agent, or the launch

service customer in the case of a Launch

and Associated Services Agreement.

(d) If articles procured under contract

by NASA are imported prior to

compliance with these procedures and

it is essential that the articles be

released from Customs custody prior to

such compliance, the procedures

outlined in 19 CFR 10.101 may be

followed by cognizant NASA officials to

secure the release of the articles from

Customs custody. To the extent

applicable, the procedures in § 1217.105

of this part shall be followed when time

permits to obtain duty-free entry for the

articles released from Customs custody.

§ 1217.106 Articles brought into the United

States by NASA from space.

Pursuant to U.S. note 1 subchapter

VIII of chapter 98, HTSUS, articles

brought into the customs territory of the

United States by NASA from space shall

not be considered an importation, and

no certification or entry of such

materials through U.S. Customs shall be

required. This provision is applicable to

articles brought to the U.S. from space

whether or not the articles were

launched into space aboard a NASA

vehicle.

Daniel S. Goldin,

Administrator.

[FR Doc. 97–3415 Filed 2–11–97; 8:45 am]

BILLING CODE 7510–01–M

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 240

[Release No. 34–38246; File No. S7–30–95]

RIN 3235–AG66

Order Execution Obligations

AGENCY: Securities and Exchange

Commission.

ACTION: Revised compliance dates;

exemptive order.

SUMMARY: The Securities and Exchange

Commission is revising the compliance

dates and is providing exemptive relief

to responsible brokers and dealers,

electronic communications networks,

exchanges, and associations with

respect to certain Nasdaq securities to

be phased-in under Rule 11Ac1–4

(‘‘Limit Order Display Rule’’) and

amendments to Rule 11Ac1–1 (‘‘ECN

Amendment’’) (cumulatively ‘‘Order

Execution Rules’’).

DATES: Effective: February 5, 1997.

Compliance Dates: Compliance with the

Order Execution Rules shall continue to

be required with respect to exchangelisted securities and the 50 Nasdaq

securities that were phased-in on

January 20, 1997. The phase-in schedule

with respect to the next 100 Nasdaq

securities shall be as follows: (1) 50

Nasdaq securities shall be phased-in on

February 10, 1997; (2) an additional 50

Nasdaq securities shall be phased-in on

February 24, 1997.

Exemptive Relief: The Commission is

exempting responsible brokers and

dealers, electronic communications

networks, exchanges, and associations,

until April 14, 1997, from the

requirements of the Order Execution

Rules with respect to the Nasdaq

securities not phased-in under such

rules as of February 24, 1997.
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Rules and Regulations 6469

1See Securities Exchange Act Release Nos.

37619A (September 6, 1997) (‘‘Adopting Release’’),

37972 (November 22, 1996), 38110 (January 2,

1997), and 38139 (January 8, 1997). The

Commission notes that a broker-dealer’s duty of

best execution discussed in the Adopting Release

applies whether or not the security has been

phased-in under the Order Execution Rules.

2See letter from Bernard L. Madoff, Securities

Industry Association, to Richard R. Lindsey, dated

January 30, 1997, and letter from John N. Tognino,

Securities Traders Association, to Richard R.

Lindsey, dated January 31, 1997.

3The Commission also amended subsection

(a)(25)(ii) of the Quote Rule, thereby expanding the

coverage of the Quote Rule to all exchange-traded

securities. Thereafter, the Commission determined

that it was appropriate to make this aspect of the

amendments effective April 10, 1997. See Securities

Exchange Act Release No. 38110, supra note 1. The

present order does not change that date and,

therefore, the effective date of subsection (a)(25)(ii)

of the Quote Rule remains April 10, 1997.

4Currently, compliance with the Order Handling

Rules is required for 50 of the 1000 Nasdaq

securities with the highest average daily trading

volume. These 50 securities have been identified by

Nasdaq. Similarly, Nasdaq is to identify the next

two groups of 50 stocks to be phased-in under the

Order Handling Rules.

FOR FURTHER INFORMATION CONTACT:

Betsy Prout Lefler, Special Counsel, Gail

Marshall-Smith, Special Counsel, or

David Oestreicher, Special Counsel,

(202) 942–0158, Division of Market

Regulation, Securities and Exchange

Commission, 450 Fifth Street, NW., Mail

Stop 5–1, Washington, DC 20549.

SUPPLEMENTARY INFORMATION:

Background

On August 28, 1996, the Securities

and Exchange Commission

(‘‘Commission’’) adopted Rule 11Ac1–4,

the ‘‘Limit Order Display Rule,’’ and

amendments to Rule ‘‘Ac1–1, the ‘‘ECN

Amendment,’’ to require OTC market

makers and exchange specialists to

display certain customer limit orders,

and to publicly disseminate the best

prices that the OTC market maker or

exchange specialist has placed in

certain electronic communications

networks (‘‘ECNs’’), or to comply

indirectly with the ECN Amendment by

using an ECN that furnishes the best

market maker and specialist prices

therein to the public quotation system.

On January 20, 1997, the Order

Execution Rules became effective. As of

that date, compliance with the rules

became mandatory for all exchangetraded securities and 50 Nasdaq

securities. Compliance with the rules for

the remaining Nasdaq securities is to be

completed in accordance with a

schedule established by the

Commission.1 Under the previously

announced schedule, compliance with

the Order Handling Rules would have

been required with respect to another

100 Nasdaq securities on February 7,

1997, and another 850 Nasdaq securities

on February 28, 1997. In addition, on

March 28, 1997, compliance would have

been required with respect to all

remaining Nasdaq securities under the

ECN Rule, and with respect to another

1500 Nasdaq securities under the Limit

Order Display Rule. Thereafter,

compliance under the Limit Order

Display Rule was to be phased-in over

several months.

The Commission has been closely

monitoring the implementation of the

Order Execution Rules, and recently

received two letters from representatives

of numerous industry participants

(‘‘Industry Letters’’) requesting that the

Commission adopt a more conservative

schedule for implementing the Order

Execution Rules.2 Accordingly, the

Commission has determined that it is

appropriate to modify the schedule to

provide a more gradual phase-in to

allow market participants more time to

adapt to the Order Execution Rules.3

The new schedule is as follows: On

February 10, 1997, 50 Nasdaq securities,

and on February 24, 1997, an additional

50 Nasdaq securities, shall be phased-in

for compliance under the Order

Execution Rules.4 Furthermore, in

response to the Industry Letters, the

Commission is exempting responsible

brokers and dealers, electronic

communications networks, exchanges,

and associations, until April 14, 1997,

from the requirements of the ECN

Amendment with respect to all Nasdaq

securities not phased-in as of February

24, 1997, and from the requirements of

the Limit Order Display Rule with

respect to the 2350 Nasdaq securities

that will not be phased-in as of February

24, 1997. Under the prior schedule, all

Nasdaq securities would have been

phased-in by March 28, 1997 for

compliance with the requirements of the

ECN Amendment. Likewise, 850 of

these securities would have been

phased-in on February 28, and another

1500 on March 28, 1997, for compliance

with the Limit Order Display Rule.

The Commission believes it is

imperative to continue to phase-in

implementation of the Order Execution

Rules with respect to additional Nasdaq

securities. The Commission has granted

exemptive relief to monitor operation of

the rules carefully, and will develop a

further phase-in schedule for the

Nasdaq securities not phased-in as of

February 24, 1997.

The Commission finds that the

modifications of the compliance dates

described above, and the exemptive

relief provided herein to responsible

brokers and dealers, electronic

communications networks, exchanges,

and associations are consistent with the

public interest, the protection of

investors and the removal of

impediments to and perfection of the

mechanism of a national market system.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority, 17 CFR 200.30(a)(28), (61), and

(62).

Dated: February 5, 1997.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–3432 Filed 2–11–97; 8:45 am]

BILLING CODE 8010–01–M

17 CFR Part 240

[Release No. 34–38245; File No. S7–21–93]

RIN 3235–AF91

Reporting Requirements for Brokers or

Dealers Under the Securities Exchange

Act of 1934

AGENCY: Securities and Exchange

Commission.

ACTION: Final rule.

SUMMARY: The Securities and Exchange

Commission (‘‘Commission’’) is

amending its broker-dealer record

preservation rule to allow broker-dealers

to employ, under certain conditions,

electronic storage media to maintain

records required to be retained. The

amendments reflect a recognition of

technological developments that will

provide economic as well as time-saving

advantages for broker-dealers by

expanding the scope of recordkeeping

options while at the same time

continuing to require broker-dealers to

maintain records in a manner that

preserves their integrity. The

Commission is also issuing an

interpretation of its record preservation

rule relating to the treatment of

electronically generated

communications.

EFFECTIVE DATE: The amendments

become effective April 14, 1997.

FOR FURTHER INFORMATION CONTACT:

Michael A. Macchiaroli, Associate

Director (202/942–0132), Peter R.

Geraghty, Assistant Director (202/942–

0177) or Barbara A. Stettner, Staff

Attorney (202/942–0734), Division of

Market Regulation, Securities and

Exchange Commission, 450 Fifth Street,

NW., Mail Stop 5–1, Washington, DC

20549.

SUPPLEMENTARY INFORMATION

I. Introduction

On July 9, 1993, the Commission

issued a release (‘‘Proposing Release’’)

requesting comment on proposed

amendments to its broker-dealer record