Federal Register / Vol. 62, No. 33 / Wednesday, February 19, 1997 / Notices 7483

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

2The Exchange seeks accelerated approval of the

proposed rule change in order to allow the pilot

program, which expires on February 10, 1997, to

continue with interruption.

3Securities Exchange Act Release No. 38024 (Dec.

6, 1996), 61 FR 65623 (approving File No. SR–

Amex–96–47).

4Securities Exchange Act Release No. 26445 (Jan.

10, 1989), 54 FR 2248 (approving File No. SR–

Amex–88–23).

5Securities Exchange Act Release No. 38024 (Dec.

6, 1996), 61 FR 65623 (approving File No. SR–

Amex–96–47). Prior to that release, the Commission

had extended this pilot program thirteen times. See

Securities Exchange Act Release Nos. 37462 (July

19, 1996), 61 FR 39170 (approving File No. SR–

Amex–96–25); 36821 (Feb. 8, 1996), 61 FR 6050

(approving File No. SR–Amex–96–06); 35344 (Feb.

8, 1995), 60 FR 8430 (approving File No. SR–Amex–

95–03); 34949 (Nov. 8, 1994), 59 FR 58863

(approving File No. SR–Amex–94–47); 34496 (Aug.

Continued

designed to provide that the

requirements of the application will be

met. In addition, the Board will evaluate

each Joint Account arrangement

annually and will authorize continued

participation in such Joint Account only

if it determines that there is a reasonable

likelihood that such continued

participation will benefit each Series

and its shareholders.

9. Each Series’ investment in a Joint

Account will be documented daily on

the books of the Series and the books of

the Custodian.

10. Short-Term Investments held in a

Joint Account generally will not be sold

prior to maturity unless: (a) The Adviser

believes that the investment no longer

presents minimal credit risks; (b) the

investment no longer satisfies the

investment criteria of the Series because

of a credit downgrading or otherwise; or

(c) in the case of a repurchase

agreement, the counterparty defaults.

The Adviser may, however, sell any

Short-Term Investment (or any

fractional portion thereof) on behalf of

some or all Series prior to maturity of

the investment if the cost of such

transactions will be borne soley by the

selling Series, and the transaction will

not adversely affect the other Series.

Each Series will be deemed to have

consented to such sale and partition of

the investments in the Joint Account.

11. Short-Term Investments held

through a Joint Account with a

remaining maturity of more than seven

days will be considered illiquid and

subject to the restriction that the Series

may not invest more than 15% (or such

other percentage as set forth by the SEC

from time to time) of its assets in

illiquid securities, if the Series cannot

sell its fractional interest in the

investment in such Joint Account

pursuant to the requirements described

in the preceding condition.

12. All joint repurchase transactions

will be effected in accordance with

Investment Company Act Release No.

13005 (February 2, 1983) and with other

existing and future positions taken by

the SEC or its staff by rule, interpretive

release, no-action letter, any release

adopting any new rule, or any release

adopting any amendments to any

existing rule.

13. Any investment made through a

Joint Account will satisfy the

investment policies or criteria of all

Series participating in that investment.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4047 Filed 2–18–97; 8:45 am]

BILLING CODE 8010–01–M

Sunshine Act; Meeting

‘‘FEDERAL REGISTER’’ CITATION OF

PREVIOUS ANNOUNCEMENT: [62 FR 6288,

February 11, 1997].

STATUS: Closed Meeting.

PLACE: 450 Fifth Street, N.W.,

Washington, D.C.

DATE PREVIOUSLY ANNOUNCED: February

11, 1997.

CHANGE IN THE MEETING: Deletion/

Rescheduling.

The following item, scheduled for

consideration on Friday, February 14,

1997, has been rescheduled for

consideration on Tuesday, February 18,

1997, following the open meeting, at

10:00 a.m.:

Regulatory matter bearing

enforcement implications.

Commissioner Wallman, as duty

officer, determined that Commission

business required the above change and

that no earlier notice thereof was

possible.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postponed, please contact: The Office

of the Secretary (202) 942–7070.

Dated: February 14, 1997.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–4242 Filed 2–14–97; 3:46 pm]

BILLING CODE 8010–01–M

[Release No. 34–38266; File No. SR–Amex–

97–08]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the American Stock

Exchange, Inc. Relating to a Pilot

Program for Execution of Odd-Lot

Orders

February 11, 1997.

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

Securities Exchange Act of 1934

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

February 10, 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 and II below, which Items have

been prepared by the self-regulatory

organization. The Commission

publishing this notice to solicit

comments on the proposed rule change

from interested persons and to grant

accelerated approval to the proposed

rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to extend for

three months its existing pilot program

under Amex Rule 205 requiring

execution of odd-lot market orders at

the prevailing Amex quote with no

differential charge.2

The text of the proposed rule change

is available for 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 III 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 Commission previously

approved, on a pilot basis extending to

February 10, 1997, amendments to

Amex Rule 205 to require execution of

odd-lot market orders at the Amex quote

with no odd-lot differential charged.3

The procedures were not initially

approved by the Commission in 19894

and were most recently extended in

December 1996.5
7484 Federal Register / Vol. 62, No. 33 / Wednesday, February 19, 1997 / Notices

8, 1994), 59 FR 41807 (approving File No. SR–

Amex–94–28); 33584 (Feb. 7, 1994), 59 FR 6983

(Approving File No. SR–Amex–93–45); 32726 (Aug.

9, 1993), 58 FR 43394 (approving File No. SR–

Amex–93–24); 31828 (Feb. 5, 1993), 59 FR 8434

(approving File No. SR–Amex–93–06); 30305 (Jan.

20, 1992), 57 FR 4653 (approving File No. SR–

Amex–92–04); 29922 (Nov. 8, 1991), 56 FR 58409

(approving File No. SR–Amex–91–30); 29186 (May

19, 1991), 56 FR 22488 (approving File No. SR–

Amex–91–09); 28758 (Jan. 10, 1991), 56 FR 1656

(approving File No. SR–Amex–90–39; and 27590

(Jan. 5, 1990), 55 FR 1123 (approving File No. SR–

Amex–89–31).

6See Securities Exchange Act Release No. 35344

(Feb. 8, 1995), 60 FR 8430 (approving File No. SR–

Amex–95–03).

7See Securities Exchange Act Release No. 36181

(Sept. 1, 1995), 60 FR 47194 (approving File No.

SR–Amex–95–24).

8In order to protect against the inclusion of

incorrect or stale quotations when determining the

highest bid and lowest offer, Amex Rule 205,

Commentary .04, contains seven criteria that must

be met before a quotation in a stock from another

ITS market center will be considered. If the ITS

quotation fails to meet one of the specified criteria,

the best bid or offer disseminated by the Exchange

will be used. See Securities Exchange Act Release

No. 36181 (Sept. 1, 1995), 60 FR 47194 (approving

File No. SR–Amex–95–24).

9 15 U.S.C. 78f(b).

10 15 U.S.C. 78f(b)(5).

11 15 U.S.C. 78k–1(a)(1).

12 15 U.S.C. 78f(b)(5) and 78K–1(a)(1).

13Prior to the 1989 pilot program, odd-lot market

orders were routed to a specialist and held in

accumulation in the PER system or by the specialist

until a round-lot execution in that security took

place on the Exchange. Subsequent to the round-lot

execution, the odd-lot order received the same price

as the last Exchange round-lot transaction, plus or

minus an odd-lot dealer differential. See Securities

Exchange Act Release No. 26445 (Jan. 10, 1989), 54

FR 2248 (approving File No. SR–Amex–88–23).

14See Securities Exchange Act Release No. 35344

(Feb. 8, 1995), 60 FR 8430 (noting that the

Exchange’s current pricing formula does not

include quotations from other markets).

15As noted above, the new procedures provide

for odd-lot market orders to be filled at the

‘‘adjusted ITS best bid or offer.’’

In approving prior extensions to the

Exchange’s odd-lot pilot program, the

Commission has expressed interest in

the feasibility of the Exchange utilizing

the Intermarket Trading System (‘‘ITS’’)

best bid or offer, rather than the Amex

bid or offer, for purposes of the

Exchange’s odd-lot pricing system. In

File No. SR–Amex–95-03, requesting a

further extension of the pilot program,

the Exchange stated that it had

determined to proceed with systems

modifications to provide for execution

of odd-lot market orders at the ITS best

bid or offer.6

The Commission has approved

amendments to Amex Rule 205 to

accommodate the prospective

modifications to the Exchange’s odd-lot

pricing system.7 Specifically, amended

Amex Rule 205 would provide that oddlot market orders to buy or sell would

be filled at the ‘‘adjusted ITS offer’’ or

‘‘adjusted ITS bid,’’ respectively, which

would be defined in Amex Rule 205,

Commentary .04, as the lowest offer and

highest bid disseminated by the Amex

or by another ITS participant market.8

Where quotation information is not

available (e.g., when quotation

collection of dissemination facilities are

inoperable) odd-lot market orders would

be executed at the prevailing Amex bid

or offer, or at a price deemed

appropriate under prevailing market

conditions. These procedures also will

apply to odd-lot limit orders that were

immediately executable based on the

Amex quote at the time the order is

received at the trading post or through

Post Execution Reporting (‘‘PER’’)

system.

As the Exchange noted in SR–Amex–

95–24, it will implement these

amendments upon completion of the

necessary systems enhancements by the

Exchange and the Securities Information

Automation Corporation (‘‘SIAC’’).

Upon implementation of the amended

rule, the Exchange will notify the

Commission, as well as Exchange

members and member organizations. In

order to provide the additional time

necessary to implement these systems

enhancements, the Exchange proposes

to extend the existing pilot program

procedures under Amex Rule 205 for

three months.

2. Statutory Basis

The Exchange believes the proposed

rule change is consistent with Section

6(b) 9 of the Act in general and furthers

the objectives of Section 6(b)(5) 10 and

Section 11A(a)(1) 11 in particular in that

it is designed to facilitate the

economically efficient execution of oddlot transactions and to improve the

execution of customers’ orders.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes 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

The Exchange has neither solicited

nor received written comments with

respect to the proposed rule change.

III. 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 at

the Commission’s Public Reference

Section, 450 Fifth Street NW.,

Washington, DC 20549. Also, copies of

such filing will be available for

inspection and copying at the principal

office of the Amex. All submissions

should refer to File No. SR–Amex–97–

08 and should be submitted by March

12, 1997.

IV. Commission’s Findings and Order

Granting Accelerated Approval of the

Proposed Rule Change

The Commission finds that the

Exchange’s proposal to extend its pilot

program concerning the execution of

odd-lot orders through May 12, 1997, is

consistent with the requirements of the

Act and the rules and regulations

thereunder applicable to a national

securities exchange. Specifically, the

Commission believes the proposal is

consistent with Section 6(b)(5) and

Section 11A(a)(1) of the Act 12 because

the Exchange’s proposed pricing

procedures are designed to facilitate

transactions in odd-lot orders, to help

ensure the economically efficient

execution of these transactions, and, in

general, to protect investors and the

public interest. The Commission further

believes the revised procedures should

provide investors with more timely

executions of their odd-lot orders and

should produce execution prices that

more accurately reflect market

conditions than would otherwise be the

case under the pre-pilot pricing

procedures.13

Nevertheless, the Commission is

concerned that the Exchange has been

unable to implement the new odd-lot

pricing procedures as planned. Under

the current pilot pricing procedures,

which only use the Amex quote in

establishing the execution price, some

odd-lot orders may not be receiving the

best available price.14 Therefore, the

Commission expects the Exchange to

complete the systems modifications

upon which implementation of the new

odd-lot pricing procedures depend

before the May 12, 1997 deadline.15 To

ensure that the Commission is

adequately informed of the Exchange’s
Federal Register / Vol. 62, No. 33 / Wednesday, February 19, 1997 / Notices 7485

16The Commission expects the Amex to

implement the new odd-lot pricing procedures no

later than the May 12, 1997 expiration of this pilot

extension.

17See Securities Exchange Act Release No. 35344

(Feb. 8, 1995), 60 FR 8430; Securities Exchange Act

Release No. 36821 (Feb. 8, 1996), 61 FR 6050;

Securities Exchange Act Release No. 37462 (July 19,

1996), 61 FR 39170; and Securities Exchange Act

Release No. 38024 (Dec. 6, 1996), 61 FR 65623

(approving File No. SR–Amex–96–47).

18 15 U.S.C. 78s(b)(2).

19 17 C.F.R. 200.30–3(a)(12).

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

2See Securities Exchange Act Release No. 27967

(May 1, 1990), 55 FR 19131 (May 8, 1990)

(approving File No. SR–NYSE–89–22, Series 17);

Securities Exchange Act Release No. 36629,

International Series Release No. 909 (Dec. 21, 1995),

60 FR 67385, corrected, Securities Exchange Act

Release No. 36629A, International Series Release

No. 909A (Jan. 4, 1996), 61 FR 744 (Jan. 10, 1996)

(approving File No. SR–NYSE–95–29, Series 37 and

Series 38); Securities Exchange Act Release No.

36708, International Series Release No. 915 (Jan. 11,

1996), 61 FR 1808 (Jan. 23, 1996) (approving File

No. SR–NYSE–95–36, Series 47).

3See Securities Exchange Act Release No. 27967

(May 1, 1990), 55 FR 19131 (May 8, 1990)

(approving File No. SR–NYSE–89–22, Series 17);

Securities Exchange Act Release No. 36629,

International Series Release No. 909 (Dec. 21, 1995),

60 FR 67385, corrected, Securities Exchange Act

Release No. 36629A, International Series Release

No.909A (Jan 4, 1996), 61 FR 744 (Jan. 10, 1996)

(approving File No. SR–NYSE–95–29, Series 37 and

Series 38); Securities Exchange Act Release No.

36708, International Series Release No. 915 (Jan. 11,

1996), 61 FR 1808 (Jan 23, 1996) (approving File

No. SR–NYSE–95–36, Series 47); see also Securities

Exchange Act Release No. 36825 (Feb. 9, 1996), 61

FR 6052 (approving File No. SR–NASD–96–04,

Series 37 and 38); Securities Exchange Act Release

No. 37112 (April 12, 1996), 61 FR 17339 (approving

File No. SR–NASD–96–13).

progress towards such completion, the

Commission again requests that the

Exchange provide the Commission with

a status report regarding this project on

the first day of every month until the

necessary system modifications are

completed. Finally, upon completion of

the systems modifications, the Exchange

should give advance notice to the

Commission of the date when the new

odd-lot pricing procedures are to be

implemented.16

The Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice thereof in the

Federal Register. This will permit the

pilot program to continue on an

uninterrupted basis while the Amex

works to implement the new

procedures. In addition, the procedures

the Exchange proposes to continue

using are identical to the procedures

that were published previously in the

Federal Register for the full comment

period and were approved by the

Commission.17

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,18 that the

proposed rule change (SR–Amex–97–

08) is approved on a pilot basis for a

three-month period ending on May 12,

1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.19

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4051 Filed 2–18–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38274; International Series

Release No. 1051; File No. SR–CBOE–97–

04]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated Relating to Adoption of

Foreign Examination Modules

February 12, 1997.

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

Securities Exchange Act of 1934

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

January 24, 1997, the Chicago Board

Options Exchange, Incorporated (‘‘CBOE

or Exchange’’) filed with 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 CBOE. The

CBOE has designated this proposal as a

noncontroversial rule change pursuant

to Section 19(b)(3)(A) of the Act and

subparagraph (e)(6) of Rule 19b–4. 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 CBOE proposes to adopt certain

foreign examination modules for the

United Kingdom (‘‘U.K.’’), Canada and

Japan, which would reduce duplicative

qualification standards. The exams were

developed by the New York Stock

Exchange (‘‘NYSE’’) and currently are in

use by the NYSE and National

Association of Securities Dealers

(‘‘NASD’’). Exchange Rule 9.3 has

certain requirements for registered

representatives, one of which is passing

various tests. The Exchange previously

has recognized the requirement that all

registered representative pass the Series

7 examination. The CBOE now is

expanding the types of exams that may

satisfy the Series 7 requirement.

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

CBOE 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 CBOE 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

The purpose of the proposed rule

change is to adopt foreign examination

modules for the U.K., Canada and Japan.

Exchange Rule 9.3 has certain

requirements for registered

representatives, one of which is passing

various tests. The Exchange previously

has recognized the requirement that all

registered representatives pass the

Series 7 examination. The CBOE now is

expanding the types of exams that may

satisfy the Series 7 requirement.

These foreign examination modules

allow persons in good standing with the

securities regulators of their respective

countries to qualify as general securities

registered representatives (Series 7

registrants) by successfully completing

certain modified general securities

representative examinations which have

been developed by the NYSE.2

The purpose of the proposal is to

reduce duplicative qualification

standards that foreign registered

representatives from the U.K., Canada

and Japan encounter to qualify as a U.S.

general securities registered

representative, the equivalent of the

Series 7 registration. A person who

qualifies through one of these

examinations may perform all of the

functions permitted of a person who

holds a Series 7 registration, with the

exception of selling municipal

securities. The examination modules for

the U.K. (Series 17), Canada (Series 37/

38) and Japan (Series 47) currently are

in use by the NYSE and NASD.3 At the

present time, the CBOE has no rule

which allows CBOE registration of a

person who has passed the Series 17,

Series 37/38 or series 47 versions of the

modified general securities

representative examinations.

The CBOE wishes to give U.K.,

Canadian, and Japanese registered

representatives the same advantage they

have at the NYSE and NASD by

eliminating duplicative examinations.

the CBOE believes that these

examinations will benefit both the

Exchange and the foreign representative

affected by the proposal.

The Series 17 version, the Limited

Registered Representative Examination,