8070 Federal Register / Vol. 62, No. 35 / Friday, February 21, 1997 / Notices

5A copy of the Amendment is attached to NSCC’s

filing. A copy of the filing is available for copying

and inspection in the Commission’s Public

Reference Room or through NSCC.

6 15 U.S.C. 78q–1(b)(3)(F).

7 17 CFR 200.30–3(a)(12).

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

2For a complete description of these

modifications to the standards for letters of credit,

refer to Securities Exchange Act Release No. 29641

(August 30, 1991), 56 FR 46027 [File No. SR–OCC–

91–13] (order temporarily approving proposed rule

change through February 28, 1992).

3The Commission has modified the text of the

summaries prepared by OCC.

4Securities Exchange Act Release Nos. 29641

(August 30, 1991), 56 FR 46027 [File No. SR–OCC–

91–13] (order temporarily approving proposed rule

change through February 28, 1992); 30424

(February 28, 1992), 57 FR 8106 [File No. SR–OCC–

92–06] (order temporarily approving proposed rule

change through May 31, 1992); 30763 (June 1,

1992), 57 FR 24284 [File No. SR–OCC–92–11]

(order temporarily approving proposed rule change

through August 31, 1992); 31126 (September 1,

1992), 57 FR 40925 [File No. SR–OCC–92–19]

(order temporarily approving proposed rule change

through December 31, 1992); 31614 (December 17,

1992), 57 FR 61142 [File No. SR–OCC–92–37]

(order temporarily approving proposed rule change

through June 30, 1993); 32532 (June 28, 1993), 58

FR 36232 [File No. SR–OCC–93–14] (order

temporarily approving proposed rule change

through June 30, 1994); 34206 (June 13, 1994), 59

FR 31661 [File No. SR–OCC–94–06] (order

temporarily approving proposed rule change

through June 30, 1995); 36138 (August 23, 1995), 60

FR 44926 [File No. SR–OCC–95–9] (order

temporarily approving proposed rule change

through June 28, 1996); and 37618 (August 29,

1996), 61 FR 46889 [File No. SR–OCC–96–07]

(order temporarily approving proposed rule change

through June 30, 1997).

contained in the SCG data base but will

also provide members with enhanced

features and capabilities. For example,

the SCG data base contains aggregate

information on clearing fund and

margin deposits including excess and

deficit amounts whereas the CMS

contains both aggregate information on

clearing fund and margin deposits

including excess and deficit amounts as

well as detailed information on the

underlying collateral comprising

clearing fund and margin deposits (i.e.,

cash, securities, and letters of credit).

The SCG members recognize that

termination of the SCG data base is

desirable at this point to avoid

redundancies with the CMS.

Second, termination of the SCG data

base will eliminate the occurrence of a

significant increase in costs that would

be required to maintain the SCG data

base because the data base on which it

is built is no longer supported by the

original vendor. As a result, SCG

members would be required to enter

into a new and more costly contract

with a new vendor. Third, because the

CMS contains more detailed

information and more features than the

SCG data base, use of the CMS in place

of the SCG data base should enable the

SCG members to better coordinate and

share information and to monitor

clearing fund and margin deposits with

respect to common participants.

Accordingly, the SCG members have

executed Amendment No. 6 to the SCG

Agreement.5 The Amendment: (i)

authorizes the termination of the SCG

data base, (ii) authorizes NSCC to use all

data information, computer coding, and

programs contained in the SCG data

base in establishing and maintaining the

operation of CMS, and (iii) grants to

each SCG Member a nonexclusive and

nontransferable license to use NSCC’s

CMS.

II. Discussion

Section 17A(b)(3)(F) provides that the

rules of a clearing agency must be

designed to assure the safeguarding of

securities and funds in the custody or

control of the clearing agency or for

which it is responsible and to foster

cooperation and coordination with

persons engaged in the clearance and

settlement of securities transactions.6

The Commission believes that the

proposed rule change is consistent with

the Act because the amendment to the

SCG Agreement provides for each SCG

member to have access to the CMS, and

the Commission believes the CMS and

the data contained in it should assist

SCG members in assuring the

safeguarding of securities and funds in

their custody or control. The

Commission also believes the

termination of the SCG data base in

conjunction with NSCC’s grant to each

SCG member of a nonexclusive and

nontransferable license to use the CMS,

should foster cooperation and

coordination with persons engaged in

the clearance and settlement of

securities transactions.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposed

rule change is consistent with the

requirements of the Act and in

particular Section 17A of the Act and

the rules and regulations thereunder.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

NSCC–96–19) be, and hereby is,

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4235 Filed 2–20–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38284; File No. SR–OCC–

96–15)

Self-Regulatory Organizations; The

Options Clearing Corporation; Notice

of Filing of a Proposed Rule Change

Relating to Revisions to the Standards

for Letters of Credit Deposited as

Margin

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

Securities Exchange Act of 1934

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

November 4, 1996, The Options

Clearing Corporation (‘‘OCC’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

OCC–96–15) as described in Items I, II,

and III below, which items have been

prepared primarily by OCC. 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 purpose of the proposed rule

change is to request the Commission’s

permanent approval for OCC’s

modifications to its standards for letters

of credit deposited with OCC as a form

of margin.2

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

OCC 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. OCC has prepared

summaries, set forth in sections A, B,

and C below, of the most significant

aspects of such statements.3

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Purposed Rule

Change

In previous filings, OCC has proposed

and the Commission has approved on a

temporary basis OCC’s modifications to

its rules governing letters of credit

deposited with OCC as a form of

margin.4 This filing proposes to make

permanent the Commission’s temporary

approval of OCC’s modifications to its

Rule 604, which sets forth the standards

for letters of credit deposited with OCC

as a form of margin.

The modifications for which OCC has

temporary approval are as follows. First,

in order to conform to the Uniform

Commercial Code and to avoid any
Federal Register / Vol. 62, No. 35 / Friday, February 21, 1997 / Notices 8071

5 15 U.S.C. 78q–1.

6 17 CFR 200.30–3(1)(12).

1 15 U.S.C. § 78s(b).

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 34–38127

(January 14, 1997). 4 15 U.S.C. § 78(b).

ambiguity as to the latest time for

honoring demands upon letters of

credit, letters of credit must state

expressly that payment must be made

prior to the close of business on the

third banking day following demand.

Second, letters of credit must be

irrevocable. Third, letters of credit must

expire on a quarterly basis. Fourth, OCC

included language in its Rule 604 to

make explicit OCC’s authority to draw

upon letters of credit at any time,

whether or not the clearing member that

deposited the letter of credit has been

suspended or is in default, if OCC

determines that such draws are

advisable to protect OCC, other clearing

members, or the general public.

According to OCC, since its original

filing, OCC has received no adverse

comments or complaints from any of its

clearing members, the banks, or other

interested parties with respect to the

modifications to Rule 604 or the

implementation of the revised letter of

credit standards. As a result, OCC now

requests that the Commission

permanently approve its revisions.

OCC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act 5

because the proposed rule change

promotes the protection of investors by

enhancing OCC’s ability to safeguard the

securities and funds in its possession or

subject to its control.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

OCC does not believe that the

proposed rule change would impose any

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Comments were not and are not

intended to be solicited by OCC with

respect to the proposed rule change, and

none were received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five 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

ninety 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 OCC 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, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of OCC. All submissions should

refer to the file number SR–OCC–96–15

and should be submitted by March 14,

1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4234 Filed 2–20–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38279; File No. SR–PSE–

96–48]

Self-Regulatory Organizations; Pacific

Stock Exchange, Inc.; Order Granting

Approval to Proposed Rule Change

Relating to A.M.-Settlement

February 12, 1997.

On December 18, 1996, the Pacific

Stock Exchange, Inc. (‘‘PSE’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission

(‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change to

codify certain existing procedures

relating to a.m.-settled index options.

Notice of the proposed rule change

was published for comment in the

Federal Register on January 14, 1997.3

No comments were received on the

proposal. This order approves the

proposal.

I. Description

The Exchange proposes to adopt new

Rule 7.8(e), entitled ‘‘A.M.-Settled Index

Options.’’ This rule provides that the

last day of trading for A.M.-settled index

option shall be the business day

preceding the last day of trading in the

underlying securities prior to

expiration. It states that the current

index value at the expiration of an A.M.-

settled option shall be determined on

the last day of trading in the underlying

securities prior to expiration. It further

provides that the current index value

shall be determined by reference to the

reported level of such index is derived

from first reported sale (opening) prices

of the underlying securities on such

day. In addition, in any case where the

security does not open for trading on

that day, the last reported sale price of

such security shall be used unless the

exercise settlement amount is fixed in

accordance with the Rules and By-Laws

of The Options Clearing Corporation.

Subsection (1)(B) of the proposed rule

further states that in any case where an

exercise settlement amount is fixed for

any series of index options pursuant to

the Rules and By-Laws of The Options

Clearing Corporation, the amount so

fixed shall be the amount required to be

paid upon exercise of options of that

series notwithstanding any difference

between the current index value used by

The Options Clearing Corporation in

fixing that amount and the index value

determined pursuant to Exchange Rules

or practices.

The rule change further states that the

following A.M.-settled index options are

approved for trading on the Exchange:

the PSE Technology Index; the Wilshire

Small Cap Index, and the Dow Jones &

Co. Taiwan Index.

II. Discussion

After careful review, the Commission

finds that the proposed rule change is

consistent with the requirements of the

Act and the rules and regulations

thereunder applicable to a national

securities exchange, and, in particular,

with the requirements of Section 6(b).4

Specifically, the proposal clarifies

procedures for determining the current

index value of A.M.-settled index

options by conforming PSE’s rules and

practices regarding these products to the

current rules and practices of The