1348 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Notices

1 15 U.S.C. § 78s(b)(1).

2 17 CFR 240.19b–4.

3See Letter from David T. Rusoff, Foley & Lardner

to David Sieradzki, SEC, dated December 11, 1996

(‘‘Amendment No. 1’’). Amendment No. 1 changes

the period of time for an Approved Lessor to lease

a seat on the exchange from ‘‘a reasonable time’’ to

within 60 days after becoming an Approved Lessor.

The Exchange will have the authority to extend the

60 day time period upon the request of an

Approved Lessor for good cause shown. In addition,

Article IA, Rule 1, Interpretation and Policy .01 is

amended to reduce the percentage ownership

required to be considered a control person from

10% to 5%. This is consistent with recent changes

to Article VI, Rule 2, where the 5% standard was

used.

4See Letter from David T. Rusoff, Foley & Lardner

to David Sieradzki, SEC, dated December 17, 1996

(‘‘Amendment No. 2’’). Amendment No. 2 adds

language describing the amendment to Article XIV,

Rule 2, relating to the imposition of transaction

fees.

5See Letter from David T. Rusoff, Foley & Lardner

to Katherine England, SEC, dated December 30,

1996 (‘‘Amendment No. 3’’). Amendment No. 3

changes language in Article I, Rule 10 relating to the

ability of the Exchange to waive the requirement

that no person own or have voting power for more

than ten percent of the outstanding memberships.

The former language, which provided that the

requirement may be waived by the Exchange

‘‘under appropriate circumstances,’’ has been

replaced by ‘‘for good cause shown.’’ In addition,

the Amendment makes several technical, nonsubstantive changes to the filing.

Act for entergy to issue or sell shares of

Stock for corporate purposes other than

as set forth herein would be the subject

to a separate filing or filings with the

Commission.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–444 Filed 1–8–97; 8:45 am]

BILLING CODE 8010–01–M

Sunshine Act Meetings

Notice is hereby given, pursuant to

the provisions of the Government in the

Sunshine Act, Pub. L. 94–409, that the

Securities and Exchange Commission

will hold the following meetings during

the week of January 13, 1997.

An open meeting will be held on

Monday, January 13, 1997, at 10:00 a.m.

A closed meeting will be held on

Thursday, January 16, 1997, at 2:30 p.m.

Commissioners, Counsel to the

Commissioners, the Secretary to the

Commission, and recording secretaries

will attend the closed meeting. Certain

staff members who have an interest in

the matters may also be present.

The General Counsel of the

Commission, or his designee, has

certified that, in his opinion, one or

more of the exemptions set forth in 5

U.S.C. 552b(c)(4), (8), (9)(A) and (10)

and 17 CFR 200.402(a)(4), (8), (9)(i) and

(10), permit consideration of the

scheduled matters at the closed meeting.

Commissioner Wallman, as duty

officer, voted to consider the items

listed for the closed meeting in a closed

session.

The subject matter of the open

meeting scheduled for Monday, January

13, 1997, at 10:00 a.m., will be:

Consideration of whether to issue a

release proposing rules and soliciting

comments to require the front of

prospectuses to be drafted in plain

English and amending current rules to

provide standards on the meaning of

clear, concise and understandable

disclosure in prospectuses. For further

information, contact Ann D. Wallace in

the Division of Corporation Finance at

(202) 942–2980, or Kathleen Clarke in

the Division of Investment Management

at (202) 942–0724.

The subject matter of the closed

meeting scheduled for Thursday,

January 16, 1997, at 2:30 p.m., will be:

Injunction and settlement of

injunctive actions.

Institution and settlement of

administrative proceedings of an

enforcement nature.

Opinion.

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 at (202) 942–7070.

Dated: January 7, 1997.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–621 Filed 1–7–97; 12:34 pm]

BILLING CODE 8010–01–M

[Release No. 34–38114; File No. SR–CHX–

96–30]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Stock Exchange,

Incorporated Relating to Standards for

Approved Lessors of Exchange

Memberships

January 3, 1997.

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

Securities Exchange Act of 1934

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

notice is hereby given that on November

12, 1996, the Chicago Stock Exchange,

Incorporated (‘‘CHX’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change. On December 11,

1996, the Exchange filed Amendment

No. 1 3 to the proposed rule change, on

December 17, 1996, the Exchange filed

Amendment No. 2 4 and on December

30, 1996, filed Amendment No. 3 5 to

the proposed rule change as described

in Items I and II 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 proposes to amend

Article I, Article VIII and Article XIV of,

and add a new Article IA to, the CHX’s

Rules, to create standards for Approved

Lessors (as defined below) of Exchange

memberships.

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 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

1. Purpose

The purpose of the proposed rule

change is to create a new form of

membership known as an ‘‘Approved

Lessor.’’ An Approved Lessor will be an

individual or entity that desires to

purchase a membership in the CHX for

the sole purpose of providing a

financing mechanism for another person

or entity that desires to become a

member or member organization

(‘‘lessee’’). A lessor that registers with

and is approved by the CHX will be an

Approved Lessor.

When an Approved Lessor has

entered into this financing relationship

(or lease) with a lessee, the Approved

Lessor will not be considered a

‘‘member’’ or ‘‘member organization’’ of

the CHX for purposes of the Act, or for

purposes of the CHX’s Certificate of

Incorporation, Constitution and Rules

except that an Approved Lessor will

have the right to vote on proposals to

liquidate or dissolve the Exchange and

shall possess liquidation rights, as set

forth in Article IX, Sec. 2 of the

Constitution, upon such dissolution. In

addition, an Approved Lessor shall be
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Notices 1349

6 15 U.S.C. § 78f(b).

7 15 U.S.C. § 78f(b)(5)

subject to the Exchange’s member

arbitration rules. Among other things,

this means that an Approved Lessor will

be inactive with respect to CHX

activities. For example, Approved

Lessors will not be permitted to vote

(except as stated above) or trade on the

CHX as a member or have any access to

the CHX trading floor unless an

Approved Lessor is also a ‘‘member’’

(i.e., is a registered broker-dealer and

has been approved by the Exchange as

as ‘‘member’’ or ‘‘member

organization’’) pursuant to another

membership.

A lessee will be deemed a ‘‘member’’

or ‘‘member organization,’’ and, as a

result, a lessee must satisfy all the

requirements to become a member or

member organization currently set forth

in CHX Certificate of Incorporation,

Constitution, Rules and the federal

securities laws. A lessee will not,

however, be entitled to vote on a

proposal to dissolve or liquidate the

Exchange and will not have any

liquidation rights.

Because Approved Lessors will not be

‘‘members’’ of the CHX, they will not be

required to be registered as brokerdealers. However, to prevent

inappropriate persons or entities from

having indirect dealings on the CHX,

Approved Lessors will be required to

submit information to the CHX on Form

BD and/or Form U–4. The CHX will be

permitted to disapprove registration as

an Approved Lessor if the lessor is the

subject of a statutory disqualification or

fails to meet other pre-requisites set

forth in the rule. For example, a lessor

may be denied registration as an

Approved Lessor if, among other things,

it or its employees or control persons

are subject of or a party to a disciplinary

proceeding, are or have been,

suspended, barred or expelled by a

regulatory entity (including a selfregulatory organization) described in the

rule, have been convicted of certain

criminal offenses set forth in the rule, or

have not paid dues, fines, charges or

other debts to a regulatory entity.

In addition, an Approved Lessor will

be required to enter into a financing

arrangement (or lease) with a lessee

within sixty days (this time period may

be extended upon request of an

Approved Lessor for good cause shown)

after becoming approved as an

Approved Lessor or the termination of

an earlier financing arrangement (or

lease). If a financial arrangement (or

lease) is not entered into, the Approved

Lessor will be required to promptly

dispose of the membership. If not

promptly disposed of, the CHX will be

permitted to sell the membership on the

Approved Lessor’s behalf. This

provision will prevent Approved

Lessors from acquiring one or more

memberships purely to speculate on the

price of the membership and will ensure

that memberships do not sit idle.

Until the Approved Lessor enters into

a financing arrangement (or lease) with

a lessee, or, after such financing

arrangement (or lease) has been

terminated and the seat transferred to

Approved Lessor, the Approved Lessor

will still not be a ‘‘member’’ for

purposes of the federal securities laws

or the Exchange’s Certificate of

Incorporation, Constitution and Rules

(except with respect to voting on

dissolution, rights to net proceeds on

dissolution, and the Exchange’s member

arbitration rules). During this time, the

membership shall be viewed as inactive,

but the dues shall continue to accrue

and will be the obligation of the

Approved Lessor.

Current CHX rules protect the CHX

and other CHX members by providing

that the proceeds received in the

transfer of a membership are first to be

applied to satisfy the debts owed by the

transferor member to the Exchange or

certain other persons. However, because

Approved Lessors are not ‘‘members’’ of

the Exchange, the Exchange will require

Approved Lessors, and their lessees, to

enter into a standard subordination and

sale agreement with the CHX that

provides that the CHX is authorized to

sell the membership under certain

circumstances when obligations are

owed to the CHX or certain other

creditors by the lessee and whereby the

Approved Lessor agrees to be bound by

CHX rules relating to Approved Lessors,

among other things.

The proposed rule change also makes

technical, nonsubstantive changes to

improve the clarity of Article I, Rule 17.

The proposed rule change sets forth

specific provisions that the CHX will

require in any financing agreement or

lease. The CHX will require that these

agreements be filed with, and approved

by, the CHX. Additionally, the transfer

of the title to the membership to a lessee

will be posted in the same manner as all

other transfers of memberships.

Furthermore, the proposed rule

change prohibits members and

Approved Lessors from owning or

controlling 10% or more of the

outstanding memberships on the

Exchange.

Finally, the proposed rule change

amends Article XIV, Rule 2, relating to

the imposition of transaction fees to

reflect present practice. The rule

currently provides that the rate of these

fees shall be fixed before the close of

each fiscal year. The proposed rule

provides that they are fixed from time

to time.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b) of the Act 6 in general and

furthers the objectives of Section

6(b)(5) 7 in particular in that it is

designed to promote just and equitable

principles of trade, to remove

impediments to and perfect the

mechanism of a free and open market

and a national market system and, in

general, to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange 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 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 the 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
1350 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Notices

8 17 C.F.R. 200.30–3(a)(12).

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

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

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to File No.

SR–CXH–96–30 and should be

submitted by January 30, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority. 8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–443 Filed 1–8–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38112; File No. SR–NASD–

96–53]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc., Relating to Fees for

Registering and Termination the

Registration of Registered Individuals

January 3, 1997.

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

Securities Exchange Act of 1934

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

December 19, 1996, NASD Regulation

Inc. (‘‘NASD Regulation’’) filed with the

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 self-regulatory

organization. NASD Regulation has

designated this proposal as one

constituting a rule through which the

Association imposes dues, fees and

other charges under § 19(b)(3)(A)(ii) of

the Act, which renders the rule effective

upon the Commission’s receipt of this

filing. 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

NASD Regulation is proposing to

amend Section 2 of Schedule A to the

By-Laws of the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), to eliminate the

scheduled fee rollbacks and to retain the

current fee level for registration and

termination of registration of

individuals indefinitely. Below is the

text of the proposed rule change.

Proposed new language is in italics;

proposed deletions are in brackets.

Schedule A

Assessments and fees pursuant to the

provisions of Article VI of the By-Laws

of the Corporation, shall be determined

on the following basis.

Fees

Sec. 2.

(b) Each member shall be assessed a

fee of $85.00 for each application filed

with the Association for registration of

a registered representative or registered

principal [from August 1, 1995 through

December 31, 1996. Such fee shall be

$70.00 from January 1, 1997 through

December 31, 1997 and shall be $65.00

thereafter]. Additionally, each member

shall be assessed a surcharge of $95.00

for registrations involving a special

registration review filed with the

Association [from August 1, 1995

through December 31, 1997 and shall be

$85.00 thereafter]. The following shall

apply to the filing of applications to

register or transfer the registration of

registered persons or registered

principals in connection with

acquisition of all or a part of a member’s

business by another member:

Number of registered personnel

transferred

Discount in

percent

1,000–1,999 .............................. 10

2,000–2,999 .............................. 20

3,000–3,999 .............................. 30

4,000–4,999 .............................. 40

5,000 and over .......................... 50

(h) (i) Each member shall be assessed

a fee of $40.00 for each notice of

termination of a registered

representative or registered principal

filed with the Corporation as required

by Section 3 of Article IV of the ByLaws [from August 1, 1995 through

December 31, 1996. Such fee shall be

$35.00 from January 1, 1997 through

December 31, 1997 and shall be $25.00

thereafter].

(ii) A late filing fee of $65.00 shall be

assessed a member who fails to file with

the Corporation written notice of

termination of a registered

representative or registered principal

within thirty (30) calendar days of such

termination [from August 1, 1995

through December 31, 1996. Such fee

shall be $60.00 from January 1, 1997

through December 31, 1997 and shall be

$50.00 thereafter].

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 IV below.

The self-regulatory organization has

prepared summaries, set forth in Section

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

NASD Regulation has a major systems

development project underway to

completely redesign the Central

Registration Depository (‘‘CRD’’). The

CRD is a computerized system for onestop registration and licensing of NASD

members and their associated persons.

The system was developed in 1981 to

standardize and streamline the

registration process by accommodating a

single filing and payment of fees for

registration in multiple jurisdictions.

Today the system processes filing on

behalf of 50 states, the District of

Columbia and Puerto Rico, seven (7)

self-regulatory organizations and the

Commission.

The redesigned CRD, scheduled for a

staged implementation in 1996 and

1997, will feature electronic filings, reengineered work processes, expedited

relicensing and a highly structured,

relational database to better serve the

information requirements of regulators,

members and investors. In addition, the

new system will include investment

adviser registration for the SEC and

states, an E-mail communication

capability for system participants and a

document imaging/storage/retrieval

service for support documents required

in certain filing situations.

NASD Regulation had originally

intended to fund the CRD redesign effort

from the current registration filing fees

based on expected activity levels in the

1995-1997 period. In 1995 registration

activity declined significantly, and the

resulting lower revenue levels are now

expected to continue through 1997. As

a result, in 1995 the NASD adopted a

temporary fee increase in order to

continue the investment in this