Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Notices 75327

8 17 CFR 200.30–3(a)(12).

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

2The Commission has modified the text of the

summaries prepared by EMCC.

3EMCC’s Rules define an IDB as ‘‘a broker-dealer

that conducts securities trading which matches

buyers and sellers who are banks or dealers, and

who is designated as such by the Corporation.’’

4See, e.g., Government Securities Clearing

Corporation Rule 4, Section 2(c).

5October, 1997 (Asia), August, 1998 (Russia), and

January, 1999 (Brazilian).

The Commission finds good cause for

approving Amendment Nos. 1 and 2 to

the proposal prior to the thirtieth day

after the date of publication of notice of

filing thereof in the Federal Register.

Amendment No. 1 merely elaborates on

the rationale for the proposal.

Amendment No. 2 makes clear that the

proposed rule change will apply to

narrow-based index warrants as well as

broad-based index warrants. Although

the descriptive section of the original

filing referred to broad-based index

warrants, the actual text of the proposed

rule change in that filing made no

distinction between the two. The

purpose of the proposal as it relates to

broad-based index warrants relates

equally to narrow-based index warrants:

to enable the CBOE to compete with the

overseas and OTC derivative markets in

the trading of these instruments. The

Commission’s belief that elimination of

the 400 public holder requirement

would not significantly impact investors

also applies equally to narrow-based

index warrants. Acceleration of the

amendment will allow the Exchange to

implement the proposed rule change to

all stock index warrants at once.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment No.

1 and 2, including whether Amendment

Nos. 1 and 2 are consistent with the Act.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. 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

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the CBOE. All

submissions should refer to File No.

SR–CBOE–99–14 and should be

submitted by December 22, 2000.

V. Conclusion

For the reasons discussed above, the

Commission finds that the proposal is

consistent with 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 (SR–CBOE–99–

14), as amended, be and hereby is

approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority. 8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30670 Filed 11–30–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43618; File No. SR–EMCC–

00–05]

Self-Regulatory Organizations;

Emerging Markets Clearing

Corporation; Notice of Filing of

Proposed Rule Change Seeking To

Increase the Minimum Clearing Fund

Requirement for All EMCC Members to

$3,000,000 and To Establish Two Tiers

of Inter-Dealer Broker Membership

Standards

November 27, 2000.

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

Securities Exchange Act of 1934

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

July 14, 2000, the Emerging Markets

Clearing Corporation (‘‘EMCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) and on

August 16, 2000, and November 1, 2000,

amended the proposed rule change as

described in Items I, II, and III below,

which items have been prepared

primarily by EMCC. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested parties.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change (1) would

increase the minimum clearing fund

requirement for all EMCC members to

$3,000,000 and (2) would establish two

tiers of inter-dealer broker (‘‘IDB’’)

membership standards.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

EMCC 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. EMCC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of these statements.2

(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 (i) increase the minimum

clearing fund requirement for all EMCC

members to $3,000,000 from the current

required minimum of $1,000,000 and

(ii) provide two tiers of IDB membership

standards.3

With respect to the proposed

increased minimum clearing fund

requirement, EMCC’s risk advisory

subgroup reviewed EMCC’s two years of

operations, including trade files and

daily margin calculations. The

subcommittee concluded that, generally,

members’ calculated clearing fund

requirements did not go below

$3,000,000. Moreover, raising the

minimum requirement from $1,000,000

to $3,000,000 is consistent with the

clearing fund requirements imposed on

IDBs by other clearing corporations,4

and it addresses the fact that IDB

members have a potential clearing fund

loss liability that could well exceed the

current $1,000,000 clearing fund

minimum. Accordingly, EMCC has

determined that it would be more

appropriate to have a greater amount of

IDB funds on hand to cover the

potential exposure than to have to

request such a deposit if needed due to

a loss. Therefore, EMCC has decided to

increase IDB’s minimum clearing fund

requirement to $3,000,000 and has

determined that it is appropriate to have

this standard apply to all members.

The rule change also proposes to

separate IDBs into two membership

categories based on excess net capital or

excess financial resources. Those IDBs

with excess net capital, or excess

financial resources for a broker or dealer

regulated by the Securities and Futures

Authority Limited, of between

$10,000,000 and $20,000,000 would be

margined using an ‘‘event factor’’ of 1.5

instead of the factor of 1.25 currently

used in EMCC’s base margining formula.

This factor is representative of the

volatilities experienced during the last

three emerging market events.5 Those

75328 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Notices

6 15 U.S.C. 78q–1.

7 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

IDBs with excess net capital or excess

financial resources of more than

$20,000,000 would be margined under

the current event factor of 1.25. In either

case, the event factor would be subject

to EMCC’s right to change the risk

factor, as provided in EMCC Rule 4,

Section 5(A)III.

EMCC believes that the two-tier

membership standard will permit it to

accept IDBs for membership while

appropriately collateralizing the risk

posed by those entities with lower

levels of capital. EMCC recognizes that

the clearing fund is a key mitigant to

market risk in the event of member

insolvency and feels that margining

those IDBs with less than $20,000,000

excess regulatory capital at an event

factor of 1.5 should mitigate any risk of

their lower capital levels.

The effective date for these proposed

changes will be thirty days following

the date the Commission approves the

filing for current members and will be

immediately for any applicant who

becomes a member after the rule change

is approved.

EMCC believes that the proposed rule

change is consistent with the

requirements of section 17A of the Act 6

and the rules and regulations

thereunder because it promotes the

prompt and accurate settlement of

emerging markets securities

transactions.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

EMCC does not believe that the

proposed rule change will have an

impact on or impose a 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 relating to the

proposed rule change have been

solicited or received. EMCC will notify

the Commission of any written

comments received by EMCC.

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 reason for so finding or (ii)

as to which the self-regulatory

organization 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,

including whether the proposed rule

change is consistent with the Act.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. 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, DC 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of EMCC. All submissions should

refer to File No. SR–EMCC–00–05 and

should be submitted by December 22,

2000.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30669 Filed 11–30–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43613; File No. SR–NASD–

00–59]

Self Regulatory Organizations; Notice

of Filing of a Proposed Rule Change by

the National Association of Securities

Dealers, Inc. To Permit the Inclusion of

Certain Unit Investment Trusts in

Nasdaq’s Mutual Fund Quotation

Service

November 22, 2000.

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 October

20, 2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’)

through its wholly owned subsidiary,

The Nasdaq Stock Market, Inc.

(‘‘Nasdaq’’) 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 Nasdaq. 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

Nasdaq is proposing to amend NASD

Rule 6800 to permit the inclusion of

certain Unit Investment Trusts (‘‘UITs’’)

in Nasdaq’s Mutual Fund Quotation

Service (‘‘MFQS’’). Proposed new

language is in italics; proposed

deletions are in brackets.

* * * * *

6800. MUTUAL FUND QUOTATION

SERVICE

(a) Description

The Mutual Fund Quotation Service

collects and disseminates through The

Nasdaq Stock Market prices for [both]

mutual funds, [and] money market

funds, and unit investment trusts.

(b) Eligibility Requirements

To be eligible for participation in the

Mutual Fund Quotation Service, a fund

shall:

(1) be registered with the Commission

as an open-end (‘‘open-end fund’’) or a

closed-end (‘‘closed-end fund’’)

investment company or a unit

investment trust pursuant to the

Investment Company Act of 1940,

(2) execute the agreement specified by

the Association relating to the fund’s

obligations under the Program,

(3) pay, and continue to pay, the fees

as set forth in Rule 7090, an d

(4) submit quotations through an

automatic quotation system operated by

the Association.

(c) News Media Lists

(1) (A) An eligible open-end fund

shall be authorized for inclusion in the

News Media List released by the

Association if it has at least 1,000

shareholders or $25 million in net

assets.

(B) An eligible closed-end fund or

unit investment trust shall be authorized

for inclusion in the News Media List

released by the Association if it has at

least $60 million in net assets.

(C) Compliance with subparagraphs

(1)(A) and (B) shall be certified by the

fund to the Association at the time of

initial application for inclusion in the

List.