75330 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Notices

12 15 U.S.C. 78k–1(a)(1)(C).

13 17 CFR 200.30–3(a)(12).

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

2Securities Exchange Act Release No. 43457

(October 17, 2000) 65 FR 63662 (October 24, 2000).

3Securities Exchange Act Release No. 31937

(March 1, 1993), 58 FR 12609 [SR–NSCC–92–14]

(order approving post settlement correction

initiated by Settling Members and TPA Members).

4Currently, a Settling Member or TPA Member

must reject the extended correction instruction

within three days. NSCC will issue an ‘‘Important

Notice’’ at least 30 days prior to implementing

changes in the time frames required for rejections

of extended corrections. Telephone conservation

between Richard J. Paley, Associate Counsel, NSCC,

and Susan M. Petersen, Special Counsel, Division

of Market Regulation, Commission (October 16,

2000).

5Pursuant to Section 21 of Rule 52A, a Fund

Member or Mutual Fund Processor (‘‘Receiving

Fund Member’’) may initiate a request for the

transfer of a customer’s mutual fund shares,

investment fund, or UIT units from another Fund

Member or Mutual Fund Processor (‘‘Delivering

Fund Member’’). The Delivering Fund Member

must acknowledge or reject the transfer request

system, and, in general, to protect

investors and the public interest. In

section 11A(a)(1)(C),12 the Congress

found that it is in the public interest and

appropriate for the protection of

investors and the maintenance of fair

and orderly markets to assure the

availability to brokers, dealers, and

investors of information with respect to

quotations and transactions in

securities.

Nasdaq believes that the proposed

rule change will protect investors and

the public interest by promoting better

processing of price information in UITs.

Accordingly, the new listing criteria

will provide greater transparency to the

markets by providing greater pricing

information for a broader base of

investments for which there is

significant investor interest. Nasdaq

believes the proposed listing standards

serve as a means for the marketplace to

screen issuers and to provide listed

status only to bona fide investment

companies with sufficient investor base

and trading interest to maintain fair and

orderly markets.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq does not believe that the

proposed rule change will impose any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Nasdaq did not solicit or receive

written comments on the proposed rule

change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 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

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 NASD 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 at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office at the NASD. All

submissions should refer to File No.

SR–NASD–00–59 and should be

submitted by December 22, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Security.

[FR Doc. 00–30664 Filed 11–30–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43598; File No. SR–NSCC–

00–12]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Order Granting

Accelerated Approval of a Proposed

Rule Change Relating to the

Submission of Extended Corrections

and Time Frames for Confirmation

November 20, 2000.

On August 28, 2000, the National

Securities Clearing Corporation

(‘‘NSCC’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

a proposed rule change (File No. SR–

NSCC–00–12) pursuant to section

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

of 1934 (‘‘Act’’) 1 to permit NSCC to

allow Fund Members and Mutual Fund

Processors to submit extended (post

settlement) corrections in NSCC’s

Mutual Fund Service’s Fund/Serv.

Notice of the proposal was published in

the Federal Register on October 24,

2000.2 No comment letters were

received. For the reasons discussed

below, the Commission is granting

accelerated approval of the proposed

rule change.

I. Description

Pursuant to NSCC’s Rule 52A, section

12, only a Settling Member or TPA

Member may currently submit extended

(post settlement) correction instructions.

These types of instructions are

submitted when a Settling Member or

TPA Member determines that data with

respect to a settled order previously

transmitted to a Fund Member or

Mutual Fund Processor is in need of

correction.3

Under the proposed rule change,

section 12 will be amended to also

permit Fund Members and Mutual Fund

Processors to submit extended (post

settlement) corrections to Settling

Members or TPA Members. No action

will be required by a Settling Member

or TPA Member if it determines to

accept the extended correction of a

Fund Member or Mutual Fund

Processor. A Settling Member or TPA

Member will be able to reject the

extended correction instruction within

the time frame established by NSCC.4 In

addition, section 12 will be revised to

permit extended corrections for

exchange orders.

The rule change also proposes to

make two additional changes to Rule

52A. Sections 4 and 8 of Rule 52A are

being amended to allow NSCC to delete

certain orders, corrections, and

extended corrections that have not been

confirmed or rejected, respectively,

within the time frame established by

NSCC. Section 21 is being amended to

reduce the maximum time frame within

which a Delivering Fund Member must

confirm the value of Fund/Serv eligible

mutual fund shares, investment funds,

or UIT units being transferred to a

Receiving Fund Member from sixty days

to tens days.5

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Notices 75331

within two business days. Once the transfer is

acknowledged, the Delivering Fund Member must

also confirm the value of the shares to be

transferred within the time frame specified under

Section 21. Under the proposed rule change, a

Delivering Fund Member must submit the

confirmation no earlier than one business day and

no later than ten business days after acknowledging

the transfer.

6 15 U.S.C. 78q–1(b)(3)(F).

7The new IRS regulation relates to the

certification of foreign accounts, specifically the

communication of W8-related registration

information. Since fund companies typically do not

implement December code or system changes,

NSCC requested acceleration of the rule filing so as

to implement and test the system changes prior to

December.

8 17 CFR 200.30–3(a)(12).

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

2A copy of OCC’s proposed rule change is

available at the Commission’s Public Reference

Section or through OCC.

3The Commission has modified the text of the

summaries prepared by OCC.

4Section 11(a) of Article VI of OCC’s By-Laws

states that whenever there is a dividend, stock split,

reorganization, recapitalization, or similar event

with respect to an underlying security or whenever

there is a merger, consolidation, dissolution, or

liquidation of the issuer of an underlying security,

the number of option contracts, unit of trading,

exercise price, and the underlying security of all

outstanding options contracts open for trading in

that underlying security may be adjusted.

NSCC intends to implement these

changes, subject to SEC approval, on

November 20, 2000.

II. Discussion

Section 17A(b)(3)(F) 6 of the Act

requires that the rules of a clearing

agency be designed to promote the

prompt and accurate clearance and

settlement of securities transactions,

and to foster cooperation and

coordination with persons engaged in

the clearance and settlement of

securities transactions. By permitting

Fund Members and Mutual Fund

Processors to submit post settlement

corrections and by amending the time

frames within which the value of the

instruments being transferred must be

confirmed, the rule change should allow

NSCC to provide a mechanism to help

facilitate the prompt and accurate

clearance and settlement of transactions

between users of Fund/Serv.

Furthermore, by extending the ability to

submit post settlement corrections to

Fund Members and Mutual Fund

Processors, an ability already granted to

Settling Members and TPA Members,

NSCC is ensuring that the primary users

of Fund/Serv are afforded similar

capabilities. These actions should foster

cooperation and coordination among

Fund/Serv users. Accordingly, the

Commission finds that the rule change

is consistent with NSCC’s obligations

under the Act.

NSCC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing. The

Commission finds good cause for so

approving the proposed rule change

prior to the thirtieth day after

publication in the Federal Register

because accelerated approval will

permit NSCC to implement these Fund/

Serv system enhancements, which are

designed to accommodate new Internal

Revenue Service regulations (which will

be effective January 1, 2001),7 in a

manner consistent with industry

practices with respect to system

enhancements. Furthermore, the

Commission has not received any

comment letters and does not expect to

receive any comment letters on the

proposal.

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–00–12) be and hereby is

approved. For the Commission by the

Division of Market Regulation, pursuant

to delegated authority.8

Jonathan G. Katz,

Secretary.

[FR Doc. 00–30592 Filed 11–30–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43612; File No. SR–OCC–

00–10]

Self-Regulatory Organizations; The

Options Clearing Corporation; Notice

of Filing of Proposed Rule Change

Relating to Adjustments to Options

Contracts

November 22, 2000.

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

Securities Exchange Act of 1934

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

October 3, 2000, The Options Clearing

Corporation (‘‘OCC’’) 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 primarily by OCC.2 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 would

amend Article VI, Section 11(b) of

OCC’s By-Laws to explicitly provide

that neither OCC nor OCC’s securities

committee will be liable for a failure to

adjust outstanding options contracts

when the securities committee does not

learn or does not learn in a timely

manner of an event for which it

otherwise would have directed an

adjustment.

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. OCFC has prepared

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

and (C) below, of the most significant

aspects of these statements.3

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed new

language to be added to paragraph (b) of

Article VI, Section 11 of OCC’s By-Laws

is to clarify that neither OCC nor OCC’s

securities committee will be liable for

any failure to adjust outstanding option

contracts or any delay in adjusting such

contracts when the securities committee

does not learn in a timely manner of an

event for which it would otherwise have

directed an adjustment. While OCC

believes that this should be the result

under the By-Laws in its present form,

OCC believes it is advisable to cover this

situation specifically.

Normally, OCC is notified of the

occurrence of a section 11(a) adjustment

event 4 by its internal stock watch

department or by the exchanges, which

use their research departments to

monitor the underlying securities and

the issuers of the underlying securities.

OCC’s economic research department

regularly scans Bloomberg, Reuters, and

Dow Jones newswires for

announcements of adjustment events.

When it learns of such an event, OCC

contacts the options exchanges, the

primary market for the underlying, and

the issuer of the underlying to obtain

more information about the event and to

monitor the event. Likewise, the

research departments at the various