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

75332 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Notices

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

2 17 CFR 240.19b–4.

3 15 U.S.C. 78s(b)(3)(A).

4 17 CFR 240.19b–4(f)(6).

5Securities Exchange Act Release No. 42272

(December 23, 1999), 65 FR 153 (January 3, 2000)

(SR–Phlx–99–42). In the approval order, the

Commission requested that the Exchange examine

the operation of the Committee to ensure that the

Committee is not dominated by any one Exchange

interest (e.g., On-Floor or Off-Floor interests). The

options exchanges scan a variety of

newswires and employ different news

alert services to monitor for adjustment

events. When the exchanges learn of an

adjustment event, they alert OCC and

contact the primary market for the

underlying security to obtain more

information about the event and to

monitor the event.

Through these procedures, the

likelihood that a potential adjustment

event will escape notice is minimized.

However, the possibility of such an

occurrence can never be completely

eliminated. Accordingly, OCC wishes to

make clear that neither it nor its

securities committee will have liability

for any failure to act or delay in acting

on events not known to the securities

committee. The proposed rule change

would also clarify that adjustment

determinations are made in light of

circumstances known at the time the

determination is made. For example, if

the securities committee does not learn

of an event for which an adjustment

would normally be made until after the

ex-date, the fact that options trading

and/or exercise activity has taken place

in circumstances suggesting that there

would be no adjustment could tip the

balance of fairness against making an

adjustment.

The proposed rule change is

consistent with the requirements of

Section 17A of the Act and the rules and

regulations thereunder applicable to

OCC because it fosters cooperation and

coordination with persons engaged in

the clearance and settlement of

securities transactions, removes

impediments to and perfects the

mechanism of a national system for the

prompt and accurate clearance and

settlement of securities transactions,

and, in general, protects investors and

the public interest.

(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

Written comments were not and are

not intended to be solicited with respect

to the proposed rule change, and none

have been 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 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 OCC. All submissions should

refer to File No. SR–OCC–00–10 and

should be submitted by December 22,

2000.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30665 Filed 11–30–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43614; File No. SR–Phlx–

00–101]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.

Extending the Pilot Program for

Exchange Rule 98, Emergency

Committee Until April 30, 2001

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

17, 2000, the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)

filed a proposed rule change with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’). The

proposed rule change is described in

Items I, II, and III below, which Items

have been prepared by the Exchange.

The Exchange filed the proposed rule

change pursuant to section 19(b)(3)(A)

of the Act,3 and Rule 19b–4(f)(6)

thereunder,4 which renders the

proposed rule change effective upon

filing with the Commission. 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 is proposing to extend

the pilot program period for Rule 98,

Emergency Committee until April 30,

2001. No changes to the existing rule

language are being proposed.

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

Exchange 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

Exchange 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

On December 23, 1999, the

Commission approved amendments to

Rule 98, Emergency Committee (the

‘‘Committee’’), which updated the

composition of the Committee to reflect

the current governance structure of the

Exchange, on a 120-day pilot basis.5 The