75990 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Notices

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

2The Commission has modified the text of the

summaries prepared by the NASD.

3Securities Exchange Act Release No. 40712

(Nov. 25, 1998), 63 FR 67163 (December 4, 1998). 4 17 CFR 240.19b–4(f)(6).

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43635; File No. SR–NASD–

00–68]

Self-Regulatory Organizations; The

National Association of Securities

Dealers, Inc.; Notice of Filing and

Immediate Effectiveness of a Proposed

Rule Change Relating to the Transfer

Customer Account(s)

November 29, 2000.

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

Securities Exchange Act of 1934

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

November 20, 2000, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’) through its wholly-owned

subsidiary, 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 primarily by NASD. The

Commission is publishing this notice to

solicit comments on the propose 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

allow the NASD to amend Rule 11879(e)

of the Uniform Practice Code to require

that following the validation of a

transfer instruction, the carrying

member must complete the transfer of

customer account(s) to the receiving

member within three business days

instead of four business days.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NASD 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. NASD 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

Rule 11870(e) regulates the transfer of

customer accounts from one member

organization to another. Such transfers

are generally effected through the

Automated Customer Account Transfer

(‘‘ACAT’’) Service, which is a system

administered by the National Securities

Clearing Corporation (‘‘NSCC’’). Since

the inception of the ACAT Service in

1985, numerous enhancements to the

system have allowed for faster and more

efficient transfers of customer accounts.

The NSCC enhanced the ACAT Service

in 1999 to require carrying members to

complete the transfer of accounts to the

receiving member within three business

days following the validation of a

transfer instruction. The NYSE has

already amended its Rule 412 to reduce

the total post-validation transfer period

from four days to three days. 3 The

NASD currently expects its members to

comply with the three-day requirement

notwithstanding that Rule 11870(e) to

conform to the NYSE Rule 412(b)(3)

requirement that post-validation transfer

occur within three business days. This

will make Rule 11870(e) consistent with

the current NSCC and NYSE three-day

requirement, which is the industry

standard.

NASD Regulation believes that the

proposed rule change is consistent with

the provisions of Section 15A(b)(6) of

the Act, which requires, among other

things, that the NASD’s rules must be

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, and, in general, to protect

investors and the public interest. The

NASD believes that the proposed rule

change is designed to accomplish these

ends by reducing the time frame

allowed for the transfer of customer

accounts from one member organization

to another and to make NASD

requirements conform to NYSE Rule

412(b)(3) and current NSCC

requirements.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

NASD Regulation does not believe

that the proposed rule change will result

in any burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, as amended.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments were neither

solicited nor received.

III. Date of Effectiveness of the

Proposed Rule change and Timing for

Commission Action

The proposed rule change has been

filed by NASD as a ‘‘non-controversial’’

rule change under Rule 19b–4(f)(6)

under the Act.4 In accordance with Rule

19b–4(f)(6)(iii), prior to the filing date,

NASD Regulation submitted written

notice of its intent to file the proposed

rule change along with a brief

description and text of the proposed

rule change. In that notice of its intent,

NASD Regulation requested that the

Commission waive the requirement that

the rule change, by its terms, not

become operative for 30 days after the

date of the filing, as consistent with the

protection of investors and the public

interest. The Commission has decided

to waive that requirement. Accordingly,

the proposed rule change will become

effective upon filing pursuant to Section

19(b)(3)(A) of the Act and Rule 19b–

4(f)(6) thereunder. At any time within

60 days of this filing, the Commission

may summarily abrogate this proposal if

it appears to the Commission that such

action is necessary or appropriate in the

public interest, for the protection of

investors, or otherwise in furtherance of

the purposes of the act.

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, N.W.,

Washington, D.C. 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 the

Commission’s Public Reference Section,

450 Fifth Street, N.W., Washington, D.C.

20549. Copies of such filing also will be

available for inspection and copying at

the principal office of NASD. All

submissions should refer to File No.

SR–NASD–00–68 and should be

submitted by December 21, 2000.

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Notices 75991

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

2A copy of the text of OCC’s proposed rule

change and the attached exhibit are available at the

Commission’s Public Reference Section or through

OCC.

3The Commission has modified the text of the

summaries prepared by OCC. 4 15 U.S.C. 78q–1.

5 15 U.S.C. 78s(b)(3)(A)(iii).

6 17 CFR 240.19b–4(f)(3).

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30879 Filed 12–4–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43630; File No. SR–OCC–

00–05]

Self-Regulatory Organizations; The

Options Clearing Corporation; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change Relating to

Stockholder Approval of Certain ByLaw Amendments

November 28, 2000.

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

Securities Exchange Act of 1934

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

June 20, 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. 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 XI, Section 1 to provide

more explicit authorization for a

procedure to obtain stockholder

approval of certain By-Law

amendments.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 section (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 rule

change is to make explicit a longstanding interpretation of OCC’s ByLaws, Article XI, Section 1, which

provides that certain enumerated

provisions of the By-Laws ‘‘may not be

amended by action of the Board of

Directors without the approval of the

holders of all of the outstanding

Common Stock of the Corporation.’’

Each of OCC’s stockholders is a

participant exchange of OCC, and each

is entitled to elect one ‘‘exchange

director’’ to OCC’s board of directors. It

has been the practice of OCC and the

exchanges to consider the affirmative

vote of each exchange director to be the

required approval of the stockholder

that elected that exchange director. OCC

is proposing to amend Article XI,

Section 1 to provide more explicit

authorization for this procedure. The

proposed rule change was approved by

the holders of all outstanding common

stock of OCC by unanimous written

consent on May 23, 2000, and by OCC’s

board of directors at a meeting held on

May 23, 2000.

In order to eliminate any potential

conflict between an exchange director’s

fiduciary duty as a director of OCC and

his or her duty to the stockholder that

elected the director, the rule change also

allows an exchange director to choose

not to have his or her vote in favor of

a By-Laws amendment considered to be

the approval of such stockholder. In the

event that any exchange director

exercises this right, the rule change

provides that the By-Laws amendment

in question will require the written

approval of the stockholder represented

by that exchange director. Such

approval could then be given or

withheld by the stockholder without the

vote of the exchange director.

The proposed rule change is

consistent with Delaware corporate law.

Absent the current provision in Article

XI, Section 1 of the By-Laws, no

stockholder action would be required in

order to amend any part of the By-Laws

of OCC. Where the requirement of

stockholder ‘‘approval’’ is imposed by

the By-Laws, the By-Laws may specify

the mechanism by which that approval

is to be obtained.

The proposed rule change is also

consistent with the purposes and

requirements of Section 17A of the Act 4

and the rules and regulations

thereunder applicable to OCC because it

assures the fair representation of OCC

stockholders in the administration of

OCC’s affairs and does not impose any

burden on competition.

(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 relating to the

proposed rule change have not yet been

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A)(iii) 5 of the Act and Rule

19b–4(f)(3) 6 promulgated thereunder

because the proposal is solely

concerned with the administration of

OCC and does not affect the protection

of investors or the public interest and

does not impose any burden on

competition. At any time within sixty

days of the filing of such proposed rule

change, the Commission may summarily

abrogate such rule change if it appears

to the Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

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 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.