77054 Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Notices

the employees’ securities companies to

estate planning vehicles formed for the

benefit of lineal descendants of the

eligible employees.

APPLICANTS: Elfun Trusts, Elfun TaxExempt Income Fund, Elfun Income

Fund, Elfun International Equity Fund,

Elfun Diversified Fund, Elfun Money

Market Fund (collectively, the ‘‘Elfun

Funds’’), and General Electric S&S

Program Mutual Fund and General

Electric S&S Long Term Interest Fund

(collectively, the ‘‘S&S Funds’’).

FILING DATES: The application was filed

on December 22, 1999, and amended on

December 1, 2000.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

December 26, 2000, and should be

accompanied by proof of service on

applicants, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549–

0609. Applicants, c/o Alan M. Lewis,

Esq., GE Asset Management

Incorporated, 3003 Summer Street,

Stamford, Connecticut 06905.

FOR FURTHER INFORMATION CONTACT:

Elaine M. Boggs, Special Counsel, at

(202) 942–0572, or Christine Y.

Greenlees, Branch Chief, at (202) 942–

0564 (Division of Investment

Management, Office of Investment

Company Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch, 450 5th Street,

NW., Washington, DC 20549–0102 (tel.

(202) 942–8090).

Applicants’ Representations

1. Applicants are diversified, openend management investment companies

registered under the Act. Shares of the

Elfun Funds are registered under the

Securities Act of 1933. Each applicant is

organized and operated to meet the

definition of an ‘‘employees’ securities

company’’ within the meaning of

section 2(a)(13) of the Act for the benefit

of employees of General Electric

Company (‘‘GE’’).

2. Pursuant to the Prior Orders, shares

of the Elfun Funds may be purchased

by: (a) members of an honor society of

GE employees (‘‘Elfun Society

Members’’); (b) employees of the Elfun

Funds’ adviser who have been

employed by the adviser for at least one

year (‘‘Adviser Employees’’); (c)

immediate family members of both (a)

and (b) above; (d) trusts whose sole

beneficiaries are individuals in (a)

through (c) above; (e) surviving

unmarried spouses of deceased Elfun

Society members; (f) members of the

board of directors of GE; and (g) GE and

its subsidiaries (persons in (a), (b), and

(f) are ‘‘Elfun Eligible Investors’’).

3. The S&S Funds are part of a

defined contribution profit sharing plan

(the ‘‘Program’’) that is intended to

qualify for favorable tax treatment under

sections 401(a) and 401(k) of the

Internal Revenue Code of 1986, as

amended. Units in the S&S Funds

(‘‘Units’’) are offered only to employees

participating in the Program (‘‘S&S

Employee Participants’’). Although

Units cannot be purchased outside of

the Program, under certain

circumstances S&S Employee

Participants may hold Units outside the

Program (‘‘S&S Distributees’’).

(Collectively, Elfun Eligible Investors

and S&S Distributees are ‘‘Eligible

Employees’’)

4. Under the Prior Orders, the Elfun

Funds have limited investment by the

immediate family members of Elfun

Society Members and Adviser

Employees to spouses and children

(including step and adoptive

relationships) of such Elfun Society

Members and Adviser Employees. The

S&S Funds have limited the transfer of

Units held outside of the Program to the

immediate family members of S&S

Distributees, which is limited to spouses

and children (including step and

adoptive relationships). Applicants

propose to expand the class of

immediate family members of Eligible

Employees who may invest in the Elfun

and S&S Funds to include any parent,

spouse of a parent, child, spouse of a

child, spouse, brother, sister, or

grandchild (including step and adoptive

relationships) (‘‘Eligible Family

Members’’) of Eligible Employees. In

addition, the order would permit

Eligible Employees to transfer shares of

the Elfun and S&S Funds held by them

to estate planning vehicles formed for

the benefit of lineal descendants of the

Eligible Employees.

Applicants’ Legal Analysis

1. Section 2(a)(13) of the Act defines

‘‘employees’ securities company’’

generally as any investment company,

or similar issuer, all of the outstanding

securities of which (other than shortterm paper) are beneficially owned by

employees or persons on retainer,

former employees, and immediate

family of the employees, persons on

retainer, or former employees.

2. Section 6(b) of the Act provides

that the Commission shall exempt

employees’ securities companies from

the provisions of the Act to the extent

that the exemption is consistent with

the protection of investors. Applicants

state that the proposal satisfies the

requirements of section 6(b).

3. Applicants state that an employees’

securities company is a labor-related

entity that exists primarily to promote

the economic welfare of its employeeinvestors. Applicants also state that the

requested relief would permit Eligible

Employees to achieve certain tax and

economic goals through the effective use

of estate planning tools. Applicants state

that the requested relief is consistent

with the protection of investors because

permitting Eligible Family Members of

Eligible Employees to invest in the

Funds, and Eligible Employees to

transfer shares of the Funds to estate

planning vehicles formed for the benefit

of lineal descendants of the Eligible

Employees, would preserve the status of

the Funds as entities designed primarily

to promote the economic welfare of

Eligible Employees.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–31273 Filed 12–7–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

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 December 11, 2000.

An open meeting will be held on

Wednesday, December 13, 2000, at

10:00 a.m. in Room 1C30, the William

O. Douglas Room and closed meetings

will be held on Wednesday, December

13, 2000. and Thursday, December 14,

2000 at 11 a.m.

The subject matter of the open

meeting will be:

The Commission will hear oral

argument on an appeal by Russo

Securities, Inc. (‘‘RSI’’), a registered

broker-dealer, and Kimberly Kent, RSI’s

Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Notices 77055

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 43471

(October 20, 2000), 65 FR 64463 (October 27, 2000).

4For further discussion of the CSE’s Market Order

Display Rule, see CSE Regulatory Circular to

Exchange Members 97–07 (June 17, 1997).

chief financial officer and registered

financial and operations principal.

The law judge found that, on four

separate dates between December 1995

and March 1996, RSI violated the

Commission’s net capital rule, failed to

keep accurate books and records, and

failed to notify the Commission of its

net capital and books and records

deficiencies. The law judge also found

that Kent willfully aided and abetted,

and caused, RSI’s violations. The law

judge fined RSI $100,000; suspended

Kent for one year from association with

a broker-dealer or a member of a

national securities exchange or

registered securities association, and

fined Kent $25,000; and ordered RSI

and Kent to cease and desist from future

similar violations.

Among the issues likely to be argued

are the following:

(1) Whether the stock due to RSI

under its investment banking

agreements was ‘‘readily convertible

into cash,’’ and thus an allowable asset

under the net capital rule;

(2) Whether the net capital rule’s

provision for disallowing assets not

‘‘readily convertible into cash’’ violates

due process;

(3) Whether Kent’s conduct satisfied

the elements of aider and abettor

liability; and

(4) What sanctions; if any, are

appropriate.

For further information, contact Joan

Loizeaux at (202) 942–0950.

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)(A) and

(10), permit consideration for the

scheduled matter at the closed meeting.

The subject matter of the closed

meeting scheduled for Wednesday,

December 13, 2000 will be:

• Post argument discussion.

The subject matter of the closed

meeting scheduled for Thursday,

December 14, 2000 will be:

• Institution and settlement of

injunctive actions; and

• Institution and settlement of

administrative proceedings of an

enforcement nature.

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: December 6, 2000.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–31485 Filed 12–6–00; 3:44 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[File No. 500–1]

Net Tel International, Inc.; Order of

Suspension of Trading

December 5, 2000.

It appears to the Securities and

Exchange Commission that there is a

lack of current and accurate information

concerning the securities of Net Tel

International, Inc. (‘‘Net Tel’’) because

of questions regarding the accuracy of

publicly disseminated information

concerning, among other things, letters

of intent to acquire businesses entered

into by Net Tel.

The Commission is of the opinion that

the public interest and the protection of

investors require a suspension of trading

in the securities of the above listed

company.

Therefore, it is ordered, pursuant to

section 12(k) of the Securities Exchange

Act of 1934, that trading in the above

listed company is suspended for the

period from 1:30 p.m. EST, December 5,

2000, through 11:59 p.m. EST, on

December 18, 2000.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–31408 Filed 12–6–00; 11:35 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43653; File No. SR–CSE–

00–08]

Self-Regulatory Organizations; The

Cincinnati Stock Exchange,

Incorporated; Order Granting Approval

to Proposed Rule Change To Include

CSE Rule 11.9(u) and Interpretation .01

Thereunder in the Minor Rule Violation

Program

December 1, 2000.

I. Introduction

On October 13, 2000, The Cincinnati

Stock Exchange, Incorporated (‘‘CSE’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change to

amend CSE Rule 8.15, Imposition of

Fines for Minor Violation(s) of Rules, to

include CSE Rule 11.9(u) and

Interpretation .01 thereunder, requiring

CSE members to display certain market

orders (‘‘Market Order Display Rule’’).

The proposed rule change was

published for comment in the Federal

Register on October 27, 2000.3 No

comments were received on the

proposal. This order approves the

proposed rule change.

II. Description of the Proposal

The CSE proposes to amend CSE Rule

8.15, Imposition of Fines for Minor

Violation(s) of Rules, which provides for

an alternative disciplinary regimen

involving violations of Exchange rules

that the Exchange determines are minor

in nature. In lieu of commencing a

disciplinary proceeding pursuant to

Rules 8.1 through 8.14, the Minor Rule

Violation Program (‘‘Program’’) permits

the Exchange to impose a fine, not to

exceed $2,500, on any member, member

organization, or registered or nonregistered employee of a member or

member organization (‘‘Member’’) that

the Exchange determines has violated a

rule included in the Program. Adding a

particular rule violation to the Program

in no way circumscribes the Exchange’s

ability to address violations of those

rules through more formal disciplinary

rules. The Program simply provides the

Exchange with greater flexibility in

addressing rule violations that warrant a

stronger regulatory response after the

issuance of cautionary letters and yet,

given the nature of the violations, do not

rise to the level of requiring formal

disciplinary proceedings.

The Exchange proposes to add the

failure to properly expose on the

Exchange or immediately price improve

certain customer market orders, as

provided in Interpretation .01 to

Exchange Rule 11.9(u), to the list of

Exchange rule violations and fines

included in the Program.4 The Exchange

believes that Market Order Display Rule

violations often are inadvertent and, in

most cases, are best addressed in a

summary fashion. However, because

Interpretation .01 is predicated on the

Exchange’s commitment to promote

customer price improvement