10888 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Notices

1Section 17(a) of the Act generally prohibits sales

or purchases of securities between registered

investment companies and any affiliated person of

that company. Rule 17a–8 provides an exemption

from section 17(a) for certain reorganizations among

registered investment companies that may be

affiliated persons, or affiliated persons of an

affiliated person, solely by reason of having a

common investment adviser, common directors,

and/or common officers.

1 15 U.S.C. § 78s(b)(1)(1988).

2 17 CFR 240.19b–4.

3The CBOE has clarified that the name of the

Index will be the Morgan Stanley Multinational

Company Index. See letter from Scott Lyden,

Research & Product Development, CBOE, to

Stephen M. Youhn, Division of Market Regulation

(‘‘Division’’), Commission, dated February 5, 1997

(‘‘Amendment No. 2’’).

4See Securities Exchange Act Release No. 37790

(October 4, 1996), 61 FR 53774 (October 15, 1996).

5See letter from William M. Speth, Senior

Research Analyst, Product Development, Research

Department, CBOE, to Stephen M. Youhn, Division,

Commission, dated December 23, 1996

(‘‘Amendment No. 1’’). In Amendment No. 1, the

CBOE emended its rule filing regarding, among

other things, its maintenance procedures. See infra

notes 8 and 9, and accompanying text.

Applicant initially registered under the

name Strong B Fund, Inc. and changed

its name to Strong Insured Municipal

Bond Fund, Inc. on November 4, 1991.

2. At a meeting held on April 24,

1996, the board of directors of applicant

unanimously approved the Agreement

and Plan of Reorganization

(‘‘Reorganization Agreement’’) whereby

applicant would exchange its assets for

shares of Strong Municipal Bond Fund,

Inc. (‘‘Bond Fund’’). The Reorganization

Agreement provided: (i) for the transfer

of all of applicant’s assets to the Bond

Fund less a reserve for liabilities in

exchange for shares of Bond fund

(‘‘Bond Fund Shares’’) equal in value to

applicant’s net assets; (ii) the pro rata

distribution of the Bond Fund Shares to

applicant’s shareholders in liquidation

of applicant; (iii) the cancellation of

applicant’s shares; and (iv)

deregistration of applicant as an

investment company under the Act.

3. At the April 24 meeting, applicant’s

directors, (i) in reliance on rule 17a–8

under the Act,1 found that participation

in the reorganization was in the best

interest of applicant and its

shareholders and that the interests of

applicant’s shareholders would not be

diluted as a result of the reorganization,

(ii) authorized the preparation and filing

of proxy solicitations, and (iii) called a

shareholders meeting. In making its

determination that the reorganization

was in the best interest of applicant’s

shareholders, the board noted that the

relatively small size of applicant had

prevented it from realizing significant

economies of scale or reducing its

expense ratio, and had been a factor in

causing its performance to lag its

competitors in recent periods. The

board also considered that, because of

heightened competition in the insurance

industry, most municipal securities are

now insurable. As a result, the board

recognized that applicant, which sought

to keep its assets in insured municipal

securities, was no longer unique and

therefore was less attractive to investors.

The board determined that the

reorganization offered the greatest

likelihood of addressing the asset size

and growth problem while reorganizing

applicant into an investment company

with an identical investment objective

and similar investment policies and

restrictions. The board further noted

that the reorganization would result in

continuity of investment services

(advisory, transfer agent and distributor

services) and no sales or other charges

would be imposed on any shares of the

Bond Fund acquired by shareholders in

the reorganization.

4. On May 24, 1996, the

Reorganization Agreement was entered

into by applicant, the Bond Fund, and

with respect to certain matters, Strong

Capital Management, Inc., the

investment adviser of both applicant

and the Bond Fund. Proxy materials

relating to the merger (which were

contained in the Bond Fund’s

registration statement on Form N–14)

were filed with the SEC on May 24,

1996, and mailed to applicant’s

shareholders on July 3, 1996. The

Reorganization Agreement was

approved by applicant’s shareholders on

August 27, 1996.

5. As of August 30, 1996, the date of

the transfer of assets, there was an

aggregate of 2,885,713.293 shares of

outstanding common stock of applicant

having an aggregate net asset value of

$29,090,061.39 and a per share value of

$10.08. In accordance with the

Reorganization Agreement, applicant

transferred its assets to the Bond Fund

in exchange for 3,235,825.05 shares of

the Bond Fund. Such shares were equal

in value to applicant’s net asset value.

Such Bond Fund Shares received by

applicant were then distributed pro rata

to applicant’s shareholders in complete

liquidation of applicant. No brokerage

commissions were paid in the exchange.

6. The total expenses incurred in

connection with the Reorganization,

consisting of legal, accounting, proxy

solicitation, liquidation, and other

related administrative fees and

expenses, were approximately $92,903.

The applicant and Bond Fund each paid

for their own expenses in connection

with entering into and carrying out the

transactions contemplated by the

Reorganization Agreement. The adviser

waived all of applicant’s unamortized

organizational expenses of $3,600.

7. The applicant has no shareholders,

assets, debts or liabilities. Applicant is

not a party to any litigation or

administrative proceeding. Applicant is

not engaged, nor does it propose to

engage, in any business activities other

than those necessary for the winding up

of its affairs.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–5838 Filed 3–7–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38353; File No. SR–CBOE–

96–59]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

Nos. 1 and 2 to Proposed Rule Change

by the Chicago Board Options

Exchange, Inc., Relating to the Listing

and Trading of Options on the Morgan

Stanley Multinational Company Index

February 28, 1997.

I. Introduction

On October 1, 1996, the Chicago

Board Options Exchange, Inc. (‘‘CBOE’’

or ‘‘Exchange’’) submitted to the

Securities and Exchange Commission

(‘‘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

list and trade cash-settled, Europeanstyle stock index options on the Morgan

Stanley Multinational Company Index

(‘‘Index’’),3 a broad-based,

capitalization-weighted index

comprised of 50 large domestic

companies, as more fully described

below.

The proposed rule change appeared in

the Federal Register on October 15,

1996.4 No comments were received on

the proposed rule change. The Exchange

subsequently filed Amendment Nos. 1

and 2 to the proposed rule change on

December 23, 1996 and on February 5,

1997, respectively.5 This order approves

the CBOE’s proposal, as amended, and

solicits comments on Amendment Nos.

1 and 2.

II. Description

The Exchange is proposing to list and

trade cash-settled, European-style stock

index options on the Morgan Stanley

Multinational Company Index, a broadbased, capitalization-weighted index

composed of 50 high-capitalization
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Notices 10889

6A list of Index components is available at the

Commission and at the CBOE.

7Since Morgan Stanley may be consulted

regarding the maintenance of the Index, a ‘‘chinese

wall’’ has been erected around the personnel at

Morgan Stanley who have access to information

concerning changes and adjustments to the Index.

Details of Morgan Stanley’s chinese wall

procedures, which are closely modeled on existing

procedures for other Morgan Stanley indexes

underlying standardized options, have been

submitted to the Commission under separate cover.

8See Amendment No. 1. The Commission expects

CBOE to maintain the character of the Index as

represented in its proposal, i.e., as an index

comprised of very highly capitalized U.S. stocks

that are multinational in nature, as defined above.

Failure to maintain the Index in this manner would

raise issues as to whether additional approval

pursuant to Section 19(b) of the Act would be

necessary in order for CBOE to continue trading the

product. See also note 9, infra.

9 Id. The Commission notes that its and the

CBOE’s regulatory responses for failure to meet the

above maintenance criteria could include, but are

not limited to, the removal of the securities from

the Index, prohibiting opening transactions, or

discontinuing the listing of new series of Index

options. In addition, if the composition of the

Index’s underlying securities was to substantially

change, the Commission’s decision regarding the

appropriateness of the Index’s current maintenance

standards would be reevaluated, and whether

additional approval under Section 19(b) is

necessary to continue to trade the product. See also

note 8, supra.

10The Commission notes that pursuant to Article

XVII, Section 4 of the Options Clearing

Corporation’s (‘‘OCC’’) by-laws, the OCC is

empowered to fix an exercise settlement amount in

the event it determines a current index value is

unreported or otherwise unavailable. Further, the

OCC has the authority to fix an exercise settlement

amount whenever the primary market for the

securities representing a substantial part of the

value of the underlying index is not open for

trading at the time when the current index value

(i.e., the value used for exercise settlement

purposes) ordinarily would be determined. See

Securities Exchange Act Release No. 37315 (June

17, 1996), 61 FR 42671 (OCC–95–19).

domestic stocks.6 According to the

Exchange, the 50 companies that

comprise the Index are multinational in

nature as they each derive a substantial

portion of their earnings from foreign

income and have cash flows

denominated in multiple currencies.

Each of the component securities are

traded on the American Stock Exchange,

Inc. (‘‘Amex’’), the New York Stock

Exchange, Inc. (‘‘NYSE’’), or through the

facilities of the National Association of

Securities Dealers (‘‘NASD’’) Automated

Quotation system (‘‘Nasdaq’’) and are

reported national market system

securities (‘‘Nasdaq/NMS’’).

A. Index Design

The Morgan Stanley Multinational

Company Index has been designed to

measure the performance of certain high

capitalization stocks. The Morgan

Stanley Multinational Company Index is

a capitalization-weighted index with

each stock affecting the Index in

proportion to its market capitalization.

Each stock in the Index is eligible for

options trading.

On July 17, 1996, the 50 stocks ranged

in capitalization from $138.2 billion

(General Electric Co.) to $4.7 billion

(Becton Dickinson Inc.). The median

capitalization of the firms in the Index

was $29.33 billion, while the average

capitalization of the Index components

was $37.1 billion. The largest stock

accounted for 7.33% of the total

weighting of the Index, while the

smallest accounted for 0.25%. The five

highest weighted stocks accounted for

28.8% The average daily trading volume

for Index components during the sixmonth period ending July 16, 1996 was

1.93 million shares.

B. Calculation

The methodology used to calculate

the value of the Index is similar to the

methodology used to calculate the value

of other well-known broad-based

indices. The level of the Index reflects

the total market value of the component

stocks relative to a particular base

period. The Morgan Stanley

Multinational Company Index base date

is December 31, 1991, when the Index

value was set to 200. The Index had a

closing value of 405.60 on January 6,

1997. The daily calculation of the

Morgan Stanley Multinational Company

Index is computed by dividing the total

market value of the companies in the

Index by the Index divisor. The divisor

keeps the Index comparable over time

and is adjusted periodically to maintain

the Index. The values of the Index will

be calculated by the CBOE and

disseminated at 15-second intervals

during regular CBOE trading hours to

market information vendors via the

Options Price Reporting Authority

(‘‘OPRA’’).

C. Maintenance

Index maintenance includes

monitoring and completing the

adjustments for company additions and

deletions, share changes, stock splits,

stock dividends (other than ordinary

cash dividends), and stock price

adjustments due to company

restructurings or spinoffs. Routine

corporate actions, such as stock splits

and stock dividends, require simple

changes in the common shares

outstanding and the stock prices of the

companies in the Index and will be

handled by CBOE. Non-routine

corporate actions, such as share

issuances, change the market value of

the Index and require an Index divisor

adjustment as well. The CBOE will refer

all such non-routine matters and other

material changes to the Index to Morgan

Stanley.7 Over time the number of

component securities in the Index may

change. In the event of a stock

replacement, the divisor will be

adjusted to provide continuity in values

of the Index. In addition, whenever a

component change is made to the Index,

every effort will be made to substitute

a component that maintains the

character of the Index.8 Lastly, the

CBOE will notify the Commission if: (i)

less than 75% of the weight of the Index

is comprised of stocks that are eligible

for options trading; or (ii) the number of

securities in the Index is decreased to

less than 35.9

D. Index Option Trading

In addition to regular Index options,

the Exchange may provide for the listing

of long-term index option series

(‘‘LEAPS’’) and reduced-value LEAPS

on the Index (all such LEAPS series are

hereinafter referred to as ‘‘LEAPS’’). For

reduced-value LEAPS, the underlying

value would be computed at one-tenth

of the Index level. The current and

closing Index value of any such

reduced-value LEAP will, after such

initial computation, be rounded to the

nearest one-hundredth.

Strike prices will be set to bracket the

Index in 21⁄2 point increments for strikes

below 200 and 5 point increments above

200. The minimum tick size for series

trading below $3 will be 1⁄16th and for

series trading above $3 the minimum

tick will be 1⁄8th. The trading hours for

options on the Index will be from 8:30

a.m. to 3:15 p.m. (Chicago time).

E. Exercise and Settlement

The proposed options on the Index

will expire on the Saturday following

the third Friday of the expiration

month. Trading in the expiring contract

month will normally cease at 3:15 p.m.

(Chicago time) on the business day

preceding the last day of trading in the

component securities of the Index

(ordinarily the Thursday before

expiration Saturday, unless there is an

intervening holiday). The exercise

settlement value of the Index at option

expiration will be calculated by the

Exchange based on the opening prices of

the component securities on the

business day prior to expiration. If a

stock fails to open for trading, the last

available price on the stock will be used

in the calculation of the Index, as is

done for other currently listed

indexes.10 When the last trading day is

moved because of Exchange holidays

(such as when the CBOE is closed on

the Friday before expiration), the last

trading day for expiring options will be

Wednesday and the exercise settlement
10890 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Notices

11 15 U.S.C. § 78f(b) (1988).

12Pursuant to Section 6(b)(5) of the Act, the

Commission must predicate approval of any new

securities product upon a finding that the

introduciton of such product is in the public

interest. Such finding would be difficult with

respect to a product that served no hedging or other

economic function, because any benefits that might

be derived by market participants likely would be

outweighed by the potential for manipulation,

diminished public confidence in the integrity of the

markets, and other valid regulatory concerns.

13The Commission notes, however, that if the

composition of the Index’s underlying securities

was to substantially change, its decision regarding

the appropriateness of the Index’s current

maintenance standards would be reevaluated.

14The Exchange’s options listing standards,

which are uniform among the options exchange,

provide that a security underlying an option must,

among other things, meet the following

requirements: (1) the public float must be at least

7 million shares; (2) there must be a minimum of

2,000 stockholders; (3) trading volume must have

been at least 2.4 million shares over the preceding

twelve months; and (4) the market price per share

must have been at least $7.50 for a majority of

business days during the preceding three calendar

months. See Interpretation .01 to Exchange Rule

5.3. See also note 8, supra.

value of Index options at expiration will

be determined at the opening of regular

Thursday trading.

F. Surveillance

The Exchange will use the same

surveillance procedures currently

utilized for each of the Exchange’s other

index options to monitor trading in

Index options and Index LEAPS on the

Morgan Stanley Multinational Company

Index. For surveillance purposes, the

Exchange will have complete access to

information regarding trading activity in

the underlying securities.

G. Position Limits

The Exchange proposes to establish

position limits for options on the

Morgan Stanley Multinational Company

Index at 50,000 contracts on either side

of the market, and no more than 30,000

of such contracts may be in the series in

the nearest expiration month. These

limits are roughly equivalent, in dollar

terms, to the limits applicable to options

on other indices.

H. Other Exchange Rules and Matters

As modified herein, the Exchange

Rules in Chapter XXIV will be

applicable to Morgan Stanley

Multinational Company Index options.

In addition, broad-based margin rules

will apply to the Index.

The CBOE is also proposing to amend

Exchange Rule 24.14 in order to include

specific reference to Morgan Stanley as

entitled to the benefit of the disclaimer

of liability in respect of the Index.

The CBOE believes that it has the

necessary systems capacity to support

new series that would result from the

introduction of Morgan Stanley

Multinational Company Index options.

The CBOE has also been informed that

OPRA has the capacity to support the

new series.

III. Findings and Conclusions

The Commission finds that the

proposed rule chang is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, with the

requirements of Section 6(b).11

Specifically, the Commission finds that

the trading of options on the Morgan

Stanley Multinational Company Index,

includes LEAPS, will serve to promote

the public interest as well as to help

remove impediments to a free and open

securities market. Further, the trading of

options on the Index will allow

investors holding positions in some or

all of the securities underlying the Index

to hedge the risks associated with their

portfolios. Accordingly, the Commission

believes that the Index options will

provide investors with an important

trading and hedging mechanism. By

broadening the hedging and investment

opportunities of investors, the

Commission believes that the trading of

Index options will serve to protect

investors, promote the public interest,

and contribute to the maintenance of a

fair market.12

Nevertheless, the trading of options

on the Index raises several issues related

to the design and structure of the Index,

customer protection, surveillance, and

market impact. The Commission

believes, however, for the reasons

discussed below, that the CBOE has

adequately addressed these rules.

A. Index Design and Structure

The Commission believes that it is

appropriate for the Exchange to

designate the Morgan Stanley

Multinational Company Index as a

broad-based index for purposes of index

option trading. Specifically, the

Commission believes that the Index is

broad-based because, among other

reasons, it contains 50 actively-traded

stocks representing 27 industry groups,

and thus reflects a substantial segment

of the U.S. equities market. Accordingly,

the Commission believes that it is

appropriate for the Exchange to apply

its rules governing broad-based index

options to trading in the Index options.

The Commission also finds that the

large capitalizations, liquid markets,

and relative weightings of the Index’s

component stocks significantly

minimize the potential for manipulation

of the Index as well as provide a

sufficient basis for the Index’s

maintenance standards.13 First, the

Index represents and consists of the

common stock values of 50 activelytraded domestic companies. Second, as

of July 17, 1996, no one stock comprised

more than 7.33% of the Index’s value,

and the five highest weighted stocks

accounted for only 28.8% of the Index’s

value. Third, the stocks that comprise

the index are actively-traded, with an

average daily trading volume for Index

components during the six-month

period ending July 16, 1996 of 1.93

million shares. Fourth, as of July 17,

1996, the market capitalizations of the

stocks in the Index were substantial,

ranging from high of $138.2 billion

(General Electric Co.) to a low of $4.7

billion (Becton Dickinson Inc.). The

median capitalization of th efirms in the

Index was $29.33 billion, while the

average capitalization of the Index

components was $37.1 billion. Fifth, the

Index is comprised of stocks

representing a diverse group of 27

industries, including pharmaceuticals

(15.57%), crude/petroleum (9.26%), and

beverages (9.00%). Sixth, all of the

component securities currently are

eligible for options trading and the

maintenance standards require that at

least 75% of the index components

remains options eligible.14 Finally, the

Commissoin believes that, as discussed

below, existing mechanisms to monitor

trading actvity in those securities will

help to deter as well as to detect illegal

trading activity involving Index options.

B. Customer Protection

The Commission believes that a

regulatory system designed to protect

public customers must be in place

before the trading of sophisticated

financial instruments, such as options

on the Morgan Stanley Multinational

Company Index (including full-value

and reduced value LEAPS), can

commence on a national securities

exchange. The Commission notes that

the trading of standardized, exchangetraded options occurs in an

environment that is designed to ensure,

among others things, that: (1) the special

risks of options are disclosed to public

customers; (2) only investors capable of

evaluating and bearing the risks of

options trading are engaged in such

trading; and (3) special compliance

procedures are applicable to options

accounts. Accordingly, because the

Index options will be subject to the

same regulatory regime as the other

standardized options currently traded

on the CBOE, the Commission believes

that adequate safeguards are in place to

ensure the protection of investors in
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Notices 10891

15See, e.g., Securities Exchange Act Release No.

31243 (September 28, 1992), 57 FR 45849 (October

5, 1992) (CBOE-91-51) (order approving the listing

of options on the CBOE Biotech Index).

16The ISG was formed on July 14, 1983 to, among

other things, coordinate more effectively

surveillance and investigative information sharing

arrangements in the stock and options markets. See

Intermarket Surveillance Group Agreement, dated

July 14, 1983, amended January 29, 1990. The

members of the ISG are the following: the American

Stock Exchange, Inc,; the Boston Stock Exchange,

Inc.; the CBOE; the Chicago Stock Exchange, Inc.;

the National Association of Securities Dealers, Inc.;

the New York Stock Exchange, Inc.; the Securities

Stock Exchange Inc.; and the Philadelphia Stock

Exchange, Inc. The major stock index futures

exchanges (including the Chicago Mercantile

Exchange and the Chicago Board of Trade) joined

the ISG as affiliate members in 1990.

17 In addition, the CBOE has represented that it

and OPRA have the necessary systems capacity to

support those new series of index options that

would result from the introduction of Index options

and LEAPS.

18See, e.g., Securities Exchange Act Release No.

30944 (July 21, 1992), 57 FR 33376 (July 28, 1992)

(CBOE–92–09) (order approving position limits for

European-style Standard & Poor’s 500 Stock Index

options settled based on the opening prices of

component securities).

options on the Morgan Stanley

Multinational Company Index.

C. Surveillance

The Commission believes that a

surveillance-sharing agreement between

an exchange proposing to list a stock

index derivative and the exchange(s)

trading the stocks underlying the

derivative product is an important

measure for the surveillance of the

derivatives and underlying securities

markets. Such agreements ensure the

availability of information necessary to

detect and to deter potential

manipulations and other trading abuses,

thereby making the stock index product

less readily susceptible to

manipulation.15 In this regard, the

markets upon which all of the Index

component stocks trade are members of

the Intermarket Surveillance Group

(‘‘ISG’’).16 Similarly, the options on the

individual component securities trade

on markets which are ISG members. In

addition, the Exchange will apply the

same surveillance procedures as those

used for existing broad-based index

option trading on the CBOE.

The Commission notes that certain

concerns are raised when a brokerdealer, such as Morgan Stanley, is

involved in the development and

maintenance of a stock index that

underlies an exchange-traded derivative

product. For several reasons, however,

the Commission believes that the CBOE

has adequately addressed this concern

with respect to options on the Morgan

Stanley Multinational Company Index.

First, the value of the Index, including

the final settlement values, are to be

calculated and disseminated

independent of Morgan Stanley by the

CBOE. Accordingly, neither Morgan

Stanley nor any of its affiliates or other

persons (except CBOE) will be in receipt

of the values prior to their public

dissemination. Second, the Commission

believes that the procedures Morgan

Stanley has established to detect and to

prevent material non-public information

concerning the Index from being

improperly used by members of Morgan

Stanley’s Equity Research Department,

as well as other persons within Morgan

Stanley, adequately serve to minimize

the susceptibility to manipulation of the

index as well as the securities

underlying the Index. Finally, the

Exchange’s existing surveillance

produceures for stock index options will

apply to the options on the Index and

should provide the CBOE with adequate

information to detect and to deter

trading abuses that may occur. In

summary, the Commission believes that

the procedures outlined above will

ensure that Morgan Stanley will not be

able to take advantage of any

informational advantages concerning

modifications to the composition of the

Index due to its role in the maintenance

of the Index.

D. Market Impact

The Commission believes that the

listing and trading of options on the

Morgan Stanley Multinational Company

Index, including LEAPS, will not

adversely impact the underlying

securities, markets.17 First, as descried

above, the Index is broad-based and

comprised of 50 stocks with no one

stock dominating the Index. Second, as

noted above, the stocks contained in the

Index have relatively large

capitalizations and are relatively

actively-traded. Third, the 50,000

contract position and exercise limits,

with no more than 30,000 contracts in

the nearest expiration month, will serve

to minimize potential manipulation and

market impact concerns. Fourth, the risk

to investors of contra-party nonperformance will be minimized because

the Index options and LEAPS will be

issued and guaranteed by the Options

Clearing Corporation (‘‘OCC’’), similar

to all other standardized option traded

in the United States. Fifth, existing

CBOE stock index options rules and

surveillance procedures will apply to

options on the Morgan Stanley

Multinational Company Index.

Lastly, the Commission believes that

settling expiring Morgan Stanley

Multinational Company Index options,

including LEAPS, based on the opening

prices of component securities is

reasonable and consistent with the Act.

As noted in other contexts, valuing

options for exercise settlement on

expiration based on opening prices

rather than on closing prices may help

reduce adverse effects on markets for

stocks underlying options on the

Index.18

The Commission finds good cause to

approve Amendment Nos. 1 and 2 to the

proposed rule filing prior to the thirtieth

day after the date of publication of

notice of filing thereof in the Federal

Register. Amendment No. 1 to the

CBOE’s proposal describes details of

certain Index maintenance procedures.

In this regard, the Commission believes

that the Exchange’s review of the

Index’s component securities will help

to ensure that the Index maintains its

intended market character as well as

remains an appropriate trading vehicle

for public customers. In addition,

Amendment No. 2, which changes the

name of the Index to the Morgan Stanley

Multinational Company Index, raises no

substantive issues and will help to

avoid investor confusion regarding the

components of the Index. The

Commission also notes that no

comments were recevied on the original

CBOE proposal, which was subject to

the full 21-day notice and comment

period. Accordingly, the Commission

believes that it is consistent with

Section 6(b)(5) of the Act to approve

Amendment Nos. 1 and 2 to the

proposed rule change on an accelerated

basis.

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment Nos.

1 and 2 to the rule proposal. 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. 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

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 the CBOE. All submissions

should refer to File No. SR–CBOE–96–

59 and should be submitted by March

31, 1997.
10892 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Notices

19 15 U.S.C. § 78s(b)(2) (1988).

20 17 CFR 200.30–3(a)(12).

1 Due to the Board’s scheduled relocation on

March 16, 1997, any filings made after March 16,

1997, must be filed with the Surface Transportation

Board, 1925 K Street, N.W., Washington, DC 20423–

0001.

IV. Conclusion

For the foregoing reasons, the

Commission finds that the CBOE’s

proposal to list and trade options on the

Morgan Stanley Multinational Company

Index is consistent with the

requirements of the Act and the rules

and regulations thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,19 that the

proposed rule change (SR–CBOE–96–

59), as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.20

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–5746 Filed 3–7–97; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

[Docket OST–96–1334]

Application of Arriva Air International,

Inc. for Certificate Authority

AGENCY: Department of Transportation.

ACTION: Notice of order to show cause

(Order 97–3–4 ).

SUMMARY: The Department of

Transportation is directing all interested

persons to show cause why it should

not issue an order finding Arriva Air

International, Inc., fit, willing, and able,

and awarding it a certificate of public

convenience and necessity to engage in

interstate charter air transportation of

property and mail.

DATES: Persons wishing to file

objections should do so no later than

March 19, 1997.

ADDRESSES: Objections and answers to

objections should be filed in Docket

OST–96–1334 and addressed to the

Department of Transportation Dockets

(SVC–120.30, Room PL–401), U.S.

Department of Transportation, 400

Seventh Street, SW., Washington, DC

20590, and should be served upon the

parties listed in Attachment A to the

order.

FOR FURTHER INFORMATION CONTACT: Ms.

Delores King, Air Carrier Fitness

Division (X–56, Room 6401), U.S.

Department of Transportation, 400

Seventh Street, SW., Washington, DC

20590, (202) 366–2343.

Dated: March 4, 1997.

Patrick V. Murphy,

Deputy Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 97–5849 Filed 3–7–97; 8:45 am]

BILLING CODE 4910–62–P

Privacy Act of 1974: Deletion of

Systems of Records Notices

AGENCY: Office of the Secretary,

Department of Transportation.

ACTION: Notice to delete Privacy Act

systems of records.

SUMMARY: The Department of

Transportation is deleting the following

systems from its inventory of Privacy

Act systems of records notices.

EFFECTIVE DATE: March 10, 1997.

FOR FURTHER INFORMATION CONTACT:

Crystal M. Bush, Privacy Coordinator,

U.S. Department of Transportation,

Washington, DC 20590. Telephone:

(202) 366–9713.

SUPPLEMENTARY INFORMATION: In

accordance with the Privacy Act of

1974, the Department of Transportation

conducted a review of several of its

Privacy Act systems of records and

determined the following records are

covered by DOT/ALL 8, Employee

Transportation Facilitation.

System No. System name

DOT/OST 024 .. Parking Permit Application

Files and Vanpool Application Files.

DOT/OST 025 .. Parking Permit Management System.

Dated: February 25, 1997.

Crystal M. Bush,

Privacy Act Coordinator.

[FR Doc. 97–5766 Filed 3–7–97; 8:45 am]

BILLING CODE 4910–62–P

Surface Transportation Board

[STB Finance Docket No. 33361]

Wheeling & Lake Erie Railway

Company; Trackage Rights Exemption;

Consolidated Rail Corporation

Consolidated Rail Corporation

(Conrail) has agreed to grant nonexclusive overhead trackage rights to the

Wheeling & Lake Erie Railway Company

(W&LE) in Canton, OH, between

Conrail’s Canton Yard and the

connection with W&LE’s Aultman Line

at McKinley, as follows: (1) over

Conrail’s Track 96 between the

connection with W&LE’s East End Yard

and the connection with Conrail’s Fort

Wayne Line at milepost 97.8±; (2) over

Conrail’s Fort Wayne Line between

milepost 97.8± and milepost 96.8± at CP

Fairhope; and (3) over Conrail’s Reed

Runner Track (including the crossover

connection to the Fort Wayne Line and

the portion of the northwest quadrant

interchange track at McKinley owned by

Conrail) between milepost 96.8± at CP

Fairhope and milepost 102.1± at

McKinley, together with necessary head

and tail room, a total distance of

approximately 6.8 miles.

The transaction is scheduled to be

consummated on March 3, 1997.

The trackage rights will provide

W&LE with an alternate route to its

Aultman Line at McKinley, and will

allow retirement of three deteriorated

crossing diamonds at the McKinley

interlocking.

As a condition to this exemption, any

employees affected by the trackage

rights will be protected by the

conditions imposed in Norfolk and

Western Ry. Co.—Trackage Rights—BN,

354 I.C.C. 605 (1978), as modified in

Mendocino Coast Ry., Inc.—Lease and

Operate, 360 I.C.C. 653 (1980).

This notice is filed under 49 CFR

1180.2(d)(7). If it contains false or

misleading information, the exemption

is void ab initio. Petitions to revoke the

exemption under 49 U.S.C. 10502(d)

may be filed at any time. The filing of

a petition to revoke will not

automatically stay the transaction.

An original and 10 copies of all

pleadings, referring to STB Finance

Docket No. 33361, must be filed with

the Surface Transportation Board, Office

of the Secretary, Case Control Branch,

1201 Constitution Avenue, N.W.,

Washington, DC 20423.1 In addition, a

copy of each pleading must be served on

Thomas J. Litwiler, Esq., Oppenheimer

Wolff & Donnelly, Two Prudential

Plaza, 45th Floor, 180 North Stetson

Avenue, Chicago, IL 60601.

Decided: February 28, 1997.

By the Board, David M. Konschnik,

Director, Office of Proceedings.

Vernon A. Williams,

Secretary.

[FR Doc. 97–5864 Filed 3–7–97; 8:45 am]

BILLING CODE 4915–00–P