Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Notices 13415

1Newco has not yet been incorporated. SCWC

states that it will inform the Commission of

Newco’s corporate name in its rule 24 certificate.

2 In 1996, SCWC derived more than 92 percent of

its revenues (about $139.9 million) from water sales

and less than 8 percent (about $11.5 million) from

electric sales. Approximately 7 percent of SCWC’s

assets are devoted to its electric business.

3Applicant notes that the scope of CPUC’s

regulation is comprehensive including jurisdiction

over rates, accounting practices, purchases and

dispositions of utility property, extensions of

service, acquisitions of other utility and nonutility

companies, interaffiliate transactions, securities

issuances and corporate reorganizations (including

formation of utility holding companies), and access

to the books and records of the affiliates of utilities

as well as the books and records of the utilities

themselves for purposes of monitoring interaffiliate

transactions.

1This fee shall not be applicable to inactive

organizations. An inactive organization is one

which has no securities transaction revenue, as

determined by annual FOCUS reports, as long as

the organization continues to have no such revenue

each month.

provisions of the Act except section

9(a)(2), for a holding company

(‘‘Newco’’) that will result from a

planned reorganization of SCWC’s

operations.1

SCWC is engaged in the business of

providing water service to

approximately 241,000 consumers in 75

California communities, and providing

electric service to approximately 20,500

consumers (most of whom are

residential customers) in one California

community.2 The California Public

Utilities Commission (‘‘CPUC’’)

regulates both the water and the electric

distribution business of SCWC.3 SCWC

states that it has one subsidiary,

California Cities Water Company, that

engages in unregulated businesses and

generated a nominal amount of revenues

in 1996.

SCWC provides its electric service

through its Bear Valley Electric District

(‘‘Bear Valley’’), which owns no

generating capacity and purchases its

energy supply from various suppliers.

Bulk power is delivered to Bear Valley’s

distribution system through two

transmission lines owned by Southern

California Edison Company.

SCWC states that it plans to

reorganize into a holding company

structure to facilitate its expansion into

a variety of unregulated businesses

related to its current activities as a

regulated water utility while protecting

the interests of its ratepayers. After the

planned reorganization, Newco will be

a holding company with at least two

subsidiaries: one subsidiary will engage

in the water and electric distribution

businesses that are regulated by the

CPUC (‘‘Regulated Subsidiary’’), and

one or more other subsidiaries will

engage in unregulated businesses,

including businesses related to the

regulated water business.

SCWC states that Newco and the

Regulated Subsidiary will be

incorporated in California, and that the

Regulated Subsidiary will be

incorporated in California, and that the

Regulated Subsidiary’s operations will

be confined to California. Newco may

also form one or more other subsidiaries

to acquire and operate other regulated

water utility businesses outside of

California.

The Regulated Subsidiary will be a

‘‘public utility company’’ under section

2(a)(5) of the Act, and Newco will be a

holding company as defined in section

2(a)(7)(A) of the Act, and as such,

subject to regulation under the Act

unless in exemption is obtained.

SCWC states that, upon

consummation of the contemplated

reorganization, Newco will qualify for

an exemption under section 3(a)(1) of

the Act because Newco and every public

utility subsidiary of Newco from which

Newco derives, directly or indirectly,

any material part of its income, will be

predominantly intrastate in character

and carry on their business substantially

in a single State in which Newco and

every such subsidiary company will be

organized.

SCWC also asserts that the granting of

such an exemption will not be

detrimental to the public interest or the

interest of investors or consumers. In

this regard, SCWC notes, among other

things, that the proposed reorganization

requires the express approval of the

CPUC and that, following the

reorganization requires the express

approval of the CPUC and that,

following the reorganization, the

Regulated Subsidiary and its dealings

with Newco and other Newco

subsidiaries will be subject to

comprehensive regulatory oversight by

the CPUC (see note 3, above). SCWC

also states that Newco’s corporate

structure will protect ratepayers by

segregating Newco’s state-regulated

utility operations from its other business

activities thereby insulating the

Regulated Subsidiary from the risks of

the non-regulated businesses and

enhancing the CPUC’s ability to ensure

that there is no cross-subsidization.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–7045 Filed 3–19–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38397; File No. SR–CHX–

97–05]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Stock Exchange, Incorporated

Relating To Amending the Exchange’s

SRO Fee To Provide for an Exemption

for Certain Inactive Members

March 13, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on February 18, 1997,

the Chicago Stock Exchange,

Incorporated (‘‘CHX’’ or ‘‘Exchange’’)

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 by the selfregulatory organization. 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 proposes to amend

Section (q) of its Membership Dues and

Fees Schedule to provide for an

exemption from the Exchange’s SRO fee

for certain members. Below is the text

of the proposed rule change. Proposed

new language is italicized.

Chicago Stock Exchange, Incorporated

Membership Dues and Fees.

(q) Self-Regulatory Organization Fee,1

$100 per member and member

organization per month.

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

self-regulatory organization 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 self-regulatory organization has

prepared summaries, set forth in

Sections A, B, and C below, of the most

significant aspects of such statements.
13416 Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Notices

2The Commission notes that the phrase ‘‘inactive

organizations’’ includes both inactive members and

inactive member organizations that meet the

definition of ‘‘inactive organization’’ as noted in

footnote number 1. Phone conversation between

David Rusoff, Attorney, Foley & Lardner, and

Heather Seidel, Attorney, Market Regulation,

Commission, on March 7, 1997.

3This definition of ‘‘inactive organization’’ is the

same as the definition for the ‘‘inactive

organization’’ exemption from the Exchange’s

examination fee, section (p) under the CHX

Membership Dues and Fee Schedule. Phone

conversation between David Rusoff, Attorney, Foley

& Lardner, and Heather Seidel, Attorney, Market

Regulation, Commission, on March 7, 1997.

4 15 U.S.C. 78f(b)(4).

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

6 17 CFR 240.19b–4(e)(2).

1 15 U.S.C. 78s(b)(1)(1988).

1 17 CFR 240.19b–4 (1991).

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The purpose of the proposed rule

change is to provide an exemption from

the Exchange’s SRO fee for certain

members. The Exchange’s SRO fee

applies to members and members

organizations and helps recoup costs

incurred by the Exchange in performing

its self-regulatory function. The

Exchange proposes to exempt inactive

organizations 2 from this fee because the

Exchange does not incur any significant

costs for regulating these firms.

An inactive organization is defined as

an organization that has no securities

transaction revenue, as initially

determined by its most recent annual

FOCUS report, so long as the

organization continues to have no such

revenue each month.3 For inactive

organizations which do not file FOCUS

reports with the Exchange, such as

when the CHX is not the Designated

Examining Authority for the firm, each

organization must still make such filings

with the Exchange to support its

contention that it is an inactive

organization. If appropriate

documentation is not received from the

organization, the Exchange will impose

the SRO fee.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b)(4) of the Act 4 in that it

provides for the equitable allocation of

reasonable dues, fees and other charges

among its members and issuers and

persons using its facilities.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe the

proposed rule change will impose any

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective upon filing pursuant to Section

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

subparagraph (e)(2) of Rule 19b–4 6

thereunder, in that the proposal

establishes or changes a due, fee, or

other charge imposed by the Exchange.

At any time within 60 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.

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

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to File No.

SR–CHX–97–05 and should be

submitted by April 10, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–7055 Filed 3–19–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38402; File No. SR–NASD–

97–19]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by National

Association of Securities Dealers, Inc.

Relating to Small Order Execution

System Tier Size Classifications

March 14, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’)1 and Rule 19b–4 2 thereunder,

notice is hereby given that on March 7,

1997, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I, II,

and III below, which Items have been

prepared by the NASD. 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 NASD is submitting this filing to

effectuate The Nasdaq Stock Market,

Inc.’s (‘‘Nasdaq’’) periodic

reclassification of Nasdaq National

Market (‘‘NNM’’) securities into

appropriate tier sizes for purposes of

determining the maximum size order for

a particular security eligible for

execution through Nasdaq’s Small Order

Execution System (‘‘SOES’’).

Specifically, under the proposal, 692

NNM securities will be reclassified into

a different SOES tier size effective April

1, 1997. Since the NASD’s proposal is

an interpretation of existing NASD

rules, there are no language changes.

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

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. The NASD has

prepared summaries, set forth in

Sections A, B and C below, of the most

significant aspects of such statements.