98 Federal Register / Vol. 62, No. 58 / Wednesday, March 26, 1997 / Notices

1 In Amendment No. 1, Nasdaq clarifies that the

filing is made on behalf of the NASD and the

Nasdaq Stock Market, Inc. Amendment No. 1 also

includes additional discussion regarding the

statutory basis for the fee increase for Nasdaq Level

1 Service. Finally, Amendment No. 1 corrects

several typographical errors in the original filing.

See letter from Eugene A. Lopez, Assistant General

Counsel, Office of General Counsel, The Nasdaq

Stock Market Inc., to Michael Walinskas, Senior

Special Counsel, Office of Market Supervision,

Division of Market Regulation, Commission, dated

March 17, 1997 (‘‘Amendment No. 1’’). 2 15 U.S.C. 78o–3.

Road, George Town, Grand Cayman,

Cayman Islands, B.W.I.

FOR FURTHER INFORMATION CONTACT:

Diane L. Titus, Paralegal Specialist, at

(202) 942–0584, or H.R. Hallock, Jr.,

Special Counsel, 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 from the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is an open-end,

diversified management investment

company organized as a trust under the

laws of the State of New York. On July

6, 1993, applicant filed a notification of

registration on Form N–8A and a

registration statement on Form N–1A.

Applicant’s registration statement has

not been declared effective.

2. Applicant has no shareholders,

liabilities or assets. Applicant is not a

party to any litigation or administrative

proceeding.

3. Applicant is not now engaged, nor

does it propose to engage, in any

business activities other than those

necessary for the winding up of its

affairs.

4. Applicant has terminated its

existence under New York law.

For the SEC, by the Division of Investment

Management, under delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–7646 Filed 3–25–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38417; File No. SR–NASD–

97–17]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change and

Amendment No. 1 Thereto by the

National Association of Securities

Dealers, Inc. Relating to Fees Charged

for the Nasdaq Level 1 Service

March 18, 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 March 3, 1997, the

National Association of Securities

Dealers, Inc. (‘‘NASD’’) and the Nasdaq

Stock Market, Inc. (‘‘Nasdaq’’)

(hereinafter referred to collectively as

‘‘Nasdaq’’ or the ‘‘Nasdaq Stock

Market’’) 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

Nasdaq. On March 18, 1997, the Nasdaq

Stock Market filed Amendment No. 1 to

the proposal.1 The Commission is

publishing this notice to solicit

comments on the proposed rule change,

as amended, from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change amends

NASD Rule 7010(a) to increase the

monthly fee charged for Nasdaq Level 1

Service. Below is the text of the

proposed rule change. Proposed new

language is italicized and proposed

deletions are bracketed.

Rule 7000. CHARGES FOR SERVICES

AND EQUIPMENT

7010. System Services

(a) Nasdaq Level 1 Service

The charge to be paid by the

subscriber for each terminal receiving

Nasdaq Level 1 Service is $20 [19] per

month. This Service includes the

following data:

* * * * *

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

Nasdaq included statements concerning

the purpose of and basis for the

proposed rule change. The text of these

statements may be examined at the

places specified in Item IV below.

Nasdaq 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

The Nasdaq Stock Market proposes to

establish a fee increase for Nasdaq Level

1 Service to reflect the increased value

of the data being disseminated via this

Service. Under the new SEC Order

Handling Rules, Nasdaq quotations now

contain additional information that was

not previously available to subscribers.

That is, pursuant to SEC Rule 11Ac1–4,

customer limit orders are now displayed

in market maker quotations. In addition,

Nasdaq’s Level 1 Service includes price

information from electronic

communications networks (‘‘ECNs’’)

that was not previously available

through this Service. Thus, to reflect the

increased value of the transparency of

Nasdaq quotes under these new rules

and the price discovery information

available in the Nasdaq Stock Market,

Nasdaq believes that the fee for such

service should be increased.

Nasdaq proposes to increase by $1.00

the current monthly fee for the receipt

of Nasdaq quote and trade information,

resulting in a $20 fee per month per

authorized device for Level 1 Service.

As noted above, the Nasdaq Level 1

Service will include limit order

information (i.e., the best priced orders

to buy and sell) and ECN prices. This

information provides valuable

information to investors and other

market participants and helps in price

discovery. However, this fee increase

will not become effective until the latter

of April 1, 1997, or such time when

more than half of Nasdaq securities as

measured by median daily dollar

volume are subject to the new SEC

Order Handling Rules. Nasdaq believes

that it is appropriate to delay the

implementation of the increased fee

until the Level 1 Service reflects a

substantial increase in this new

information. Once Nasdaq’s higher

volume securities are subject to the new

rules, the value of the Level 1 Service

will have substantially increased and

the fee should reflect that added value.

Nasdaq believes that the abovereferenced fee is consistent with the

provisions of Section 15A(b)(5) of the

Act.2 Section 15A(b)(5) specifies that

the rules of a national securities

association shall provide for the

equitable allocation of reasonable dues,

fees and charges among members,

issuers and other persons using any

facility or system that the association

operates or controls. The increased fee

to be charged for this valuable

information results in an equitable

allocation of the cost of providing this

information in a way that the costs are

applied fairly and uniformly to all users

of the system. Nasdaq has attempted to

equitably spread the costs associated

with the information gathered pursuant

to the new SEC Order Handling Rules

over a broad base of end users, as was
Federal Register / Vol. 62, No. 58 / Wednesday, March 26, 1997 / Notices 99

3See Securities Exchange Act Release No. 29616

(August 27, 1991), 56 FR 43826 (September 4,

1991).

4 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 38203

(January 24, 1997), 62 FR 4564 (January 30, 1997).

4 In amendment No. 1 the Exchange revises the

definition of ‘‘foreign broker/dealer’’ to include

those persons or entities which are required to be

registered, authorized or licensed by a foreign

governmental agency or foreign regulatory

organization, even if they are not so registered,

authorized or licensed. See letter from Michael D.

Pierson, Senior Attorney, Regulation Policy, PSE, to

James T. McHale, Attorney, Office of Market

Supervision (‘‘OMS’’), Division of Market

Regulation (‘‘Division’’), Commission, dated March

11, 1997 (‘‘Amendment No. 1’’).

5Rule 6.52(a) provides in part that ‘‘[o]nly nonbroker/dealer customer orders may be placed with

an Order Book Official pursuant to this Rule.’’ Cf.

SEC Rule 11Ac1–4(a)(6) (equity ‘‘customer limit

orders’’ that must be displayed pursuant to Rule

11Ac1–4 include those that are ‘‘not for the account

of either a broker or dealer’’) (effective January 20,

1997).

6Rule 6.87(a) provides: ‘‘Only non-broker/dealer

customer orders are eligible for execution on the

Exchange’s Automatic Execution System (‘‘AutoEx’’).’’

7Rule 6.86(a) provides: ‘‘Each trading crowd is

required to provide a depth of twenty (20) option

contracts for all non-broker/dealer customer orders,

at the bid/offer that is displayed as the

disseminated market quote at the time such orders

are announced or displayed at the trading post

designated for trading the subject option class.’’

8Sections 3(a)(4) and 3(a)(5) of the Act provide:

(4) The term ‘‘broker’’ means any person engaged

in the business of effecting transactions in securities

for the account of others, but does not include a

bank.

(5) The term ‘‘dealer’’ means any person engaged

in the business of buying and selling securities for

his own account, through a broker or otherwise, but

does not include a bank, or any person insofar as

he buys or sells securities for his own account,

either individually or in some fiduciary capacity,

but not as a part of a regular business.

9The Commission notes that a non-broker/dealer

customer executing a trade through a foreign

broker/dealer would be treated as a public customer

for purposes of PSE Rules 6.52(a), 6.86 and 6.87, as

revised. Telephone conversation between Michael

D. Pierson, Senior Attorney, Regulation Policy, PSE,

and James T. McHale, Attorney, OMS, Division,

Commission, on March 3, 1997.

done in the dissemination of OTC

Bulletin Board information in 1991.3

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Nasdaq Stock Market does not

believe that the proposed rule change

will impose any inappropriate 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

Within 35 days of the publication of

this notice in the Federal Register or

within such longer period (i) as the

Commission may designate up to 90

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 the 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.

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 will also be available for

inspection and copying at the principal

office of the NASD. All submissions

should refer to File No. SR–NASD–97–

17 and should be submitted by April 16,

1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Jonathan G. Katz,

Secretary.

[FR Doc. 97–7642 Filed 3–25–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38420; International Series

Release No. 1066; File No. SR–PSE–96–46]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

No. 1 Thereto by the Pacific Stock

Exchange, Inc. Relating to Foreign

Broker/Dealers

March 19, 1997.

On December 16, 1996, the Pacific

Stock Exchange, Inc. (‘‘PSE’’ or

‘‘Exchange’’) submitted to 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

modify its rules to specify that the term

‘‘broker/dealer,’’ as used in PSE Rules

6.52(a), 6.86 and 6.87, includes foreign

broker/dealers. The PSE also proposed

to adopt a definition of the term

‘‘foreign broker/dealer.’’ Notice of the

proposed rule change was published for

comment and appeared in the Federal

Register on January 30, 1997.3 No

comment letters were received on the

proposal. On March 12, 1997, the

Exchange filed amendment No. 1 to the

proposed rule change.4 This order

approves the PSE proposal, as amended.

I. Description of the Proposal

PSE Rules 6.52(a), 6.86 and 6.87,

relating to option transactions only,

currently distinguish between orders for

broker/dealers and orders for nonbroker/dealers. Under these rules, only

non-broker/dealer customer orders are

eligible to be placed on the public limit

order book,5 to be entered for automatic

execution,6 or are eligible for a

guaranteed minimum execution of 20

contracts on the floor of the Exchange.7

The purpose of the proposed rule

change is to clarify the meaning of the

term ‘‘broker/dealer,’’ as used in Rules

6.52(a), 6.86 and 6.87, by specifying that

it includes foreign broker/dealers. The

Exchange is also proposing to adopt the

following definition of ‘‘foreign broker/

dealers,’’ which would be applicable to

PSE Rules 6.52(a), 6.86 and 6.87:

Foreign Broker/Dealer: The term

‘‘foreign broker/dealer’’

means any person or entity that is registered,

authorized or licensed by a foreign

governmental agency or foreign regulatory

organization (or should be so registered,

authorized or licensed) to perform the

function of a broker or dealer in securities,

or both. The terms ‘‘broker’’ and ‘‘dealer’’

mean the same as set out in Sections 3(a)(4)

and 3(a)(5) of the Securities Exchange Act of

1934, provided that a ‘‘broker’’ or ‘‘dealer’’

may be a bank.8

In light of the current globalization of

the securities markets, the Exchange

believes that the subject rules should be

applied consistently. In this regard, PSE

asserts that an exchange specialist (or

functional equivalent) in Canada or

Mexico, for example, should be subject

to the same rules applicable to trading

on the PSE as an exchange specialist in

the United States, and should not have

a competitive advantage over United

States broker/dealers.9