19538 Federal Register / Vol. 63, No. 75 / Monday, April 20, 1998 / Notices

NUCLEAR REGULATORY

COMMISSION

[Docket 70–7002]

Notice of Amendment to Certificate of

Compliance GDP–2 for the U.S.

Enrichment Corporation, Portsmouth

Gaseous Diffusion Plant, Portsmouth,

OH

The Commission made a

determination that the following

amendment request is significant in

accordance with 10 CFR 76.45. Notice of

Receipt of Amendment Request

appeared in the Federal Register on

January 5, 1998, allowing a 30-day

public comment period on the

application. No public comments were

received.

The Nuclear Regulatory Commission

(NRC) staff has reviewed the certificate

amendment application and concluded

that it provides reasonable assurance of

adequate safety, safeguards, and

security, and compliance with NRC

requirements. Therefore, the Director,

Office of Nuclear Material Safety and

Safeguards, is prepared to issue an

amendment to the Certificate of

Compliance for the Portsmouth Gaseous

Diffusion Plant. The staff has prepared

a Compliance Evaluation Report which

provides details of the staff’s evaluation.

The Commission has determined that

this amendment satisfies the criteria for

a categorical exclusion in accordance

with 10 CFR 51.22. Therefore, pursuant

to 10 CFR 51.22(b), no environmental

impact statement or environmental

assessment need be prepared for this

amendment.

United States Enrichment Corporation

(USEC) or any person whose interest

may be affected, and who submitted

written comments in response to the

Notice on the amendment application,

under § 76.37, may file a petition, not

exceeding 30 pages, requesting review

of the Director’s Decision. The petition

must be filed with the Commission not

later than 15 days after publication of

this Federal Register Notice. A petition

for review of the Director’s Decision

shall set forth with particularity the

interest of the petitioner and how that

interest may be affected by the results of

the decision. The petition should

specifically explain the reasons why

review of the Decision should be

permitted with particular reference to

the following factors: (1) the interest of

the petitioner; (2) how that interest may

be affected by the Decision, including

the reasons why the petitioner should

be permitted a review of the Decision;

and (3) the petitioner’s areas of concern

about the activity that is the subject

matter of the Decision. Any person

described in this paragraph may file a

response to any petition for review, not

to exceed 30 pages, within 10 days after

filing of the petition. If no petition is

received within the designated 15-day

period, the Director will issue the final

amendment to the Certificate of

Compliance without further delay. If a

petition for review is received, the

decision on the amendment application

will become final in 60 days, unless the

Commission grants the petition for

review or otherwise acts within 60 days

after publication of this Federal Register

Notice.

A petition for review must be filed

with the Secretary of the Commission,

U.S. Nuclear Regulatory Commission,

Washington, DC 20555–0001, Attention:

Rulemakings and Adjudications Staff, or

may be delivered to the Commission’s

Public Document Room, the Gelman

Building, 2120 L Street, NW,

Washington, DC, by the above date.

For further details with respect to the

action see (1) the application for

amendment and (2) the Commission’s

Compliance Evaluation Report. These

items are available for public inspection

at the Commission’s Public Document

Room, the Gelman Building, 2120 L

Street, NW, Washington, DC, and at the

Local Public Document Room.

Date of amendment request: February

25, 1997.

Brief description of amendment: On

February 25, 1997, USEC submitted a

request to provide for an additional

identified criticality accident case for

the X–333 cascade building related to

the previously approved increase in

assay limit to 3 percent. The operation

at increased assay creates conditions

where the location of an inadvertent

nuclear criticality event might be closer

to the X–333 Area Control Room (ACR–

1), thus producing higher potential

doses to personnel at that location. It

should be noted that this hypothetical

accident case was identified by USEC

after the NRC approved USEC’s initial

certificate application in November

1996. It should also be noted that the

increase in the X–333 assay limit was

approved by the NRC as part of the

initial certification of PORTS. For this

hypothetical accident case, an estimate

is made that personnel in ACR–1 could,

under the conservative assumption that

they remained in ACR–1 for 50 minutes

despite the likely criticality alarm,

receive a dose of 49 rem and not 0.005

rem as is currently indicated in the

Accident Analysis section of the PORTS

Safety Analysis Report (SAR). Based on

an initial review of the amendment

request, the NRC staff feels that

sufficiently adequate safety controls are

currently in place at PORTS to prevent

and mitigate this accident. Therefore,

other than the proposed modification to

the PORTS SAR, this amendment would

likely not require any other changes to

plant operations.

Effective date: The amendment to

Certificate of Compliance GDP–2 will

become effective 60 days after issuance.

Certificate of Compliance No. GDP–2:

Amendment will revise the

consequences of a criticality accident in

the X–333 cascade building in the

Safety Analysis Report.

Local Public Document Room

location: Portsmouth Public Library,

1220 Gallia Street, Portsmouth, Ohio

45662.

Dated at Rockville, Maryland, this 9 day of

April 1998.

For the Nuclear Regulatory Commission.

Carl J. Paperiello,

Director, Office of Nuclear Material Safety

and Safeguards.

[FR Doc. 98–10333 Filed 4–17–98; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–23110; 812–10940]

Lehman Brothers Inc.; Notice of

Application

April 13, 1998.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under section 12(d)(1)(J) of the

Investment Company Act of 1940 (the

‘‘Act’’) for an exemption from section

12(d)(1) of the Act, under section 6(c) of

the Act for an exemption from section

14(a) of the Act, and under section 17(b)

of the Act for an exemption from section

17(a) of the Act.

SUMMARY OF APPLICATION: Lehman

Brothers Inc. (‘‘Lehman’’) requests an

order with respect to PIES Trust I and

future trusts that are substantially

similar and for which Lehman will

serve as a principal underwriter

(collectively, the ‘‘Trusts’’) that would

(i) permit other registered investment

companies, and companies excepted

from the definition of investment

company under sections 3 (c)(1) and

(c)(7) of the Act, to own a greater

percentage of the total outstanding

voting stock (the ‘‘Securities’’) of any

Trust than that permitted by section

12(d)(1), (ii) exempt the Trusts from the

initial net worth requirements of section

14(a), and (iii) permit the Trusts to

purchase U.S. Government securities

from Lehman at the time of a Trust’s

initial issuance of Securities.
Federal Register / Vol. 63, No. 75 / Monday, April 20, 1998 / Notices 19539

1No Trust will hold Contracts relating to the

Shares of more than one issuer.

2A formula is likely to limit the Holder’s

participation in any appreciation of the underlying

Shares, and it may, in some cases, limit the Holder’s

exposure to any depreciation in the underlying

Shares. It is anticipated that the Holders will

receive a yield greater than the ordinary dividend

yield on the Shares at the time of the issuance of

the Securities, which is intended to compensate

Holders for the limit of the Holders’ participation

in any appreciation of the underlying Shares. In

some cases, there may be an upper limit on the

value of the Shares that a Holder will ultimately

receive.

3The contracts may provide for an option on the

part of a counterparty to deliver Shares, cash, or a

combination of Shares and cash to the Trust at the

termination of each Trust.

4A ‘‘majority of the Trust’s outstanding

Securities’’ means the lesser of (i) 67% of the

Securities represented at a meeting at which more

than 50% of the outstanding Securities are

represented, and (ii) more than 50% of the

outstanding Securities.

FILING DATES: The application was filed

on December 31, 1998. Applicant has

agreed to file an amendment, the

substance of which is incorporated in

this notice, during the notice period.

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 Lehman with a

copy of the request, personally or by

mail. Hearing requests should be

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

May 7, 1998, and should be

accompanied by proof of service on

Lehman, 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 may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Lehman, 3 World Financial Center, New

York, New York 10285.

FOR FURTHER INFORMATION CONTACT:

Brian T. Hourihan, Senior Counsel, at

(202) 942–0526, or Mary Kay Frech,

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 from the SEC’s

Public Reference Branch, 450 Fifth

Street, N.W., Washington, D.C. 20549

(tel. (202) 942–8090).

Applicant’s Representations

1. Each Trust will be a limited-life,

grantor trust registered under the Act as

a non-diversified, closed-end

management investment company.

Lehman will serve as a principal

underwriter (as defined in section

2(a)(29) of the Act) of the Securities

issued to the public by each Trust.

2. Each Trust will, at the time of its

issuance of Securities, (i) enter into one

or more forward purchase contracts (the

‘‘Contracts’’) with a counterparty to

purchase a formulaically-determined

number of a specified equity security or

securities (the ‘‘Shares’’) of one

specified issuer,1 and (ii) in some cases,

purchase certain U.S. Treasury

securities (‘‘Treasuries’’), which may

include interest-only or principal-only

securities maturing at or prior to the

Trust’s termination. The Trusts will

purchase the Contracts from

counterparties that are not affiliated

with either the relevant Trust or

Lehman. The investment objective of

each Trust will be to provide to each

holder of Securities (‘‘Holder’’) (i)

current cash distributions from the

proceeds of any Treasuries, and (ii)

participation in, or limited exposure to,

changes in the market value of the

underlying Shares.

3. In all cases, the Shares will trade

in the secondary market and the issuer

of the Shares will be a reporting

company under the Securities Exchange

Act of 1934. The number of Shares, or

the value of the Shares, that will be

delivered to a Trust pursuant to the

Contracts may be fixed (e.g., one Share

per Security issued) or may be

determined pursuant to a formula, the

product of which will vary with the

price of the Shares. A formula generally

will result in each Holder of Securities

receiving fewer Shares as the market

value of the Shares increases, and more

Shares as their market value decreases.2

At the termination of each Trust, each

Holder will receive the number of

Shares per Security, or the value of the

Shares, as determined by the terms of

the Contracts, that is equal to the

Holder’s pro rata interest in the Shares

or amount received by the Trust under

the Contracts.3

4. Securities issued by the Trusts will

be listed on a national securities

exchange or traded on the Nasdaq Stock

Market’s National Markets. Thus, the

Securities will be ‘‘national market

system’’ securities subject to public

price quotation and trade reporting

requirements. After the Securities are

issued, the trading price of the

Securities is expected to vary from time

to time based primarily upon the price

of the underlying Shares, interest rates,

and other factors affecting conditions

and prices in the debt and equity

markets. Lehman currently intends, but

will not be obligated, to make a market

in the Securities of each Trust.

5. Each Trust will be internally

managed by three trustees and will not

have any separate investment adviser.

The trustees will have no power to vary

the investments held by each Trust. A

bank qualified to serve as a trustee

under the Trust Indenture Act of 1939,

as amended, will act as custodian for

each Trust’s assets and as paying agent,

registrar, transfer agent, and collateral

agent with respect to the Securities of

each Trust. The bank will have no other

affiliation with, and will not be engaged

in any other transaction with, any Trust.

The day-to-day administration of each

Trust will be carried out by Lehman or

the bank.

6. The Trusts will be structured so

that the trustees are not authorized to

sell the Contracts or Treasuries unless a

default occurs under a Contract and the

Contract is accelerated. The Trusts will

hold the Contracts until maturity, at

which time they will be settled

according to their terms. However, in

the event of the bankruptcy or

insolvency of any counterparty to a

Contract with a Trust, or the occurrence

of any other default provided for in the

Contract, the obligations of the

counterparty under the Contract will be

accelerated and the available proceeds

of the Contract will be distributed to the

Security Holders.

7. The trustees of each Trust will be

selected initially by Lehman, together

with any other initial Holders, or by the

grantors of the Trust. The Holders of

each Trust will have the right, upon the

declaration in writing or vote of more

than two-thirds of the outstanding

Securities of the Trust, to remove a

trustee. Holders will be entitled to a full

vote for each Security held on all

matters to be voted on by Holders and

will not be able to cumulate their votes

in the election of trustees. The

investment objectives and fundamental

policies of each Trust may be changed

only with the approval of a ‘‘majority of

the Trust’s outstanding Securities’’ 4 or

any greater number required by the

Trust’s constituent documents. Unless

Holders so request, and except as

required by the Act, charter documents

of the Trust or a rule of a national

securities exchange, or a quotation

system it is not expected that the Trusts

will hold any meetings of Holders, or

that Holders will ever vote.

8. The Trusts will not be entitled to

any rights with respect to the Shares

until any Contracts requiring delivery of

the Shares to the Trust are settled, at

which time the Shares will be promptly
19540 Federal Register / Vol. 63, No. 75 / Monday, April 20, 1998 / Notices

distributed to Holders. The Holders,

therefore, will not be entitled to any

rights with respect to the Shares

(including voting rights or the right to

receive any dividends or other

distributions) until receipt by them of

the Shares at the time the Trust is

liquidated.

9. Each Trust will be structured so

that its organizational and ongoing

expenses will not be borne by the

Holders, but rather, directly or

indirectly, by Lehman, the

counterparties, or another third party, as

will be described in the prospectus for

the relevant Trust. At the time of the

original issuance of the Securities of any

Trust, there will be paid to each of the

administrator, the custodian, and the

paying agent, and to each trustee, a onetime amount in respect of such agent’s

fee over its term. Any expenses of the

Trust in excess of this anticipated

amount will be paid as incurred by a

party other than the Trust itself (which

party may be Lehman). Moreover, the

bank’s fee for acting as trustee,

custodian, paying agent, registrar and

transfer agent, and fees and expenses for

acting as collateral agent will be paid by

Lehman, who in turn will be reimbursed

by the counterparties.

Applicant’s Legal Analysis

A. Section 12(d)(1)

1. Section 12(d)(1)(A)(i) of the Act

prohibits any registered investment

company from owning more than 3% of

the total outstanding voting stock of any

other investment company, and any

investment company and any company

or companies controlled by the

investment company from owning in

the aggregate more than 3% of the total

outstanding voting stock of any

registered investment company. A

company that is excepted from the

definition of an investment company

under section 3 (c)(1) or (c)(7) of the Act

is deemed to be an investment company

for purposes of section 12(d)(1)(A)(i) of

the Act under sections 3 (c)(1) and

(c)(7)(D) of the Act. Section 12(d)(1)(C)

of the Act similarly prohibits any

investment company, other investment

companies having the same investment

adviser, and companies controlled by

such investment companies from

owning more than 10% of the total

outstanding voting stock of any closedend investment company.

2. Section 12(d)(1)(J) of the Act

provides that the SEC may exempt

persons or transactions from any

provision of section 12(d)(1), if, and to

the extent that, the exemption is

consistent with the public interest and

protection of investors.

3. Lehman believes, in order for the

Trusts to be marketed most successfully,

and to be traded at a price that most

accurately reflects their value, that it is

necessary for the Securities of each

Trust to be offered to large investment

companies and investment company

complexes. Lehman states that these

investors seek to spread the fixed costs

of analyzing specific investment

opportunities by making sizable

investments in those opportunities.

Conversely, Lehman asserts that it may

not be economically rational for the

investors, or their advisers, to take the

time to review an investment

opportunity if the amount that the

investors would ultimately be permitted

to purchase is immaterial in light of the

total assets of the investment company

or investment company complex.

Therefore, Lehman argues that these

investors should be able to acquire

Securities in each Trust in excess of the

limitations imposed by sections

12(d)(1)(A)(i) and 12(d)(1)(C). Lehman

requests that the SEC issue an order

under section 12(d)(1)(J) exempting the

Trusts from the limitations.

4. Lehman states that section 12(d)(1)

was designed to prevent one investment

company from buying control of other

investment companies and creating

complicated pyramidal structures.

Lehman also states that section 12(d)(1)

was intended to address the layering of

costs to investors.

5. Lehman believes that the concerns

about pyramiding and undue influence

generally do not arise in the case of the

Trusts because neither the trustees nor

the Holders, except upon the occurrence

of an event of default provided for in a

Contract, will have the power to vary

the investments held by each Trust or to

acquire or dispose of the assets of the

Trusts. To the extent that Holders can

change the composition of the board of

trustees or the fundamental policies of

each Trust by vote, Lehman argues that

any concerns regarding undue influence

will be eliminated by a provision in the

charter documents for the Trusts that

will require any investment companies

owning voting stock of any Trust in

excess of the limits imposed by sections

12(d)(1)(A)(i) and 12(d)(1)(C) to vote

their Securities in proportion to the

votes of all other Holders. Lehman also

believes that the concern about undue

influence through a threat to redeem

does not arise in the case of the Trusts

because the Securities will not be

redeemable.

6. Section 12(d)(1) also was designed

to address the excessive costs and fees

that may result from multiple layers of

investment companies. Lehman believes

that these concerns do not arise in the

case of the Trusts because of the limited

ongoing fees and expenses incurred by

the Trusts and because generally these

fees and expenses will be borne, directly

or indirectly, by Lehman or another

third party, not by the Holders. In

addition, the Holders will not, as a

practical matter, bear the organizational

expenses (including underwriting

expenses) of the Trusts. Lehman asserts

that the organizational expenses

effectively will be borne by the

counterparties in the form of a discount

in the price paid to them for the

Contracts, or will be borne directly by

Lehman, the counterparties, or other

third parties. Similarly, Lehman asserts

that the fees of the bank for acting as

trustee, paying agent, registrar, transfer

agent, and collateral agent will borne

directly by Lehman. Thus, a Holder will

not pay duplicative charges to purchase

securities in any Trust. Finally, there

will be no duplication of advisory fees

because the Trusts will be internally

managed by their trustees.

8. Lehman believes that the

investment product offered by the

Trusts serves a valid business purpose.

The Trusts, unlike most registered

investment companies, are not marketed

to provide investors with either

professional investment asset

management or the benefits of

investment in a diversified pool of

assets. Rather, Lehman asserts that the

Securities are intended to provide

Holders with an investment having

unique payment and risk characteristics,

including an anticipated higher yield

than the ordinary dividend yield on the

Shares at the time of the issuance of the

Securities.

9. Lehman believes that the purposes

and policies of section 12(d)(1) are not

implicated by the Trusts and that the

requested exemption from section

12(d)(1) is consistent with the public

interest and the protection of investors.

B. Section 14(a)

1. Section 14(a) of the Act requires, in

pertinent part, that an investment

company have a net worth of at least

$100,000 before making any public

offering of its shares. The purpose of

section 14(a) is to ensure that

investment companies are adequately

capitalized prior to or simultaneously

with the sale of their securities to the

public. Rule 14a–3 exempts from

section 14(a) unit investment trusts that

meet certain conditions in recognition

of the fact that, once the units are sold,

a unit investment trust requires much

less commitment on the part of the

sponsor than does a management

investment company. Rule 14a–3

provides that a unit investment trust
Federal Register / Vol. 63, No. 75 / Monday, April 20, 1998 / Notices 19541

investing in eligible trust securities will

be exempt from the net worth

requirement, provided that the trust

holds at least $100,000 of eligible trust

securities at the commencement of a

public offering.

2. Lehman argues that, while the

Trusts are classified as management

companies, they have the characteristics

of unit investment trusts. Investors in

the Trusts, like investors in a unit

investment trust, will not be purchasing

interests in a managed pool of

securities, but rather in a fixed and

disclosed portfolio that is held until

maturity. Lehman believes that the

make-up of each Trust’s assets,

therefore, will be ‘‘locked-in’’ for the life

of the portfolio, and there is no need for

an ongoing commitment on the part of

the underwriter.

3. Lehman states that, in order to

ensure that each Trust will become a

going concern, the Securities of each

Trust will be publicly offered in a firm

commitment underwriting, registered

under the Securities Act of 1933, and

resulting in net proceeds to each Trust

of at least $10,000,000. Prior to the

issuance and delivery of the Securities

of each Trust to the underwriters, the

underwriters will enter into an

underwriting agreement pursuant to

which they will agree to purchase the

Securities subject to customary

conditions to closing. The underwriters

will not be entitled to purchase less

than all of the Securities of each Trust.

Accordingly, Lehman states that either

the offering will not be completed at all

or each Trust will have a net worth

substantially in excess of $100,000 on

the date of the issuance of the

Securities. Lehman also does not

anticipate that the net worth of the

Trusts will fall below $100,000 before

they are terminated.

4. Section 6(c) of the Act provides that

the SEC may exempt persons or

transactions if, and to the extent that,

the exemption is necessary or

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act. Lehman requests that the SEC

issue an order under section 6(c)

exempting the Trusts from the

requirements of section 14(a). Lehman

believes that the exemption is

appropriate in the public interest and

consistent with the protection of

investors and the policies and

provisions of the Act.

C. Section 17(a)

1. Sections 17(a)(1) and (2) of the Act

generally prohibit the principal

underwriter, or any affiliated person of

the principal underwriter, of a

registered investment company from

selling or purchasing any securities to or

from that investment company. The

result of these provisions is to preclude

the Trusts from purchasing Treasuries

from Lehman.

2. Section 17(b) of the Act provides

that the SEC shall exempt a proposed

transaction from section 17(a) if

evidence establishes that the terms of

the proposed transaction are reasonable

and fair and do not involve

overreaching, and the proposed

transaction is consistent with the

policies of the registered investment

company involved and the purposes of

the Act. Lehman requests an exemption

from sections 17(a) (1) and (2) to permit

the Trusts to purchase Treasuries from

Lehman.

3. Lehman states that the policy

rationale underlying section 17(a) is the

concern that an affiliated person of an

investment company, by virtue of this

relationship, could cause the investment

company to purchase securities of poor

quality from the affiliated person or to

overpay for securities. Lehman argues

that it is unlikely that it would be able

to exercise any adverse influence over

the Trusts with respect to purchases of

Treasuries because Treasuries do not

vary in quality and are traded in one of

the most liquid markets in the world.

Treasuries are available through both

primary and secondary dealers, making

the Treasury market very competitive.

In addition, market prices on Treasuries

can be confirmed on a number of

commercially available information

screens. Lehman argues that because it

is one of a limited number of primary

dealers in Treasuries, it will be able to

offer the Trusts prompt execution of

their Treasury purchases at very

competitive prices.

4. Lehman states that it is only

seeking relief from section 17(a) with

respect to the initial purchase of the

Treasuries and not with respect to an

ongoing course of business.

Consequently, investors will know

before they purchase a Trust’s Securities

the Treasuries that will be owned by the

Trust and the amount of the cash

payments that will be provided

periodically by the Treasuries to the

Trust and distributed to Holders.

Lehman also asserts that whatever risk

there is of overpricing the Treasuries

will be borne by the counterparties and

not by the Holders because the cost of

the Treasuries will be calculated into

the amount paid on the Contracts.

Lehman argues that, for this reason, the

counterparties will have a strong

incentive to monitor the price paid for

the Treasuries, because any

overpayment could result in a reduction

in the amount that they would be paid

on the Contracts.

5. Lehman believes that the terms of

the proposed transaction are reasonable

and fair and do not involve

overreaching on the part of any person,

that the proposed transaction is

consistent with the policy of each of the

Trusts, and that the requested

exemption is appropriate in the public

interest and consistent with the

protection of investors and purposes

fairly intended by the policies and

provisions of the Act.

Applicant’s Conditions

Lehman agrees that the order granting

the requested relief will be subject to the

following conditions:

1. Any investment company owning

voting stock of any Trust in excess of

the limits imposed by section 12(d)(1) of

the Act will be required by Trust’s

charter documents to vote its Trust

shares in proportion to the vote of all

other Holders.

2. The trustees of each Trust,

including a majority of the trustees who

are not interested persons of the Trust,

(i) will adopt procedures that are

reasonably designed to provide that the

conditions set forth below have been

complied with; (ii) will make and

approve such changes as deemed

necessary; and (iii) will determine that

the transactions made pursuant to the

order were effected in compliance with

such procedures.

3. The Trusts (i) will maintain and

preserve in an easily accessible place a

written copy of the procedures (and any

modifications to such procedures), and

(ii) will maintain and preserve for the

longer of (a) the life of the Trusts and

(b) six years following the purchase of

any Treasuries, the first two years in an

easily accessible place, a written record

of all Treasuries purchased, whether or

not from Lehman, setting forth a

description of the Treasuries purchased,

the identity of the seller, the terms of

the purchase, and the information of

materials upon which the

determinations described below were

made.

4. The Treasuries to be purchased by

each Trust will be sufficient to provide

payments to Holders of Securities that

are consistent with the investment

objectives and policies of the Trust as

recited in the Trust’s registration

statement and will be consistent with

the interests of the Trust and the

Holders of its Securities.

5. The terms of the transactions will

be reasonable and fair to the Holders of

the Securities issued by each Trust and

will not involve overreaching of the
19542 Federal Register / Vol. 63, No. 75 / Monday, April 20, 1998 / Notices

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

2See Securities Exchange Act Release No. 34157

(June 3, 1994), 59 FR 30062 (June 10, 1994).

Trust or the Holders of Securities of the

Trust on the part of any person

concerned.

6. The fee, spread, or other

remuneration to be received by Lehman

will be reasonable and fair compared to

the fee, spread, or other remuneration

received by dealers in connection with

comparable transactions at such time,

and will comply with section 17(e)(2)(C)

of the Act.

7. Before any Treasuries are

purchased by the Trust, the Trust must

obtain such available market

information as it deems necessary to

determine that the price to be paid for,

and the terms of, the transaction is at

least as favorable as that available from

other sources. This will include the

Trust obtaining and documenting the

competitive indications with respect to

the specific proposed transaction from

two other independent government

securities dealers. Competitive

quotation information must include

price and settlement terms. These

dealers must be those who, in the

experience of the Trust’s trustees, have

demonstrated the consistent ability to

provide professional execution of

Treasury transactions at competitive

market prices. They also must be those

who are in a position to quote favorable

prices.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–10275 Filed 4–17–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Meeting

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 meeting during

the week of April 20, 1998.

A closed meeting will be held on

Thursday, April 23, 1998, at 10:00 a.m.

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)(i) and

(10), permit consideration of the

scheduled matters at the closed meeting.

Commissioner Unger, as duty officer,

voted to consider the items listed for the

closed meeting in a closed session.

The subject matter of the closed

meeting scheduled for Thursday, April

23, 1998, at 10:00 a.m., will be:

Institution and settlement of

injunctive actions.

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: April 15, 1998.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–10504 Filed 4–16–98; 12:34 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39854; File No. SR–Amex–

98–14]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

American Stock Exchange, Inc.

Relating to Options on the Computer

Hardware Index

April 13, 1998.

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

Securities Exchange Act of 1934

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

March 30, 1998, the American Stock

Exchange, Inc. (‘‘Amex’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission the proposed rule change

as described in Items, I, II, and III below,

which Items have been prepared by the

self-regulatory 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 Amex proposes to trade options

on the Computer Hardware Index, a new

index developed by the Amex based on

the stocks of companies engaged in the

design and production of commercial

and consumer personal computers and

systems. In addition, the Amex proposes

to amend its Rule 901C, Commentary

.01 to reflect that 90% of the Index’s

numerical index value will be

accounted for by stocks that meet the

current criteria and guidelines set forth

in Amex Rule 915. The text of the

proposed rule change is set forth in

Exhibit A to the filing.

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 Amex 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 the

Statutory Basis for, the Proposed Rule

Change

(1) Purpose

The Amex proposes to trade options

on its newly developed Computer

Hardware Index (the ‘‘Index’’), an index

based entirely on shares of widely held

companies engaged in the design and

production of commercial and

consumer personal computers and

systems. With rapidly changing

technology, vendors constantly

introducing more powerful products,

and the growing demand for systems

priced less than $1,000, stocks of

companies in this sector of the high-tech

industry are expected to remain

extremely volatile, particularly in the

near term. Options on the Index are

designed to provide investors with an

investment vehicle to participate in or

hedge against this volatility, and

decrease the risk involved in selecting

individual stocks. A list of the current

component securities is set forth in

Exhibit B to the filing.

The Amex is filing this proposal

pursuant to Amex Rule 901C,

Commentary .02, which provides for the

commencement of the trading of options

on the Index thirty days after the date

of this filing. The proposal meets all the

criteria set forth in Commentary .02 and

the Commission’s order approving that

rule as outlined below.2