23326 Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Notices

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

2The Commission has modified the text of the

summaries prepared by Philadep.

3Telephone conversation between Edith

Hallahan, Counsel, Philadep, and Greg Dumark,

Attorney, Division of Market Regulation,

Commission (April 20, 1998).

4 15 U.S.C. 78q–1(b)(3)(C).

5 John Rudolph, Supervisory Trust Analyst, Board

of Governors of the Federal Reserve Board,

concurred with the Commission’s granting of

accelerated approval per a telephone conversation

on April 21, 1998.

6 15 U.S.C. 78s(b)(2).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–11210 Filed 4–27–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39898; File No. SR–

Philadep–98–01]

Self-Regulatory Organizations;

Philadelphia Depository Trust

Company; Notice of Filing and Order

Granting Accelerated Approval of

Proposed Rule Change Relating to an

Increase in the Number of Directors

April 21, 1998.

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

Securities Exchange Act of 1934

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

March 31, 1998, the Philadelphia

Depository Trust Company (‘‘Philadep’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’), as

amended on April 21, 1998, the

proposed rule change as described in

Items I and II below, which items have

been prepared primarily by Philadep.

The Commission is publishing this

notice and order to solicit comments

from interested persons and to grant

accelerated approval of the proposed

rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change involves an

amendment to Philadep’s by-laws and

articles of incorporation to increase the

number of directors on board from

between 5 and 9 to between 5 and 23

and to include the president of Philadep

on its board.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

Philadep 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.

Philadep has prepared summaries, set

forth in sections A, B, and C below, of

the most significant aspects of such

statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The proposed rule change will amend

Philadep’s by-laws and articles of

incorporation to increase the permitted

size of the board from between 5 and 9

directors to between 5 and 23 directors

and to include the president of Philadep

on its board. According to Philadep, all

other provisions of the by-laws

prescribing the composition of the board

will remain unchanged. According to

Philadep, the rule change is desirable

due to the interest of the Board of

Governors of the Philadelphia Stock

Exchange (‘‘Phlx’’) to more fully

participate in the operation and control

of Philadep.

Philadep also believes that a larger

board will provide greater diversity and

add policy making expertise to the

process. In addition, Philadep believes

that a Philadep board comprised of

members from Phlx will allow greater

coordination in scheduling meetings

involving members from both the

boards.3

Philadep believes that the proposed

rule change provides for the fair

representation of shareholders and

participants in the selection of

Philadep’s directors and in the

administration of Philadep’s affairs and

therefore that it is consistent with

Section 17A(b)(3)(C) of the Act and the

rules and regulations thereunder

applicable to Philadep.4

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

Philadep does not believe that 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

Philadep has not solicited and does

not intend to solicit comments on this

proposed rule change. Philadep has not

received any unsolicited written

comments from participants or other

interested parties.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(C) provides that the

rules of a clearing agency must provide

for the fair representation of its

shareholders or members and

participants in the selection of directors.

The Commission believes that the

increase in the size of Philadep’s board

is consistent with the Act’s fair

representation requirements because the

resized board should allow the board to

more accurately reflect the controlling

interest of the Phlx and its Board of

Governors while still providing for fair

representation of Philadep’s

participants.

Philadep has required that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing in

order that this increase be implemented

at the meeting of Phlx’s board of

directors scheduled for April 22, 1998.

The Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after

publication of notice because such

approval will allow the Phlx to increase

Philadep’s board size at its April 22,

1998, meeting.5

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change is consistent with the Act.

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 in

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 Philadep. All submissions

should refer to File No. SR–Philadep–

98–01 and should be submitted by May

19, 1998.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,6 that the
Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Notices 23327

7 17 CFR 200.30–3(a)(12).

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

2Amendment No. 1 revised the proposal’s

maintenance criteria, position and exercise limits,

concentration limits, and corrected technical errors

and oversights.

3Amendment No. 2 clarified that the 9,000

contract position limit governing options on the

proposed index is independent of the three-tiered

position limits found in Exchange Rule 1001A(b)(i),

and instead appears as part of Exchange Rule

1001A(c). The second amendment also modified the

concentration criteria that trigger the application of

alternative position and exercise limits. See Letter

to Sharon Lawson, Senior Special Counsel, Division

of Market Regulation, Commission, from Nandita

Yagnik, Attorney, Exchange, dated April 20, 1998.

4See Exchange Rule 1101A(b)(iii). Long term

options also are referred to as ‘‘LEAPs.’’ For ease of

reference and clarity, the term ‘‘options’’ hereafter

shall include LEAPs where applicable.

5The Index is comprised of the following stocks

(primary markets in parentheses): Apple Computer,

Inc. (Nasdaq); Compaq Computer Corp. (NYSE);

Dell Computer Corp. (Nasdaq); Gateway 2000, Inc.

(NYSE); Hewlett Packard Co. (NYSE); International

Business Machines (NYSE); Micron Technology,

Inc. (NYSE); Sun Microsystems, Inc. (Nasdaq); and

Unisys Corp. (NYSE). 6 17 CFR 240.11Aa3–1.

proposed rule change (File No. SR–

Philadep–98–01) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–11213 Filed 4–27–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39895; File No. SR–Phlx–

98–07]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change and Amendment Nos. 1

and 2 Thereto by the Philadelphia

Stock Exchange, Inc., Relating to the

Listing and Trading of Options on the

Exchange’s Computer Box Maker

Index

April 21, 1998.

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

Securities Exchange Act of 1934

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

February 5, 1998, the Philadelphia

Stock Exchange, Inc. (‘‘Exchange’’ or

‘‘Phlx’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

the proposed rule change as described

in items I and II below, which Items

have been prepared by the Exchange.

On April 3, 1998, the Exchange filed

with the Commission Amendment No. 1

to the proposed rule change.2 On April

20, 1998, the Exchange filed with the

Commission Amendment No. 2 to the

proposed rule change.3 The Commission

is publishing this notice to solicit

comments on the proposed rule change,

as amended, from interested persons

and is accelerating approval of the

amended proposal.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to list and

trade European style, cash-settled

options, including long term options,4

on the Exchange’s Computer Box Maker

Index (‘‘Index’’). The Index is a priceweighted, narrow-based, A.M. settled,

index comprised of nine stocks issued

by companies that manufacture, market,

and support desktop and notebook

personal computers and fault tolerant

systems.5

The text of the proposed rule change

is available at the Office of the

Secretary, the Exchange, and at the

Commission.

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

Exchange 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 III below. The

Exchange 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

1. Purpose

The purpose of the proposed rule

change is to list for trading European

style, cash-settled options on the Index,

a new index developed by the Exchange

pursuant to Exchange Rule 1009A(a).

Options on the Index will provide a

potential hedging vehicle for basket

traders and other market participants

who trade the securities comprising this

small subsector of the technology

industry. The following is a detailed

description of the proposed option

contract and the underlying Index:

(a). Ticker Symbol: BMX.

(b). Settlement Value Symbol: BMZ.

(c). Underlying Index: The Index is a

price-weighted index comprised of nine

stocks issued by companies that

manufacture, market, and support

desktop and notebook personal

computers and fault tolerant systems.

All of the nine component stocks trade

on the New York Stock Exchange, Inc.

(‘‘NYSE’’), or are National Market

System (‘‘NMS’’) securities that trade

through the facilities of the Nasdaq

Stock market (‘‘Nasdaq’’), and therefore

are reported securities as defined in

Rule 11Aa3–1 under the Act.6 Further,

all of the component stocks presently

meet the Exchange’s listing criteria for

equity options contained in Exchange

Rule 1009 and are currently the subject

of listed options on U.S. national

securities exchanges.

The Exchange represents that only the

securities of U.S. companies are

represented in the Index. However, if

component securities issued by nonU.S. companies are added to the Index

(stocks or American Depositary

Receipts) and such component

securities are not subject to

comprehensive surveillance sharing

agreements, those component securities

will not account for more than 20% of

the weight of the Index.

Statistical information provided by

the Exchange indicates that as of April

2, 1998, the aggregate market

capitalization of the nine component

stocks in the Index exceeded $266

billion. The individual market

capitalizations ranged from a high of

$103.4 billion (IBM) to a low of $3.43

billion (Unisys Corp.). Each of the nine

component stocks in the Index had

average daily trading volumes in excess

of one million shares per trading day

over the preceding six months. The

average daily trading volumes ranged

from a high of 19.9 million shares per

day (Compaq Computer Corp.) to a low

of 2.1 million shares per day (Gateway

2000, Inc.). The Exchange believes the

Index’s component stocks are some of

the most widely held and highly

capitalized common stocks.

(d) Index Calculation: The Index is a

price-weighted index. The following

formula will be used to compute the

Index value:

SP SP SP 1 2 9

3 5

100 + +× ....

.

Where: SP=current stock price

The initial divisor is an arbitrary

number selected to achieve a certain

index value. The divisor for the Index

shall be 3.5 which generates an Index

value of 118 as of April 2, 1998.

(e). Index Maintenance: To maintain

the continuity of the Index, the divisor