19282 Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Notices

20 15 U.S.C. 78s(b).

21See Section 106 of the Amex Company Guide

which requires, among other things, that the issuer

have tangible net worth in excess of $250 million

and otherwise substantially exceed size and

earnings requirements in Section 101(A) of the

Company Guide or meet the alternative guideline

set forth in paragraph (a).

22The Commission notes that position limits for

narrow-based stock index warrants are set at a level

roughly equivalent to 75 percent of narrow-based

index options. As a result, position limits for

warrants based on the Index will be nine million.

23Telephone conversation between Claire

McGrath, Vice President and Special Counsel,

Amex, and Deborah Flynn, Division, Commission,

on March 16, 1998.

24 15 U.S.C. 78s(b)(2).

25 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Letter from Murray L. Ross, Vice President

and Secretary, Phlx, to Richard Strasser, Assistant

Director, Division of Market Regulation,

Commission, dated January 14, 1998. Amendment

No. 1 is described further below.

4See Securities Exchange Act Release No. 39622

(Feb. 4, 1998) 63 FR 7488 (Feb. 13, 1998).

5 In Amendment No. 1 to the filing, the Phlx

proposed a new rule, to be designated as Rule 21,

which would define an Inactive Nominee as

follows:

The term inactive nominee shall mean a natural

person associated with and designated by a member

organization who has applied for and been

approved by the Admissions Committee for such

status and is registered as such with the Office of

the Secretary. An inactive nominee shall have no

rights or privileges of membership unless and until

said inactive nominee becomes a member of the

Exchange pursuant to the By-Laws and Rules of the

Exchange. An inactive nominee merely stands

ready to assume legal title to a membership upon

notice by the member organization to the Office of

Secretary to be transferred intra-firm on an

expedited basis.

to reflect a static portfolio of stocks and

the active Index maintenance (i.e.,

including replacing Index components)

generally is inconsistent with such

approach. In order to address the

possibility that the quality of the stocks

in the Index could deteriorate or one or

several stocks could dominate the

Index, the Amex has represented that it

is seeking only to list and trade a single

issuance of warrants on the Index with

a limited duration of one to three years.

The Commission notes that if the

Exchange proposes to list and trade

other products based on Index,

including other index warrants, the

Exchange will advise the Commission in

order to determine whether a rule filing

pursuant to Section 19(b) of the Act 20

will be necessary. In addition, the

Commission notes that if the term of the

warrants exceeds one year, the

Exchange will monitor the options

eligibility of the underlying securities. If

less than 75% of the weight of the Index

is composed of securities that are

options eligible, the Amex will notify

the Commission. Given the high quality

of the component stocks, as well as the

other factors noted above, the

Commission believes that the absence of

active Index maintenance criteria is not

fatal to the Commission’s approval of

the listing and trading of a single

issuance of warrants on the Index.

The Commission further notes that

the rules and procedures of the

Exchange adequately address the special

concerns attendant to the trading of

Index warrants. Specifically, the

applicable suitability, account approval,

disclosure, and compliance

requirements of the applicable Amex

provisions satisfactorily address

potential public customer concerns.

Moreover, the Amex plans to distribute

a circular to its membership calling

attention to specific risks associated

with warrants on the Index. Finally,

pursuant to the Exchange’s listing

guidelines, only companies capable of

meeting the Amex’s index warrant

issuer standards will be eligible to issue

Index warrants.21

The Commission believes that the

listing and trading of warrants on the

Index will not adversely impact the

underlying securities because the Index

is comprised of highly-capitalized

securities that are actively-traded. In

addition, the Amex has established

reasonable position and exercise limits

for narrow-based stock index

warrants,22 which will serve to

minimize potential manipulation and

other stock market concerns.

Finally, the Amex represents 23 that

its existing surveillance procedures will

allow the Exchange to detect and deter

potential manipulations and other

trading abuses in the derivatives and

underlying securities markets. The

Exchange further represents that

comprehensive surveillance sharing

agreements are in place with the

appropriate regulatory authorities in the

countries that oversee the primary

markets for the two securities in the

Index that are represented by ADRs.

Accordingly, the Commission believes

that the Amex should have available to

it the regulatory tools necessary to

properly surveil for abuses in the

trading of warrants on the Index.

V. Conclusion

For the foregoing reasons, the

Commission finds that the Amex’s

proposal to list and trade warrants based

on the 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,24 that the

proposed rule change (SR–Amex–97–

48) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.25

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–10184 Filed 4–16–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39851; File No. SR–PHLX–

97–35]

April 10, 1998.

Self-Regulatory Organizations;

Philadelphia Stock Exchange, Inc.;

Order Approving Proposed Rule

Change To Amend Its By-Law Article

XII, Section 12–10, With Respect to the

Eligibility of Persons To Serve as

Inactive Nominees

On December 15, 1997, the

Philadelphia Stock Exchange,Inc.

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

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

rule change pursuant to Section 19(b)(1)

of the Securities Exchange Act of 1934

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

amend its By-Law Article XII, Section

12–10, with respect to the eligibility of

persons to serve as inactive nominees.

On January 14, 1998, the Exchange

submitted Amendment No. 1 to the

filing, in which it proposed a new rule,

Phlx Rule 21, defining ‘‘Inactive

Nominee,’’ and explained the role of an

Inactive Nominee on the Phlx.3

Notice of the proposed rule change,

including Amendment No. 1, was

published in the Federal Register.4 The

Commission received no comment

letters in response to the filing. This

order approves the proposed rule

change, as amended.

I. Description of the Proposal

Phlx’s proposal would amend its ByLaw Article XII, Section 12–10, with

respect to the eligibility of persons to

serve as Inactive Nominees.5

Phlx By-Law Article XII, Section 12–

10, sets forth the eligibility requirements
Federal Register / Vol. 63, No. 74 / Friday, April 17, 1998 / Notices 19283

6For example, an Inactive Nominee might serve

on behalf of a trader who needs to take leave for

surgery, or could serve when specialist take

vacation leave. It is anticipated that Inactive

Nominees would be used particularly following

‘‘triple-witching’’ days to assist firms in processing

the greater number of transactions during those

periods. Telephone conversation between Murray L.

Ross, Vice President and Secretary, Phlx, and Marie

D’Aguanno Ito, Special Counsel, Division of Market

Regulation, Commission, April 8, 1998.

7 15 U.S.C. 78S(b)(2).

8 17 CFR 200.30–3(a)(12).

with respect to persons designated to

serve as Inactive Nominees. An Inactive

Nominee must be a person affiliated

with a member organization who has

submitted a membership application

and has met all membership

qualification requirements, including an

examination administered by the Phlx’s

Market Surveillance Department. The

amendment to By-Law Article XII,

Section 12–10, will allow an approved

Inactive Nominee to assume the legal

title to a membership on an intra-firm

and expedited basis in the event of an

emergency due to illness or other

factors. In Amendment No. 1, the Phlx

stated that an Inactive Nominee would

serve in the ‘‘event of an emergency due

to illness or other factors,’’ and ‘‘would

allow a member organization to have a

full compliment of traders or specialists

available to conduct business on the

Exchange trading floors by transferring

legal title intra-firm to the inactive

nominee thereby making that person an

Exchange member.’’ 6

The rule change will subject a person

designated as an Inactive Nominee to

the existing membership application

process, including fees. Additionally,

the member organization with whom an

Inactive Nominee is affiliated will be

subject to a fee for the privilege of

maintaining an Inactive Nominee’s

status.

A member organization seeking to

designate an affiliated person as an

Inactive Nominee shall submit a

membership application on behalf of a

proposed Inactive Nominee, who would

go through the existing membership

application process. Upon meeting all

membership requirements and after

posting for a two-week period in the

membership Bulletin, this person will

be registered as an Inactive Nominee.

Upon notice filed with the Phlx Office

of the Secretary in writing prior to 9:00

A.M. on any business day that the

Exchange is open, an Inactive Nominee

may assume the legal title to a

membership on an intra-firm basis and

would be eligible to transact business on

the Exchange that day or for such longer

period consistent with the seat lease or

membership title and use agreement

(ABC agreement).

II. Discussion

The Commission finds that the

proposed rule change is consistent with

Section 6 of the Act in general, and in

particular, with Section 6(b)(5). Under

Exchange Act Section 6(b)(5), the rules

of an exchange must be designed,

among other things, to promote just and

equitable principles of trade and to

prevent fraudulent and manipulative

acts and practices. By creating a pool of

eligible individuals who can substitute

for traders or specialists on the trading

floor, the proposal should assist the

Exchange in facilitating the smooth

functioning of its market operations,

consistent with Exchange Act Section

6(b)(5). Such an effort to have a

prepared and available roster of

substitute traders should help to

facilitate transactions in securities and

remove impediments to, and perfect the

mechanism of, a free and open market,

also consistent with Exchange Act

Section 6(b)(5).

III. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,7 that the

proposed rule change (SR–PHLX–97–

45), as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–10182 Filed 4–16–98; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice 2782]

Advisory Committee on International

Economic Policy Notice of Partially

Closed Meeting

The Advisory Committee on

International Economic Policy (ACIEP)

will meet 1:00 pm–5:00 pm on Monday,

April 20, 1998, in Room 1107, U.S.

Department of State, 2201 C Street, NW,

Washington, DC 20520. The meeting

will be hosted by Committee Chairman

Mike Gadbaw and by Assistant

Secretary of State for Economic and

Business Affairs Alan P. Larson.

The ACIEP will first meet in closed

session, which will be devoted to

organizational matters, the Asian

financial crisis, and state/local

economic sanctions. The closed

briefings involve discussions of

classified information, pursuant to

section 10(d) of the Federal Advisory

Committee Act (FACA), 5 U.S.C.

552b(c)(1), 5 U.S.C. 442b(c)(4), and 5

U.S.C. 552b(c)(9)(B). The open session

will focus on the OECD Multilateral

Agreement on Investment and the AntiBribery Convention as well as African

issues. Members of the public may

attend the open session beginning at

3:00 p.m. as seating capacity allows.

As access to the Department of State

is controlled, persons wishing to attend

the meeting should notify the ACIEP

Executive Secretary by Monday, April

13, 1998.

Each person must provide his or her

name, company or organization

affiliation, date of birth, and social

security number to the ACIEP

Secretariat at (202) 647–5968 or fax

(202) 647–5713 (Attn: Sharon Rogers). A

list will be made up for Diplomatic

Security and the Reception personnel

will direct them to Room 1107.

FOR FURTHER INFORMATION CONTACT:

Sharon Rogers, Secretariat, U.S.

Department of State, Bureau of

Economic and Business Affairs, Room

6828, Main State, Washington, DC

20520. She may be reached at telephone

number (202) 647–5968 or fax number

(202) 647–5713.

Dated: April 14, 1998.

Alan P. Larson,

Assistant Secretary for Economic and

Business Affairs.

[FR Doc. 98–10325 Filed 4–17–98; 2:16 p.m.]

BILLING CODE 4710–07–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. PE–98–6]

Petitions for Exemption; Summary of

Petitions Received; Dispositions of

Petitions Issued

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of petitions for

exemption received and of dispositions

of prior petitions.

SUMMARY: Pursuant to FAA’s rulemaking

provisions governing the application,

processing, and disposition of petitions

for exemption (14 CFR Part 11), this

notice contains a summary of certain

petitions seeking relief from specified

requirements of the Federal Aviation

Regulations (14 CFR Chapter I),

dispositions of certain petitions

previously received, and corrections.

The purpose of this notice is to improve

the public’s awareness of, and

participation in, this aspect of FAA’s

regulatory activities. Neither publication