Federal Register / Vol. 63, No. 76 /Tuesday, April 21, 1998 / Notices 19775

9 17 CFR 200.3–3(a)(12).

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

2 17 CFR 240.19b–4.

ninety 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 GSCC consents, the

Commission will:

(A) By order approve such filing or

(B) Institute proceedings to determine

whether the rule filing should be

disapproved.

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 NW.,

Washington, D.C. 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the rule filing that are

filed with the Commission, and all

written communications relating to the

rule filing between the Commission and

any person, other than those that may be

withheld from the public in accordance

with provisions of 5 U.S.C. 552, will be

available for inspection and copying in

the Commission’s Public Reference

Room in Washington, D.C. Copies of

such filing will also be available for

inspection and copying at the principal

office of GSCC. All submissions should

refer to the File No. SR–GSCC–98–01

and should be submitted by May 12,

1998.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–10421 Filed 4–20–98; 8:45 am]

BILLING CODE 8010–02–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39873; File No. SR–MSRB–

97–15]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Municipal Securities Rulemaking

Board Relating to Rules G–11, on

Sales of New Issue Municipal

Securities During the Underwriting

Period, G–12, on Uniform Practice, and

G–8, on Books and Records

April 14, 1998.

On December 23, 1997, the Municipal

Securities Rulemaking Board (‘‘Board’’

or ‘‘MSRB’’) filed with the Securities

and Exchange Commission

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

rule change (File No. SR–MSRB–97–15),

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

Securities Exchange Act of 1934

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

The proposed rule change is described

in Items I, II, and III below, which Items

have been prepared by the Board. 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 Board is filing herewith an

amendment to Rule G–11, on sales of

new issue municipal securities during

the underwriting period, G–12, on

uniform practice, and G–8, on books

and records (hereinafter referred to as

the ‘‘proposed rule change’’). The

proposed rule change, among other

things, requires the managing

underwriter of a syndicate to maintain

a record of all issuer syndicate

requirements; requires the managing

underwriter to complete the allocation

of securities within 24 hours of the

sending of the commitment wire;

requires the managing underwriter to

disclose to syndicate members all

available designation information;

requires the managing underwriter to

disclose to members of the syndicate, in

writing, the amount of any portion of

the take-down that is directed to each

member of the syndicate by the issuer;

and shortens the deadline for payment

of designations to 30 calendar days after

the issuer delivers the securities to the

syndicate.

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

Board 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 texts of these

statements may be examined at the

places specified in Item IV below. The

Board 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

As part of the Board’s review of the

underwriting process, the Board has

determined to adopt the proposed rule

change to further strengthen the

integrity of the syndicate practices

process.

Issuer Syndicate Requirements

Issuer requirements involving

syndicate formation, order review,

designation policies and bond

allocations have become much more

prevalent in the municipal securities

market. Such requirements are

significant because they help to

determine which dealers, and ultimately

which investors, obtain the bonds. As

issuer syndicate requirements can affect

the functioning of the syndicate, and at

times the final costs to the issuer of the

new issue, the Board believes that

records of such requirements should be

maintained so that any problems or

concerns regarding the functioning of

the syndicate arising from these

requirements can be identified and

addressed and the information should

be provided to syndicate members and

others, upon request.

The proposed rule change amends

Rules G–8(a)(viii) and G–11(f) to require

the managing underwriter to maintain a

record of all issuer syndicate

requirements. If the requirements are in

a published guideline, such guidelines

should be maintained by the dealer and

supplemented by a statement of any

additional requirements that arise prior

to settlement. If the requirements are not

in published form, the managing

underwriter must create a written

detailed statement of such requirements

and maintain such statement in its

records. The managing underwriter

must provide a copy of the published

guidelines or underwriter prepared

statement of issuer syndicate

requirements to syndicate members

prior to the first offer of any securities

by the syndicate. Syndicate members

must furnish this summary promptly to

others, upon request. In addition, the

managing underwriter must provide the

issuer with a copy of any such statement

for its review.

Allocation of Securities

The proposed rule change amends

Rule G–11(g) to require the managing

underwriter to complete the allocation

of securities within 24 hours of the

sending of the commitment wire. Delays

in allocations seem to be a growing

problem in the municipal securities

market. Many delays in allocations

appear to be the result of issuers and

financial advisors failing to review

orders and proposed allocations in a

timely fashion. Investors complain that

they have difficulty finalizing their

portfolio positions when their orders
19776 Federal Register / Vol. 63, No. 76 /Tuesday, April 21, 1998 / Notices

3Section 15B(b)(2)(C) states that the rules of the

Board shall be designed to prevent fraudulent and

manipulative acts and practices, to promote just

and equitable principles of trade, to foster

cooperation and coordination with persons engaged

in regulating, clearing, settling, processing

information with respect to, and facilitating

transactions in municipal securities, to remove

impediments to and perfect the mechanism of a free

and open market in municipal securities, and, in

general, to protect investors and the public interest.

4See MSRB Reports, Vol. 17, No. 2 (June 1997)

at 3–16, ‘‘Board Review of Underwriting Process.’’

5Smith Barney.

6Prudential.

7BMA and Lehman Brothers.

8Artemis, City of Chicago, GFOA, Rauscher

Pierce and Wachovia.

remain unfilled for as long as two or

more days after the end of the order

period. During volatile market

conditions, delays in allocations hurt

the prospect for a successful

underwriting. The Board adopted the

proposed rule change to ensure a timely

allocation process in the industry.

Disclosure of Designation Information

There currently is no Board rule

requiring the disclosure to syndicate

members of all designations to

members. The proposed rule change

amends Rule G–11(g) to require that the

managing underwriter disclose to

syndicate members all available

designation information within 10

business days following the date of sale

and all information with the sending of

the designation checks.

Disclosure of Take-Down

A small number of issuers are setting

aside, or holding back, at their

discretion, a portion of the take-down to

direct to syndicate members. The Board

believes that because this issuer ‘‘setaside’’ is part of the take-down, it

should be disclosed to syndicate

members in the same manner as

customer designations. The proposed

rule change amends Rule G–11(g) to

require the managing underwriter to

disclose to members of the syndicate, in

writing, the amount of any portion of

the take-down that is directed to each

member of the syndicate by the issuer.

Such disclosure must be made by the

later of 15 business days following the

date of sale or three business days

following receipt by the managing

underwriter of notification of such setasides by the issuer.

Payment of Designations

The proposed rule change amends

Rule G–12(k) to move the deadline for

payment of designations from 30

business days following delivery of the

securities to the customer to 30 calendar

days after the issuer delivers the

securities to the syndicate. The Board

adopted this amendment to provide for

more efficient operation of syndicate

accounts.

The Board believes the proposed rule

change is consistent with Section

15B(b)(2)(C) of the Act.3

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Board does not believe that the

proposed rule change would impose any

burden on competition not necessary or

appropriate in furtherance of the

purposes of the Act, because it would

apply equally to all brokers, dealers and

municipal securities dealers.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

In May 1997, the Board published a

notice (the ‘‘Notice’’) that, among other

things, proposed for comment draft

amendments to Rules G–11, G–12 and

G–8 in three areas: (1) Recordkeeping

and disclosure of issuer syndicate

requirements; (2) timing and disclosure

of allocations and designation; and (3)

timing of settlement of syndicate

accounts.4

In response to its request for

comments, the Board received comment

letters addressing the draft amendments

from the following 13 commentators:

• Artemis Capital Group (‘‘Artemis’’)

• City of Chicago (‘‘City of Chicago’’)

• Edward Jones (‘‘Edward Jones’’)

• Franklin Templeton Group

(‘‘Franklin Templeton’’)

• Goldman, Sachs & Co. (‘‘Goldman

Sachs’’)

• Government Finance Officers

Association (‘‘GFOA’’)

• Lehman Brothers Inc. (‘‘Lehman

Brothers’’)

• Newman & Associates, Inc.

(‘‘Newman’’)

• Prudential Securities (‘‘Prudential’’)

• Rauscher Pierce Refsnes, Inc.

(‘‘Rauscher Pierce’’)

• Smith Barney Inc. (‘‘Smith Barney’’)

• The Bond Market Association

(‘‘BMA’’)

• Wachovia Bank, N.A. (‘‘Wachovia’’)

Some commentators had general

comments opposing any amendments to

rules concerning syndicate practices.

One commentator questioned the

‘‘necessity for regulatory intervention in

this area’’ because the amendments will

offer no benefit to issuers or investors

but ‘‘[r]ather, it is syndicate members

who would be the economic

beneficiaries of these changes and

senior managers who would bear the

cost.’’ 5 Another commentator stated

that ‘‘dealers should be granted some

discretion in conducting their business’’

and that ‘‘the dealer community is

capable of and should remain

responsible for developing mutually

acceptable standards and practices in

their dealings with one another through

the negotiation of contractual

obligations.’’ 6 This commentator also

believes that ‘‘the business relationship

of dealers, which does not serve the

interest of investor protection * * * is

not an area which should be subject to

rulemaking by the MSRB.’’ Two

commentators 7 noted general concern

about the Board proposing rules

requiring dealers to ‘‘police’’ other

market participants when dealer

compliance with certain of the draft

amendments is dependent upon the

actions of others (e.g., issuers and

financial advisors) to complete certain

actions within specified timeframes.

The Board has determined, however,

to adopt most of the proposed

amendments because the proposed rule

change would improve the syndicate

process and thus, be a benefit both to

investors and syndicate members.

Specific comments on the draft

amendments are summarized below.

Rule G–8(a)(viii): Managing underwriter

must maintain a record of all issuer syndicate

requirements. If the requirements are in a

published guideline, such guidelines should

be maintained by the dealer and

supplemented by a statement of any

additional requirements that arise prior to

settlement. If the requirements are not in

published form, the managing underwriter

must create a written detailed statement of

such requirements and maintain such

statement in its records.

Rule G–11(f): Managing underwriter must

provide a copy of the published guidelines or

underwriter prepared statement of issuer

syndicate requirements to syndicate members

prior to the first offer of any securities by the

syndicate. Syndicate members must furnish

this summary promptly to others, upon

request. Managing underwriter must provide

the issuer with a copy of any such statement

for its review.

Five commentators indicated general

support for these amendments without

commenting on the specific

components.8 GFOA noted that ‘‘[t]he

regulatory system should facilitate, not

hinder, activism on the part of issuers

and GFOA believes that the proposed

changes help to improve

communications about issuer directions

and are consistent with its

recommendations to issuers’’ and that it

‘‘believes it is particularly important

that issuers be provided with a copy of

any underwriter-prepared statement of

issuer requirements in advance of

distribution for approval. It urges

issuers, however, to take responsibility

themselves to provide clear directions
Federal Register / Vol. 63, No. 76 /Tuesday, April 21, 1998 / Notices 19777

9 GFOA also noted that in its 1996 recommended

practice on ‘‘Pricing Bonds in a Negotiated

Transaction,’’ it urged ‘‘issuers to communicate to

underwriters specific goals to be achieved in the

pricing of bonds and expectations regarding the

roles of each member of the financing team * * *

[and] to give clear directions to underwriters on

how bonds should be allocated and to review the

Agreement Among Underwriters prior to the sale to

ensure that it incorporated the issuer’s goals.’’ In

addition, GFOA suggested that issuers ‘‘approve all

information that will be sent out by the underwriter

on the preliminary pricing wire, including the

allocation of the bonds and the take-down.’’

10 Goldman Sachs.

11BMA, Edward Jones, Lehman Brothers,

Newman and Smith Barney. Lehman Brothers

believed that issuer policies and requirements are

more appropriately addressed in the Agreement

Among Underwriters. Lehman Brothers noted that

BMA recently revised its standard form of

Agreement Among Underwriters with comments

solicited from the industry and that none of the

areas being reviewed by the Board concerning

syndicate practices were identified as areas of

concern to be addressed in the revised Agreement

Among Underwriters; therefore, the amendments

concerning syndicate practices are not needed. The

Board notes, however, that BMA’s notice requesting

comment on its draft of a standard Agreement

Among Underwriters stated that the ‘‘Agreement

does not attempt to address the syndicate proposals

included in the recent MSRB Review of the

Underwriting Process, since at this time it is

impossible to predict whether, or in what form,

those proposals might eventually be adopted.’’

12BMA, Edward Jones, Lehman Brothers and

Smith Barney.

13BMA and Smith Barney.

14Edward Jones.

15BMA and Lehman Brothers.

16BMA believed that ‘‘[i]ssuers seeking to impose

their requirements on syndicates must take the

initiative to enunciate such requirements, in

writing, and publish them so they are available to

all who are involved, or considering becoming

involved, in a syndicate for that issuer.’’ Lehman

Brothers believed that ‘‘[t]o the extent that an issuer

has specific designation policies, the issuer should

be responsible for providing copies of such policies

to the syndicate manager who could make copies

available to syndicate members upon request.’’

17Newman.

18Artemis, Edward Jones, Franklin Templeton,

Goldman Sachs, GFOA and Rauscher Pierce.

Franklin Templeton believed ‘‘[b]onds should be

confirmed no later than 24 hours after the order

period has closed.’’

19Edward Jones.

20BMA, Lehman Brothers, Newman, Smith

Barney and Wachovia. Smith Barney also noted that

24 hours may not always provide sufficient time for

issuers to review the allocations and that ‘‘[i]ssuers

have an interest in conducting such review to

assure themselves that the book runner is acting

fairly.’’

21BMA, Edward Jones, GFOA, Lehman Brothers,

Newman and Wachovia.

22 GFOA had no comment about the timeframe.

23Edward Jones, Lehman Brothers and Newman.

24BMA.

25Wachovia.

26Artemis and Goldman Sachs.

27Artemis.

28 Goldman Sachs.

29 Goldman Sachs.

30Artemis.

about allocation designations in writing

to underwriters.’’ 9 One commentator

noted support for maintaining a record

of issuer syndicate requirements and for

requiring the managing underwriter to

provide a copy of the issuer

requirements to syndicate members

prior to the first offer of any securities

by the syndicate.10

Five commentators expressed general

support for disclosure of issuer policies

and requirements, but they noted

concerns on how the information would

be disclosed (e.g., by using the

Agreement Among Underwriters or a

dealer-prepared statement).11 Four

commentators are opposed to requiring

the managing underwriter to create a

written detailed statement of issuer

syndicate requirements if they are not in

published form.12 Two commentators

noted the time and cost that would be

involved in requiring the managing

underwriter to prepare such a

statement.13 One commentator stated

that the managing underwriter should

be allowed to use the Agreement Among

Underwriters instead of being required

to create a written statement.14 Two

commentators 15 are not opposed to

requiring syndicate managers to provide

copies of issuer policies to syndicate

members once the issuer has prepared

these policies in written form and made

them available.16 One commentator

noted that, for liability purposes, issuers

often do not provide their allocation

requirements in writing.17

Most commentators agree that

recording and disclosing issuer policies

and requirements would be beneficial.

Managing underwriters currently take

issuer direction on syndicate matters

and relate such information to the

members. The Board believes the

formalization of this process should not

be a burden; therefore, the Board has

determined to propose the draft

amendment.

Rule G–11(g): Senior syndicate managers to

complete the allocation of securities within

24 hours of the sending of the commitment

wire.

Six commentators support this draft

amendment.18 One commentator noted

that ‘‘all investors, both retail and

institutional, benefit from a more timely

allocation process.’’ 19 While five

commentators noted that support for the

prompt completion of allocations, they

also noted that a dealer’s compliance

with the draft amendment is dependent

upon the timely actions of others (i.e.,

issuers and financial advisors) and thus

recommended that the amendment not

be adopted.20

The Board has determined to submit

the proposed rule change because it

should greatly facilitate the allocation

process. The Board believes that, to

ensure compliance with the proposed

rule change, underwriters will include a

provision in the bond purchase

agreement that allocations must be

completed within the 24 hour

timeframe. If issuers or financial

advisors wish to review orders and

proposed allocations, they will have to

do so within this 24 hour time period.

Rule G–11(g): Require disclosure to

syndicate members of all designations to

members within five business days following

the date of sale.

Six commentators 21 support this draft

amendment, with five of these

recommending changes to the proposed

timeframe.22 Three commentators

recommended disclosure within 10

business days following the date of sale

to provide more time for the process to

be completed.23 One commentator

suggested that the ‘‘timeframe be

extended to the later of ten business

days after the date of sale, or three

business days following receipt by the

senior manager of the information.’’ 24

One commentator recommended 10 to

15 business days as more feasible.25

Two commentators are opposed to

syndicate members receiving a

statement of designations made to all

syndicate members.26 One of these

commentators stated that the draft

amendment ‘‘would discourage

competition, essentially forcing

accounts to go through the manager’’

and that ‘‘[s]mall accounts, in particular,

would be even more vulnerable to

intimidation by the manager and there

would be little incentive for any account

to work with any member other than the

senior manager.’’ 27 This commentator

also stated that ‘‘decreased competition

would hurt issuers by raising the cost of

issuance.’’ The other commentator

stated that ‘‘[s]yndicate members view

capital formation from the perspective

of their own competitive advantage and

would use allocation and designation

information to challenge the fairness of

decisions made by the senior

manager.’’ 28 These two commentators

are in favor of an amendment to require

the senior syndicate manager to disclose

to individual syndicate members the

amount of their respective designations,

with one commentator 29 suggesting it

be made within five business days

following the date of sale and the other

commentator 30 suggesting that it be

made within seven business days

following the date of sale. One of these

commentators also stated that ‘‘[o]ften,

syndicate members fail to receive their

full designation payments, to the benefit

of the senior managers, as a direct result

of delays in communicating this

information’’ and that ‘‘implementation

of this amendment is critical as it will
19778 Federal Register / Vol. 63, No. 76 /Tuesday, April 21, 1998 / Notices

31Artemis.

32Smith Barney.

33BMA, GFOA, Newman, Rauscher Pierce, Smith

Barney and Wachovia.

34BMA.

35 Goldman Sachs.

36Artemis.

37Newman and Wachovia.

38BMA.

39Artemis, BMA, Edward Jones, Goldman Sachs,

Newman, Rauscher Pierce, Smith Barney and

Wachovia.

40BMA.

41 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

considerably reduce the prevalence of

this problem and help to ensure that

syndicate members receive the full

designation credit they have earned.’’ 31

Another commentator opposes the

draft amendment in its entirety.32 It

believes that the designation

information ‘‘would potentially be used

to promote further fixed economics in

the municipal bond industry, through

the use of set-asides or similar methods

of allocation * * * the industry must

allow the market system to allocate the

economics if dealers are to efficiently

allocate their resources.’’ It further

stated that ‘‘those firms that provide

services to investors, such as research,

liquidity and analysis, profit by being

compensated by those investors in the

form of designations’’ and fixed

economics would provide a deterrent to

‘‘firms from providing services to

investors and the market at large.’’ It

also noted that it opposes the draft

amendment because, for senior

managers to be in compliance with any

timeframe contained within the rule,

they would have to rely on buyers

making their designations within that

timeframe. This commentator stated

that, if the Board determines to go

forward with the draft amendment, it

would support BMA’s comment to

disclose designations ‘‘upon the later of

three days after notice from the buyer or

ten days after the date of sale.’’

The Board has determined to propose

the draft amendment because it believes

all syndicate members have the right to

the disclosure of all designation

information. The Board does not believe

the proposed rule change will be used

to promote ‘‘fixed economics’’ in the

municipal securities industry. The

Board did decide, however, to change

the timeframe to require disclosure to

syndicate members of all available

designation information within 10

business days following the date of sale

and all information with the sending of

the designation checks. The Board

believes almost all of the information

will be available within 10 business

days, but the additional time is

provided to receive any late

information.

Rule G–11(g): Require the senior manager

to disclose to members of the syndicate, in

writing, within 10 business days following

the date of sale, the amount of any portion

of the take-down that is directed to each

member of the syndicate by the issuer.

Six commentators33 support this draft

amendment with one commentator

noting ‘‘this part of the take-down

should be disclosed to syndicate

members in the same manner as

customer designations.’’ 34 One

commentator is opposed to the

amendment noting that it would

provide a means for syndicate members

to challenge senior managers about their

decisions.35 Another commentator

believes that the disclosure of a dealer’s

take-down should be made only to that

dealer.36 Two commentators suggested

that the timeframe be changed to 15

days following the date of sale.37 One

commentator suggested that the

timeframe be changed to the later of 15

business days following the date of sale,

or three business days following receipt

by the senior manager of notification of

such set-asides.38

The Board has determined to propose

the draft amendment because it believes

all syndicate members have the right to

the disclosure of all take-down

information. The Board did decide,

however, to change the timeframe to the

later of 15 business days following the

date of sale or three business days

following receipt by the managing

underwriter of notification of such set

asides.

Rule G–12(k): Move the deadline for

payment of designations from 30 business

days following delivery of the securities to

the customer to 30 calendar days after the

issuer delivers the securities to the syndicate.

Eight commentators support this draft

amendment.39 One commentator stated

that the amendment ‘‘will greatly

streamline the underwriting process.’’ 40

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the date of

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 such 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,

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, NW.,

Washington, DC 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

Room. Copies of the filing will also be

available for inspection and copying at

the Board’s principal offices. All

submissions should refer to File No.

SR–MSRB–97–15 and should be

submitted by May 12, 1998.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.41

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–10506 Filed 4–20–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39866; File No. SR–NASD–

98–31]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. To Implement the

Effective Date of Recently-Approved

Amendments to Rules 3010 and 3110

April 14, 1998.

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

Securities Exchange Act of 1934

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

notice is hereby given that on April 7,

1998, the NASD Regulation, Inc.

(‘‘NASDR’’) filed with the Securities and

Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which Items have been

prepared by the NASDR. The NASDR