2708 Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Notices

1 15 U.S.C. § 78s(b)(1).

2See Securities Exchange Act Release No.

37619A (September 6, 1996), 61 FR 48290

(September 12, 1997) (‘‘SEC Limit Order Adopting

Release’’).

3See letters from Richard R. Lindsey, Director,

Division of Market Regulation, SEC, to Mr. Richard

Grasso, Chairman and Chief Executive Officer,

NYSE, dated November 22, 1996; to Mr. Richard G.

Ketchum, Chief Operating Officer, NASD, dated

January 3, 1997; and to Mr. James E Buck, Senior

Vice President and Secretary, NYSE, dated January

17, 1997.

submitted more frequently if deemed

appropriate by the applicable Board.

The obligations of the Participants to

provide these reports, materials and

data to a Board when it so reasonably

requests, shall be a contractual

obligation of all Participants under their

agreement governing participation in

the Fund and Future Funds.

12. Neither the Fund nor any Future

Fund will accept a purchase order from

a Plan if such purchase would make the

Plan shareholder or owner of 10% or

more of the assets of such Fund unless

such Plan executes a fund participation

agreement with the relevant Fund,

including the conditions set forth herein

to the extent applicable. A Plan

shareholder will execute an application

containing an acknowledgment of this

condition at the time of its initial

purchase of shares of such Fund.

Conclusion

For the reasons summarized above,

Applicants assert that the requested

exemptions are appropriate in the

public interest and consistent with the

protection of investors and the purposes

fairly intended by the policy and

provisions of the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–1113 Filed 1–15–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39540; File No. SR–CHX–

97–26]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the Chicago Stock

Exchange, Inc. Relating to the Display

of Limit Orders

January 12, 1998.

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

Securities Exchange Act of 1934

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

October 1, 1997, the Chicago Stock

Exchange, Incorporated (‘‘CHX’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission

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

rule change, as described in Items I and

II below, which Items have been

prepared by the Exchange. The

Commission is publishing this notice to

solicit comments on the proposed rule

change 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 Exchange is proposing to amend

Article XX, Rule 7 to expressly provide

for the display of customer limit orders

as contained in Rule 11Ac1–4 under the

Act and other limit orders. Proposed

new language is italicized.

Article XX

Rule 7

. . . Interpretation and Policies

.05 Quotation sizes, unless

otherwise specified, shall be assumed to

be for 100 shares. Where bids or offers

are made at the same price the aggregate

quotation size of such equal bids or

offers shall be inputted into the

quotation system. Such aggregate sizes

shall remain firm until withdrawn

unless exempted under one of the

conditions specified in paragraphs .06–

.09 of this Rule. With respect to limit

orders received by specialists, each

specialist shall publish immediately

(i.e., as soon as practicable, which

under normal market conditions means

no later than 30 seconds from time of

receipt) a bid or offer that reflects:

(i) the price and full size of each

limit order that is at a price that would

improve the specialist’s bid or offer in

such security; and

(ii) the full size of each limit order

that is priced equal to the specialist’s

bid or offer for such security;

The requirements with respect to

specialists’ display of limit orders shall

not apply to any limit order that is:

(i) executed upon receipt of the

order;

(ii) placed by a person or entity who

expressly requests, either at the time the

order is placed or prior thereto pursuant

to an individually negotiated agreement

with respect to such person’s orders,

that the order not be displayed;

(iii) and odd-lot order;

(iv) delivered immediately upon

receipt to an exchange or associationsponsored system or an electronic

communications network that complies

with the requirements of Securities and

Exchange Commission Rule 11Ac1–

1(c)(5) under the Securities Exchange

Act with respect to that order;

(v) delivered immediately upon

receipt to another exchange member or

over-the-counter market maker that

complies with the requirements of

Securities and Exchange Commission

Rule 11Ac1–4 under the Securities

Exchange Act with respect to that order;

or

(vi) an ‘‘all or none’’ order.

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 Commission has recently adopted

Rule 11Ac1–4 under the Act 2 which,

among other things, requires specialists

to immediately display the price and

full size of any customer limit order that

improved their quoted bid or offer in a

security. The proposed amendments to

Article XX, Rule 7 would make Rule 7

more consistent with the limit order

display requirements of SEC Rule

11Ac1–4 and Commission

interpretations thereunder.3

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b)(5) of the

Act in that it is designed to promote just

and equitable principles of trade, to

remove impediments to and perfect the

mechanism of a free and open market

and a national market system and, in

general, to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any burden on competition.
Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Notices 2709

4See SEC’s Limit Order Adopting Release.

5See SEC’s Limit Order Adopting Release at note

147.

6 15 U.S.C. § 78f(b)(5).

7 15 U.S.C. § 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

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

2This version of the NASD By-Laws was

approved by the Commission in Securities

Exchange Act Release No. 39326 (Nov. 14, 1997),

62 FR 62385 (Nov. 21, 1997). Additions are

italicized, deletions are bracketed.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The Exchange has neither solicited

nor received written comments on the

proposed rule change.

III. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, 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 at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the CHX. All

submissions should refer to File No.

SR–CHX–97–26 and should be

submitted by February 6, 1998.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission believes that the

Exchange’s proposal to adopt a limit

order display rule is consistent with the

policies behind the Commission’s own

Limit Order Display rule.4 The

Commission recognizes that the

Exchange’s proposal has the additional

requirements that CHX specialists

display all limit orders, not just

customer limit orders, unless a specified

exception exists. In addition, a CHX

specialist, under the Exchange’s

proposal, must increase the size of its

quote upon receipt of a limit order even

if such order creates a de minimis

increase. The Commission recognized,

in adopting the Limit Order Display

Rule, that SRO’s may impose more

stringent standards.5

The Commission finds that the

Exchange’s proposal is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange. Specifically, the Commission

finds that the proposed rule change is

consistent with Section 6(b)(5) of the

Act,6 which requires an exchange to

have rules designed to prevent

fraudulent and manipulative acts and

practices, to promote just and equitable

principles of trade, to remove

impediments to and perfect the

mechanism of a free and open market

and a national market system, and, in

general, to protect investors and the

public interest.

The Commission therefore finds good

cause for approving the proposed rule

change (SR–CHX–97–26) prior to the

thirtieth day after date of publication of

notice thereof ion the Federal Register.

It is therefore ordered, pursuant to

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

proposed rule change be, and hereby is,

approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–1111 Filed 1–15–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39539; File No. SR–NASD–

97–92]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to By-Law

Amendment to Require Members To

Update Firm Contact Information

Electronically, To Maintain Electronic

Mail Account, and for Other Purposes

January 12, 1998.

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

Securities Exchange Act of 1934

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

December 19, 1997, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II, and III below, which Items

have been prepared by the NASD. 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 Association is proposing the

following changes to its by-laws, to

require its members to update firm

contact information electronically, to

maintain an electronic mail (e-mail)

address, and to make certain other

technical changes:

By-Laws of the National Association of

Securities Dealers, Inc.2

Article IV—Executive Representative

Sec. 3. Each member shall appoint

and certify to the Secretary of the NASD

one ‘‘executive representative’’ who

shall represent, vote, and act for the

member in all the affairs of the NASD,

except that other executives of a

member may also hold office in the

NASD, serve on the Board or

committees appointed under Article IX,

Section 1 or otherwise take part in the

affairs of the NASD. A member may

change its executive representative

upon giving notice thereof via electronic

process or such other process the NASD

may prescribe to the Secretary, or may,

when necessary, appoint, by notice via

electronic process to the Secretary, a

substitute for its executive

representative. An executive

representative of a member or a

substitute shall be a member of senior

management and registered principal of

the member. Not later than January 1,

1999, each executive representative

shall maintain an Internet electronic

mail account for communication with

the NASD and shall update firm contact

information via the NASD Regulation

Web Site or such other means as

prescribed by the NASD.

* * * * *

Article VII—Board of Governors

* * * * *

Sec. 9. (b) The National Nominating

Committee shall consist of no fewer

than six and no more than nine

members. The number of [Industry]

Non-Industry committee members shall

equal or exceed the number of [NonIndustry] Industry committee members.

If the National Nominating Committee

consists of six members, at least two

shall be Public committee members. If

the National Nominating Committee

consists of seven or more members, at

least three shall be Public committee

members. No officer or employee of the

Association shall serve as a member of