25130 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices

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

2 17 CFR 240.19b–4.

3See Letter from cott VanHatten, Legal Counsel,

Derivative Securities, Amex to Michael Walinskas,

Senior Special Counsel, Division of Market

Regulation, SEC dated February 27, 1998

(‘‘Amendment No. 1’’). In Amendment No. 1, the

Exchange adds language to Rule 903G indicating

that FLEX options may only be traded on an equity

or index that was previously approved for nonFLEX trading. In addition, the Exchange represents

that it will request Commission approval before

trading FLEX options on indices not yet approved

for FLEX options trading.

4The term ‘‘FLEX’’ is a trademark of the Chicago

Board Options Exchange, Inc.

5Securities Exchange Act Release No. 32781

(August 20, 1993), 58 FR 45360 (August 27, 1993).

6Securities Exchange Act Release No. 33262

(December 1, 1993), 58 FR 64622 (December 8,

1993).

7Amex Broad Stock Index Group Options

currently consist of the following: EUROTOP 100

Index, Hong Kong Options Index, Institutional

Index, Japan Index, Major Market Index, S&P

MidCap 400 Index, Morgan Stanley Consumer

Index and Morgan Stanley Cyclical Index.

8Amex Stock Index Industry Group Options

currently consist of the following: Airline Index,

Gold BUGS Index, Biotechnology Index, Computer

Technology Index, de Jager Year 2000 Index, Disk

Drive Index, Interactive Week Internet Index,

Mexico Index, M.S. Commodity Related Index, M.S.

Heathcare Payor Index, M.S. Healthcare Product

Index, M.S. Healthcare Provider Index, M.S. High

Technology 35 Index, Natural Gas Index, The

NatWest Energy Index, Networking Index, North

American Telecommunications Index, Oil Index,

Pharmaceutical Index, Securities Broker/Dealer

Index and Tobacco Index.

9On January 14, 1998, the Commission approved

the Philadelphia Stock Exchange’s proposal to

establish Rule 1079 providing for the trading of

FLEX Options on equities and narrow and broad

indices. Securities Exchange Act Release No. 39549

(January 14, 1998), 63 FR 3601 (January 23, 1998).

On September 3, 1997, the Commission approved

the Chicago Board Options Exchange’s proposal to

list FLEX Options on the Dow Jones Industrial

Average. Securities Exchange Act Release No.

39011 (September 3, 1997), 62 FR 47841 (September

11, 1997).

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39928; File No. SR–AMEX–

98–01]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change and Amendment No. 1

Thereto by the American Stock

Exchange, Inc. Relating to Flexible

Exchange Index Options

April 28, 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 January

14, 1998, the American Stock Exchange,

Inc. (‘‘Amex’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change as described

in Items I and II below, which Items

have been prepared by the selfregulatory organization. On March 2,

1998, the Exchange filed Amendment

No. 1 to the proposal with the

Commission.3 The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons and to grant

accelerated approval to the proposed

rule change as amended.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to expand the

listing and trading of Flexible Exchange

options (‘‘FLEX Options’’) to all of the

Exchange’s Broad Stock Index Groups

and Stock Index Industry Groups. The

text of the proposed rule change is

available at the Office of the Secretary,

Amex and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed

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 III below.

The self-regulatory organization 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

On August 20, 1993, the Commission,

pursuant to Section 19(b)(2) of the Act

and Rule 19b–4 thereunder, approved

the Exchange’s FLEXTM Options 4

framework permitting the Exchange to

list and trade FLEX Options based on

the Major Market (‘‘XMI’’), Institutional

(‘‘XII’’) and Standard & Poor’s

Corporation (‘‘S&P’’) MidCap (‘‘MID’’)

Indices.5 On December 1, 1993, the

Commission approved the listing and

trading of FLEX Options on the

Exchange’s Japan Index (‘‘JPN’’).6

The Exchange now proposes to

expand approval for FLEX Options

trading to all of its indices, including all

Broad Stock Index Groups (other than

the ones currently approved as noted

above) 7 and all Stock Index Industry

Groups.8

Broad Stock Index Group FLEX

Options. As noted above, the Exchange

currently provides for the trading of

FLEX Options on XMI, XII, MID and

JPN indices. The Exchange now

proposes to expand the ability to trade

FLEX Options to include all of its Broad

Stock Index Group indices, including

the EUROTOP 100, Hong Kong Option,

Morgan Stanley Consumer and Morgan

Stanley Cyclical Indices. All of the

Exchange’s rules applicable to FLEX

Index Options will apply to the

additional Broad Stock Index Group

FLEX Options. In addition, the

Exchange proposes to apply its current

position and exercise limits of 200,000

contracts on the same side of the market

for FLEX Options on broad indices to

FLEX Options on the additional Broad

Stock Index Group indices. The

Exchange is proposing this expansion in

response to requests from market

participants to make available FLEX

Options on various additional broad

indices. In addition, the Exchange

believes that expansion of trading in

FLEX Options to all of its Broad Stock

Index Group indices will provide new

and important trading opportunities

which are currently unavailable to

market participants. Further, it will

increase the Exchange’s competitiveness

with the over-the-counter market place

as well as with other exchanges which

have continued to expand FLEX

Options trading on indices.9 Rules

currently in place for FLEX Options on

indices shall apply to the FLEX Options

on these additional broad indices.

Stock Index Industry Group FLEX

Options. The Exchange also proposes to

provide for the trading of FLEX Options

on all of its Stock Index Industry Group

indices (‘‘Industry Indices’’). As with its

Broad Stock Index Group indices, the

Exchange has received requests to

provide for the trading of FLEX Options

on its Industry Indices and believes this

expansion will provide new and

important trading opportunities

currently unavailable to market

participants while increasing the

Exchange’s competitiveness with the

over-the-counter market place and other

exchanges which have continued to

expand FLEX Options trading on their

indices.

In addition to applying its existing

FLEX Index Options rules to the trading

of Industry Index FLEX Options, the

Exchange proposes to establish position

limits for these FLEX Options at four

times the position limits for standard

options on the respective underlying

Industry Index (36,000, 48,000 and

60,000 contracts on the same side of the

market). The Exchange believes such

position limits are appropriate given the

institutional nature and use of FLEX

Index Options. Further, the proposed
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices 25131

10Securities Exchange Act Release No. 39549

(January 14, 1998), 63 FR 3601 (January 23, 1998).

11 Id.

12 15 U.S.C. 78f(b)(5).

13 15 U.S.C. 78f(b)(5).

14 15 U.S.C. 78k–1.

15 In approving this rule change, the Commission

has considered the proposed rule’s impact on

efficiency, competition, and capital formation, 15

U.S.C. 78c(f).

16Securities Exchange Act Release No. 39549

(January 14, 1998), 63 FR 3601 (January 23, 1998).

17The Commission notes that this underlying

equivalent value requirement is identical to that

recently approved by the Commission for the

Philadelphia Stock Exchange. See Phlx Rule

1079(a)(8)(A)(i).

position limits are the same as those

recently adopted by the Philadelphia

Stock Exchange, Inc.10

Finally, the Exchange proposes to

adopt $5 million Underlying Equivalent

Value as the minimum value size for

opening transactions and Request for

Quotes in Stock Index Industry Group

Flex Index Options for any series with

no open interest, $1 million Underlying

Equivalent Value for any series with

open interest and $1 million Underlying

Equivalent Value, or the remaining

Underlying Equivalent Value for a

closing transaction, whichever is less.

Similar to the proposed position limits

for Stock Index Industry Group Flex

Options, the Exchange believes such

minimum value sizes for opening and

closing transactions and Requests for

Quotes are appropriate given the

institutional nature and use of FLEX

Index Options and they are the same

minimum value sizes proposed by the

Philadelphia Stock Exchange, Inc. in its

proposal to trade FLEX Options on

narrow based indices.11

2. Statutory Basis

The basis under the Act for the

proposed rule change is the requirement

under Section 6(b)(5) 12 that an

Exchange have rules that are designed to

promote just and equitable principles of

trade, and is not designed to permit

unfair discrimination between

customers, issuers, brokers or dealers.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange represents that the

proposed rule change will impose no

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. 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 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 Exchange. All

submissions should refer to File No.

SR–AMEX–98–01 and should be

submitted by May 27, 1998.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, with the

requirements of Sections 6(b)(5) 13 and

11A 14 of the Act. Specifically,

consistent with Section 11A of the Act,

the proposal should encourage fair

competition among brokers and dealers

and the exchange markets, by allowing

the Exchange to compete more

effectively with the growing OTC

market in customized index options.

The Commission believes that the

Exchange’s proposal reasonably

addresses its desire to better meet the

demands of sophisticated portfolio

managers and other institutional

investors who are increasingly using the

OTC market in order to satisfy their

hedging needs. Additionally, the

Commission believes that the

Exchange’s proposal will help promote

the maintenance of a fair and orderly

market, consistent with Sections 6(b)(5)

and 11A of the Act, because the purpose

of the proposal is to facilitate the

extension of the benefits of a listed

exchange market to a wider variety of

index options that are more flexible

than current listed options and that

currently trade OTC. The benefits of the

Exchange’s options market include, but

are not limited to, a centralized market

center, an auction market with posted

transparent market quotations and

transaction reporting, parameters and

procedures for clearance and settlement,

and the guarantee of OCC for all

contracts traded on the Exchange.15

The Commission believes that the

Exchange’s proposal to designate all

currently approved Amex Industry and

Broad Stock Group Indices as eligible

for FLEX index options trading is

consistent with the Act. The

Commission notes, however, that when

submitting a Section 19(b) proposal to

list and trade a new non-FLEX index

options product, the Exchange must, in

the same filing, specifically propose to

list and trade the FLEX index options.

If the Exchange is not prepared at that

time to seek approval for the listing of

FLEX options overlying the proposed

index, then the Exchange should submit

a rule filing pursuant to Section 19(b) of

the Act proposing to list and trade FLEX

options on that index at an appropriate

time in the future.

In addition, the Commission believes

that it is reasonable for the Exchange to

apply its existing position limit of

200,000 contracts on the same side of

the market to the additional Broad Stock

Index Group indices approved for FLEX

Options trading pursuant to this

proposal. The Commission also believes

that it is reasonable for the Exchange to

establish position limits for Amex

Industry Index FLEX Options at four

times the position limits for standard

options on the respective underlying

Industry Index (36,000, 48,000 and

60,000 contracts on the same side of the

market). The Commission notes that

these position limits are identical to

those recently adopted by the

Philadelphia Stock Exchange.16

Finally, the Commission believes that

it is reasonable for the Amex to require

a $5 million underlying equivalent

value for an opening transaction in

Amex Industry Index FLEX options.17

The Commission believes that this large

underlying equivalent value

requirement should help to ensure that

transactions in FLEX index options

remain of substantial size and, therefore,

that the product is geared to an

institutional, rather than a retail market.

The Commission finds good cause for

approving the proposed rule change and

Amendment No. 1 thereto prior to the

thirtieth day after the date of

publication of notice thereof in the

Federal Register. Specifically, as noted

above, the Exchange’s proposal is

substantially similar to a recently

approved proposal by the Philadelphia
25132 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices

18See Securities Exchange Act Release No. 39549

(January 14, 1998), 63 FR 3601 (January 23, 1998).

The Commission notes that this proposal was

published for the full notice and comment period

during which no comments were received.

19 15 U.S.C. 78(f(b)(5) and 78s(b)(2).

20 15 U.S.C. 78s(b)(2).

21 17 CFR 200.3–3(a)(12).

Stock Exchange.18 Therefore, the

Commission believes that Amendment

No. 1 does not raise any new regulatory

issues.

Accordingly, the Commission

believes, consistent with Section 6(b)(5)

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

good cause exists to grant accelerated

approval to the proposed rule change.19

It Is Therefore Ordered, pursuant to

Section 19(b)(2) of the Act,20 that the

proposed rule change (SR–AMEX–98–

01) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.21

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–11952 Filed 5–5–98; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Notice of Intent to Rule on Application

(98–03–C–00–CPR) to impose and use

the revenue from a passenger facility

charge (PFC) at the Natrona County

International Airport, submitted by the

County of Natrona, Wyoming

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of intent to rule on

application.

SUMMARY: The FAA proposes to rule and

invites public comment on the

application to impose and use the

revenue from a PFC at the Natrona

County International Airport under the

provisions of 49 U.S.C. 40117 and part

158 of the Federal Aviation Regulations

(14 CFR part 158).

DATES: Comments must be received on

or before June 5, 1998.

ADDRESSES: Comments on this

application may be mailed or delivered

in triplicate to the FAA at the following

address: Alan Wiechmann, Manager;

Denver Airports District Office, DEN–

ADO; Federal Aviation Administration;

26805 E. 68th Avenue, Suite 224;

Denver, CO 80249–6361.

In addition, one copy of any

comments submitted to the FAA must

be mailed or delivered to Mr. Dan E.

Mann, Airport Manager, at the following

address: Natrona County International

Airport, 8500 Airport Parkway, Casper,

Wyoming 82604.

Air Carriers and foreign air carriers

may submit copies of written comments

previously provided to the Natrona

County International Airport, under

section 158.23 of part 158.

FOR FURTHER INFORMATION CONTACT:

Mr. Christopher Schaffer, (303) 342–

1258; Denver Airports District Office,

DEN–ADO; Federal Aviation

Administration; 26805 E. 68th Avenue,

Suite 224; Denver, CO 80249–6361. The

application may be reviewed in person

at this same location.

SUPPLEMENTARY INFORMATION: The FAA

proposes to rule and invites public

comment on the application (98–03–C–

00–CPR) to impose and use the revenue

from a PFC at Natrona County

International Airport, under the

provisions of 49 U.S.C. 40117 and part

158 of the Federal Aviation Regulations

(14 CFR part 158).

On April 29, 1998, the FAA

determined that the application to

impose and use a PFC submitted by the

County of Natrona, Wyoming, was

substantially complete within the

requirements of § 158.25 of Part 158.

The FAA will approve or disapprove the

application, in whole or in part, no later

than July 29, 1998.

The following is a brief overview of

the application.

Level of the proposed PFC: $3.00.

Proposed charge effective date:

October 1, 1998.

Proposed charge expiration date:

August 1, 2003.

Total requested for use approval:

$774,857.00.

Brief description of proposed projects:

Rehabilitate water tank for airport

rescue fire fighting (ARFF) use, terminal

modifications, rehabilitate Runway 8/

26, rehabilitate ARFF building

ventilation.

Class or classes of air carriers which

the public agency has requested not be

required to collect PFC’s: None.

Any person may inspect the

application in person at the FAA office

listed above under FOR FURTHER

INFORMATION CONTACT and at the FAA

Regional Airports Office located at:

Federal Aviation Administration,

Northwest Mountain Region, Airports

Division, ANM–600, 1601 Lind Avenue,

SW., Suite 315, Renton, WA 98055–

4056.

In addition, any person may, upon

request, inspect the application, notice

and other documents germane to the

application in person at the Natrona

County International Airport.

Issued in Renton, Washington on April 29,

1998.

David A. Field,

Manager, Planning, Programming and

Capacity Branch, Northwest Mountain

Region.

[FR Doc. 98–12042 Filed 5–5–98; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Docket No. AB–6 (Sub-No. 379X)]

The Burlington Northern and Santa Fe

Railway Company; Abandonment

Exemption; in Garfield and Logan

Counties, OK

The Burlington Northern and Santa Fe

Railway Company (BNSF) has filed a

notice of exemption under 49 CFR 1152

Subpart F—Exempt Abandonments to

abandon 42.80 miles of its line of

railroad between milepost 73.60 near

Fairmont and milepost 116.40 near

Guthrie including the stations of

Douglas at milepost 82.4, Marshall at

milepost 88.4, Lovell at milepost 95.1,

and Crescent at milepost 102.8, in

Garfield and Logan Counties, OK. The

line traverses United States Postal

Service Zip Codes 73736, 73733, 73056,

73028 and 73044.

BNSF has certified that: (1) No local

traffic has moved over the line for at

least 2 years; (2) any overhead traffic on

the line can be rerouted over other lines;

(3) no formal complaint filed by a user

of rail service on the line (or by a state

or local government entity acting on

behalf of such user) regarding cessation

of service over the line either is pending

with the Surface Transportation Board

(Board) or with any U.S. District Court

or has been decided in favor of

complainant within the 2-year period;

and (4) the requirements at 49 CFR

1105.7 (environmental reports), 49 CFR

1105.8 (historic reports), 49 CFR

1105.11 (transmittal letter), 49 CFR

1105.12 (newspaper publication), and

49 CFR 1152.50(d)(1) (notice to

governmental agencies) have been met.

As a condition to this exemption, any

employee adversely affected by the

abandonment shall be protected under

Oregon Short Line R. Co.—

Abandonment—Goshen, 360 I.C.C. 91

(1979). To address whether this

condition adequately protects affected

employees, a petition for partial

revocation under 49 U.S.C. 10502(d)

must be filed. Provided no formal

expression of intent to file an offer of

financial assistance (OFA) has been

received, this exemption will be

effective on June 5, 1998, unless stayed