27058 Federal Register / Vol. 63, No. 94 / Friday, May 15, 1998 / Notices

Snake River sockeye salmon; juvenile,

threatened, naturally produced and

artificially propagated, Snake River

spring/summer chinook salmon;

juvenile, threatened, Snake River fall

chinook salmon; and juvenile,

endangered, naturally produced and

artificially propagated, UCR steelhead

associated with research designed to

compare biological and physiological

indices of wild and hatchery juvenile

fish exposed to stress from bypass,

collection, and transportation activities

at the dams on the Snake and Columbia

Rivers. The purpose of the research is to

determine effects of manmade structures

and management activities on

outmigrating salmonids and to provide

information that can be used to improve

their survival. Permit 1136 expires on

December 31, 2000.

Notice was published on March 6,

1998 (63 FR 11220), that an application

had been filed by NWFSC for a

scientific research permit. Permit 1137

was issued to NWFSC on April 24,

1998. Permit 1137 authorizes NWFSC

takes of juvenile, endangered, Snake

River sockeye salmon; juvenile,

threatened, naturally produced and

artificially propagated, Snake River

spring/summer chinook salmon;

juvenile, threatened, Snake River fall

chinook salmon; and juvenile,

endangered, naturally produced and

artificially propagated, UCR steelhead

associated with four scientific research

studies at hydropower dams on the

Snake and Columbia Rivers in the

Pacific Northwest. The purpose of the

four studies are: To evaluate a prototype

fish separator at Ice Harbor Dam; to

establish biological design criteria for

fish passage facilities at McNary Dam; to

evaluate vertical barrier screens, outlet

flow control devices, and methods of

debris control at McNary and Little

Goose Dams; and to evaluate extendedlength bar screens at the first

powerhouse of Bonneville Dam. Permit

1137 expires on December 31, 1998.

Dated: May 8, 1998.

Patricia A. Montanio,

Deputy Director, Office of Protected

Resources, National Marine Fisheries Service.

[FR Doc. 98–12844 Filed 5–14–98; 8:45 am]

BILLING CODE 3510–22–F

COMMODITY FUTURES TRADING

COMMISSION

New York Mercantile Exchange

Proposed Specialist Market Maker

Program

AGENCY: Commodity Futures Trading

Commission.

ACTION: Notice of proposed new rule

and rule amendments of the New York

Mercantile Exchange to establish a

Specialist Market Maker program.

SUMMARY: The New York Mercantile

Exchange (‘‘NYMEX’’ or ‘‘Exchange’’)

has submitted a proposed new rule and

rule amendments that would establish a

Specialist Market Maker (‘‘SMM’’)

program for certain new or low-volume

futures contracts. The Exchange would

appoint one SMM for each contract

market that it determined would benefit

from the SMM program. The SMM

would be required to maintain a

continuous physical presence on the

floor of the Exchange throughout the

regular trading session of the contract

and to maintain a two-sided market in

the contract for which he or she had

been appointed. The SMM also would

be required to maintain a limit order

book of member and non-member (i.e.,

customer) limit orders. In return for

these services, the SMM would be paid

a contract development fee and receive

various priorities with respect to certain

transactions executed in the trading ring

for the appointed contract.

Acting pursuant to the authority

delegated by Commission Regulation

140.96, the Division of Trading and

Markets (‘‘Division’’) has determined to

publish the NYMEX proposal for public

comment. The Division believes that

publication of the proposal is in the

public interest and will assist the

Commission in considering the views of

interested persons.

DATE: Comments must be received on or

before June 15, 1998.

FOR FURTHER INFORMATION CONTACT:

Thomas Smith, Attorney, Division of

Trading and Markets, Commodity

Futures Trading Commission, Three

Lafayette Centre, 1155 21st Street, NW.,

Washington, DC 20581. Telephone:

(202) 418–5495; or electronic mail:

tsmith@cftc.gov.

SUPPLEMENTARY INFORMATION:

I. Description of Proposed SMM

Program

A. Introduction

By letter dated April 16, 1998,

NYMEX submitted proposed new Rule

6.45 (‘‘Specialist Market Maker

Program’’) and proposed amendments to

Rule 6.43A (‘‘Broker Registration

Requirements’’) pursuant to Section

5a(a)(12)(A) of the Commodity Exchange

Act (‘‘Act’’) and Commission Regulation

1.41(c). The proposed new rule and rule

amendments would establish an SMM

program for certain new or low-volume

futures contracts. The SMM program is

intended to provide liquidity for new or

illiquid markets and would be

terminated once the contract obtained a

predetermined trading volume. The

SMM program is patterned after a

market maker program at the Chicago

Mercantile Exchange that was

previously approved by the Commission

on April 20, 1995.

NYMEX intends to implement the

SMM program in the Cinergy Electricity

and Entergy Electricity futures

contracts, which were approved by the

Commission for trading on March 23,

1998. NYMEX anticipates listing the

two new electricity futures contracts for

trading within the next few months. The

SMM program may be extended to other

new or low-volume futures contracts at

a later date.

B. SMM Eligibility Criteria

Applications for SMM positions

would be accepted from members and

member firms. Applications also would

be accepted from individuals and firms

that were not members or member firms.

Appointment as an SMM could not

occur however, until the individual or

firm had been approved by the NYMEX

Board of Directors as a member or

member firm.

NYMEX would establish a new

Exchange Committee, the Specialist

Review Committee (‘‘SRC’’). The SRC

would assess each SMM applicant’s

financial resources, operational

capabilities, trading experience,

regulatory history, and ability and

willingness to promote NYMEX as a

marketplace and would report its

findings to the Board of Directors.

Prospective SMM applicants also would

need to demonstrate that they have the

ability to provide multiple qualified

personnel with the capability to perform

the defined SMM obligations and have

working capital in excess of $500,000.

The Board of Directors would make the

final decision as to which applicants to

appoint as SMMs.

Only one SMM would be appointed

for each contract market eligible for the

SMM program. The Board of Directors,

however, may appoint a member or

member firm as an SMM for more than

one contract market.

For any market for which an SMM has

been appointed, the Exchange would

issue an SMM trading permit to the

SMM. The permit would allow the

member or member firm to perform the

SMM functions without incurring the

cost of dedicating a membership for use

in that designated futures contract.

Thus, for example, if a member firm

with two full NYMEX memberships

were appointed an SMM in a new

contract, the member firm would be

permitted to act as the SMM for the new
Federal Register / Vol. 63, No. 94 / Friday, May 15, 1998 / Notices 27059

1The SMM Agreement would be negotiated by

the SMM and SRC and would be subject to the

approval of the NYMEX Board of Directors.

2The duration of the SMM’s term would be set

forth in the SMM Agreement.

3The maximum number of contracts that the

SMM would be obligated to fill at any one price

would be set forth in the SMM Agreement.

4NYMEX current does not have a rule governing

large-order executions. The Exchange has stated

that it would submit a proposed large-order

execution rule to the Commission pursuant to

Section 5a(a)(12)(A) of the Act and Commission

Regulation 1.41(c) prior to its implementation.

5The proposal would require a member or

member firm using the SMM facility for the

execution of customer limit orders to disclose in

writing to the customer that the SMM may trade

against such orders and that the customer may

choose not to place a limit order with the SMM.

market while also retaining the trading

privileges associated with the two full

memberships.

C. Duties of the SMM

The SMM’s rights and obligations

would be set forth in a written

agreement (the ‘‘SMM Agreement’’).1

The SMM Agreement would require the

SMM to provide a continuous physical

presence on the floor of the Exchange

throughout the regular trading session

in order to maintain an orderly market

in the appointed futures contract.

During the trading session of the

appointed market, the SMM would

continuously provide bid and offer

quotes for outright futures trades and

price differentials for spread

transactions for the contract delivery

months set forth in the SMM

Agreement.

The SMM Agreement would establish

a maximum bid/offer quote spread and

maximum price differential for certain

contract delivery months.2 At a given

bid or offer, the SMM would be

obligated to satisfy all bids and offers in

the ring at the same price up to a

predefined maximum number of

contracts for any one trade.3 In

complying with this obligation for a

particular price, the SMM could fill a

bid or offer, as applicable, with one or

more limit orders maintained in a limit

order book at that price (the limit order

book is discussed further below), with a

trade for the SMM’s proprietary

account, or with a combination of limit

orders and trading for his or her

proprietary account.

NYMEX anticipates that a maximum

bid/offer quote spread and maximum

price differential would be set only for

the ‘‘near’’ months (e.g., for one to three

months out from the front-month

contract) and the most active spread

transactions. In addition, the SMM

Agreement may provide for a maximum

bid/offer quote spread and price

differential during usual market

conditions and a larger maximum bid/

offer quote spread and price differential

during periods of extreme volatility,

extreme trading volume, or market

emergencies. The SMM Agreement

would define these ‘‘unusual’’ market

conditions for the purposes of the SMM

program.

The SMM also would be required to

maintain an order book of limit orders

(‘‘OB’’) in the markets for which he or

she has been appointed an SMM. The

limit orders could be for outright futures

trades or spread transactions. The term

‘‘Order Book Official’’ (‘‘OBO’’) would

be used to refer to the SMM whenever

the SMM was acting in the capacity of

managing the OB.

A customer may elect to have a limit

order given to the SMM for inclusion in

the OB. NYMEX members also may

place limit orders for their proprietary

accounts with the SMM for inclusion in

the OB. The OBO would be obligated to

accept all limit orders presented for

inclusion in the OB. Customers also

may request that non-limit orders be

given to the OBO for execution. The

OBO would not be obligated to accept

non-limit orders.

Upon a request from a member or

clerk on the trading floor, the OBO

would be required to disclose the prices,

quantities and contract delivery months

for the limit orders held in the OB. The

promptness of the OBO’s response

would depend upon market conditions.

All orders presented to the OBO

would have to be in writing. Orders

entered into the OB would be executed

on a price-priority and time-priority

basis. The Exchange would provide the

OBO with a time-stamp clock in the

trading ring, and the OBO would be

required to time-stamp each limit order

that he or she received.

The proposal also would provide that

the SMM may, at his or her discretion,

respond to a request for a bid or offer

as part of a large-order execution

procedure. The SMM would be

permitted to survey the ring to

determine if other floor members were

interested in participating in responding

to the request.4

D. Transaction Priorities

The SMM program would provide

certain trading priorities to the OBO and

to the SMM. With respect to the

execution of limit orders in the OB, the

OBO would have a 100% priority right

over other proprietary traders and floor

brokers in the ring for trades that take

place at the OBO’s bid or offer. For

example, if the OB contained limit

orders to buy a total of 10 contracts at

a price of 40, the OBO would have a

right to participate in any transactions

executed at a price of 40 in the trading

ring until all 10 of the limit orders in the

OB were executed. With respect to this

priority, no distinction would be made

between members and customer limit

orders in the OB.

In connection with the SMM’s

proprietary account, the SMM would

have priority rights with respect to

trades executed (1) against the OB; (2)

in the ring and within the SMM’s bid/

offer spread; and (3) as a cross-trade

against the OB. The SMM, however,

would not be obligated to exercise his

or her priority rights. The extent of each

of these priorities is specified below.

The SMM would have a 10% priority

right with respect to any transaction

executed opposite the OB. For example,

if a floor broker executed a trade

opposite the OB for 20 contracts at a

price of 39, the SMM may exercise his

or her priority right and ‘‘take’’ 2 of the

contracts at a price of 39 from the floor

broker.

The SMM would have a 40% priority

right with respect to trades executed in

the trading ring that do not involve the

OB and are within the SMM’s bid/offer

spread. For example if the SMM’s

spread is bid 40 and offer 50, and two

floor brokers execute a trade for 20

contracts at a price of 40, the SMM may

exercise his or her right to buy 8 of the

contracts from the selling floor broker.

The SMM may trade for his or her

proprietary account against the OB,

provided that the SMM follows the

cross-trade procedures set forth in

NYMEX Rule 6.40, including

announcing the price and quantity of

the contracts to be purchased and sold

to the trading ring three times and

executing the transaction in the

presence of an Exchange employee

designated to observe such transactions.

If one or more floor members respond to

the SMM’s bid and offer, the SMM may

exercise a right of priority to a

maximum of 40% of the transaction. For

example, if the OB contained limit

orders to buy a total of 10 contracts at

a price of 30, the SMM may elect to

trade opposite the OB by announcing

three times the bid and offer for 10

contracts at a price of 30 to the other

floor members in the trading ring. If

other floor members respond to the

announcement by offering to sell 10

contracts at 30, the SMM may elect to

exercise his or her priority and trade

against four of the contracts in the OB.

The remaining six contracts would go to

the other floor members in the trading

ring who wished to participate in the

transaction.5
27060 Federal Register / Vol. 63, No. 94 / Friday, May 15, 1998 / Notices

The SMM’s priorities would extend to

floor members executing trades for

proprietary accounts and floor brokers

executing customer orders. Therefore,

the SMM’s priority may preempt the

execution of customer orders.

E. Contract Development Fee

The SMM would receive a contract

development fee (‘‘CDF’’) as an

incentive to perform the SMM function.

The terms and duration of the CDF

would be set forth in the SMM

Agreement, and would be based upon

the level of customer trading volume in

the designated contract. Unless

otherwise provided in the SMM

Agreement, the SMM would receive

$8,000 per month if monthly customer

trading volume was less than 3,500

contracts. Once monthly customer

trading volume exceeded 3,500

contracts, the SMM would receive

$8,000 plus a per contract fee for each

transaction in excess of 3,500 that

involved a customer order.

F. Specialist Floor Brokers

The proposal would permit the SMM

to contract with one or more floor

brokers (‘‘Specialist Floor Brokers’’ or

‘‘SFB’’) to perform all or part of the

SMM function. For example, the SMM

may contract with the SFB to manage

the OB and to perform all of the OBO

obligations, including the OB’s priority

with respect to trading against the OB.

The proposal would give significant

latitude to the SMM to contract with an

SFB. However, any contract between an

SMM and an SFB would be subject to

the review and approval of the SRC. The

proposal also would provide that the

SMM would be principally liable to the

Exchange for the execution of all SMM

obligations and duties.

II. Request for Comments

The Commission requests comments

from interested persons concerning any

aspect of NYMEX’s proposed SMM

program that the commenters believe

raise issues under the Act or

Commission Regulations. In particular,

the Commission requests comments

regarding the appropriateness of: (1)

Permitting members to place limit

orders for their own accounts in the OB;

(2)permitting member limit orders to be

executed ahead of customer limit orders

that are at the same price, but received

by the OBO at a later time; (3) granting

the SMMs trading priorities, including

the priority to trade against the OB; and

(4) permitting the SMM’s trading

priority to preempt the execution of

customer orders in the trading ring.

Copies of the proposed new Rule 6.45

and the proposed amendments to Rule

6.43A and related materials are

available for inspection at the Office of

the Secretariat, Commodity Futures

Trading Commission, Three Lafayette

Centre, 1155 21st Street, NW,

Washington, DC 20581. Copies also may

be obtained through the Office of the

Secretariat at the above address or by

telephoning (202) 418–5100.

Any person interested in submitting

written data, views, or arguments on the

proposed SMM program should send

such comments, by the specified date, to

Jean A. Webb, Secretary, Commodity

Futures Trading Commission, Three

Lafayette Centre, 1155 21st Street, NW,

Washington, DC 20581; transmitted by

facsimile to (202) 418–5521; or

transmitted electronically to

secretary@cftc.gov.

Issued in Washington, DC, on May 11,

1998.

Alan L. Seifert,

Deputy Director.

[FR Doc. 98–12970 Filed 5–14–98; 8:45 am]

BILLING CODE 6351–01–M

DEPARTMENT OF DEFENSE

Office of the Secretary

Proposed Collection; Comment

Request

AGENCY: Office of the Under Secretary of

Defense (Personnel and Readiness).

ACTION: Notice.

In compliance with Section

3506(c)(2)(A) of the Paperwork

Reduction Act of 1995, the Office of the

Under Secretary of Defense (Personnel

and Readiness) announces the following

proposed reinstatement of a public

information collection and seeks public

comment on the provisions thereof.

Comments are invited on: (a) whether

the proposed collection of information

is necessary for the proper performance

of the functions of the agency, including

whether the information shall have

practical utility; (b) the accuracy of the

agency’s estimate of burden of the

proposed information collection; (c)

ways to enhance the quality, utility, and

clarity of the information to be

collected; and (d) ways to minimize the

burden of the information collection on

respondents, including through the use

of automated collection techniques or

other forms of information technology.

DATES: Consideration will be given to all

comments received by July 14, 1998.

ADDRESSES: Written comments and

recommendations on the proposed

information collection should be sent to

the Office of the Under Secretary of

Defense (Personnel and Readiness)

(Force Management Policy/DeCA),

ATTN: Herman Weaver, 1300 E Avenue,

Ft. Lee, Virginia 23801–1800.

FOR FURTHER INFORMATION CONTACT:

To request more information on this

proposed information collection or to

obtain a copy of the proposal and

associated collection instruments,

please write to the above address or call

at (804) 734–8322.

Title, Associated Form, and OMB

Control Number: Commissary Customer

Service Survey, DeCA Form 60–28,

0704–0380.

Needs and uses: This information

collection requirement is necessary to

the Defense Commissary Agency for the

purpose of measuring customer service,

which is our number one Strategic and

Performance goal. This management

tool uses a survey instrument designed

to extract objective, subjective, and

demographic information from our

customers so we can better serve their

needs. The results will be reported and

distributed to the regional headquarters

and commissaries to use the past and

present trends for the purpose of future

improvement. Also, the results will

directly affect our policies and quality

initiatives for an efficient and costeffective commissary system.

Affected Public: Individuals or

households.

Annual Burden Hours: 1,200 hours.

Number of Respondents: 18,000.

Responses per Respondent: 1.

Average Burden per Response: 4

minutes.

Frequency: Annually.

SUPPLEMENTARY INFORMATION:

Summary of Information Collection

The primary purpose of this

information collection is to determine

how well each commissary is satisfying

the customer. This will serve as a

baseline measure for future trends and

provide defense officials vital

information to make cost-effective

management decisions. The information

received will be of benefit to return

patrons, as well as inspire new

customers, which should increase our

surcharge accounts to provide new

commissary construction and

renovations. Our primary goal is to

preserve the military’s most valued

benefit through enhanced customer

satisfaction.

Each commissary, both stateside and

overseas, will receive the Commissary

Customer Service Survey. Each

commissary officer will select an

administrator who will distribute the

surveys randomly three times each day

(one hour after store opens, mid-day,