Federal Register / Vol. 63, No. 15 / Friday, January 23, 1998 / Notices 3595

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

2See Securities Exchange Act Release No. 39248

(October 16, 1997), 62 FR 55296 (October 23, 1997).

3 15 U.S.C. 78s(b)(3)(A)(ii).

4 17 CFR 240.19b–4(e)(2).

For the Nuclear Regulatory Commission.

David E. LaBarge,

Senior Project Manager, Project Directorate

II–2, Division of Reactor Projects—I/II, Office

of Nuclear Reactor Regulation.

[FR Doc. 98–1752 Filed 1–22–98; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Meeting

Notice is hereby given, pursuant to

the provisions of the Government in the

Sunshine Act, Pub. L. 94–409, that the

Securities and Exchange Commission

will hold the following meeting during

the week of January 26, 1998.

A closed meeting will be held on

Thursday, January 29, 1998, at 10:00

a.m.

Commissioners, Counsel to the

Commissioners, the Secretary to the

Commission, and recording secretaries

will attend the closed meeting. Certain

staff members who have an interest in

the matters may also be present.

The General Counsel of the

Commission, or his designee, has

certified that, in his opinion, one or

more of the exemptions set forth in 5

U.S.C. 552b(c)(4), (8), (9)(A) and (10)

and 17 CFR 200.402(a)(4), (8), (9)(i) and

(10), permit consideration of the

scheduled matters at the closed meeting.

Commissioner Johnson, as duty

officer, voted to consider the items

listed for the closed meeting in a closed

session.

The subject matter of the closed

meeting scheduled for Thursday,

January 29, 1998, at 10:00 a.m., will be:

Institution and settlement of

injunctive actions.

Institution and settlement of

administrative proceedings of an

enforcement nature.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postposed, please contact: The Office

of the Secretary at (202) 942–7070.

Dated: January 21, 1998.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–1852 Filed 1–21–98; 3:40 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39555; File No. SR–NASD–

97–98]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. Relating to SelectNet

Fees

January 15, 1998.

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

Securities Exchange Act of 1934

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

December 31, 1997, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) through its

wholly owned subsidiary, the Nasdaq

Stock Market, Inc. (‘‘Nasdaq’’) filed with

the Securities and Exchange

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

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

Pursuant to Rule 19b–4 under the Act

Nasdaq is herewith filing a proposed

extension of the temporary 50% fee

reduction currently charged under

NASD Rule 7010(1) for the execution of

a transaction in SelectNet.

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

NASD included statements concerning

the purpose of and basis for the

proposed rule change.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

Nasdaq is proposing to extend the

temporary 50% fee abatement currently

charged under NASD Rule 7010(1) for

the execution of a transaction in

SelectNet. This proposed extension

continues the current SelectNet fee

reduction from $2.50 per side to $1.25

per side and is effective January 1, 1998,

through March 31, 1998. The proposed

extension constitutes only a temporary

abatement in the fee Nasdaq collects

and, if no further action is taken,

SelectNet fees will revert to the $2.50

per side level on April, 1998.

The reasons justifying a SelectNet fee

reduction are contained in Nasdaq’s

original rule filing in October of 1997

seeking a 50% abatement for the period

of October 1, 1997, through December

31, 1997.2 SelectNet usage has

continued to grow with more than

107,000 transactions in October of 1997

and over 79,000 transactions in

November of 1997. Nasdaq believes that

while the level of SelectNet activity

supports a continuation of lower

SelectNet fees, the volatility of current

SelectNet usage levels militates in favor

of the maintenance of the fee reduction

on a temporary basis.

Nasdaq believes that the proposed

extension of the fee reduction is

consistent with Section 15A(b)(5) of the

Act, which requires that the rules of the

NASD provide for the equitable

allocation of reasonable dues, fees and

other changes among members and

issuers and other persons using any

facility or system which the NASD

operates or controls.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The NASD believes that the proposed

rule change will not result in any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Comments were neither solicited nor

received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

This filing applies to the assessment

of SelectNet fees to NASD members, and

thus the proposed rule change is

effective immediately upon filing

pursuant to Section 19(b)(3)(A)(ii) 3 of

the Act and subparagraph (e)(2) of Rule

19b–4 under the Act 4 because the

proposal is establishing or changing a

due, fee or other charge.

At any time within 60 days of the

filing of the proposed rule change, the

Commission may summarily abrogate

such rule change if it appears to the

Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.
3596 Federal Register / Vol. 63, No. 15 / Friday, January 23, 1998 / Notices

5 17 CFR 200.30-3(a)(12).

1 15 U.S.C. § 78s(b)(1).

2 17 CFR 240.19b–4.

3See Letter from Philip H. Becker, Senior Vice

President and Chief Regulatory Officer, Phlx, to

Michael Walinskas, Senior Special Counsel,

Division of Market Regulation, SEC, dated August

1, 1997 (‘‘Amendment No. 1’’).

4See Letter from Philip H. Becker, Senior Vice

President, Phlx, to Michael Walinskas, Senior

Special Counsel, SEC, dated October 17, 1997

(‘‘Amendment No. 2’’). Amendment No. 2 revises

the proposal to provide that relief from the

requirements concerning double-up/down

guarantee sizes may be granted pursuant to the

extraordinary circumstances language contained in

the text of proposed Rule 229.07(c)(iii), rather than

that of existing Rule 229.13. Moreover, the text of

Rule 229.07(c)(iii) is proposed to be amended to

state that extraordinary circumstances also include

situations where the Exchange is unable to receive

market quotations in a timely and accurate manner.

In addition, while the Form 19b–4 filing containing

the proposed rule change stated that member

organizations may decline to participate in both

double-up/down automatic price improvement and

manual price protection, the text of proposed Rule

229.07(c)(i)(D) did not reflect this option.

Amendment No. 2 adds such language to the text.

5Rule 229.05 provides that round-lot market

orders up to 500 shares and partial round-lot

(‘‘PRL’’) market orders of up to 599 shares, which

combine a round-lot with an odd-lot, are stopped

at the PACE Quote at the time of their entry into

PACE (‘‘Stop Price’’) for a 30 second delay to

provide the Phlx specialist with the opportunity to

effect price improvement when the spread between

the PACE Quote exceeds 1⁄8 of a point. This feature

is known as the Public Order Exposure System

(‘‘POES’’) ‘‘window.’’ Rule 229.05 further provides

that market orders for more than 599 shares that a

specialist voluntarily has agreed to execute

automatically also are entitled to participation in

POES. If orders eligible for POES are not executed

within the POES 30 second window, the order is

automatically executed at the Stop Price.

6The PACE Quote consists of the best bid/offer

among the American Stock Exchange (‘‘Amex’’);

New York Stock Exchange (‘‘NYSE’’); Pacific

Exchange; Phlx, Boston Stock Exchange, Cincinnati

Stock Exchange, and Chicago Stock Exchange, as

well as the Intermarket Trading System/Computer

Assisted Execution System (‘‘ITS/CAES’’). See Rule

229.

7A market order is an order to buy or sell a stated

amount of a security at the best price obtainable

when the order is received. A marketable limit

order is an order to buy or sell a stated amount of

a security at a specified price, which is received at

a time when the market is trading at or better than

such specified price.

IV. 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, N.W.,

Washington, D.C. 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 such filing will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to File No.

SR–NASD–97–98 and should be

submitted by February 13, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–1645 Filed 1–22–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39548; File No. SR–Phlx–

97–23]

Self-Regulatory Organizations:

Philadelphia Stock Exchange, Inc.;

Order Granting Approval to Proposed

Rule Change and Notice of Filing and

Order Granting Accelerated Approval

to Amendment No. 2 Relating to the

Treatment of PACE Orders in Doubleup/Double-down Tick Situations

January 13, 1998.

I. Introduction

On May 2, 1997, the Philadelphia

Stock Exchange, Inc. (‘‘Phlx’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change

relating to double-up/double-down

automatic price improvement and

manual price protection. On August 4,

1997, the Exchange submitted to the

Commission Amendment No. 1 to the

proposed rule change.3

The proposed rule change was

published for comment in Securities

Exchange Act Release No. 39000

(September 2, 1997), 62 FR 47865

(September 11, 1997). No comments

were received on the proposal. On

October 20, 1997, the Exchange

submitted to the Commission

Amendment No. 2 to the proposed rule

change.4 This order approves the

proposal, including Amendment No. 2

on an accelerated basis.

II. Description

A. Background

The Exchange, pursuant to Rule 19b–

4 of the Act, proposes to adopt

Supplementary Material .07(c) to Phlx

Rule 229, Philadelphia Stock Exchange

Automatic Communication and

Execution (‘‘PACE’’) System, relating to

automatic double-up/double-down price

improvement and manual double-up/

double-down price protection. The

PACE System accepts orders for

automatic or manual execution in

accordance with the provisions of Phlx

Rule 229, which governs the operation

of the PACE System and defines its

objectives and parameters. Agency

orders received through PACE are

subject to certain minimum execution

parameters and non-agency orders are

subject to the provisions of

Supplementary Material .02 of Rule 229.

In addition, Rule 229 establishes

execution parameters for orders

depending on type (market or limit),

size, and the guarantees offered by

specialists.5

B. Automatic Double-up/Double-down

Price Improvement

The Exchange proposes to adopt Rule

2929.07(c)(i), Automatic Double-up/

Double-down Price Improvement,

which would state that where the

specialist voluntarily agrees to provide

automatic double-up/double-down price

improvement to all customers and all

eligible orders in a security, in any

instance where the bid/ask spread of the

PACE Quote 6 is a 1⁄4 point or greater,

market and marketable limit orders 7 in

NYSE-listed or Amex-listed securities

for 599 shares or less that are received

through PACE in double-up/doubledown situations shall be provided with

automatic price improvement of 1⁄8 of a

point, beginning at 9:45 a.m.

Under the proposal, a ‘‘double-up/

double-down situation’’ is defined as a

trade that would be at least: (i) 1⁄4 point

(up or down) from the last regular way

sale on the primary market; or (ii) 1⁄4

point from the regular way sale that was

the previous intra-day change on the

primary market. The term ‘‘double’’

originated with two 1⁄8 point ticks,

meaning 1⁄4 of a point. Under the

proposal, a down tick of 1⁄16 of a point

followed by a down tick of 3⁄16 of a point

would be a double-down situation,

because it equals 1⁄4 of a point.

As an example of the part (i) of the

definition of a double up/double-down

situation, assuming that the specialist

has agreed to participate in this feature,

where the PACE Quote is 221⁄2–223⁄4, if

the last sales on the primary market

were 223⁄4 followed by a down tick at

225⁄8, a double-up/double-down

situation would not occur for a market

order to buy, because buying at 223⁄4 is

a single up tick of 1⁄8 of a point and,