36460 Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Notices

contractowners’ objectives and

expectations.

(b) The costs of the Substitution will

be borne by the Applicants and will not

be borne by contractowners. No charges

will be assessed to effect the

Substitution.

(c) The Substitution will, in all cases,

be at net asset values of the respective

shares without the imposition of any

transfer or similar charge and with no

change in the amount of any

contractowner’s account value.

(d) The proposed Substitution will

not cause fees and charges under the

Contracts currently being paid by

contractowners to be greater after the

proposed Substitution than before the

proposed Substitution.

(e) The contractowners have been

given notice of the Substitution and will

have an opportunity to reallocate

contract values among other available

Funds without the imposition of any

transfer charge or limitation, nor will

any such transfers from the date of the

initial notice through a date 30 days

following the Substitution count against

the number of free transfers permitted in

a year.

(f) Within five days after the

Substitution, Phoenix will send to

contractowners written Notice that the

Substitution has occurred, identifying

the Fund that was substituted and

disclosing the Substitute Fund.

(g) The Substitution will in no way

alter the insurance benefits to

contractowners or the contractual

obligations of Phoenix.

(h) The Substitution will in no way

alter the tax benefits to contractowners.

Counsel for Phoenix has advised that

the Substitution will not give rise to any

tax consequences to the contractowners.

5. Section 17(a)(1) of the Act prohibits

any affiliated person, or an affiliate of an

affiliated person, of a registered

investment company from selling any

security or other property to such

registered investment company. Section

17(a)(2) of the Act prohibits any

affiliated person from purchasing any

security or other property from such

registered investment company.

6. Applicants anticipate that the

Substitution will be effected by

redeeming shares of the Current Fund

in-kind and then using those assets to

purchase shares of the Substitute Fund.

This redemption and purchase in-kind

involves the purchase of property from

the Current Fund by the separate

account, an affiliated person of that

Fund, and the sale of property to the

Substitute Fund by the separate

account, which may be considered an

affiliate of the Substitute Fund.

7. Similarly, where two investment

divisions holding shares of the same

Substitute Fund are combined into a

single investment division, the transfer

of assets could be said to involve

purchase and sale transactions between

the investment divisions by an affiliated

person.

8. Applicants request an order

pursuant to Section 17(b) of the Act

exempting the in-kind redemption and

purchase and the merger of certain

investment divisions from the

provisions of Section 17(a). Section

17(b) of the Act provides that the

Commission shall grant an order

exempting a proposed transaction from

Section 17(a) if evidence establishes

that: (a) the terms of the proposed

transaction, including the consideration

to be paid or received, are reasonable

and fair and do not involve

overreaching on the part of any person

concerned; (b) the proposed transaction

is consistent with the policy of each

registered investment company; and (c)

the proposed transaction is consistent

with the general purposes of the Act.

9. Applicants represent that the terms

of the in-kind redemption and purchase

are reasonable and fair and do not

involve overreaching on the part of any

person concerned and that the interests

of contractowners will not be diluted.

The in-kind redemption and purchase

will be done at values consistent with

the objectives and policies of both the

Current and Substitute Funds. The asset

transfers will be reviewed to assure that

the assets meet the objectives and

policies of the Substitute Fund and that

they are valued under the appropriate

valuation procedures of the Current and

Substitute Funds. In-kind redemption

and purchase will reduce the brokerage

costs that would otherwise be incurred

in connection with the Substitution.

10. Applicants represent that the

merger of the investment divisions is

intended to reduce administrative costs

and thereby benefit contractowners with

assets in those investment divisions.

The purchase and sale transactions will

be effected based on the net asset value

of the shares held in the investment

divisions and the value of the units of

the investment division involved.

Therefore, there will be no change in

value to any contractowner.

Conclusion

For the reasons summarized above,

Applicants assert that the requested

orders meet the standards set forth in

Sections 26(b) and 17(b), respectively,

and should, therefore, be granted.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–17715 Filed 7–2–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26891]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

June 26, 1998.

Notice is hereby given that the

following filling(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated under the Act. All

interested persons are referred to the

application(s) and/or declaration(s) for

complete statements of the proposed

transactions(s) summarized below. The

application(s) and/or declaration(s) and

any amendments is/are available for

public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

July 21, 1998, to the Secretary,

Securities and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing should

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After July 21, 1998, the application(s)

and/or declaration(s), as filed or as

amended, may be granted and/or

permitted to become effective.

New England Electric System (70–9167)

New England Electric System

(‘‘NEES’’), 25 Research Drive,

Westborough, Massachusetts 01582, a

registered holding company, has filed a

post-effective amendment to its

declaration under sections 6(a) and 7 of

the Act and rule 54 under the Act.

By order dated March 25, 1998 (HCAR

No. 26849) (‘‘March Order’’), the

Commission authorized NEES to issue,

no later than December 31, 2002, up to

one million shares of its common stock

to be used to acquire the stock or assets
Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Notices 36461

of one or more ‘‘energy-related

companies,’’ as defined in rule 58 under

the Act. The March Order authorized

NEES to make the acquisitions directly

or indirectly through a nonutility

subsidiary of NEES.

NEES now proposes to increase its

authorization under the March Order to

issue an additional one million shares of

its common stock, no later than

December 31, 2002, totalling two

million shares of its common stock

available to be used to acquire the stock

or assets of one or more ‘‘energy-related

companies,’’ as defined in rule 58 under

the Act.

Central and South West Corporation, et

al. (70–9119)

Central and South West Corporation

(‘‘CSW’’), a registered holding company,

and Central and South West Services,

Inc., a service company subsidiary of

CSW (‘‘Services’’ and, together with

CSW, ‘‘Applicants’’), both at 1616

Woodall Rodgers Freeway, P.O. Box

660164, Dallas, Texas 75266, have filed

an application-declaration under

sections 6(a), 7, 9(a), 10, 11 and 12(b) of

the Act, and rules 45 and 54 under the

Act.

The Applicants request authority

through December 31, 2003 to permit:

(a) Services to engage in the business of

marketing, selling, leasing and renting

to consumers certain electric bicycles,

electric tricycles, electric skateboards

and electric scooters (‘‘Electric

Vehicles’’ or ‘‘EVs’’), as well as retrofit

kits to convert traditional bicycles to

electric bicycles (collectively, ‘‘EV Sales

& Leasing’’); (b) Services to provide

financing to, or guarantee borrowings

by, creditworthy commercial and noncommercial customers other than

individuals in connection with their

purchase or lease of EVs (‘‘EV Customer

Financing’’) utilizing funds available to

Services through its participation in the

CSW money pool; and (c) Services to

use borrowings from the CSW money

pool to fund the management, operation

and administrative costs of the EV

Business and to finance the EV Business

by making loans and providing

guarantees and other credit support to

commercial and institutional customers,

and CSW to provide guarantees and

other credit support on behalf of

Services, up to an aggregate amount

outstanding at any time of $25 million

(‘‘EV Business Financing’’, and together

with EV Sales & Leasing and EV

Customer Financing, ‘‘EV Business’’).

Services proposes to provide EV Sales

& Leasing activities to sporting

equipment stores, bicycle shops, noncommercial entities including

universities and government

organizations and, on a smaller scale, to

individuals via the Internet. In

connection with EV Sales & Leasing,

Services proposes to provide the EV

Customer Financing to support the

purchase of Electric Vehicles and to

encourage public utilization of Electric

Vehicles for transportation. The

Applicants will obtain funds to finance

the EV Business through the CSW

money pool, as authorized by the

Commission under prior orders. EV

Business Financing would be conducted

through use of the CSW money pool, as

authorized by Commission orders dated

March 31, 1993, September 28, 1993,

March 18, 1994, June 15, 1994, February

1, 1995, March 21, 1995, March 28, 1997

and April 3, 1998 (HCAR Nos. 25777,

25897, 26007, 26066, 26226, 26254,

26697 and 26854, respectively).

EV Customer Financing provided by

Services may take the form of

guarantees, capital leases, operating

leases or promissory notes with terms of

one to five years, with pricing to be

competitive with that readily available

in the market for similar financial

instruments. Loans made by Services

directly or, with respect to which

Services, or CSW on behalf of Services,

is providing a guarantee, will have an

average annual interest rate not to

exceed prime plus 7%. These loans may

be unsecured or secured by a lien or

other security interest in the Electric

Vehicle or other real or personal

property other than utility assets.

Services will obtain funding through its

participation in the CSW money pool

system. In some instances, the

Applicants expect that Services may

place the EV Customer Financing with

third party lenders and leasing

companies.

By increasing the availability of

Electric Vehicles through sales and

financing efforts, the Applicants hope to

advance new electro-technologies and

the use of electricity as an alternative

source of fuel for vehicles. The

Applicants also anticipate that the

marketing and sale of new technologies

associated with the Electric Vehicles

will increase customer awareness of

other potential uses of electricity,

resulting in an increase in overall

demand for electric service, both within

the states in CSW’s service areas and in

surrounding regions. CSW has four

operating company subsidiaries—Public

Service Company of Oklahoma,

Southwestern Electric Power Company,

West Texas Utilities and Central Power

& Light Company (‘‘Operating

Companies’’)—which service portions of

Texas, Oklahoma, Louisiana and

Arkansas (‘‘Service Areas’’). The

Applicants expect that promotion of a

new market for Electric Vehicles will

spur demand for electricity and help the

Operating Companies make a successful

transition from a regulated industry to a

competitive one. EV Sales & Leasing

activities are also expected to enhance

CSW’s name recognition and customer

loyalty.

The Applicants propose to engage in

the EV Business both within the Service

Areas of the CSW Operating Companies

and in all other areas of the United

States. During the twelve-month period

beginning on the first day of January in

the year following the date the

Applicants commence the EV Business

under approval of the Commission, and

for each subsequent calendar year, total

revenues of Services derived from the

EV Business in the states comprising the

Service Areas will exceed total revenues

of Services derived from the EV

Business in all other states.

The Applicants will treat its EV

Business as a separate cost an revenue

center for accounting purposes. CSW

proposes to provide EV Business

Financing to Services in an aggregate

amount outstanding at any time of up to

$25 million. These funds would be

designated for specific use by Services

in support of the EV Business. CSW

further proposes to guarantee or to act

as surety on bonds, indebtedness and

performance and other obligations

undertaken by Services in connection

with its EV Business. Guarantees or

arrangements may be made from time to

time through December 31, 2002, and

will expire or terminate no later than

December 31, 2003. The total amount of

all loans and guarantees for which

authorization is sought will not exceed

$25 million at any time outstanding.

The Applicants state that Services

currently has an insufficient staff to

engage in the EV Business and will hire

outside individuals or firms to conduct

the EV Business activities. Hiring will

be done on a contract basis, and the

additional personnel will be deemed

independent contractors of Services.

These independent contractors will be

paid by Applicants through

commissions only and will receive no

salary or employee benefits from

Applicants. Through the date of the

filing of the application-declaration,

Applicants have executed one

agreement with a manufacturer or

certain Electric Vehicles which gives

Applicants the right to market, sell,

lease and rent these vehicles in several

states.

Indiana Michigan Power Company (70–

9315)

Indiana Michigan Power Company

(‘‘I&M’’), One Summit Square, P.O. Box
36462 Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Notices

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

2 17 CFR 240.19b–4.

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

60, Fort Wayne, Indiana 46801, an

electric public utility subsidiary

company of American Electric Power

Company, Inc., a registered holding

company, has filed an applicationdeclaration under sections 6(a), 7, 9(a)

and 10 and rule 54 under the Act.

I&M proposes to guarantee loan

payments, including principal, interest

and penalties, on a promissory note

(‘‘Note’’) from one of its industrial

customers, Iron Dynamics, Inc. (‘‘IDI’’),

an Indiana corporation, which is

constructing a main mill substation,

power distribution facilities from main

mill to coal preparation facilities, coal

reparation facilities and submerged arc

furnace transformers and vaults

(‘‘Equipment’’) to be installed on IDI’s

property in DeKalb, Indiana, which is in

I&M’s service territory. The Note will

evidence a loan by GE Capital

Corporation (‘‘GE Capital’’) or a similar

lender (‘‘Lender’’) to IDI in an amount

up to $6.5 million to acquire the

Equipment. I&M will supply electric

service to IDI’s facility.

The loan will be made under a loan

agreement (‘‘Loan Agreement’’) which

provides, among other things, that the

interest rate on the Note may be variable

or fixed. The variable interest rate will

be equal to an index rate (‘‘Index Rate’’)

plus 1.75%. On the date the initial loan

is made, the index Rate will be the

interest rate equal to the per annum

interest rate for commercial paper

issued by GE Capital for the period of

time closest to 90-days on such date

(‘‘CPR’’), and the Index Rate will be

adjusted every 90 days and be equal to

the CPR in effect on the tenth day

preceding the end of each 90 day period

during the term of the loan. If, for any

reason, GE Capital does not issue the

commercial paper on the applicable

date, the CPR will be equal to the rate

listed for ‘‘3 Month’’ commercial paper

under the column indicating an average

rate as stated in the Federal Reserve

Statistical Release H. 15 (519) for the

calendar month preceding the calendar

month in which the 90-day period ends.

If, for any reason, the Federal Reserve

Statistical Release H.15 (519) is no

longer published, the CPR will be equal

to the latest commercial paper rate for

high grade unsecured notes of 90-day

maturity sold through dealers by major

corporations in multiples of $1,000, as

indicated in the ‘‘Money Rates’’ column

of the Wall Street Journal, Eastern

Edition, published on the tenth day

prior to the end of each 90-day period

or the first business day thereafter.

Under the terms of the Loan

Agreement, IDI may elect to convert the

interest rate on the Note to a fixed rate.

The fixed rate will be equal to 1.75%

over the average of one, three and fiveyear U.S. Treasuries as published in the

Wall Street Journal on the date of IDI’s

election to convert to a fixed rate. IDI is

responsible to the Lender for any costs

incurred as a result of converting to a

fixed rate.

The Notes will mature in not more

than 96 months and be secured by a first

lien on the Equipment. There will be no

consideration paid by IDI for the

guarantee.

In an alternative to I&M’s loan

guarantee, I&M requests authority to

make a direct loan to IDI and to acquire

the Note on substantially the same terms

as the loan from GE Capital or Lender

to IDI.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–17716 Filed 7–2–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40137; File No. SR–NASD–

98–43]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. to Extend the Deadline for

Presently Registered Representatives

to Apply for the Equity Trader, Series

55 Examination

June 26, 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 June 12,

1998, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’) through its whollyowned subsidiary, 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

has designated this proposal as one

constituting a stated policy, practice, or

interpretation with respect to the

meaning of an existing rule under

Section 19(b)(3)(A)(i) of the Act,3 which

renders the rule effective upon the

Commission’s receipt of this filing. 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 NASDR is proposing to amend

NASD Membership and Registration

Rule 1032 to change the date by which

registered representatives who currently

trade equity securities in the Nasdaq

Stock Market (Nasdaq) and/or over-thecounter must apply for Equity Trader

registration. Below is the text of the

proposed rule change. Proposed new

language is in italics; proposed

deletions are in brackets.

Rule 1032. Categories of Representative

Registration

* * * * *

(f) Limited Representative—Equity

Trader

* * * * *

Before registration as a Limited

Representative—Equity Trader as

defined in subparagraph (1) hereof may

become effective, an applicant must:

* * * * *

(B) pass an appropriate Qualification

Examination for Limited RepresentativeEquity Trader. Any person who was

performing any of the activities

described in paragraph (f)(1) above on

or prior to May 1, 1998 and who has

filed an application to take this

examination by [(date thirty (30) days

after the effective date of this rule)]

August 31, 1998 must pass the

examination by [(24 months after

effective date above)] May 1, 2000. Any

person who is eligible for this extended

qualification period and who fails this

examination during [such] the twentyfour (24) month time period

commencing on May 1, 1998 and ending

on May 1, 2000 must wait thirty (30)

days from the date of failure to take the

examination again. Any person, other

than a person who is eligible for the

extended qualification period, who files

an application to take this qualification

examination after [(date thirty (30) days

after the effective date of this rule)] May

1, 1998 must pass this examination

before conducting such activities as

described in paragraph (f)(1) above. In

no event may a person who is eligible

for the extended qualification period

function as an Equity Trader beyond the

24-month period without having

successfully passed the appropriate

qualification examination.