Federal Register / Vol. 63, No. 123 / Friday, June 26, 1998 / Notices 34949

1Central Maine has reached an agreement with a

third party, FPL Group (‘‘FPL’’), to sell its interests

in AVEC, as part of a sale to FPL of all of its

nonnuclear generating assets.

2Central Maine also owns a 38% common stock

interest in Maine Yankee Atomic Power Company

(‘‘Maine Yankee’’), which owns the Maine Yankee

nuclear electric generating plant in Wiscasset,

Maine. The Maine Yankee plant is not currently

operating. On August 6, 1997, the board of directors

of Maine Yankee voted to shut down permanently

and begin to decommission the Maine Yankee

plant.

3Central Maine’s shareholders approved the

Merger Plan at their annual meeting on May 21,

1998.

4Central Maine expects to sell its interests in

Hydro, Merimil and GIPOP as part of the planned

sale of its nonnuclear generation assets. Central

Maine has offered for sale its interest in Kennebec

Water. If Central Maine does not receive an

acceptable bid for this interest, it will retain the

interest and not transfer it to Holdco. Cumberland

and Central will remain subsidiaries of Central

Maine.

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 14, the application(s)

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

amended, may be granted and/or

permitted to become effective.

Central Maine Power Company, et al.

Central Maine Power Company

(‘‘Central Maine’’), a public utility

holding company exempt from

regulation under the Act, in accordance

with rule 2 under the Act, and HoldCo,

Inc. (‘‘Holdco’’), a wholly owned

subsidiary of Central Maine (together,

‘‘Applicants’’), both located at 83 Edison

Drive, Augusta, Maine 04336, have filed

an application under sections 3(a)(1),

9(a)(2) and 10 of the Act.

Central Maine is an investor-owned

public utility company primarily

engaged in the business of generating,

transmitting and distributing electricity

to wholesale customers, principally

other utilities, and to retail customers in

Maine. Central Maine is the largest

electric utility in Maine and serves

approximately 528,000 customers in its

11,000 square mile service area. Central

Maine had $954 million in consolidated

electric operating revenues in 1997.

Central Maine is subject to the

regulatory authority of the Maine Public

Utilities Commission.

Central Maine currently has three

utility subsidiaries: Maine Electric

Power Company, Inc. (‘‘MEPCO’’),

Aroostook Valley Electric Company

(‘‘AVEC’’), and NORVARCO. MEPCO

owns and operates a 345-kV

transmission interconnection between

Wiscasset, Maine and the Maine-New

Brunswick international border at

Orient, Maine. AVEC owns and operates

a 31 MW wood-fired generating plant in

Fort Fairfield, Maine, the output of

which is sold to Central Maine.1

NORVARCO is one of two general

partners in Chester SVC Partnership, a

general partnership which owns certain

transmission assets in Chester, Maine,

adjacent to MEPCO’s transmission

interconnection.2

Central Maine’s nonutility

subsidiaries include: CMP International

Consultants (‘‘CMPI’’), Central

Securities Corporation (‘‘Central’’),

Cumberland Securities Corporation

(‘‘Cumberland’’), Kennebec Hydro

Resources (‘‘Hydro’’), The Merimil

Limited Partnership (‘‘Merimil’’),

MaineCom Services, Inc. (‘‘MainCom’’),

TeleSmart (‘‘Telesmart’’), The Union

Water-Power Company (‘‘Union

Water’’), Androscoggin Reservoir

Company (‘‘Androscoggin’’), Kennebec

Water Power Company (‘‘Kennebec

Water’’), and the Gulf Island Pond

Oxygenation Project (‘‘GIPOP’’). These

subsidiaries are engaged in utility

support services (such as training,

research, project management and

technical consulting),

telecommunications, river facilities

management, administrative services,

and real estate activities. In 1997, they

provided total revenues of $21,238,000,

or approximately 2% of Central Maine’s

total consolidated electric operating

revenues for that year.

Holdco and Central Maine seek

authority for Holdco to acquire all of the

outstanding common stock of Central

Maine and, indirectly, of its utility

subsidiaries. In addition, Holdco and

Central Maine seek an order under

section 3(a)(1) of the Act exempting

Holdco and Central Maine from all

provisions of the Act, except section

9(a)(2).

Holdco intends to form a subsidiary

company, Merger Sub, for the sole

purpose of consummating the

acquisition of Central Maine by Holdco

(‘‘Acquisition’’). In accordance with an

agreement (‘‘Merger Plan’’) to be entered

into by Holdco, Central Maine and

Merger Sub, Merger Sub will merge with

and into Central Maine. In addition each

issued and outstanding share of Central

Maine common stock (‘‘CM Common

Stock’’) will be converted into one share

of Holdco common stock (‘‘Holdco

Common Stock’’).3 The outstanding

shares of Merger Sub common stock will

be automatically converted into a

number of shares of CM Common Stock

equal to the number of shares of CM

Common Stock before the Merger. The

shares of Holdco Common Stock owned

by Central Maine before the Merger will

be canceled. All debt securities and

series of Central Maine preferred stock

will be unaffected by the Merger Plan

and will remain securities of Central

Maine.

Upon consummation of the

Acquisition, each person that held

shares of CM Common Stock before the

Acquisition, will hold an equal number

of shares of Holdco Common Stock, and

Holdco will hold all of the issued and

outstanding shares of CM Common

Stock.

Applicants state that concurrently

with the Acquisition, or shortly

thereafter, Central Maine will transfer

by dividend its existing equity interests

in CMPI, MaineCom, Telesmart, Union

Water and Androscoggin to Holdco.4

Applicants assert that they will each

satisfy the requirements for an

exemption under section 3(a)(1) upon

consummation of the Merger. They state

that they and their public utility

subsidiaries currently are, and will

continue to be, predominately intrastate

in character and will continue to carry

on their business substantially in Maine.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–17082 Filed 6–25–98; 8:45 am]

BILLING CODE 8010–01–M

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 June 29, 1998.

A closed meeting will be held on

Wednesday, July 1, 1998, at 2:30 p.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.
34950 Federal Register / Vol. 63, No. 123 / Friday, June 26, 1998 / Notices

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

2 17 CFR 240.19b–4.

3 NYSE Rule 344 states that supervisory analysts

must be acceptable to, and approved by, the NYSE.

NYSE Rule 344, Supplementary Material .10 sets

forth examination and other requirements for

supervisory analysts.

4 See Securities Exchange Act Release No. 39985

(May 12, 1998), 63 FR 27608.

5See NYSE Rule 344, Supplementary Material

.10.

6The NASD principal examination referred to

here is the Series 24 Qualification Examination for

Principals.

7NYSE Rule 472, Supplementary Material .10

defines ‘‘research reports’’ as ‘‘* * * an analysis of

individual companies, industries, market

conditions, securities or other investment vehicles

which provide information reasonably sufficient

upon which to base an investment decision.’’

8 15 U.S.C. 78o–e.

9This representation was made by Robert J. Smith

of the Office of General Counsel, NASD Regulation,

Commissioner Hunt, as duty officer,

voted to consider the items listed for the

closed meeting in a closed session.

The closed meeting scheduled for

Wednesday, July 1, 1998, at 2:30 p.m.,

will be:

Institution of injunctive actions.

Institution 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 postponed, please contact:

The Office of the Secretary at (202)

942–7070.

Dated: June 23, 1998.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–17149 Filed 6–23–98; 4:11 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40105; File No. SR–NASD–

98–28]

Self-Regulatory Organizations;

National Association of Securities

Dealers, Inc.; Order Approving

Proposed Rule Change Relating to

Approval of Research Reports

June 22, 1998.

I. Introduction

On April 27, 1998, NASD Regulation,

Inc. (‘‘NASD Regulation’’) filed with the

Securities and Exchange Commission

(‘‘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 to

amend Rule 2210, ‘‘Communications

with the Public,’’ of the Conduct Rules

of the National Association of Securities

Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’). The proposed rule

change will permit the approval of

research reports by a supervisory

analyst acceptable to the New York

Stock Exchange (‘‘NYSE’’) under NYSE

Rule 344, ‘‘Supervisory Analysts,’’ 3 to

satisfy the requirement under NASD

Rule 2210 that research reports be

approved by a registered principal.

The proposed rule change was

published for comment in the Federal

Register on May 19, 1998.4 No

comments were received on the

proposal. This order approves the

proposal.

II. Description of the Proposal

Currently, NASD Rule 2210(b)(1)

requires each item of advertising and

sales literature to be approved by

signature or initial of a registered

principal of an NASD member prior to

use or filing with NASD Regulation.

Under NASD Rule 2210(a)(2), ‘‘sales

literature’’ includes research reports. A

joint NASD/NYSE member asked the

NASD whether the approval of research

reports by a supervisory analyst

approved by the NYSE under NYSE

Rule 344 could satisfy the requirement

under NASD Rule 2210 that a registered

principal approve research reports prior

to use or filing with NASD Regulation.

In order to become a supervisory

analyst under NYSE Rule 344, an

applicant may present evidence of

appropriate experience and either (i)

pass an NYSE Supervisory Analyst

Examination, or (ii) successfully

complete a specified level of the

Chartered Financial Analysts

Examination prescribed by the NYSE

and pass only that portion of the NYSE

Supervisory Analysts Examination

dealing with NYSE rules on research

standards and related matters.5 The

NASD Regulation staff reviewed the

NYSE content outline for the NYSE’s

Supervisory Analysts Examination and

found that the particular categories of

securities addressed in the ‘‘securities

analysis’’ section of the content outline

are fixed income securities and equity

securities. The NASD Regulation staff

concluded that the coverage of the

NYSE communication rules in NYSE’s

Supervisory Analysts Examination is

comparable to the communication

materials covered in the NASD

principal examination.6 Accordingly,

NASD Regulation believes that, with

respect to the level of training and

experience necessary for review of

research reports on debt and equity

securities, the level of supervisory

analyst registration is comparable to the

level of NASD principal registration.

Given that the scope of approval

authority is limited to research reports

on debt and equity securities and that

the material in the NYSE’s Supervisory

Analysts Examination and the NASD’s

principal examination is comparable,

the NASD Regulation staff concluded

that the investor protection goals that

the NASD’s principal review

requirement are designed to serve could

be satisfied by the NYSE’s requirements

in this area.

Accordingly, the proposed rule

change amends NASD Rule 2210(b)(1)

to state that the requirement that

advertising and sales literature be

approved by a registered principal of an

NASD member firm may be met, with

respect to corporate debt and equity

securities that are the subject of research

reports as that term is defined in NYSE

Rule 472, ‘‘Communications with the

Public,’’ 7 by the signature or initial of

a supervisory analyst approved

pursuant to NYSE Rule 344. Any other

material requiring supervisory approval

would continue to require approval by

an NASD registered principal.

III. Discussion

After careful review, the Commission

finds that the proposed rule change is

consistent with the provisions of

Section 15A(b)(6) 8 of the Act, which

require that the rules of the Association

be designed to promote just and

equitable principles of trade and to

protect investors and the public interest.

The proposal amends NASD Rule

2210(b)(1) to state that the requirement

that advertising and sales literature be

approved by a registered principal of an

NASD member firm may be met, with

respect to corporate debt and equity

securities that are the subject of research

reports, as defined in NYSE Rule 472,

by the signature or initial of a

supervisory analyst approved pursuant

to NYSE Rule 344. NASD Regulation

staff states that it has reviewed the

content outline for the NYSE

Supervisory Analysts Examination and

concluded that the coverage of the

NYSE communication rules in the

Supervisory Analysts Examination is

comparable to the communication

materials covered in the NASD

principal examination. Additionally, the

NASD Regulation staff has represented

that any change to NYSE Rule 344 or the

NYSE Supervisory Analysts

Examination would be cause for the

NASD to review NASD Rule 2210 to

ensure that NASD and NYSE

requirements for approval of research

reports remain comparable.9 Given that