36468 Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Notices

5The initial series offered by this investment

company are: the Australia Index Series; the Austria

Index Series; the Belgium Index Series; the Canada

Index Series; the France Index Series; the Germany

Index Series; the Hong Kong Index Series; the Italy

Index Series; the Japan Index Series; the Malaysia

Index Series; the Mexico (Free) Index Series; the

Netherlands Index Series; the Singapore (Free)

Index Series; the Spain Index Series; the Sweden

Index Series; the Switzerland Index Series; and the

United Kingdom Index Series.

6Supra note 3.

7A holder of a single European-style call option

contract will have the right on and only on the

expiration date, expiring at the expiration time on

such date, to purchase from OCC at the aggregate

exercise price the number of units of the underlying

security represented by such option contract.

8A holder of a single European-style put option

contract will have the right on and only on the

expiration date, expiring at the expiration time on

such date, to sell to OCC at the aggregate exercise

price the number of units of the underlying security

represented by such option contract.

9Section 11 sets forth the general rules pertaining

to adjustments on stock option contracts. OCC has

deleted Section .08 from the Interpretations and

Policies and moved these provisions to new Rule

807.

10 15 U.S.C. 78q–1(b)(3)(F). 11 17 CFR 200.30–3(a)(12).

and trade similarly to shares of common

stock.

The Amex also trades fund shares

known as World Equity Benchmark

Shares (‘‘WEBS’’) which are issued by

an open-end management investment

company consisting of seventeen

separate series based on seventeen

foreign equity market indexes.5 The

investment objective of each series is to

provide results that correspond to the

aggregate price and yield performance of

publicly traded securities in a particular

market as represented by a particular

foreign equity index.

The Amex has proposed trading

options on exchange-traded trust units

and fund shares pursuant to the same

rules and procedures that are generally

applicable to trading in options on

equity securities with only minor

differences that affect their clearance

and settlement.6 These differences are

that options on trust units and fund

shares would be listed as European-style

options only and that each option

contract would cover 1000 trust units or

fund shares as the unit of trading.

The general rights of a holder of a

single call equity option contract are set

forth in Article VI, Section 9(a) of OCC’s

by-laws, and the general rights of a

holder of a single put equity option

contract are set forth in Article VI,

Section 9(b) of OCC’s by-laws. Because

options on trust units or fund shares are

deemed equity option contracts under

OCC’s rules, OCC is amending Section

9(a) and (b) of Article VI to set forth the

general rights of a holder of a single

European-style equity call option 7 and

a single European-style equity put

option,8 respectively. Furthermore, OCC

is amending Interpretations and Policy

.01 to Section 9, which provides that

subsections (a) and (b) of Section 9

apply only to stock option contracts to

clarify that the term ‘‘stock option

contracts’’ will include option contracts

on publicly traded interests in trust

units, fund shares, or shares in entities

similar to investment companies that

hold portfolios or baskets of common

stock.

OCC is adding Interpretation and

Policy .01 to Article VI, Section 10 of

the by-laws to reflect that, for series of

options in which the underlying

security is trust units or fund shares, the

unit of trading is the amount of the

underlying security deliverable upon

the exercise of the option as specified by

the exchange on which the option is

traded unless otherwise specified by

OCC in accordance with its by-laws and

rules.

In addition, OCC is adding Rule 807

to its rules. The rule contains essentially

the same provisions as those found in

Interpretations and Policy .08 to Article

VI, Section 11 of the by-laws.9 Rule 807

sets forth the general provision that

when a flexibly structured option

contract with a European-style

expiration has been adjusted to require

upon exercise the delivery of a fixed

amount of cash, the expiration date with

respect to the option will be accelerated

to fall on or shortly after the date on

which the conversion of the underlying

security to a right to receive cash occurs.

The ability to accelerate an expiration

date following an adjustment calling for

a fixed amount of cash was added

specifically to accommodate Europeanstyle, flexibly-structured equity options.

Without the ability to accelerate, the

option position would have to be

maintained until it could be exercised at

its regular expiration. For the same

reason, OCC is making this applicable to

all European-style stock option

contracts. In connection with the

addition of Rule 807, OCC is amending

the term ‘‘expiration date’’ as defined in

Article I, Section 1 of OCC’s by-laws, to

provide that the expiration date of a

stock option contract is subject to the

acceleration provisions of the new rule.

II. Discussion

Section 17A(b)(3)(F) of the Act 10

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds in

its custody or control or for which it is

responsible. The Commission believes

the rule change is consistent with OCC’s

obligation under the Act because OCC

will clear and settle options on trust

units and fund shares by using existing

OCC systems, rules, and procedures.

Thus, OCC should be able to implement

the clearance and settlement of options

on trust units and fund shares in a safe

manner consistent with its statutory

obligation due to the similarity of

options on trust units and fund shares

to option products currently cleared and

settled by OCC.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposed

rule change is consistent with the

requirements of the Act and in

particular Section 17A of the Act and

the rules and regulations thereunder.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

OCC–97–02) be and hereby is approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–17717 Filed 7–2–98; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[License No. 04/04–0273]

Capital Across America, L.P.; Notice of

Issuance of a Small Business

Investment Company License

On April 21, 1998, an application was

filed by Capital Across America, L.P.,

414 Union Street, Suite 2025, Nashville,

Tennessee 37219, with the Small

Business Administration (SBA)

pursuant to Section 107.300 of the

Regulations governing small business

investment companies (13 CFR 107.300

(1997)) for a license to operate as a small

business investment company.

Notice is hereby given that, pursuant

to Section 301(c) of the Small Business

Investment Act of 1958, as amended,

after having considered the application

and all other pertinent information, SBA

issued License No. 04/04–0273 on June

17, 1998, to Capital Across America,

L.P. to operate as a small business

investment company.

(Catalog of Federal Domestic Assistance

Program No. 59.011, Small Business

Investment Companies)

Dated: June 17, 1998.

Don A. Christensen,

Associate Administrator for Investment.

[FR Doc. 98–17714 Filed 7–2–98; 8:45 am]

BILLING CODE 8025–01–P