Federal Register / Vol. 63, No. 130 /Wednesday, July 8, 1998 / Notices 36979

1See Letter from Robert E. Aber, Vice President

and General Counsel, Nasdaq, to Jonathan G. Katz,

Secretary, Commission, dated June 30, 1998 (‘‘June

1998 Extension Request’’). The June 1998 Extension

Request also requests the Commission continue to

provide exemptive relief, previously granted in

connection with the Plan on a temporary basis,

from Rules 11Ac1–2 and 11Aa3–1 under the

Securities Exchange Act of 1934, as amended

(‘‘Act’’). 15 U.S.C. 78a et seq. The signatories to the

Plan are the Participants for purposes of this

release, however, the BSE joined the Plan as a

‘‘limited participant’’ and reports quotation

information and transaction reports only in Nasdaq/

NM securities listed on the BSE. Originally, the

American Stock Exchange, Inc. (‘‘Amex’’) was a

Participant but withdrew its participation from the

Plan in August 1994.

2Section 12 of the Act generally requires an

exchange to trade only those securities that the

exchange lists, except that Section 12(f) of the Act

permits unlisted trading privileges (‘‘UTP’’) under

certain circumstances. For example, Section 12(f),

among other things, permits exchanges to trade

certain securities that are traded over-the-counter

(‘‘OTC/UTP’’), but only pursuant to a Commission

order or rule. The present order fulfills this Section

12(f) requirement. For a more complete discussion

of the Section 12(f) requirement, see November

1995 Extension Order, infra note 8.

3On March 18, 1996, the Commission solicited

comment on a revenue sharing agreement among

the Participants. See March 1996 Extension Order,

infra note 8. Thereafter the Participants submitted

certain technical revisions to the revenue sharing

agreement (‘’Revised Amendment No. 9’’). See

Letter from Robert E. Aber, Vice President and

General Counsel, Nasdaq, to Jonathan G. Katz,

Secretary, Commission, dated September 13, 1996.

See also September 1996 Extension Order, infra

note 8.

4See Section 12(f)(2) of the Act.

5See Securities Exchange Act Release No. 28146

(June 26, 1990), 55 FR 27917 (July 6, 1990) (‘‘1990

Plan Approval Order’’).

6See letter from David T. Rusoff, Foley & Lardner,

to Betsy Prout, Division of Market Regulation

(‘‘Division’’), SEC, dated May 9, 1994.

7See Securities Exchange Act Release No. 34371

(July 13, 1994), 59 FR 37103 (July 20, 1994);

Securities Exchange Act Release No. 35221 (January

11, 1995), 60 FR 3886 (January 19, 1995); Securities

Exchange Act Release No. 36102 (August 14, 1995),

60 FR 43626 (August 22, 1995); Securities Exchange

Act Release No. 36226 (September 13, 1995), 60 FR

49029 (September 21, 1995); Securities Exchange

Act Release No. 36368 (October 13, 1995), 60 FR

54091 (October 19, 1995); Securities Exchange Act

Release No. 36481 (November 13, 1995), 60 FR

58119 (November 24, 1995) (‘‘November 1995

Extension Order’’); Securities Exchange Act Release

Continued

based on the relative net asset values

per share. Applicant and New

Opportunities Fund paid approximately

$108,400 and $25,600, respectively, in

expenses related to the reorganization.

On January 26, 1998, Putnam

Intermediate Government Income Trust

transferred all of its assets and liabilities

to Putnam Mater Intermediate Income

Trust (the ‘‘Master Fund’’), based on the

relative net asset values per share.

Applicant and the Master Fund paid

approximately $310,696 and $360,303,

respectively, in expenses related to the

reorganization.

Filing Date: Each application was

filed on May 27, 1998.

Applicants’ Address: One Post Office

Square, Boston, Massachusetts 02109.

Dean Witter Managers’ Select Fund [File

No. 811–8053]

Summary: Applicant seeks an order

declaring that it has ceased to be an

investment company. On April 27,

1998, applicant distributed its assets to

Dean Witter InterCapital, Inc. (‘‘Dean

Witter’’), applicant’s investment adviser

and sole shareholder. Applicant never

made a public offering of its shares and

does not propose to make a public

offering or engage in any business

activities.

Filing Date: The application was filed

on May 8, 1998.

Applicant’s Address: Two World

Trade Center, New York, New York

10048.

Oppenheimer Fund [File No. 811–847]

Summary: Applicant seeks an order

declaring that it has ceased to be an

investment company. On June 20, 1997,

applicant transferred all of its assets to

Oppenheimer Multiple Strategies Fund

(the ‘‘Strategies Fund’’) at net asset

value. Applicant and Strategies Fund

bore $56,000 and $28,000, respectively,

in expenses in connection with the

transaction.

Filing Dates: The application was

filed on April 21, 1998 and amended on

June 12, 1998.

Applicant’s Address: Two World

Trade Center, New York, New York

10048–0203.

Oppenheimer Global Emerging Growth

Fund [File No. 811–5381]

Summary: Applicant seeks an order

declaring that it has ceased to be an

investment company. On June 20, 1997,

applicant transferred all of its assets to

Oppenheimer Global Fund (the ‘‘Global

Fund’’) at net asset value. Applicant and

Global Fund paid $66,754 and $27,923,

respectively, in expenses in connection

with the transaction.

Filing Dates: The application was

filed on April 21, 1998 and amended on

June 12, 1998.

Applicant’s Address: Two World

Trade Center, New York, New York

10048–0203.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18004 Filed 7–7–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40151; File No. S7–24–89]

Joint Industry Plan; Solicitation of

Comments and Order Approving

Request to Extend Temporary

Effectiveness of Reporting Plan for

Nasdaq/National Market Securities

Traded on an Exchange on an Unlisted

or Listed Basis, Submitted by the

National Association of Securities

Dealers, Inc., the Boston Stock

Exchange, Inc., the Chicago Stock

Exchange, Inc., and the Philadelphia

Stock Exchange, Inc.

July 1, 1998.

I. Introduction

On June 30, 1998, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’), on behalf of itself and the

Boston Stock Exchange, Inc. (‘‘BSE’’),

the Chicago Stock Exchange, Inc.

(‘‘CHX’’), and the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’) submitted to the

Securities and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) a proposal to

extend the operation of a joint

transaction reporting plan (‘‘Plan’’) 1 for

Nasdaq/National Market (‘‘Nasdaq/

NM’’) (previously referred to as Nasdaq/

NMS) securities traded on an exchange

on an unlisted or listed basis.2 The

proposal would extend the effectiveness

of the Plan, as amended by Revised

Amendment No. 9, as defined in

footnote 3, through December 31, 1998.3

The Commission also is extending

certain exemptive relief as described

below. The June 1998 Extension Request

also requests that the Commission

approve the Plan, as amended, on a

permanent basis on or before December

31, 1998. During the six-month

extension of the Plan, the Commission

will consider whether to approve the

proposed Plan, as amended, on a

permanent basis.

II. Background

The Plan governs the collection,

consolidation and dissemination of

quotation and transaction information

for Nasdaq/NM securities listed on an

exchange or traded on an exchange

pursuant to a grant of UTP.4 The

Commission approved trading pursuant

to the Plan on a one-year pilot basis,

with the pilot period to commence

when transaction reporting pursuant to

the Plan commenced. The Commission

originally approved the Plan on June 26,

1990.5 Accordingly, the pilot period

commenced on July 12, 1993 and was

scheduled to expire on July 12, 1994.6

The Plan has since been in operation on

an extended pilot basis.7
36980 Federal Register / Vol. 63, No. 130 /Wednesday, July 8, 1998 / Notices

No. 36589 (December 13, 1995), 60 FR 65696

(December 20); Securities Exchange Act Release No.

36650 (December 28, 1995), 61 FR 358 (January 4,

1996); Securities Exchange Act Release No. 36934

(March 6, 1996), 61 FR 10408 (March 13, 1996);

Securities Exchange Act Release No. 36985 (March

18, 1996), 61 FR 12122 (March 25, 1996) (‘‘March

1996 Extension Order’’); Securities Exchange Act

Release No. 37689 (September 16, 1996), 61 FR

50058 (September 24, 1996) (‘‘September 1996

Extension Order’’); Securities Exchange Act Release

No. 37772 (October 1, 1996), 61 FR 52980 (October

9, 1996); Securities Exchange Act Release No. 38457

(March 31, 1997), 62 FR 16880 (April 8, 1997);

Securities Exchange Act Release No. 38794 (June

30, 1997) 62 FR 36586 (July 8, 1997) (‘‘June 1997

Extension Order’’); and Securities Exchange Act

Release No. 39505 (December 31, 1997) 63 FR 1515

(‘‘December 1997 Extension Order’’).

8The Plan defines ‘‘eligible security’’ as any

Nasdaq/NM security as to which unlisted trading

privileges have been granted to a national securities

exchange pursuant to Section 12(f) of the Act or that

is listed on a national securities exchange.

9The full text of the Plan, as well as a ‘‘Concept

Paper’’ describing the requirements of the Plan, are

contained in the original filing which is available

for inspection and copying in the Commission’s

public reference room.

10Rule 11Ac1–2 under the Act requires that the

best bid or best offer be computed on a price/size/

time algorithm in certain circumstances.

Specifically, Rule 11Ac1–2 under the Act provides

that ‘‘in the event two or more reporting market

centers make available identical bids or offers for

a reported security, the best bid or offer . . . shall

be computed by ranking all such identical bids or

offers . . . first by size . . . then by time.’’ The

exemption permits vendors to display the BBO for

Nasdaq securities subject to the Plan on a price/

time/size basis.

11See Securities Exchange Act Release No. 39285

(October 29, 1997), 62 FR 59932 (November 5,

1997).

12See Securities Exchange Act Release No. 38513

(April 15, 1997), 62 FR 19369 (April 21, 1997).

Under the Actual Size Rule, market makers in

certain Nasdaq securities are subject to a minimum

quotation size requirement of 100 shares instead of

the applicable small order execution system

(‘‘SOES’’) tier size for that security.

13See Securities Exchange Act Release No. 39760

(March 16, 1998), 63 FR 13894 (March 23, 1998).

14See Securities Exchange Act Release No. 39718

(March 4, 1998), 63 FR 12124 (March 12, 1998).

(‘‘IODES Proposal’’) Directed orders are those that

an order-entry firm chooses to send to a specific

Nasdaq market maker, electronic communications

network (‘‘ECN’’) or UTP exchange for delivery and

execution. Non-directed orders are those that are

not sent to a particular Nasdaq market maker or

ECN. In other words, when the broker-dealer

entering the order does not specify the particular

Nasdaq market maker, ECN or UTP exchange it

wants to access, the order will be sent to the next

available executing participant quoting at the

national BBO.

15Portions of the proposed new system are

contingent on the approval of the request to

implement the Actual Size Rule for all Nasdaq

securities. The proposal does, however, contain

alternative approaches if the Actual Size Rule is not

approved for all Nasdaq securities. See IODES

Proposal, supra note 14.

16The BSE submitted comments to the SEC

concerning the proposed new order delivery and

execution system’s impact on the Plan, preservation

of the BSE’s rights concerning issues still not agreed

upon or specifically covered by the Plan

(specifically the need for a trade-through rule). See

Comment letter No. 1511, SR–NASD–98–17 from

Karen A. Aluise, Vice President, BSE to Jonathan

G. Katz, Secretary, SEC dated May 14, 1998. In

addition, the CHX submitted comments to the SEC

concerning the IODES proposal and encouraged the

Commission to grant permanent approval of the

Plan. See Comment letter No. 1160, SR–NASD–98–

17 from Patricia L. Levy, Senior Vice President and

General Counsel, CHX to Jonathan G. Katz,

Secretary, SEC dated May 13, 1998.

III. Description of the Plan

The Plan provides for the collection

from Plan Participants and the

consolidation and dissemination to

vendors, subscribers and others of

quotation and transaction information

in ‘‘eligible securities.’’ 8 The Plan

contains various provisions concerning

its operation, including: Implementation

of the Plan; Manner of Collecting,

Processing, Sequencing, Making

Available and Disseminating Last Sale

Information; Reporting Requirements

(including hours of operation);

Standards and Methods of Ensuring

Promptness, Accuracy and

Completeness of Transaction Reports;

Terms and Conditions Access;

Description of Operation of Facility

Contemplated by the Plan; Method and

Frequency of Processor Evaluation;

Written Understandings of Agreements

Relating to Interpretation of, or

Participation in, the Plan; Calculation of

the Best Bid and Offer (‘‘BBO’’); Dispute

Resolution; and Method of

Determination and Imposition, and

Amount of Fees and Charges.9

IV. Exemptive Relief

In conjunction with the Plan, on a

temporary basis scheduled to expire on

June 30, 1998, the Commission granted

an exemption to vendors from Rule

11Ac1–2 under the Act regarding the

calculation of the BBO 10 and granted

the BSE an exemption from the

provision of Rule 11Aa3–1 under the

Act that requires transaction reporting

plans to include market identifiers for

transaction reports and last sale data. As

discussed further below in the Summary

of Comments, the Participants ask in the

June 1998 Extension Request that the

Commission grant an extension of the

exemptive relief described above to

vendors until the BBO calculation issue

is resolved. Additionally, in the June

1998 Extension Request, the

Participants also request that the

Commission grant an extension of the

exemptive relief described above to the

BSE for as long as the BSE is a Limited

Participant under the Plan.

V. Summary of Comments

In the December 1997 Extension

Order, the Commission requested

comment on the following issues:

Whether the BBO calculation for

securities traded pursuant to the Plan

should be based on a price/time/size

methodology or a price/size/time

methodology; whether there is a need

for a trade through rule, and the impact

of the CHX’s intended use of BRASS, as

defined below.

With respect to the BBO calculation

issue, the Nasdaq Board approved a

recommendation to modify the

methodology for calculating the BBO on

Nasdaq in order to prioritize quotes

based on a price/size/time algorithm

instead of the current price/time/size

algorithm, provided that Nasdaq market

makers are subject to a minimum quote

size requirement of 100 shares for at

least 1,000 Nasdaq securities. In

furtherance of this goal, on October 29,

1997, the Commission approved a

NASD proposal to extend and expand

the ‘‘Actual Size Rule’’ 11 to a total of

150 securities from 100 securities.12

More recently, the NASD proposed to

expand the Actual Size Rule to cover all

Nasdaq securities and to implement this

rule on a permanent basis.13 In addition,

the NASD submitted a proposed rule

change to establish an integrated order

delivery and execution system for

directed orders and non-directed

orders.14 The proposed new system, if

approved would replace the NASD’s

SOES and SelectNet systems and would

have an impact on the Plan (e.g., the

manner in which Plan participants

interact with orders and quotes

displayed in Nasdaq).15 As a result, the

NASD and the Plan participants request

an extension of the Plan until December

31, 1998 to afford the Plan participants

time to resolve the BBO issue.16

With respect to the need for a trade

through rule, the NASD continues to

maintain in the June 1998 Extension

Request that it would be more

appropriate to address this issue once

the issue of electronic access to Nasdaq

market makers’ quotes has been

resolved.

With regard to the CHX’s use of

BRASS, by the end of 1998 the CHX

intends to replace its existing trade

support system for accessing securities

subject to the Plan and begin using

BRASS, developed by Automated

Securities Clearance, Limited (‘‘ASC’’).

BRASS is a trade support and order

routing system which offers subscribers,

generally broker-dealers, software and

hardware to enable them to perform

various functions. ASC grants its

subscribers a license to operate the

BRASS software through a customized

computer terminal purchased from ASC

or by running the BRASS software on

their own terminals. The CHX has

represented that ASC has specifically

customized BRASS to meet the special
Federal Register / Vol. 63, No. 130 /Wednesday, July 8, 1998 / Notices 36981

17See December 1997 Extension Request and

Letter from George T. Simon, Foley & Lardner to

Howard L. Kramer, Senior Associate Director,

Division, SEC, dated December 12, 1997 (‘‘CHX

Letter’’).

18See e.g., Actual Size Rule Release, supra note

13 and IODES Proposal, supra note 14. 19 17 CFR 200.30–3(a)(29).

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 39392 (Dec.

3, 1997), 62 FR 65112.

4See Letter from Claudia Crowley, Special

Counsel, Legal and Regulatory Policy, Amex, to

Sharon Lawson, Senior Special Counsel, Division of

Market Regulation, Commission, dated April 3,

1998 (‘‘Amendment No. 1’’). In Amendment No. 1,

Amex proposes raising the initial warrant listing

standards from 100,000 warrants with no public

holder requirement, as originally proposed, to

200,000 warrants publicly held by not less than 100

public warrantholders. Amendment No. 1 makes

several other clarifications which are discussed

herein.

5The Amex has represented that the proposal

would only affect warrants listed under Section 105

of the Exchange’s Company Guide and not currency

or other types of warrants listed pursuant to Section

106 or 107. See Amendment No. 1.

needs of the CHX. Among other things,

Nasdaq market makers that already

subscribe to BRASS will be able to route

OTC/UTP orders to specialists on the

CHX floor through a SelectNet linkage

with BRASS workstations on the CHX

floor. Conversely, CHX specialists will

be able to route orders into SelectNet

through their BRASS workstations.17

The Commission notes that ASC will be

subject to the Commission’s inspection

and examination procedures with

regards to the specific customized

BRASS system that ASC will provide to

the CHX because ASC will be operating

a facility of an exchange.

The Commission continues to solicit

comment regarding the BBO calculation,

the trade through rule and the CHX’s

use of the BRASS system as well as

issues presented by changes occurring

in the market place.

VI. Discussion

The Commission finds that an

extension of temporary approval of the

operation of the Plan, as amended,

through December 31, 1998, is

appropriate and in furtherance of

Section 11A of the Act. The

Commission believes that such

extension will provide the Participants

with additional time to seek

Commission approval of pending

proposals concerning the BBO

calculation 18 and to begin to make

reasonable proposals concerning a trade

through rule to facilitate the trading of

OTC securities pursuant to UTP. In

addition, the Commission believes that

the extension will afford the CHX

adequate time to test the BRASS system,

address any operating issues concerning

its use and implement it. While the

Commission continues to solicit

comment on these matters, the

Commission believes that these matters

should be addressed directly by the

Participants on or before September 30,

1998 so that the Commission may have

ample time to determine whether to

approve the Plan on a permanent basis

by December 31, 1998.

The Commission also finds that it is

appropriate to extend the exemptive

relief from Rule 11Ac1–2 under the Act

until the earlier of December 31, 1998 or

until such time as the calculation

methodology for the BBO is based on a

price/size/time algorithm pursuant to a

mutual agreement among the

Participants approved by the

Commission. The Commission further

finds that it is appropriate to extend the

exemptive relief from Rule 11Aa3–1

under the Act, that requires transaction

reporting plans to include market

identifiers for transaction reports and

last sale data, to the BSE through

December 31, 1998. The Commission

believes that the extensions of the

exemptive relief provided to vendors

and the BSE, respectively, are consistent

with the Act, the Rules thereunder, and

specifically with the objectives set forth

in Sections 12(f) and 11A of the Act and

in Rules 11Aa3–1 and 11Aa3–2

thereunder.

VII. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the extension,

including whether the extension is

consistent with the Act. 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

plan amendment that are filed with the

Commission and all written

communications relating to the

proposed plan amendment 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 at

the Commission’s Public Reference

Room. All submissions should refer to

File No. S7–24–89 and should be

submitted by [insert date 21 days from

date of publication].

VIII. Conclusion

It is therefore ordered, pursuant to

Sections 12(f) and 11A and the Act and

paragraph (c)(2) of Rule 11Aa3–2

thereunder, that the Participants’

request to extend the effectiveness of the

Joint Transaction Reporting Plan, as

amended, for Nasdaq/National Market

securities traded on an exchange on an

unlisted or listed basis through

December 31, 1998, and certain

exemptive relief until December 31,

1998, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.19

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18053 Filed 7–7–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40143; File No. SR–Amex–

97–38]

Self-Regulatory Organizations;

American Stock Exchange, Inc.; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

No. 1 to the Proposed Rule Change by

the American Stock Exchange, Inc.,

Relating to the Exchange’s Warrant

Listing Guidelines.

June 29, 1998.

I. Introduction

On October 22, 1997, the American

Stock Exchange, Inc. (‘‘Amex’’ 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 to

amend its Company Guide to revise its

warrant listing and maintenance

guidelines.

The proposed rule change was

published for comment in the Federal

Register on December 10, 1997.3 No

comments were received on the

proposal. On April 3, 1998, Amex filed

an Amendment to the proposed rule

change.4 This order approves the Amex

proposal, as amended.

II. Description of the Proposal

The Amex proposes to amend its

Company Guide to revise its warrant

listing standards.5 Currently, Section

105 provides that the Amex will not list

warrants unless the underlying common

stock is listed on the Amex or the New

York Stock Exchange (‘‘NYSE’’) and

further provides that the Exchange will

evaluate the warrant issuer’s listing

eligibility using the same financial and

distribution guidelines as are applied to

the listing of common stock.