32628 Federal Register / Vol. 63, No. 114 / Monday, June 15, 1998 / Proposed Rules

occurs in flight. If there is a cap/valve at the

flush/fill line port, the cap/valve must be

removed/open during the test. Check for

leakage at the flush/fill line port for a period

of 5 minutes.

(9) As a result of the leak tests and

inspections required by paragraph (a) of this

AD, or if evidence of leakage is found at any

other time, accomplish the requirements of

paragraph (a)(9)(i), (a)(9)(ii), or (a)(9)(iii), as

applicable.

(i) If a leak is discovered, prior to further

flight, repair the leak. Prior to further flight

after repair, perform the appropriate leak test,

as applicable. Additionally, prior to returning

the airplane to service, clean the surfaces

adjacent to where the leakage occurred to

clear them of any horizontal fluid residue

streaks; such cleaning must be to the extent

that any future appearance of a horizontal

fluid residue streak will be taken to mean

that the system is leaking again.

Note 3: For purposes of this AD, ‘‘leakage’’

is defined as any visible leakage, if observed

during a leak test. At any other time (than

during a leak test), ‘‘leakage’’ is defined as

the presence of ice in the service panel, or

horizontal fluid residue streaks/ice trails

originating at the service panel. The fluid

residue is usually, but not necessarily, blue

in color.

(ii) If any worn or damaged seal is found,

or if any damaged seal mating surface is

found, prior to further flight, repair or replace

it in accordance with the valve

manufacturer’s maintenance manual.

(iii) In lieu of performing the requirements

of paragraph (a)(9)(i) or (a)(9)(ii): Prior to

further fight, drain the affected lavatory

system and placard the lavatory inoperative

until repairs can be accomplished.

(b) For all airplanes: Unless accomplished

previously, within 5,000 flight hours after the

effective date of this AD, perform the actions

specified in paragraph (b)(1) or (b)(2) of this

AD:

(1) Install an FAA-approved lever/lock cap

on the flush/fill lines for all lavatories. Or

(2) Install a flush/fill ball valve Kaiser

Electroprecision part number series 0062–

0009 on the flush/fill lines for all lavatories.

(c) For any affected airplane acquired after

the effective date of this AD: Before any

operator places into service any airplane

subject to the requirements of this AD, a

schedule for the accomplishment of the leak

tests required by this AD shall be established

in accordance with either paragraph (c)(1) or

(c)(2) of this AD, as applicable. After each

leak test has been performed once, each

subsequent leak test must be performed in

accordance with the new operator’s schedule,

in accordance with paragraph (a) of this AD.

(1) For airplanes that have been maintained

previously in accordance with this AD, the

first leak test to be performed by the new

operator must be accomplished in

accordance with the previous operator’s

schedule or with the new operator’s

schedule, whichever results in the earlier

accomplishment date for that leak test.

(2) For airplanes that have not been

maintained previously in accordance with

this AD, the first leak test to be performed by

the new operator must be accomplished prior

to further flight, or in accordance with a

schedule approved by the FAA Prinicipal

Maintenance Inspector (PMI), but within a

period not to exceed 200 flight hours.

(d) Alternative method(s) of compliance

with this AD: An alternative method of

compliance or adjustment of the compliance

time that provides an acceptable level of

safety may be used if approved by the

Manager, Seattle ACO. Operators shall

submit their requests through an appropriate

FAA PMI, who may add comments and then

send it to the Manager, Seattle ACO.

Note 4: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Seattle ACO.

(e) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

Issued in Renton, Washington, on June 8,

1998.

John J. Hickey,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 98–15783 Filed 6–12–98; 8:45 am]

BILLING CODE 4910–13–U

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 240

[Release No. 34–40077, International Series

Release No. 1139, File No. S7–15–98]

RIN 3235–AH46

Exemption of the Securities of the

Kingdom of Belgium Under the

Securities Exchange Act of 1934 for

Purposes of Trading Futures Contracts

on Those Securities

AGENCY:Securities and Exchange

Commission.

ACTION:Proposed rule.

SUMMARY:The Commission proposes for

comment an amendment to Rule 3a12–

8 (‘‘Rule’’) that would designate debt

obligations issued by the Kingdom of

Belgium (‘‘Belgium’’) as ‘‘exempted

securities’’ for the purpose of marketing

and trading of futures contracts on those

securities in the United States. The

amendment is intended to permit

futures trading on the sovereign debt of

Belgium.

DATES:Comments should be submitted

by July 15, 1998.

ADDRESSES: All comments should be

submitted in triplicate and addressed to

Jonathan G. Katz, Secretary, Securities

and Exchange Commission, 450 Fifth

Street, NW., Washington, DC 20549.

Comments also may be submitted

electronically at the following E-mail

address: rule-comments@sec.gov. All

comments should refer to File No. S7–

15–98; this file number should be

included on the subject line if e-mail is

used. Comment letters will be available

for public inspection and copying at the

Commission’s Public Reference Room,

450 Fifth Street, NW., Washington, DC

20549. Electronically submitted

comment letters will also be posted on

the Commission’s Internet web site

(http://www.sec.gov).

FOR FURTHER INFORMATION CONTACT:

Joshua Kans, Attorney, Office of Market

Supervision (‘‘OMS’’), Division of

Market Regulation (’’Division’’),

Securities and Exchange Commission

(Mail Stop 10–1), 450 Fifth Street, NW.,

Washington, DC 20549, at 202/942–

0079.

SUPPLEMENTARY INFORMATION:

I. Introduction

Under the Commodity Exchange Act

(‘‘CEA’’), it is unlawful to trade a futures

contract on any individual security

unless the security in question is an

exempted security (other than a

municipal security) under the Securities

Act of 1933 (‘‘Securities Act’’) or the

Securities Exchange Act of 1934

(‘‘Exchange Act’’). Debt obligations of

foreign governments are not exempted

securities under either of these statutes.

The Securities and Exchange

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

however, has adopted Rule 3a12–8 (17

CFR 240.3a12–8) (‘‘Rule’’) under the

Exchange Act to designate debt

obligations issued by certain foreign

governments as exempted securities

under the Exchange Act solely for the

purpose of marketing and trading

futures contracts on those securities in

the United States. As amended, the

foreign governments currently

designated in the Rule are Great Britain,

Canada, Japan, Australia, France, New

Zealand, Austria, Denmark, Finland, the

Netherlands, Switzerland, Germany, the

Republic of Ireland, Italy, Spain,

Mexico, Brazil, Argentina, and

Venezuela (the ‘‘Designated Foreign

Governments’’). As a result, futures

contracts on the debt obligations of

these countries may be sold in the

United States, as long as the other terms

of the Rule are satisfied.

The Commission today is soliciting

comments on a proposal to amend Rule

3a12–8 to add the debt obligations of the

Kingdom of Belgium (‘‘Belgium’’) to the

list of Designated Foreign Governments

whose debt obligations are exempted by

Rule 3a12–8. To qualify for the

exemption, futures contracts on the debt

obligations of Belgium would have to
Federal Register / Vol. 63, No. 114 / Monday, June 15, 1998 / Proposed Rules 32629

1See Securities Act Release No. 20708 (‘‘Original

Adopting Release’’) (March 2, 1984), 49 FR 8595

(March 8, 1984); Securities Exchange Act Release

No. 19811 (‘‘Original Proposing Release’’) (May 25,

1983), 48 FR 24725 (June 2, 1983).

2 In approving the Futures Trading Act of 1982,

Congress expressed its understanding that neither

the SEC nor the Commodity Futures Trading

Commission (‘‘CFTC’’) had intended to bar the sale

of futures on debt obligations of the United

Kingdom of Great Britain and Northern Ireland to

U.S. persons, and its expectation that

administrative action would be taken to allow the

sale of such futures contracts in the United States.

See Original Proposing Release, supra note 1, 48 FR

at 24725 (citing 128 Cong. Rec. H7492 (daily ed.

September 23, 1982) (statements of Representatives

Daschle and Wirth)).

3As originally adopted, the Rule required that the

board of trade be located in the country that issued

the underlying securities. This requirement was

eliminated in 1987. See Securities Exchange Act

Release No. 24209 (March 12, 1987), 52 FR 8875

(March 20, 1987).

4As originally adopted, the Rule applied only to

British and Canadian government securities. See

Original Adopting Release, supra note 1. In 1986,

the Rule was amended to include Japanese

government securities. See Securities Exchange Act

Release No. 23423 (July 11, 1986), 51 FR 25996

(July 18, 1986). In 1987, the Rule was amendmed

to include debt securities issued by Australia,

France and New Zealand. See Securities Exchange

Act Release No. 25072 (October 29, 1987), 52 FR

42277 (November 4, 1987). In 1988, the Rule was

amended to include debt securities issued by

Austria, Denmark, Finland, the Netherlands,

Switzerland, and West Germany. See Securities

Exchange Act Release No. 26217 (October 26, 1988),

53 FR 43860 (October 31, 1988). In 1992 the Rule

was again amended to (1) include debt securities

offered by the Republic of Ireland and Italy, (2)

change the country designation of ‘‘West Germany’’

to the ‘‘Federal Republic of Germany,’’ and (3)

replace all references to the informal names of the

countries listed in the Rule with references to their

official names. See Securities Exchange Act Release

No. 30166 (January 8, 1992), 57 FR 1375 (January

14, 1992). In 1994, the Rule was amended to

include debt securities issued by the Kingdom of

Spain. See Securities Exchange Act Release No.

34908 (October 27, 1994), 59 FR 54812 (November

2, 1994). In 1995, the Rule was amended to include

the debt securities of Mexico. See Securities

Exchange Act Release No. 36530 (November 30,

1995), 60 FR 62323 (December 6, 1995). Finally, in

1996, the Rule was amended to include debt

securities issued by the Federative Republic of

Brazil, the Republic of Argentina, and the Republic

of Venezuela. See Securities Exchange Act Release

No. 36940 (March 7, 1996) 61 FR 10271 (March 13,

1996).

5See Letters from Jos Schmitt, President and

Chief Executive Officer, Belfox, to Arthur Levitt, Jr.,

Chairman, Commission, dated June 27, 1997, to

Howard L. Kramer, Senior Associate Director,

Division, Commission, dated February 10, 1998

(collectively ‘‘Belfox petition’’).

6The Belgian long-term government bond future

(‘‘BGB future’’) and the Belgian medium-term

government bond future (‘‘BMB future’’). Id.

7The Belgian public debt securities underlying

the two futures contracts traded on BELFOX are not

represented by physical certificates, but appear as

entries in an electronic register held by the National

Bank of Belgium. Id.

8See, e.g., Securities Exchange Act Release No.

36530 (November 30, 1995), 60 FR 62323

(December 6, 1995) (amending the Rule to add

Mexico because the Commission believed that as a

whole, the market for Mexican sovereign debt was

sufficiently liquid and deep for the purposes of the

Rule); Securities Exchange Act Release No. 36940

(March 7, 1996), 61 FR 10271 (March 13, 1996)

(amending the Rule to add Brazil, Argentina and

Venezuela because the Commission believed that

the market for the sovereign debt of those countries

was sufficiently liquid and deep for the purposes

of the Rule).

9The two highest categories used by Moody’s

Investor Services (‘‘Moody’s’’) for long-term debt

are ‘‘Aaa’’ and ‘‘Aa.’’ See Moody’s Investors Service,

Rating Definitions (http://www.moodys.com/

ratings/ratdefs.htm). The two highest categories

used by Standard and Poor’s (‘‘S&P’’) for long-term

debt are ‘‘AAA’’ and ‘‘AA.’’ See Standard & Poor’s

Global Rating Handbook, ‘‘Issue Credit Rating

Definitions’’ and ‘‘Issuer Credit Rating Definitions’’

(February 1998) (submitted as part of Belfox’s

petition).

10See, e.g., Securities Exchange Act Release No.

30166 (January 6, 1992) 57 FR 1375 (January 14,

1992) (amending the Rule to include debt securities

issued by Ireland and Italy—Ireland’s long-term

sovereign debt was rated Aa3 by Moody’s and AA¥

by S&P, and Italy’s long-term sovereign debt was

rated Aaa by Moody’s and AA+ by S&P); and

Securities Exchange Act Release No. 34908 (October

27, 1994), 59 FR 54812 (November 2, 1994)

(amending the Rule to include Spain, which had

long-term debt ratings of Aa2 from Moody’s and AA

from S&P)

meet all the other existing requirements

of the Rule.

II. Background

Rule 3a12–8 was adopted in 1984 1

pursuant to the exemptive authority in

Section 3(a)(12) of the Exchange Act in

order to provide a limited exception

from the CEA’s prohibition on futures

overlying individual securities.2 As

originally adopted, the Rule provided

that the debt obligations of Great Britain

and Canada would be deemed to be

exempted securities, solely for the

purpose of permitting the offer, sale,

and confirmation of ‘‘qualifying foreign

futures contracts’’ on such securities.

The securities in question were not

eligible for the exemption if they were

registered under the Securities Act or

were the subject of any American

depositary receipt so registered. A

futures contract on the covered debt

obligation under the Rule is deemed to

be a ‘‘qualifying foreign futures

contract’’ if the contract is deliverable

outside the United States and is traded

on a board of trade.3

The conditions imposed by the Rule

were intended to facilitate the trading of

futures contracts on foreign government

securities in the United States while

requiring offerings of foreign

government securities to comply with

the federal securities laws. Accordingly,

the conditions set forth in the Rule were

designed to ensure that, absent

registration, a domestic market in

unregistered foreign government

securities would not develop, and that

markets for futures on these instruments

would not be used to avoid the

securities law registration requirements.

In particular, the Rule was intended to

ensure that futures on exempted

sovereign debt did not operate as a

surrogate means of trading the

unregistered debt.

Subsequently, the Commission

amended the Rule to include the debt

securities issued by Japan, Australia,

France, New Zealand, Austria,

Denmark, Finland, the Netherlands,

Switzerland, Germany, Ireland, Italy,

Spain, Mexico and, most recently,

Brazil, Argentina, and Venezuela.4

III. Discussion

Belfox c.v./s.c. (‘‘Belfox’’), the Belgian

company recognized as the institution

to organize and administer the Belgian

Futures and Options Exchange

(‘‘BELFOX’’), has proposed that the

Commission amend Rule 3a12–8 to

include the sovereign debt of Belgium.5

BELFOX currently lists two futures

contracts 6 overlying Belgian public debt

securities, and wishes to market and

make trading of those products available

to U.S. investors.

Under the proposed amendment, the

existing conditions set forth in the Rule

(i.e., that the underlying securities not

be registered in the United States, the

futures contracts require delivery

outside the United States, and the

contracts be traded on a board of trade)

would continue to apply. Belfox has

represented that (1) the securities

underlying the futures contracts listed

on BELFOX are not registered in the

United States; (2) the two futures

contracts overlying Belgian public debt

securities which BELFOX intends to

market to U.S. investors are listed

exclusively on BELFOX, located in

Brussels, Belgium; and (3) when the

BELFOX listed futures contracts expire,

the underlying securities are delivered

against payment through the clearing

system of the National Bank of

Belgium.7

In the most recent determinations to

amend the Rule adding Mexico, Brazil,

Argentina, and Venezuela, the

Commission considered primarily

whether an active and liquid secondary

trading market existed for the particular

sovereign debt of these countries.8 Prior

to the addition of those countries to the

Rule, the Commission considered

principally whether the particular

sovereign debt had been rated in one of

the two highest rating categories 9 by at

least two nationally recognized

statistical rating organizations

(‘‘NRSROs’’).10 The Commission will

continue to consider the existence of a

high credit rating in its evaluation of an

application to amend the Rule, because

the Commission believes that a high

debt rating provides indirect evidence of
32630 Federal Register / Vol. 63, No. 114 / Monday, June 15, 1998 / Proposed Rules

11See, e.g., Securities Exchange Act Release No.

36213 (September 11, 1995), 60 FR 48078

(September 18, 1995) (proposal to add Mexico to

list of countries encompassed by rule); Securities

Exchange Act Release No. 24428 (May 5, 1987), 52

FR 18237 (May 14, 1987) (proposed amendment,

which was not implemented, that would have

extended the rule to encompass all countries rated

in one of the two highest categories by at least two

NRSROs).

12The Belgian public debt is principally

denominated in Belgian francs (‘‘BEF’’). The portion

of Belgian public debt denominated in foreign

currencies was 7.6% in 1996, 11.4% in 1995 and

14.5% in 1994. The debt instruments that underlie

the futures contracts currently listed on BELFOX

are denominated in Belgian francs. Belfox petition,

supra note 5.

13See Moody’s Investor Service, Moody’s Bond

Record at 131–32 (March 1998); see also Letter from

Sosi Vartanesyan, Vice President, Moody’s, dated

January 15, 1998 (submitted as part of Belfox

petition; confirming Aa1 ratings for Belgian longterm local currency denominated government

securities and long-term foreign currency

denominated government securities).

14See Letter from Konrad Reuss, Director,

Standard & Poor’s, to An De Pauw, Senior Legal

Advisor, Belfox, dated Feb. 5, 1998 (accompanying

Belfox petition). The letter explained that those

‘‘issuer’’ credit ratings ‘‘have not been assigned as

issue credit ratings to any outstanding debt issued

by the Kingdom.’’

15The market figures set forth here are found in

Belfox’s petition. U.S. dollar equivalents are based

on a conversion rate of BEF 37.10 for USD 1.00 (the

conversion rate on December 31, 1997). Belfox

petition, supra note 5.

16Belgian public debt is comprised of government

bonds, Treasury bills and various debt instruments

of lesser importance, such as road fund loans, and

municipal and provincial loans. Id.

17OLOs, which are issued by means of a price

auction system, have maturities ranging from 1 to

20 years and are available with fixed or variable

interest rate payments. Only those holding a Linear

bond account with the National Bank of Belgium

may participate in the auction for these bonds. The

bonds are denominated in Belgian francs. Id.

18The amount of OLOs outstanding was

equivalent to approximately US$138.79 billion at

the end of 1996, US$130.01 billion in 1995, and

US$112.27 billion in 1994. Id.

19OLOs are traded on the Brussels Stock

Exchange and over the counter. Id. 20 15 U.S.C. 78w(a)(2).

an active and liquid secondary trading

market.11 Absent a high debt rating, the

Commission would consider a debt

instrument’s historical trading data.

Belgian long-term debt meets the debt

rating standard. Moody’s Investors

Service (‘‘Moody’s’’) has assigned an

official rating of Aa1 to long-term local

currency denominated 12 Belgian

government securities and to long-term

foreign currency denominated Belgian

government securities.13 Standard &

Poor’s (’’S&P’’) has assigned the

Kingdom of Belgium a long-term local

currency issuer credit rating of AAA

and a long-term foreign currency issuer

credit rating of AA+.14

The Commission also observes that

there appears to exist an active and

liquid trading market for Belgian issued

debt instruments, based on the

representations in Belfox’s petition.15

The total Belgian public debt

outstanding16 was equivalent to

approximately US$258.92 billion as of

December 31, 1996, approximately

US$256.86 billion in 1995, and

approximately US$251.64 billion in

1994. Linear bonds (‘‘Obligations

Line ́aires—Lineaire Obligaties’’ or

‘‘OLOs’’),17 which are the only type of

Belgian public debt instruments

underlying the two futures contracts

(BGB and BMB) currently listed on

BELFOX, represented 53.6 percent of

the total amount of Belgian public debt

outstanding in 1996, 50.6 percent in

1995 and 44.6 percent in 1994.18 At the

end of the first quarter of 1997, the total

amount of outstanding OLOs was

equivalent to approximately US$139.89

billion. The total value traded in OLOs

on an annual basis was equivalent to

approximately US$1.86 trillion in 1996,

US$1.7 trillion in 1995, and US$1.3

trillion in 1994. The average value

traded in OLOs on a daily basis was

equivalent to approximately US$7.44

billion in 1996, US$6.79 billion in 1995,

and US$5.23 billion in 1994. The

average number of trades on a daily

basis involving OLOs was

approximately 571, 614, and 636 for

1996, 1995 and 1994, respectively.19

In light of the above data, the

Commission preliminarily believes that

the debt obligations of Belgium should

be subject to the same regulatory

treatment under the Rule as the debt

obligations of the Designated Foreign

Governments. Moreover, the trading of

futures on the sovereign debt of Belgium

should provide U.S. investors with a

vehicle for hedging the risks involved in

the trading of the underlying sovereign

debt of Belgium.

In addition, the Commission

preliminarily believes that the proposed

amendment offers potential benefits for

U.S. investors. If adopted, the proposed

amendment would allow U.S. and

foreign boards of trade to offer in the

United States, and U.S. investors to

trade, a greater range of futures contracts

on foreign government debt obligations.

The Commission does not anticipate

that the proposed amendment would

result in any direct cost for U.S.

investors or others. The proposed

amendment would impose no

recordkeeping or compliance burdens,

and merely would provide a limited

purpose exemption under the federal

securities laws. The restrictions

imposed under the proposed

amendment are identical to the

restrictions currently imposed under the

terms of the Rule and are designed to

protect U.S. investors.

Section 23(a)(2) of the Exchange

Act 20 requires the Commission in

amending rules to consider the potential

impact on competition. Because the

proposal is intended to expand the

range of financial products available in

the United States, the Commission

preliminarily believes that the proposed

amendment to the Rule will not impose

any burden on competition not

necessary or appropriate in furtherance

of the purposes of the Exchange Act.

IV. Request for Comments

The Commission seeks comments on

the desirability of designating the debt

securities of Belgium as exempted

securities under Rule 3a12–8.

Comments should address whether the

trading or other characteristics of

Belgium’s sovereign debt warrant an

exemption for purposes of futures

trading. Commentators may wish to

discuss whether there are any legal or

policy reasons for distinguishing

between Belgium and the Designated

Foreign Governments for purposes of

the Rule. The Commission also solicits

comments on the costs and benefits of

the proposed amendment to Rule 3a12–

8. Specifically, the Commission requests

commentators to address whether the

proposed amendment would generate

the anticipated benefits, or impose any

costs on U.S. investors or others. The

Commission also requests information

regarding the potential impact of the

proposed rule on the economy on an

annual basis. If possible, commenters

should provide empirical data to

support their views. Finally, the

Commission seeks comments on the

general application and operation of the

Rule given the increased globalization of

the securities markets since the Rule

was adopted.

V. Administrative Requirements

Pursuant to section 605(b) of the

Regulatory Flexibility Act, 5 U.S.C.

605(b), the Chairman of the Commission

has certified that the amendment

proposed herein would not, if adopted,

have a significant economic impact on

a substantial number of small entities.

This certification, including the reasons

therefor, is attached to this release as

Appendix A. We encourage written

comments on the Certification.

Commentators are asked to describe the

nature of any impact on small entities

and provide empirical data to support

the extent of the impact. The Paperwork

Reduction Act does not apply because

the proposed amendment does not

impose recordkeeping or information

collection requirements, or other
Federal Register / Vol. 63, No. 114 / Monday, June 15, 1998 / Proposed Rules 32631

collections of information which require

the approval of the Office of

Management and Budget under 44

U.S.C. 3501, et seq.

VI. Statutory Basis

The amendment to Rule 3a12–8 is

being proposed pursuant to 15 U.S.C.

78a et seq., particularly sections 3(a)(12)

and 23(a), 15 U.S.C. 78c(a)(12) and

78w(a).

List of Subjects in 17 CFR Part 240

Reporting and recordkeeping

requirements, Securities.

Text of the Proposed Amendment

For the reasons set forth in the

preamble, the Commission is proposing

to amend part 240 of Chapter II, Title 17

of the Code of Federal Regulations as

follows:

PART 240—GENERAL RULES AND

REGULATIONS, SECURITIES

EXCHANGE ACT OF 1934

1. The authority citation for part 240

continues to read in part as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j,

77s, 77z–2, 77eee, 77ggg, 77nnn, 77sss, 77ttt,

78c, 78d, 78f, 78i, 78j, 78j–1, 78k, 78k–1, 78l,

78m, 78n, 78o, 78p, 78q, 78s, 78u–5, 78w,

78x, 78ll(d), 78mm, 79q, 79t, 80a–20, 80a–23,

80a–29, 80a–37, 80b–3, 80b–4 and 80b–11,

unless otherwise noted.

* * * * *

2. Section 240.3a12–8 is amended by

removing the word ‘‘or’’ at the end of

paragraph (a)(1)(xviii), removing the

‘‘period’’ at the end of paragraph

(a)(1)(xix) and adding ‘‘; or’’ in its place,

and adding paragraph (a)(1)(xx), to read

as follows:

§ 240.3a12–8 Exemption for designated

foreign government securities for purposes

of futures trading.

(a) * * *

(1) * * *

(xx) The Kingdom of Belgium.

* * * * *

By the Commission.

Dated: June 8, 1998.

Margaret H. McFarland,

Deputy Secretary.

Note: Appendix A to the Preamble will not

appear in the Code of Federal Regulations.

Appendix A—Regulatory Flexibility

Act Certification

I, Arthur Levitt, Jr., Chairman of the

Securities and Exchange Commission, hereby

certify, pursuant to 5 U.S.C. 605(b), that the

proposed amendment to Rule 3a12–8

(‘‘Rule’’) under the Securities Exchange Act

of 1934 (‘‘Exchange Act’’) set forth in

Securities Exchange Act Release No. 40077,

which would define the government debt

securities of the Kingdom of Belgium

(‘‘Belgium’’) as exempted securities under the

Exchange Act for the purpose of trading

futures on such securities, will not have a

significant economic impact on a substantial

number of small entities for the following

reasons. First, the proposed amendment

imposes no record-keeping or compliance

burden in itself and merely allows, in effect,

the marketing and trading in the United

States of futures contracts overlying the

government debt securities of Belgium.

Second, because futures contracts on the

nineteen countries whose debt obligations

are designated as ‘‘exempted securities’’

under the Rule, which already can be traded

and marketed in the U.S., still will be eligible

for trading under the proposed amendment,

the proposal will not affect any entity

currently engaged in trading such futures

contracts. Third, because those primarily

interested in trading such futures contracts

are large, institutional investors, neither the

availability nor the unavailability of these

futures products will have a significant

economic impact on a substantial number of

small entities, as that term is defined for

broker-dealers in 17 CFR 240.0–10.

Dated: June 4, 1998.

Arthur Levitt, Jr.,

Chairman.

[FR Doc. 98–15827 Filed 6–14–98; 8:45 am]

BILLING CODE 8010–01–P

DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 11

RIN 1076–AD76

Law and Order on Indian Reservations;

Correction

AGENCY: Bureau of Indian Affairs.

ACTION: Correction to proposed

regulations.

SUMMARY: This document contains

corrections to the proposed regulations

which were published Friday, July 5,

1996 (61 FR 35158) and corrections to

the proposed regulations which were

published Wednesday, February 26,

1997 (62 FR 8665) and Friday,

November 14, 1997 (62 FR 61057). The

proposed rule amends regulations

governing Courts of Indian Offenses.

DATES: Comments must be received on

or before July 15, 1998.

ADDRESSES: Comments are to be mailed

to Bettie Rushing, Office of Tribal

Services, Bureau of Indian Affairs, 1849

C Street, NW, MS 4641–MB,

Washington, DC 20240; or, hand

delivered to Room 4641 at the same

address.

FOR FURTHER INFORMATION CONTACT:

Bettie Rushing, Bureau of Indian Affairs

(202) 208–4400.

SUPPLEMENTARY INFORMATION:

Background

The proposed rule that is the subject

of these corrections supersedes 25 CFR

11.100(a) and affects those tribes that

have exercised their inherent

sovereignty by removing the names of

those tribes from the list of Courts of

Indian Offenses.

The Assistant Secretary-Indian

Affairs, or his designee, has received

law and order codes adopted by the

Absentee Shawnee Tribe of Indians, the

Cheyenne—Arapaho Tribe, the Citizen

Band of Potawatomi Indians, the Iowa

Tribe, the Kaw Tribe, the Kickapoo

Tribe, the Otoe-Missouri Tribe, and the

Pawnee Tribe, all of Oklahoma, the

Quechan Indian Tribe in Arizona and

California, and the Yomba Shoshone

Tribe in Nevada, in accordance with

their constitutions and by-laws and

approved by the appropriate bureau

official. The Assistant Secretary-Indian

Affairs recognizes that these courts were

established in accordance with the

tribe’s constitutions and by-laws.

Inclusion in § 11.100, Where are

Courts of Indian Offenses established?,

does not defeat the inherent sovereignty

of a tribe to establish tribal courts and

exercise jurisdiction under tribal law.

Tillett v. Lujan, 931 F.2d 636, 640 (10th

Cir. 1991) (CFR courts ‘‘retain some

characteristics of an agency of the

federal government’’ but they ‘‘also

function as tribal courts’’); Combrink v.

Allen, 20 Indian L. Rep. 6029, 6030 (Ct.

Ind. App., Tonkawa, Mar. 5, 1993) (CFR

court is a ‘‘federally administered tribal

court’’); Ponca Tribal Election Board v.

Snake, 17 Indian L. Rep. 6085, 6088 (Ct.

Ind. App., Ponca, Nov. 10, 1988) (‘‘The

Courts of Indian Offenses act as tribal

courts since they are exercising the

sovereign authority of the tribe for

which the court sits.’’). Such exercise of

inherent sovereignty and the

establishment of tribal courts shall

comply with the requirements in 25

CFR 11.100(c).

Need for Correction

As published, the proposed rule

contains errors which may prove to be

misleading and are in need of

clarification.