Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices 38437

1Although certain actions have been brought

against applicant and McLaughlin, these actions do

not trigger the disqualification provisions of section

9(a) of the Act. In December 1992, applicant and

McLaughlin, without admission of liability or

wrongdoing, entered into a settlement agreement in

the amount of $250,000. The complaint arose out

of plaintiff’s purchase of bonds issued by the

Washington Public Power Supply System and

alleged violations by the defendants of section 10(b)

of the 1934 Act and rule 10b–5 thereunder, as well

as common law fraud and breach of contract. In

addition, thirteen separate orders and sanctions

have been imposed against applicant by state

regulatory agencies during the period from 1982 to

the present. The violations included acting as a

broker-dealer in states where applicant was

unregistered; the sale of securities by unlicensed

employees of applicant; and the failure to file

required documents. In addition, in November

1995, the New York Stock Exchange affirmed a

hearing panel decision in which Applicant was

fined $15,000 for including in its registered

representative employment agreements a provision

which waived arbitration. In December 1996, the

SEC affirmed the hearing panel’s decision.

conduct or sponsor, and a person is not

required to respond to, a collection of

information unless it displays a

currently valid control number.

General comments regarding the

estimated burden hours should be

directed to the following persons: (i)

Deck Officer for the Securities and

Exchange Commission, Officer of

Information and Regulatory Affairs,

Office of Management and Budget,

Room 3208, New Executive Office

Building, Washington, D.C. 20503; and

(ii) Michael E. Bartell, Associate

Executive Director, Office of

Information Technology, Securities and

Exchange Commission, 450 Fifth Street,

N.W., Washington, D.C. 20549.

Comments must be submitted to OMB

within 30 days of this notice.

Dated: July 10, 1998.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18908 Filed 7–15–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

23310; 812–7860]

McLaughlin, Piven, Vogel Securities,

Inc.; Notice of Application

July 10, 1998.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’ or the

‘‘Commission’’).

ACTION: Notice of application for an

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

SUMMARY OF APPLICATION: Applicant

requests a conditional order under

section 9(c) exempting applicant from

the disqualification provisions of

section 9(a) solely with respect to a

securities related injunction entered

against one of applicant’s affiliates. The

conditional order would permit

applicant to act as sponsor, depositor,

and principal underwriter for one or

more unit investment trusts.

FILING DATES: The application was filed

on January 30, 1992, and amendments

to the application were filed on March

5, 1992, August 6, 1992, October 6,

1992, March 4, 1997, and January 20,

1998.

HEARING OF NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC 5:30 p.m. on

August 4, 1998, and should be

accompanied by proof of service on

applicants, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writers’s interest, the reason for

the request, and the issues contested.

Persons may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicant, 30 Wall Street, New York,

New York 10005.

FOR FURTHER INFORMATION CONTACT:

Deepak T. Pai, Attorney Advisor, at

(202) 942–0574, or Nadya B. Roytblat,

Assistant Director, (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee by writing to

SEC’s Public Reference Branch at 450

Fifth Street, N.W., Washington, D.C.

20549, tel. (202) 942–8090.

Applicant’s Representatives

1. Applicant is a New York

corporation engaged in the underwriting

and securities brokerage business.

Applicant is a member of the National

Association of Securities Dealers, Inc.

and is registered with the Commission

as a broker-dealer.

2. Subject to receiving the requested

exemption, applicant proposes to serve

as sponsor, principal underwriter, and

depositor for the Traditional Value

Guaranteed Income Trust, Series 1, and

subsequent series (the ‘‘Trust’’), a unit

investment trust to be registered under

the Act. Units of the Trust are to be

registered for sale to the public under

the Securities Act of 1933 (the ‘‘1933

Act’’). Applicant also may serve as

sponsor, principal underwriter, and

depositor for future series of the Trust

and for other unit investment trusts that

it may organize in the future.

3. James J. McLaughlin

(‘‘McLaughlin’’) is the Senior VicePresident and a director of applicant,

and owns 52.32% of applicant’s shares.

In 1973, the Commission brought an

action alleging that McLaughlin, an

assistant sales vice president of Paragon

Securities Incorporated of New York

(‘‘Paragon’’), acting in concert with

others, violated section 17(a) of the 1933

Act and sections 10(b), 15(a), 15(b), and

15(c) of the Securities Exchange Act of

1934 (the ‘‘1934 Act’’), and various rules

thereunder in connection with

Paragon’s activities as a broker-dealer.

Securities and Exchange Commission v.

Paragon Securities Co., Civil Action No.

1120 (D.C. N.J.). On October 3, 1974,

without admitting or denying

wrongdoing, McLaughlin consented to

the entry of a permanent injunction (the

‘‘Injunction’’) enjoining him from

conduct in violation of such provisions.

In addition, McLaughlin agreed to

disgorge $8,450. Applicant represents

that since 1974, McLaughlin has not

been the subject of any proceedings, or

allegations of violations of state or

federal securities laws other than those

discussed in the application.1

4. Applicant is not currently in

violation of the provisions of section

9(a), as it does not serve as an

investment adviser or depositor of any

registered investment company, or

principal underwriter for any registered

open-end company, registered unit

investment trust, or registered faceamount certificate company. Because

McLaughlin has been permanently

enjoined from engaging in certain

conduct in connection with his

activities at paragon, however, applicant

is prohibited under section 9(a)(3) of the

Act from acting as an investment

adviser or depositor of any registered

investment company, or principal

underwriter for any registered open-end

company, registered unit investment

trust, or registered face-amount

certificate company. Accordingly,

applicant seeks the requested relief

solely with respect to the Injunction so

that it may engage in the proposed

activities.

Applicant’s Legal Analysis

1. Section 9(a)(2) of the Act, in

pertinent part, prohibits any person who

have been enjoined from engaging in or

continuing any conduct or practice in

connection with the purchase or sale of
38438 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices

2The certification is attached as an exhibit to the

amendment to the application filed on August 6,

1992. An additional certification is attached as an

exhibit to the amendment to the application filed

on January 20, 1998. The two certifications are

referred to collectively as the ‘‘Certification.’’

a security from acting as an ‘‘employee,

officer, director, member of an advisory

board, investment adviser, or depositor

of any registered investment company,

or principal underwriter for any

registered open-end company, registered

unit investment trust, or registered face

amount certificate company.’’ A

company with an employee or other

affiliated person ineligible to serve in

any of these capacities under section

9(a)(2) is similarly ineligible under

section 9(a)(3).

2. Section 9(c) provides that the

Commission shall grant an application

for an exemption from the

disqualification provisions of section

9(a), either unconditionally or on an

appropriate temporary or other

conditional basis, if it is established that

these provisions, as applied to the

applicant, are unduly or

disproportionately severe or that the

conduct of the applicant has been such

as not to make it against the public

interest or protection of investors to

grant such application.

3. As a result of the Injunction,

applicant is subject to the

disqualification provisions of section

9(a). Applicant asserts that the

application of such provisions to

applicant is unduly and

disproportionately severe. Applicant

notes that almost twenty years have

passed since the activities which gave

rise to the Injunction. Applicant states

that since the entry of the Injunction in

1974, McLaughlin has not been enjoined

by any court, or sanctioned by the

Commission, any self-regulatory

organization, or any state securities

commission. Applicant also states that

to the best of its knowledge, there have

been no customer complaints against

McLaughlin, nor any securities related

administrative or legal proceedings

involving McLaughlin, except as

described in footnote 1.

4. Applicant further asserts that

McLaughlin’s conduct has been such as

to not make it against the public interest

or protection of investors to grant the

requested relief. The conduct that give

rise to the Injunction was not in any

way related to investment company

activities.

5. Applicant states that it will

undertake every effort to ensure that

McLaughlin does not and will not serve

in any capacity related to applicant’s

role as depositor for any registered

investment company or as principal

underwriter for any registered unit

investment trust. Applicant states that

McLaughlin’s role as an officer and

director of applicant will not involve

him in investment company activities.

Applicant states that McLaughlin is

semi-retired and is no longer involved

in the daily management or operation of

applicant. Moreover, applicant has

consented to the conditions set forth

below, which are intended to ensure

that McLaughlin will not serve in any

capacity related to applicant’s role as

sponsor, depositor, and principal

underwriter for a unit investment trust.

6. In addition, applicant retained

outside counsel to conduct an

independent review of compliance by

applicant with the state and federal

securities laws affecting applicant’s

business as a broker-dealer and of the

adequacy of the procedures applicant

has in place to provide reasonable

assurance of compliance. Based upon its

review, counsel made a number of

recommendations with respect to

applicant’s compliance and supervisory

procedures, including, among other

things, the revision of applicant’s

supervisory manual and education of

applicant’s personnel. In a letter dated

August 4, 1992, counsel certified that

applicant’s revised compliance

procedures and practices, if adhered to,

should provide reasonable assurance

that applicant will comply with the

provisions of the 1934 Act, the laws of

the states relating to broker-dealer and

broker-dealer representative registration,

and the provisions of the Act in

connection with applicant’s proposed

role as sponsor, principal underwriter,

and depositor for unit investment

trusts.2

Applicant’s Conditions

Applicant agrees that any order

granted by the Commission pursuant to

the application will be subject to the

conditions set forth below:

1. McLaughlin will not serve in any

capacity directly related to providing

investment advice to, or acting as

depositor for, any registered investment

company, or acting as principal

underwriter for any registered open-end

company, registered unit investment

trust, or registered face amount

certificate company without making

further application to the Commission.

McLaughlin will not sell interests in

investment companies sponsored by

applicant, or for which applicant serves

as principal underwriter or depositor.

2. Applicant’s legal department or its

counsel shall develop, and applicant

shall adopt, written procedures

designed to ensure that McLaughlin

does not and will not serve in any

capacity directly related to providing

investment advice to, or acting as

depositor for, any registered investment

company, or acting as principal

underwriter for any registered open-end

company, registered unit investment

trust, or registered face amount

certificate company. Such procedures

shall include, but shall not be limited

to, the following: (a) applicant shall

notify in writing its Chairman of the

Board, its owners and executive officers,

its Chief Compliance Officer, and all

employees working under the direct

supervision of McLaughlin (collectively,

the ‘‘Affected Personnel’’) immediately

upon the granting of any order issued

pursuant to the application, with

respect to the responsibilities of and

restrictions on McLaughlin. Applicant

shall notify in writing any new member

of the Affected Personnel upon his or

her employment by or affiliation with

applicant, with respect to the

responsibilities of and restrictions on

McLaughlin. Receipt of notification will

be acknowledged in writing by each

recipient and returned to applicant; and

(b) applicant will obtain, on an annual

basis, written certification from each

member of the Affected Personnel that

he or she has not discussed any matters

relating to the Trust with McLaughlin.

3. McLaughlin will not attend any

future meetings of applicant’s board of

directors where the operations of any

investment company for which

applicant acts as depositor or principal

underwriter, including the Trust, are on

the agenda.

4. McLaughlin shall be excused from

all meetings of applicant’s board of

directors where the operations of any

investment company for which

applicant acts as depositor or principal

underwriter, including the Trust, are

proposed to be discussed prior to any

such discussion.

5. Applicant’s general counsel or chief

executive officer will certify on an

annual basis that applicant and

McLaughlin have complied with the

procedures referred to above and the

conditions set forth above.

6. The certificates, acknowledgements

of notification, and procedures referred

to in these conditions shall be

maintained as part of the records of

applicant and shall be available for

inspection by the Commission staff.

7. Applicant’s general counsel or its

chief executive officer will certify on an

annual basis that applicant has

complied with the procedures and

practices referred to in the Certification

and that such procedures and practices

continue to be sufficient to insure

applicant’s compliance with the state
Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices 38439

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

2 17 CFR 240.19b–4.

and federal securities laws noted in the

Certification.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18965 Filed 7–15–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–26894]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

July 10, 1998.

Notice is hereby given that the

following filing(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

transaction(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

August 4, 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 by any hearing,

if ordered, and will receive a copy of

any notice or order in the matter. After

August 4, 1998, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

New Century Energies, Inc., et al. (70–

9199)

New Century Energies, Inc. (‘‘New

Century’’), a registered holding

company, Public Service Company of

Colorado, a wholly owned electric and

gas subsidiary of New Century (‘‘PSC

Colorado’’), and, NC Enterprises, Inc.

(‘‘NC Enterprises’’), a wholly owned

nonutility subsidiary of New Century,

all located at 1225 17th Street, Denver,

Colorado 80202–5533 (‘‘Applicants’’),

have filed an application-declaration

under sections 6(a), 7, 9(a), 10, and 12(f)

of the Act and rules 43 and 54 under the

Act.

Applicants seek authority to: (1)

Acquire 50% of the equity securities of

WYCO Development LLC (‘‘WYCO’’), a

nonutility company formed for the

purpose of facilitating the transactions

described herein, for an amount not to

exceed $26 million; (2) purchase,

through WYCO, the Front Range and

Powder River Lateral Expansion

(‘‘Powder River’’) pipeline projects from

PSC Colorado and Wyoming Interstate

Company, a non-associated company,

respectively; and (3) lease the Front

Range and Powder River pipelines back

to PSC Colorado and Wyoming

Interstate Company.

PSC Colorado provides electric and

retail natural gas distribution service to

the Denver and Front Range

metropolitan areas. PSC Colorado is

subject to regulation by the Colorado

Public Utilities Commission (‘‘Colorado

PUC’’). The Front Range Pipeline

construction, sale and lease is subject to

review and approval by the Colorado

PUC. The Powder River lease is subject

to review and approval by the Federal

Energy Regulatory Commission.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18966 Filed 7–15–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40189; File No. SR–AMEX–

97–39]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the American Stock

Exchange, Inc. Relating to Minimum

Trading Increments (Rule 127)

July 10, 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 October

22, 1997, the American Stock Exchange,

Inc. (‘‘Amex’’ or ‘‘Exchange’’) filed with

the Securities Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) the proposed

rule change as described in Items I and

II below, which Items have been

prepared by the self-regulatory

organization. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons and to grant

accelerated approval to the proposed

rule chage.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Amex proposes to amend

Exchange Rule 127 to add Commentary

.03 to permit members to trade on the

Exchange in increments smaller than

1⁄16 in order to match bids and offers

displayed in other markets for the

purpose of preventing Intermarket

Trading System (‘‘ITS’’) trade-throughs.

The text of the proposed rule change is

available at the Office of the Secretary,

the Amex and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization included

statements concerning the purpose of

and basis for the proposed rule change

and discussed any comments it received

on the proposed rule change. The text

of these statements may be examined at

the places specified in Item IV below.

The self-regulatory organization has

prepared summaries, set forth in

Sections A, B, and C below, of the most

significant aspect of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

Amex Rule 127 currently provides

that the minimum fractional change for

transactions on the Exchange is 1⁄16 for

securities selling above 1⁄4, and 1⁄32 for

securities selling below 1⁄4. In May 1997,

the Exchange extended trading in

sixteenths to all Amex equity securities

selling at $10 or higher, having

previously only traded securities priced

under $10 in sixteenths. The Exchange

took this step based on its belief that

trading in increments of 1⁄16 promotes

investor protection by enhancing price

improvement opportunities on the

Exchange.

Since Amex’s initiative and

subsequent initiatives by other markets

to implement sixteenths trading, certain

third market makers have disseminated

quotations in a limited number of listed

securities in fractions smaller than a

sixteenth. In addition, ITS has been

modified to permit commitments to

trade to be sent through ITS in fractions

as small as 1⁄64. This ITS modification

permits Amex members to send orders