36280 Federal Register / Vol. 63, No. 127 /Thursday, July 2, 1998 / Notices

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

2 17 CFR 240.19b–4.

to update information to each client.

Based on the foregoing, the Commission

staff therefore estimates the total annual

burden of the rule’s paperwork

requirements for all program sponsors to

be 2,128,666.5 hours. This represents an

increase of 1,112,666.5 hours from the

prior estimate of 1,016,000 hours. The

increase results primarily from an

increase in the amount of assets

managed under investment advisory

programs and the resulting increase in

the estimated number of clients in those

programs. The increase also results from

a more accurate calculation of certain

collection of information burdens.

Form N–8B–2 is the form used by unit

investment trusts (‘‘UITs’’) which are

currently issuing securities, including

UITs which are issuers of periodic

payment plan certificates and UITs of

which a management investment

company is the sponsor or depositor, to

comply with the filing and disclosure

requirements imposed by section 8(b) of

the Act. Form N–8B–2 requires

disclosure about the organization of a

UIT, its securities, the trustee, the

personnel and affiliated persons of the

depositor, the distribution and

redemption of securities, and financial

statements. The Commission uses the

information provided in the collection

of information to determine compliance

with section 8(b) of the Act.

Based on the Commission’s industry

statistics, the Commission estimates that

there will be approximately 34 initial

filings on Form N–8B–2 and 11 posteffective amendment filings to the Form.

The Commission estimates that each

registrant filing an initial Form N–8B–

2 would spend 1,150 hours in preparing

and filing the Form and that the total

hour burden for all initial Form N–8B–

2 filings is 39,100 hours. Also, the

Commission estimates that each UIT

filing a post-effective amendment to

Form N–8B–2 would spend 150 hours

in preparing and filing the amendment

and that the total hour burden for all

post-effective amendments to the Form

is 1,650 hours. By combining the total

hour burdens estimated for initial Form

N–8B–2 filings and post-effective

amendment filings to the Form, the

Commission estimates that the total

annual burden hours for all registrants

on Form N–8B–2 is 40,750 hours.

The estimate of average burden hours

is made solely for the purposes of the

Paperwork Reduction Act. The estimate

is not derived from a comprehensive or

even a representative survey or study of

the costs of Commission rules and

forms.

Written comments are invited on: (a)

whether the collections of information

are necessary for the proper

performance of the functions of the

Commission, including whether the

information has practical utility; (b) the

accuracy of the Commission’s estimate

of the burdens of the collections of

information; (c) ways to enhance the

quality, utility, and clarity of the

information collected; and (d) ways to

minimize the burdens of the collections

of information on respondents,

including through the use of automated

collection techniques or other forms of

information technology. Consideration

will be given to comments and

suggestions submitted in writing within

60 days of this publication.

Please direct your written comments

to Michael E. Bartell, Associate

Executive Director, Office of

Information Technology, Securities and

Exchange Commission, Mail Stop 0–4,

450 5th Street, NW., Washington, DC

20549.

Dated: June 22, 1998.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–17560 Filed 7–1–98; 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 meetings during

the week of July 6, 1998.

An open meeting will be held on

Tuesday, July 7, 1998, at 10:00 a.m., in

Room 6600.

A closed meeting will be held on

Tuesday, July 7, 1998, following the

10:00 a.m. open meeting. A closed

meeting will be held on Thursday, July

9, 1998, at 10:00 a.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 exceptions 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.

Commissioner Johnson, as duty

officer, voted to consider the items

listed for the closed meeting in a closed

session.

The open meeting scheduled for

Tuesday, July 7, 1998, at 10:00 a.m.,

will be:

The Commission will hear oral

argument on an appeal by Valicenti

Advisory Services, Inc. (‘‘VAS’’), a

registered investment adviser, and

the Division of Enforcement from

an administrative law judge’s initial

decision.

The closed meeting scheduled for

Tuesday, July 7, 1998, following the

10:00 a.m. open meeting, will be:

Post argument discussion.

The closed meeting scheduled for

Thursday, July 8, 1998, at 10:00

a.m., will be:

Institution and settlement of

injunctive actions.

Institution and settlement 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

for postponed, please contact: The

Office of the Secretary at (202) 942–

7070.

Dated: June 30, 1998.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–17835 Filed 6–30–98; 3:53 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40123; file No. SR–AMEX–

98N10]

Self-Regulatory Organizations;

American Stock Exchange, Inc., Order

Granting Approval to Proposed Rule

Change and Notice of Filing and Order

Granting Accelerated Approval to

Amendment No 1. to Proposed Rule

Change Relating to Market-at-theClose and Limit-at-the-Close Order

Handling Requirements

June 24, 1998.

I. Introduction

On February 18, 1998, the American

Stock Exchange, Inc. (‘‘Amex’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities and Exchange

Act of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change to

revise the Exchange’s policy for entry of

market-at-the-close orders (‘‘MOC’’) and
Federal Register / Vol. 63, No. 127 /Thursday, July 2, 1998 / Notices 36281

3Securities Exchange Act Release No. 39770

(Mar. 18, 1998), 63 FR 14747.

4See letter from Claudia Crowley, Special

Counsel, Legal & Regulatory Policy, Amex to David

Sieradzki, Attorney, Division of Market Regulation

(‘‘Division’’), Commission dated May 7, 1998

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

Exchange clarifies that the proposed policy

regarding imbalance dissemination requirements

will be applied to the opening as well as the close,

and any applicable imbalance must be published

prior to the opening at 9:30 a.m. In addition, the

Exchange represents that it does not intend to apply

the proposed order entry procedures to the opening.

5See Securities and Exchange Act Release No.

35660 (May 2, 1995), 60 FR 22592 (May 8, 1995).

6The Commission recently approved a proposal

submitted by the NYSE to make various changes to

its policy with respect to MOC and LOC orders. See

Securities and Exchange Act Release No. 40094

(June 15, 1998) (order approving SR–NYSE–97–36).

7This policy will not apply to any security the

pricing for which is based on another security or

an index, such as derivatives, warrants and

convertible securities.

8Commentary .08 requires a specialist to have

Floor Official approval before executing a

transaction in a stock at a price (i) of $20 or more

a share at 2 points or more away from the last sale,

(ii) between $10 and $20 a share at one point or

more away from the last sale, and (iii) of less than

$10 a share at 1⁄2 point or more away from the last

sale.

9Pursuant to Amex Rule 22(d), a specialist may

request that a Floor Governor review a

determination by a Floor Official not to permit

publication of an order imbalance.

10Telephone conversation between Stuart

Diamond, Director, Rulings, Amex and David

Sieradzki, Attorney, Division, Commission on June

16, 1998.

11See Amendment No. 1, supra note 3.

12 15 U.S.C. 78f.

13 15 U.S.C. 78f(b)(5).

14 In approving the proposed rule change, the

Commission has considered the proposed rule’s

impact on efficiency, competition, and capital

formation. 15 U.S.C. 78f(b).

15See Securities Exchange Act Release No. 31610

(Dec. 16, 1992), 57 FR 61131 (Dec. 23, 1992).

to permit the entry of limit-at-the-close

orders (‘‘LOC’’). The proposed rule

change was published for comment in

the Federal Register on March 26,

1998.3 On May 12, 1998, the Exchange

submitted Amendment No. 1 to the

proposed rule change.4 This order

approves the proposal as amended.

II. Description of the Proposal

Exchange Rule 109 sets for the

procedures to be followed in executing

MOC orders. Paragraph (d) of Rule 109

provides that where there is an

imbalance between MOC buy and sell

orders, the imbalance or buy orders

should be executed against the offer,

and the imbalance of sell orders against

the bid. The remaining buy and sell

orders are then paired off and executed

at the price of the immediately

preceding last sale. The ‘‘pair off’’

transaction is reported to the

consolidated last-sale reporting system

as ‘‘stopped stock.’’

In May 1995, the Exchange amended

Commentary .02 to Exchange Rule 109

to impose a 3:50 p.m. deadline for the

entry, cancellation or reduction of MOC

orders through Amex’s Post Execution

Reporting system (‘‘PER’’).5 After the

3:50 p.m. deadline, a member may only

enter, modify or cancel MOC orders

other than through the PER system. This

change was intended to reduce the

sometimes disruptive effect on the

market of MOC orders entered through

the PER system shortly before the close.

Prior to the imposition of the 3:50 p.m.

deadline, it often took several minutes

for a specialist to ascertain whether an

imbalance existed and to pair off buyers

and sellers, with the sellers, with the

result that the executed MOC

transactions did not actually print until

after the close. When this happened, it

was difficult for market participants to

ascertain the closing price of the

security in question on a timely basis.

Although the 3:50 p.m. deadline has

alleviated some of the disruptive impact

of MOC orders, Amex believes that

further modifications are appropriate to

reduce excess market volatility that may

arise from the liquidation of stock

positions related to trading strategies

involving index derivative products,

and to provide consistency to member

organizations by substantially

conforming the Amex’s policy to the

policy currently in effect at the New

York Stock Exchange (‘‘NYSE’’) 6

As a result, Amex is proposing to

substantially conform its policy to the

NYSE policy. However, Amex’s policy

will differ from that of the NYSE in

several respects to account for the

differences in the types of stocks that

trade on the Amex versus those that

trade on the NYSE (e.g., smaller float

and capitalization of Amex companies).

The proposed policy is as follows:

(a) A 3:40 p.m. deadline will be

imposed every day for the entry of all

MOC orders in all common stocks,7

other than those that trade in units of

less than 100 shares. After the 3:40 p.m.

deadline, MOC orders will only be

accepted to offset published imbalances.

MOC orders will be irrevocable after

that time, except to correct an error.

(b) Order imbalances must be

published on the tape as soon as

practicable after 3:40 p.m. if there is an

imbalance of 25,000 shares or more. In

addition, an order imbalance below

25,000 shares may also be published by

a specialist, with the concurrence of a

Floor Official, if the specialist (1)

anticipates that the execution price of

the MOC orders on the book will exceed

the price change parameters of Amex

Rule 154, Commentary .08,8 or (2)

believes that an order imbalance should

otherwise be planned.9

(c) LOC orders (which Amex does not

currently permit to be entered) will now

be permitted to be entered prior to the

applicable deadline (i.e., 3:40 p.m.), but

after the deadline only to offset a

published imbalance. LOC orders will

be irrevocable after that time, except to

correct an error.10

The Exchange is also proposing that

the order imbalance dissemination

requirements described in paragraph (b)

above also be applied to the opening at

9:30 a.m.11

III. Discussion

The Commission finds that the

proposed rule change is consistent with

Section 6 12 of the Act the rules and

regulations thereunder. In particular,

the Commission believes that the

proposal is consistent with the Section

6(b)(5) 13 requirements that the rules of

an exchange be designed to prevent

fraudulent and manipulative acts and

practices, to promote just and equitable

principles of trade, to remove

impediments to, and perfect the

mechanism of a free and open market

and a national market system, and, in

general, to protect investors and the

public interest.14

In recent years, the Exchange and

other self-regulatory organizations have

instituted certain safeguards to

minimize excess market volatility that

may arise from the liquidation of stock

positions at the end of the trading day.

The Exchange has been utilizing special

closing procedures for the entry of MOC

orders in Amex-listed stocks since

December 16, 1992.15 These procedures

allow Amex specialist to determine the

buying and selling interest in MOC

orders and, if there is a substantial

imbalance on one side of the market, to

provide the investing public with timely

and reliable notice of the imbalance and

with an opportunity to make

appropriate investment decision in

response. The Commission believes that

Amex’s proposal appropriately refines

and augments the current procedures.

The Commission believes that the

proposed rule change may further

increase public awareness of MOC order

imbalances and provide market

participants with more of an

opportunity to make appropriate

investment decisions. Specifically, the

proposal will change the deadline from

3:50 p.m. to 3:40 p.m. for entry of all

MOC orders on all trading days. In

addition, the proposal will allow the

entry of LOC orders prior to the

applicable deadline, but after the

deadline only to offset a published
36282 Federal Register / Vol. 63, No. 127 /Thursday, July 2, 1998 / Notices

16As discussed above, LOC orders will be subject

to the same deadlines for order entry as MOC

orders.

17As discussed above and in Amendment No. 1,

the Commission notes that the Exchange will not

apply the order entry procedures used for the close

of trading to the opening of trading. See

Amendment No. 1, supra note 3.

18 15 U.S.C. 78f(b)(5) and 15 U.S.C. 78s(b).

19 15 U.S.C. 78s(b)(2).

20 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1) (1994).

2 17 CFR 240.19b–4 (1997).

imbalance. In conjunction with the

prohibition on canceling or modifying

any MOC/LOC order after 3:40 p.m. the

Commission believes that this

requirement should allow the specialist

to make a timely and reliable

assessment, for every Amex-listed stock,

of MOC/LOC order flow and its

potential impact on closing prices.

Further, the proposal would require

Amex specialists to publish order

imbalances of 25,000 shares or more as

close to 3:40 p.m. as practicable. In

addition, under certain circumstances,

order imbalances of less than 25,000

shares may be published as close to 3:40

p.m. as practicable with the approval of

a Floor Official. The Commission

believes that permitting order imbalance

publications even though the imbalance

is under 25,000 shares should give

specialists needed flexibility to balance

order flow where the specialist believes

that it may be necessary to attract

contra-side interest. With respect to

changing the deadline for entering MOC

orders on non-expiration days, the

Commission believes that, by giving

market participants more time to react

to published MOC order imbalances, the

proposal may contribute to reducing

volatility at the close.16

Finally, the Exchange proposes to

apply the order imbalance

dissemination requirements at the

opening of trading as well as at the

close. Specifically, as discussed above,

the Exchange will require order

imbalances of 25,000 shares or more to

be disseminated before 9:30 a.m.

Circumstances under which an

imbalance of less than 25,000 shares

would be published will apply to the

opening as well.17 The Commission

believes that requiring order imbalances

to be published prior to the opening

may help reduce volatility at the

opening as well as at the close of

improving the specialists’ ability to

accurately assess opening order flow,

and attract contra-side interest to help

alleviate order imbalances. Further, the

policy should help provide the

investing public with more timely and

reliable information regarding likely

opening and closing prices, and thus the

ability to make more informed trading

decision.

The Commission finds good cause for

approving Amendment No. 1 to the

proposed rule change prior to the

thirtieth day after the date of

publication of notice of filing of this

amendment in the Federal Register.

Amendment No. 1 clarifies the proposal

to indicate what the deadline is for

order imbalance publications at the

opening. In addition, Amendment No. 1

clarifies that MOC/LOC order entry

procedures will not apply to the

opening of trading. As a result, the

Commission does not believe that

Amendment No. 1 raises any new

regulatory issues. Further, the

Commission notes that the original

proposal was published for the full 21-

day comment period and no comments

were received by the Commission.

Accordingly, the Commission believes

there is good cause, consistent with

Sections 6(b)(5) and 19(b) 18 of the Act,

to approve Amendment No. 1 to the

Exchange’s proposal on an accelerated

basis.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

1, including whether it is consistent

with the Act. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street, NW., Washington, DC 20549.

Copies of the submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change 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. Copies of such filing will also be

available for inspection and copying at

the principal office of the Amex. All

submissions should refer to File No.

SR–AMEX–98–10 and should be

submitted by July 23, 1998.

V. Conclusion

It is therefore ordered, pursuant to

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

proposed rule change (SR–AMEX–98–

10) is approved as amended.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.20

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–17561 Filed 7–1–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40124; File No. SR–NASD–

98–42]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval to Proposed

Rule Change by the National

Association of Securities Dealers, Inc.

Relating to Extension of Effectiveness

of the Pilot Injunctive Relief Rule

June 24, 1998.

Pursuant to Section 19(b)(1) of the

Securities and Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 12,

1998, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change as described in Items I and II

below, which Items have been prepared

by NASD Regulation, Inc. (‘‘NASD

Regulation’’). The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons. For the reasons

discussed below, the Commission is

granting accelerated approval of the

proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

NASD Regulation is proposing to

amend Rule 10335 of the Code of

Arbitration (‘‘Code’’) of the NASD to

extend the pilot injunctive relief rule for

six months. Below is the text of the

proposed rule change. Proposed new

language is italicized; proposed

deletions are in brackets.

10335. Injunctions

* * * * *

(i) Effective Date

This Rule shall apply to arbitration

claims filed on or after January 3, 1996.

Except as otherwise provided in this

Rule, the remaining provisions of the

Code shall apply to proceedings

instituted under this Rule. This Rule

shall expire on [July 3, 1998] January 3,

1999, unless extended by the

Association’s Board of Governors.