Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 3941

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

2The commission has modified the text of the

summaries prepared by DTC.

3For a complete description of CCS, refer to

Securities Exchange Act Release No. 35750 (January

22, 1996), 61 FR 2852 [File No. SR–DTC–95–18]

(order approving proposed rule change).

the course of such examination, inquiry

or investigation or otherwise in

furtherance of the discharge of its or his

duties. Failure to furnish such

testimony, documentary materials or

other information requested pursuant to

the proposed rule on the date or within

the time period requested would be

considered obstruction of an Exchange

inquiry or investigation and would not

be subject to formal disciplinary action.

2. Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b)(5) of the Act in that it is

designed to promote just and equitable

principles of trade, to foster cooperation

and coordination with persons

regulating securities transactions, 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.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The Exchange has neither solicited

nor received written comments on the

proposed change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Because the proposed rule change: (1)

does not significantly affect the

protection of investors or the public

interest; (2) does not impose any

significant burden on competition; and

(3) does not become operative for 30

days from December 11, 1997, the date

of which it was filed, and the Exchange

provided the Commission with written

notice of its intent to file the proposed

rule change at least five days prior to the

filing date, it has become effective

pursuant to Section 19(b)(3)(A) of the

Act and Rule 19b–4(e)(6) thereunder.

At any time within 60 days of the

filing of the proposed rule change, the

Commission may summarily abrogate

such rule change if it appears to the

Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purpose of this Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing.

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 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 CHX. All

submissions should refer to File No.

SR–CHX–97–33 and should be

submitted by February 17, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–1856 Filed 1–26–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39561; File No. SR–DTC–

97–17]

Self-Regulatory Organizations; the

Depository Trust Company; Notice of a

Proposed Rule Change Relating to a

Modification of the Coupon Collection

Service

January 20, 1998.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

August 7, 1997. The Depository Trust

Company (‘‘DTC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) and on December 22,

1997, amended the proposed rule

change as described in Items I, II, and

III below, which items have been

prepared primarily by DTC. The

Commission is publishing this notice to

solicit comments from interested

persons on the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change will

expand DTC’s coupon collection service

(‘‘CCS’’) to include the collection of

interest relating to coupons from

corporate bearer bonds.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

DTC 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. DTC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

CCS currently provides DTC

participants with a method for the

collection of interest relating to coupons

from municipal bearer bonds.3

Participants using CCS are required to

deposit coupons in a standard sealed

envelop or ‘‘shell,’’ each of which may

contain no more than 200 coupons for

the same CUSIP number, series, and

payable date. DTC submits the contents

of the shells to the appropriate issuer or

paying agent and then credits the

interest to the participant’s account.

Under the proposed rule change, CCS

will be modified to process corporate

bearer bonds in addition to municipal

bearer bonds. With certain exceptions,

DTC will handle shells containing

corporate bearer bonds in the same

manner in which it currently handles

municipal bearer bonds.

First, DTC will contact the corporate

paying agent before submitting the

coupons for payment to determine

whether the coupon proceeds are

payable in U.S. dollars. To be eligible

for CCS, corporate bearer bonds must be

payable in either U.S. dollars or

Canadian funds. Where the corporate

bearer bonds are payable in Canadian

funds, DTC will request the paying

agent to convert the funds to U.S.

dollars in accordance with the
3942 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

4 15 U.S.C. 78q–1.

5 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Rel. No. 39322 (Nov.

13, 1997), 62 FR 62391.

prevailing exchange rate. DTC will not

process corporate bearer bonds through

CCS unless the paying agent is able to

convert the funds to U.S. dollars.

Second, DTC will suppress for

corporate bearer coupons the automatic

payment function that it applies to

municipal bearer coupons. Under the

current operation of CCS, DTC credits

participants’ accounts on the payable

date of the municipal bearer coupons

regardless of whether it has received the

money. With corporate bearer bonds,

DTC will need to receive the interest

payment before paying the participant

in order to avoid having to adjust

participants’ accounts due to

fluctuations in exchange rates. DTC has

informed the Commission that due to

the additional processing and tracking

of corporate bearer coupon deposits, a

surcharge will be added in the future for

the handling of these deposits.

DTC will require that each shell

contain the following information on its

face:

1. CUSIP number;

2. description of issue including

purpose, series, date of issue, and

maturity date;

3. payable date;

4. quantity of coupons enclosed;

5. dollar value of individual coupons;

6. total shell value unless payable in

Canadian dollars;

7. participant number; and

8. contact number and telephone

number of the depositing participant.

The shells will need to be

accompanied by one completed deposit

ticket for up to twenty-five shells which

provides the following information:

1. participant number;

2. shell quantity;

3. total dollar value;

4. CUSIP number per shell;

5. coupon quantity per shell;

6. dollar value per shell unless

payable in Canadian dollars; and

7. whether the coupons are future-due

or past-due.

DTC will verify the number of shells

listed on the deposit ticket and give the

participant a time-stamped copy of the

ticket. If the number of shells listed on

the deposit ticket does not agree with

the physical number of shells, the entire

deposit will be rejected and sent back to

the participant.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act4

and the rules and regulations

thereunder because it promotes

efficiencies in the clearance and

settlement of securities transactions.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impose any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, in the public

interest, and for the protection of

investors.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments from DTC

participants and others have not been

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

ninety days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which DTC consents, the

Commission will:

(A) by order approve such proposed

rule change or

(B) institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

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 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 in

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to File No. SR–DTC–97–17 and

should be submitted by February 17,

1998.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–1857 Filed 1–26–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39562; File No. SR–NASD–

97–78]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to the Amended

Interpretation of IM–8310–2

Concerning the Release of Additional

Disciplinary Information

January 20, 1998.

I. Introduction

On October 17, 1997, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) 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 which amended

the Interpretation on the Release of

Disciplinary Information, IM–8310–2 of

Rule 8310 of the Procedural Rules of the

NASD (‘‘Interpretation’’ or ‘‘IM–8310–

2’’). A notice of the proposed rule

change was published in the Federal

Register on November 21, 1997.3 The

Commission has received no comment

letters on the proposed rule change. For

the reasons discussed below, the

Commission is approving the proposed

rule change.

In its notice, filed on October 17,

1997, the NASD Regulation, Inc.

(‘‘NASDR’’) proposed to amend IM–

8310–2 to include the phrase

‘‘electronic inquiry’’ in the rule

language so that it could respond to

electronic inquiries, as well as written

or telephonic inquiries. In the notice,

the NASDR also proposed to amend the

rule language to include the additional

information required to be reported on

the amended Forms U–4, U–5, and BD.

In November 1997, the NASDR

requested that the Commission approve,

on an accelerated basis, that portion of

the amended rule language that would

allow it to respond to electronic