Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices 39923

15 15 U.S.C. 78o–3(b)(6).

16 15 U.S.C. 78o–3(b)(11).

17 15 U.S.C. 78k–1(a)(1)(C).

18 17 CFR 200.30–3(a)(12).

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

and coordination with persons engaged

in regulating, clearing, settling,

processing information with respect to,

and facilitating transactions in

securities, to remove impediments to an

perfect the mechanisms of a free and

open market and a national market

system and in general to protect

investors and the public interest.15

Section 15A(b)(11) empowers the NASD

to adopt rules governing the form and

content of quotations relating to

securities in the Nasdaq market.16 Such

rules must be designed to produce fair

and informative quotations, prevent

fictitious or misleading quotations, and

promote orderly procedures for

collecting, distributing, and publishing

quotations. Section 11A(a)(1)(C)

provides that it is in the public interest

and appropriate for the protection of

investors and the maintenance of fair

and orderly markets to, among other

things, assure the economically efficient

execution of securities transactions and

the availability to brokers, dealers, and

investors of information with respect to

quotations for and transactions in

securities, and to assure fair competition

among brokers and dealers.17

Specifically, the reserved size

proposal is consistent with Sections

11A(a)(1)(C) and 15A(b)(6). This

proposal helps to ensure that members

meet their best execution obligations

and discourages piecemeal executions,

which may be economically inefficient

and costly to the customer. Thus, the

proposal promotes just and equitable

principles of trade and the protection of

investors and the public interest.

Additionally, the rule helps remove

impediments to and perfect the

mechanism of a free and open market,

and ensures economically efficient

executions by discouraging piecemeal

executions of large orders.

The proposal to require members to

provide Nasdaq staff with information

and the amendments to NASD Rule

4613(e) are consistent with Sections

15A(b)(6) and 11A(a)(1)(C). By requiring

market makers and ECNs to avoid locks

and crosses on the market’s opening and

to provide Nasdaq staff with

information necessary to administer

NASD and SEC rules, these proposed

rules foster cooperation and

coordination with members. These two

proposals also ensure the fair and

orderly operation of Nasdaq, as they

clearly delineate the obligations

regarding the entry of quotations that

lock/cross the market at the opening and

permit staff to gather information

necessary to administer particular rules

or to discharge particular departmental

duties.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq does not believe that the

proposed rule change will result in any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments were neither

solicited nor received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of publication of this

notice in the Federal Register or within

such longer period (i) as the

Commission may designate up to 90

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 the NASD 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. Solicitations of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change 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 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

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to file number

SR–NASD–98–01 and should be

submitted by August 14, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.18

Jonathan G.Katz,

Secretary.

[FR Doc. 98–19807 Filed 7–23–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40224; File No. SR–NSCC–

98–2]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing and Order

Granting Accelerated Approval of a

Proposed Rule Change Allowing Users

of NSCC’s Mutual Fund Services

(‘‘MFS’’) Access to Annuity Processing

Services (‘‘APS’’) and to Allow Users

of APS Access to MFS

July 16, 1998.

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

Securities Exchange Act of 1934

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

March 12, 1998, the National Securities

Clearing Corporation (‘‘NSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change and on March 26,

1998, amended the proposed rule

change as described in Items I and II

below, which items have been prepared

primarily by NSCC. The Commission is

publishing this notice and order to

solicit comments from interested

persons and to grant accelerated

approval of the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change amends

NSCC’s rules to allow users of NSCC’s

Mutual Fund Services (‘‘MFS’’) access

to Annuity Processing Services (‘‘APS’’)

and to allow users of APS access to

MFS.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NSCC 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. NSCC has prepared

summaries, set forth in sections (A), (B),
39924 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices

2The Commission has modified the text of the

summaries prepared by NSCC.

3The term Insurance Entity is defined using

language that is currently in NSCC’s Rules as ‘‘an

insurance company, partnership, corporation,

limited liability corporation or other organization,

entity or person who is licensed to sell insurance

products and is subject to supervision or regulation

pursuant to the provisions of state insurance law.’’

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, Proposed Rule

Change

The purpose of the proposed rule

change is to give users of NSCC’s MFS,

currently restricted to use by MFS

members, access to APS and to give

users of APS, currently restricted to use

by APS members, the ability to use

MFS. Specifically, shared access to MFS

and APS will be achieved by combining

categories of Annuities Agency

Members and Mutual Fund Service

Members into a new category to be

known as Mutual Fund/Annuity

Services Members. No changes are being

made to the financial or operational

requirements for MFS members or APS

members.

The proposed rule change will also

permit an Insurance Entity, which may

become an APS member but not a MFS

member under the present rules, to

become a Mutual Fund/Annuity

Services Member.

Currently, participants who are MFS

members or Fund Members are not

permitted to use any NSCC service other

than MFS. Similarly, participants who

are Annuities Agency Members or

Annuities Carrier Members are not

allowed to use any NSCC service other

than APS. According to NSCC, there is

no reason not to permit these

participants to use either or both

services. The membership criteria for

these two categories of membership, (as

set forth in Addendum B of NSCC’s

Rules) are identical.

Because the proposed rule change

merely combines different membership

types into one, no changes are being

made with respect to the clearing fund

requirements related to the use of MFS

or APS. There will continue to be no

clearing fund requirement relating to the

use of APS. Mutual Fund/Annuities

Service Members that use MFS will

continue to be required to deposit the

appropriate amount of clearing fund.

The following is a detailed

description of the changes made to

NSCC’s Rules and Procedures

Rule 1: (Definitions)

A new definition entitled ‘‘Insurance

Entity’’ is added. This term is

substituted in NSCC’s Rules where a

lengthy phrase, which is not the

definition of Insurance Entity, was

previously used in the text of the Rules.3

The defined terms ‘‘Annuities Agency

Member’’ and ‘‘Mutual Fund Services

Member’’ are deleted and are replaced

with the new defined term ‘‘Mutual

Fund/Annuity Services Member.’’ The

definition of ‘‘Mutual Fund/Annuity

Services Member’’is a combination of

the old definitions of annuities Agency

Member and Mutual Fund Services

Member. A footnote is added to the

definition of ‘‘Mutual Fund/Annuity

Services Member’’ to inform members

that this category of membership

replaces both the ‘‘Annuities Agency

Member’’ category and ‘‘Mutual Fund

Services member’’ category.

Rule 2: (Members)

The language of Sections (iv) and (vi)

of Section 1 are replaced with the new

defined term ‘‘Insurance Entity.’’ The

inclusion of a limited liability

corporation as a type of entity which

can apply for membership is added to

Section 1 to make it consistent with the

preface to such Section. The paragraphs

relating to applicants whose use of

NSCC’s service is limited to MFS and

APS are combined into one paragraph.

Section 2(i) is revised to reflect that the

Membership Agreement which will be

entered into by ‘‘Mutual Fund/Annuity

Services Members’’ will appropriately

restrict their use of NSCC’s services to

MFS and/or APS.

Rule 4: (Clearing Fund)

Conforming changes relating to the

new defined terms are made.

Rule 15: (Financial Responsibility and

Operational Capability)

Previously, Annuities Agency

Members were required by Section 2(a)

to submit to NSCC certain reports filed

with state insurance departments. This

requirement is now being imposed on

Mutual Fund/Annuities Services

Members that use APS. Conforming

changes relating to the new defined

terms are made to Section 2(b).

Rule 29: (Qualified Securities

Depositories)

The proposed rule change makes

conforming changes relating to the new

defined terms.

Rule 51: (Fund Member)

The proposed rule change adds a

footnote to Section 2(a) clarifying that

Fund Members are not precluded from

applying to become an Annuities Carrier

Member or Mutual Fund/Annuity

Services Member.

Rule 52: (Mutual Fund Services)

The proposed rule change deletes the

reference to MFS Member because the

term ‘‘Member’’, by definition, includes

MFS Member, now known as ‘‘Mutual

Fund/Annuities Service Member.’’

Rule 56: (Annuities Carrier Member)

A footnote was added to Section 2(a)

clarifying that Annuities Carrier

Members are not precluded from

applying to become a Fund Member or

Mutual Fund/Annuity Services

Member.

Rule 57: (APS—Commissions and

Charge Backs)

The reference to Annuities Agency

Members in Section 3(f) is replaced with

‘‘Members,’’ which by definition

includes Mutual Fund/Annuity Services

Members.

Procedure XV: (Clearing Fund Formula

and Other Matters)

The clearing fund formula for users of

MFS, is revised to refer to those Mutual

Fund/Annuity Services Members that

use MFS. The proposed rule change

revises footnote 2 to clarify that Section

A.I.(b) only applies to entities whose

use of NSCC’s services is restricted to

MFS and/or APS. The proposed rule

change makes conforming changes

relating to the new defined terms in

Section A.III. Section A.IV. is revised to

reflect that, as was the case with

Annuities Agency Members, those

Mutual Fund/Annuity Services

Members that use only APS are not

subject to a clearing fund requirement.

Addendum B—(Standards of Financial

Responsibility and Operational

Capability)

Previously, section B.4 covered

applicants whose use of NSCC’s services

was limited to MFS, and Section B.5

covered applicants whose use of NSCC’s

services was limited to APS. Because

these sections currently contain

identical requirements, they are

combined into Section B.4. Accordingly,

Section B.5. is deleted, and Section B.6.

is renumbered. Section I is revised to

refer to the new defined term of Mutual

Fund/Annuity Services Members.

Section J previously prescribed the

information required to be filed by

Mutual Fund Services Members and

Section K previously prescribed the

information required to be filed by

Annuities Agency Members. Because

there is now one membership category,

these sections are combined in Section

J, with appropriate technical changes,
Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices 39925

4 15 U.S.C. 78q–1(b)(3)(F). 5 17 CFR 200.30–3(a)(12).

and section K is deleted. Section II.F has

been revised to refer to the new defined

term of Mutual Fund/Annuity Services

Members.

Addendum F—(Statement of Policy in

Relation to Same Day Funds Settlement)

Section II is revised to refer to the

new defined term of Mutual Fund/

Annuity Services Members.

Addendum I—(Standards of Financial

Responsibility and Operational

Capability for Fund Members)

The lead-in to this Addendum and the

lead-in to Section I.A. are revised to

clarify that this addendum pertains to

Fund Members.

Addendum Q—(Standards of Financial

Responsibility and Operational

Capability for Annuities Carrier

Members)

The lead-in to Section II is modified

to clarify that the prescribed

information must be furnished by

applicants, in addition to current

Annuities Carrier Members. Additional

modifications which conform to

insurance industry terminology are

made.

NSCC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act

and the rules and regulations

thereunder because it provides for the

equitable allocation of dues, fees, and

other charges among NSCC’s members.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

NSCC does not believe that the

proposed rule change will impact or

impose a burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments have been

solicited or received. NSCC will notify

the Commission of any written

comments received by NSCC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(F) of the Act

requires that the rules of a clearing

agency be designed to remove

impediments to and perfect the

mechanisms of a national system for the

prompt and accurate clearance and

settlement of securities transactions.4

The Commission believes that the rule

change is consistent with this obligation

because the proposal will reduce the

number of memberships an entity

would need to have in order to use MFS

and APS. Because the requirements for

these membership categories are

identical, it is duplicative to require

participants to obtain two separate

memberships to use these services.

Therefore, combining the membership

categories promote efficiencies and

helps promote the development of the

national clearance and settlement

system.

NSCC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after

publication of the notice of filing. The

Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after

publication of the notice of filing

because accelerated approval will

permit NSCC to make the Mutual Fund/

Annuity Services membership category

available immediately. Thus, NSCC will

be able to reduce the current

administrative burdens on both itself

and on its participants.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change 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 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 NSCC. All submissions should

refer to File No. SR–NSCC–98–2 and

should be submitted by August 14,

1998.

It is therefore, ordered, pursuant to

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

proposed rule change (File No. SR–

NSCC–98–2) be and hereby is approved

on an accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Jonathan G. Katz,

Secretary.

[FR Doc. 98–19752 Filed 7–23–98; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Reporting and Recordkeeping

Requirements Under OMB Review

AGENCY: Small Business Administration.

ACTION: Notice of Reporting

Requirements Submitted for OMB

Review.

SUMMARY: Under the provisions of the

Paperwork Reduction Act (44 U.S.C.

Chapter 35), agencies are required to

submit proposed reporting and

recordkeeping requirements to OMB for

review and approval, and to publish a

notice in the Federal Register notifying

the public that the agency has made

such a submission.

DATES: Submit comments on or before

August 24, 1998. If you intend to

comment but cannot prepare comments

promptly, please advise the OMB

Reviewer and the Agency Clearance

Officer before the deadline.

COPIES: Request for clearance (OMB 83–

1), supporting statement, and other

documents submitted to OMB for

review may be obtained from the

Agency Clearance Officer.

ADDRESSES: Address all comments

concerning this notice to: Agency

Clearance Officer, Jacqueline White,

Small Business Administration, 409 3rd

Street, S.W., 5th Floor, Washington,

D.C. 20416; and OMB Reviewer, Victoria

Wassmer, Office of Information and

Regulatory Affairs, Office of

Management and Budget, New

Executive Office Building, Washington,

D.C. 20503.

FOR FURTHER INFORMATION CONTACT:

Jacqueline White, Agency Clearance

Officer, (202) 205–6629.

SUPPLEMENTARY INFORMATION:

Title: 8(a) Export Survey Initiative.

Form No.: 2068.

Frequency: New Collection.

Description of Respondents: 8(a)

Firms.

Annual Responses: 200.

Annual Burden: 33.

Dated: July 20, 1998.

Jacqueline White,

Chief, Administrative Information Branch.

[FR Doc. 98–19856 Filed 7–23–98; 8:45 am]

BILLING CODE 8025–01–P