Federal Register / Vol. 63, No. 18 /Wednesday, January 28, 1998 / Notices 4333

1 15 U.S.C. § 78s(b)(1).

2 17 CFR 240.19b–4.

3See letter from Robert E. Aber, Vice President

and General Counsel, Nasdaq, to Katherine A.

England, Assistant Director, Division of Market

Regulation, SEC, dated January 17, 1997

(‘‘Amendment No. 1’’). Amendment No. 1 corrected

typographical errors in the text of the proposed rule

change.

4Securities Exchange Act Release No. 38196 (Jan.

22, 1997) 62 FR 4368 (Jan. 29, 1997) (‘‘Notice’’).

5See Letter from Robert E. Aber, Vice President

and General Counsel, Nasdaq, to Ivette Lopez,

Assistant Director, Division of Market Regulation,

SEC, dated March 11, 1997 (‘‘Amendment No. 2’’).

In Amendment No. 2, the NASD: (1) Provides the

names of Nasdaq officers who have authority to

declare transactions clearly erroneous (see footnote

12, below); (2) replaces the term ‘‘Association’’ with

‘‘Nasdaq’’ in section (b)(4) of NASD Rule 11890; (3)

clarifies that the Market Operations Review

Committee’s (‘‘MORC’s’’) decision constitutes the

final action of the NASD; (4) clarifies that the

officers with the authority to declare on their own

motion transactions clearly erroneous because of a

system malfunction are the same persons who are

authorized to take action when a member makes a

complaint; (5) clarifies the length of time for Nasdaq

to act on an allegedly clearly erroneous transaction;

and (6) explains that as soon as Nasdaq obtains a

written appeal from a party, Nasdaq would notify

the other party to the transaction.

6See Letter from Robert E. Aber, Vice President

and General Counsel, Nasdaq, to Ivette Lopez,

Assistant Director, Division of Market Regulation,

SEC, dated August 13, 1997 (‘‘Amendment No. 3’’).

In Amendment No. 3, Nasdaq adds to NASD Rule

11890(d)(1) a provision that if Nasdaq notifies the

parties of action taken pursuant to paragraph (c) of

that rule after 4:00 p.m., either party has until 9:30

a.m. the next trading day to appeal.

7See Letter from Robert E. Aber, Vice President

and General Counsel, Nasdaq, to Katherine A.

England, Assistant Director, Division of Market

Regulation, SEC, dated January 5, 1998

(‘‘Amendment No. 4’’). In Amendment No. 4

Nasdaq corrected a drafting error to proposed NASD

Rule 11890(d)(1) to clarify that an ‘‘appeal to the

Committee [i.e., the MORC] shall not operate as a

stay of the determination made pursuant to

paragraphs (a)(2) or (c)’’ of proposed NASD Rule

11890.

loans made by it to such subsidiaries or

customers, provided, further, that any

such entity excluded from the definition

of investment company under section

3(c)(6) of the Act will not be engaged

primarily, directly, or through majorityowned subsidiaries in one or more of

the businesses described in section

3(c)(5) of the Act (except as permitted in

this condition).

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–2016 Filed 1–27–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[File No. 500–1]

Struthers Industries, Inc.; Order of

Suspension of Trading

United States of America Before the

Securities and Exchange Commission

January 26, 1998.

On January 9, 1998, the Securities and

Exchange Commission (the

‘‘Commission’’) ordered a 10 day

suspension in trading in Struthers

Industries, Inc. (‘‘Struthers’’) because of

questions regarding the accuracy of

statements, and material omissions,

concerning, among other things, (1) the

value of certain broadcast licenses in

which Struthers claims to have an

ownership interest, (2) the presence of

or potential for a recapitalization which

will enable Struthers to pursue its

business plan, and (3) the resignation of

Struthers’ auditors.

It appears to the Commission that

there is a further lack of current and

accurate information concerning the

securities of Struthers because of

separate and additional questions

regarding the accuracy of statements

and material omissions in a press

release issued by Struthers on or about

January 12, 1998 to the effect that,

among other things:

(1) Struthers continues to work

closely with representatives of its

former auditor, BDO Seidman, to

resolve the ‘‘disagreement with the

SEC’’ over the value of the IVDS

licenses Struthers holds under contract;

and

(2) Struthers’ former auditor strongly

believes that Struthers has fairly and

accurately valued these licenses.

The Commission is of the opinion that

the public interest and the protection of

investors require a second suspension of

trading in the securities of the above

listed company.

Therefore, it is ordered, pursuant to

Section 12(k) of the Securities Exchange

Act of 1934, that trading in the above

listed company is suspended for the

period from 9:30 a.m. EST, January 26,

1998 through 11:59 p.m. EST, on

February 6, 1998.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–2183 Filed 1–26–98; 12:31 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Meeting

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: [To be Published]

STATUS: Closed Meeting.

PLACE: 450 Fifth Street, N.W.,

Washington, D.C.

DATE PREVIOUSLY ANNOUNCED: To Be

Published.

CHANGE IN THE MEETING: Cancellation of

Meeting.

The closed meeting scheduled for

Thursday, January 29, 1998, at 10:00

a.m., has been cancelled.

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

or postponed, please contact:

The Office of the Secretary (202) 942–

7070.

Dated: January 23, 1998.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–2136 Filed 1–23–98; 4:35 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39550; File No. SR–NASD–

96–51]

Self-Regulatory Organizations;

National Association of Securities

Dealers, Inc.; Order Approving

Proposed Rule Change and Notice of

Filing and Order Granting Accelerated

Approval to Amendment Nos. 2, 3, and

4 to the Proposed Rule Change

Relating to NASD Rule 11890

Regarding Clearly Erroneous

Transactions

January 14, 1998.

On December 17, 1996, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) filed with

the Securities and Exchange

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

a proposed rule change pursuant to

Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Exchange

Act’’) 1 and Rule 19b–4 thereunder.2 On

January 17, 1997, the NASD filed

Amendment No. 1 to the proposed rule

change.3 Notice of the proposed rule

change and Amendment No. 1 thereto,

including the substance of the proposal,

were published for comment in the

Federal Register.4 No comments were

received. On March 11, 1997, August

13, 1997, and January 5, 1998, the

NASD, through its wholly owned

subsidiary, The Nasdaq Stock Market,

Inc. (‘‘Nasdaq’’), submitted to the

Commission Amendment Nos. 2,5 3,6

and 4 7 respectively, to the proposed

rule change. The Commission is hereby

approving the proposed rule change,

including Amendment 1 to the

proposal. In addition, the Commission

is publishing this notice to solicit
4334 Federal Register / Vol. 63, No. 18 /Wednesday, January 28, 1998 / Notices

8See, e.g., New York Stock Exchange Rule 75.

9Proposed NASD Rule 11890(b)(1).

10Proposed NASD Rule 11890(b)(2).

11Proposed NASD Rule 11890(b)(3).

comments from interested persons on

Amendment Nos. 2, 3, and 4 to the

proposed rule change and is approving

those amendments on an accelerated

basis.

I. Description of Rule Changes

A. Background

In April 1990, the SEC approved an

NASD proposal to add Section 70 to the

Uniform Practice Code (now NASD Rule

11890) to permit the NASD to declare

clearly erroneous transactions null and

void if they arise out of the use or

operation of any automated quotation,

execution, or communication system

owned or operated by the NASD.

Previously, the NASD had no authority

to cancel a transaction, even if one or

more terms of the transaction clearly

was in error. As described in Nasdaq’s

filing, one of the catalysts for adopting

Rule 11890 was a member’s complaint

concerning a transaction executed over

SelectNet. The transaction was ten

points away from the inside quotation,

which the member argued was clearly

an error, but the contra party refused to

cancel the transaction. NASD Rule

11890 gives Nasdaq the ability to

resolve disputes involving obvious

errors in an expeditious manner, akin to

an exchange floor governor ruling.8

B. Current Procedures

NASD Rule 11890 governs the review

and resolution of clearly erroneous

transaction complaints. Currently, the

rule permits the NASD to declare any

transaction arising out of the use or

operation of any automated quotation,

execution, or communication system

owned or operated by the NASD or any

subsidiary thereof, null and void when

there is an obvious error in any term,

such as price, number of shares or other

unit of trading, or identification of the

security. The rule also sets forth

procedures for declaring a transaction

null and void.

Under NASD Rule 11890(b)(1), a

member or person associated with a

member seeking to have a transaction

declared null and void must notify an

officer of the NASD designated by the

President of the transaction during

Nasdaq’s operating hours on the same

business day the transaction occurs, and

provide such official with all facts and

information necessary for a

determination. The rule requires the

complainant to confirm in writing any

information communicated orally. Each

member and/or person associated with

a member involved in the transaction

must provide the NASD with any

information requested to resolve the

matter on a timely basis.

Under NASD Rule 11890(b)(2), the

designated officer must then review the

information submitted and determine

whether the transaction is clearly

erroneous and detrimental to the

maintenance of a fair and orderly

market and the protection of investors

and the public interest. The official may

decline to act on a disputed transaction

if he or she believes that action is

unnecessary or inappropriate. Under

NASD Rule 11890(b)(3), if either party

wishes to appeal the staff determination,

it may seek review by the Market

Operations Review Committee

(‘‘MORC’’).

While the current procedures have

served as a vehicle to cancel erroneous

transactions, experience has shown that

NASD Rule 11890 can be improved to

enhance the fairness and expediency

with which clearly erroneous

transaction complaints are resolved.

Experience with the Rule also has

revealed shortcomings in the scope of

Nasdaq’s authority to take action with

respect to clearly erroneous

transactions. In particular, there have

been instances in the past where it

would have been appropriate for

NASDAQ to declare a series of

transactions clearly erroneous even

through the parties to the transactions

were unaware of any error and therefore

were not in a position to bring the error

to Nasdaq’s attention. The proposed

changes to NASD Rule 11890 are

intended to eliminate these

shortcomings and to provide Nasdaq

with additional capabilities to resolve

clearly erroneous transactions.

C. Proposed Amendments

The proposed amendments provide

greater specificity and flexibility

regarding declarations of clearly

erroneous transactions. As explained in

more detail below, the proposed

amendments would:

(1) Provide Nasdaq officials the

authority to effciently and expeditiously

nullify or modify the price and size of

clearly erroneous transactions

(currently, Nasdaq officials may only

nullify, affirm, or decline to act with

respect to an allegedly clearly erroneous

transaction) (NASD Rule 11890(a)(2));

(2) Shorten the time period in which

parties may submit clearly erroneous

transaction complaints from any time

the same day to within 30 minutes of

the disputed transaction (NASD Rule

11890(b)(1));

(3) Clarify the procedures by which

the parties to an allegedly clearly

erroneous transaction may submit

written information concerning the

transaction (NASD Rule 11890(b)(2)–

(4));

(4) Provide Nasdaq officials the

requisite authority to cancel or modify

clearly erroneous transactions on their

own motion during system disruptions

or malfunctions in the use or operation

of any automated quotation, execution,

or communication system owned or

operated by Nasdaq and approved by

the Commission (NASD Rule 11890(c));

(5) Prohibit a member from

withdrawing a clearly erroneous

transaction complaint unless the other

party to the transaction agrees to

withdraw the matter (NASD Rule

11890(b)(5));

(6) Shorten the time period to appeal

a clearly erroneous transaction

determination from four ‘‘market’’ hours

to 30 minutes (NASD Rule 11890(d)(1));

and

(7) Clarify that an appeal of a clearly

erroneous transaction determination

does not operate as a stay of the

determination (NASD Rule 11890(d)(1)).

Under the proposed rule change, a

complainant seeking to have a

transaction reviewed must submit a

written complaint to Nasdaq Market

Operations: (1) By 10:30 a.m., Eastern

Time, for transactions occurring prior to

10:00 a.m.; or (2) within 30 minutes of

the transaction for transactions

occurring on or after 10:00 a.m.9 Once

a complaint is received, the

complainant has up to 30 minutes, or

such longer period as specified by

Nasdaq staff, to submit any supporting

written information concerning the

complaint necessary for a

determination. 10 The counterparty to

the transaction would be verbally

notified of the complaint by Nasdaq

staff and would have up to 30 minutes,

or such longer period as specified by

Nasdaq staff, to submit any supporting

written information concerning the

complaint necessary for a

determination. Either party to a

disputed transaction may request the

written information provided by the

other party. Once a party to a disputed

transaction communicates that it does

not intend to submit any further

information concerning a complaint, the

party may not thereafter provide

additional information unless requested

to do so by Nasdaq staff.11 If both parties

to a disputed transaction indicate that

they have no further information to

provide concerning the complaint

before their respective 30-minute

periods have elapsed, the matter would
Federal Register / Vol. 63, No. 18 /Wednesday, January 28, 1998 / Notices 4335

12Proposed NASD Rule 11890(a)(2). According to

the NASD, officers of Nasdaq are designated by the

President of Nasdaq based on the breadth and depth

of their experience regarding Nasdaq’s rules and

market procedures. Alfred Berkeley, Nasdaq’s

President, has designated, in addition to himself,

the following senior officers of Nasdaq as having

the authority to act under Rule 11890(a)(2) and

11890(c): John T. Wall, Executive Vice President;

John Hickey, Executive Vice President; Glen

Shipway, Senior Vice President; Sherman W. Broka,

Senior Vice President; Mark DeNat, Vice President;

Donald Bosic, Vice President; Beth Weimer, Vice

President; William Wlcek, Vice President; Richard

Gonzales, Vice President; Richard Bayha, Vice

President; and Robert E. Aber, Vice President and

General Counsel. According to the NASD, these

officers are the only officers that are authorized to

declare a transaction clearly erroneous. A list of

these designated officers would be maintained by

Nasdaq Market Operations and the NASD’s

Corporate Secretary. See Amendment No. 2.

13The NASD has represented to the Commission

that Nasdaq officers will render a decision based

upon the record as soon as possible under the

circumstances. According to the NASD, currently,

in almost all cases, the officer makes a decision on

the same day the transaction occurred. The NASD

indicated that a matter is not handled on the

transaction date only where the complaint was filed

late in the day (i.e., after 5:00 p.m.) and the

necessary information cannot be obtained the same

day. The NASD explained that, generally, a

decision is made within an hour of the final

submission from a party except where a particular

transaction involves complexities that require the

staff to take additional time to verify facts provided

by the parties. See Amendment No. 2.

14Proposed NASD Rule 11890(b)(5).

15Proposed NASD Rule 11890(c).

16The officials who have the authority to review

transactions on their own motion would be the

same officials who have the authority to review

transactions submitted by a member’s complaint.

See Amendment No. 2 and note 12, above.

17Proposed NASD Rule 11890(d).

18As soon as Nasdaq obtains a written appeal

from a party, Nasdaq would notify the other party

to the transaction of the appeal. See Amendment

No. 2, and note 5, above.

19See Proposed NASD Rule 11890(d)(2). In

Amendment No. 4, Nasdaq clarified the ability of

parties to seek arbitration: With respect to the

ability of a party to submit a dispute to arbitration

without prejudice notwithstanding an adverse

decision by a Nasdaq officer or the Committee [i.e.,

the MORC], as set forth in paragraph (d)(2) [of

proposed NASD Rule 11890], it should be made

clear that this rule does not prevent such party from

seeking arbitration either before any such decision

is rendered, or in the absence of a determination

altogether.

be immediately presented by a Nasdaq

officer for a determination.

Under the proposed rule change, the

President of Nasdaq would designate

officers of Nasdaq who would have the

authority to review any transaction

arising out of the use or operation of any

automated quotation, execution, or

communication system owned or

operated by Nasdaq and approved by

the Commission.12 A Nasdaq officer

would review the transactions with a

view toward maintaining a fair and

orderly market and protecting investors

and the public interest. Based upon this

review, the officer would (1) Decline to

act on a disputed transaction if the

officer believes the transaction under

dispute is not clearly erroneous, or (2)

declare the transaction null and void or

modify one or more terms of the

transaction if the officer determines that

the transaction is clearly erroneous.

With respect to the modification of

transactions, the Nasdaq officer may

adjust any of the terms of a disputed

transaction (e.g., price, number of shares

or other unit of trading, or identification

of the security) to achieve an equitable

rectification of the error that would

place the parties to the transaction in

the same position or as close as possible

to the same position as they would have

been in had the error not occurred. After

making a determination with respect to

a particular transaction or group of

transactions, Nasdaq would promptly

provide oral notification of that

determination to the parties and

thereafter issue a written confirmation

of the determination.13 Under the

proposal, once a party has applied to

Nasdaq for review, the transaction

would be reviewed and a determination

rendered, unless both parties to the

transaction agree to withdraw the

application for review prior to a

decision being rendered.14

The proposed rule change also would

provide Nasdaq with the authority and

procedures to review transactions

executed during system disruptions or

malfunctions in the use or operation of

any automated quotation, execution or

communication system owned or

operated by Nasdaq and approved by

the Commission.15 In such an event,

Nasdaq, acting through an officer

designated by the President of Nasdaq,

may, on its own motion, declare the

transactions null and void or modify the

terms of the transactions.16 The

proposed rule provides that in the

absence of extraordinary circumstances,

a Nasdaq officer must take action within

30 minutes of detection of the clearly

erroneous transactions, but by no later

than 6:00 p.m., Eastern Time, on the

next trading day following the date of

the transactions at issue. When Nasdaq

takes action under these circumstances,

the member firms involved in the

transactions would be notified as soon

as practicable and have a right to appeal

such action.

Finally, the NASD proposal changes

the process by which a Nasdaq officer’s

determination is appealed. Under the

proposal, a member or person associated

with a member may appeal a

determination to the MORC, provided

that such an appeal is made in writing

within 30 minutes after the member or

person associated with a member

receives verbal notification of such

determination.17 An exception exists for

circumstances where Nasdaq notifies

the parties of action taken pursuant to

paragraph (c) (i.e., in cases of system

disruptions or malfunctions) after 4:00

p.m. Under these circumstances, either

party has until 9:30 a.m. the next

trading day to appeal after the member

or person associated with a member

receives verbal notification of such

determination. Once a written appeal

has been received, the counterparty to

the transaction would be notified of the

appeal 18 and both parties would be

permitted to submit any additional

supporting written information until the

time the appeal is considered by the

MORC. Either party to a disputed

transaction may request the written

information provided by the other party

during the appeal process. An appeal to

the MORC would not operate as a stay

of the determination. Once a party has

appealed a determination to the MORC,

the determination would be reviewed

and a decision rendered. Upon

consideration of the record and after

such hearings as it may in its discretion

order, the MORC would affirm, modify,

reverse, or remand the determination of

the designated Nasdaq officer. Under

the proposal, any adverse determination

by a Nasdaq officer or any adverse

decision by the MORC would be

rendered without prejudice as to the

rights of the parties to the transaction to

submit their dispute to arbitration.19

II. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment Nos.

2, 3, and 4. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street, N.W., 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

Section, 450 Fifth Street, N.W.,

Washington, DC 20549. 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 No. SR–NASD–96–

51 and should be submitted by February

18, 1998.
4336 Federal Register / Vol. 63, No. 18 /Wednesday, January 28, 1998 / Notices

20Regarding the transparency of voided or

modified clearly erroneous transactions, Nasdaq

represented to the Division of Market Regulation

that whenever possible within the constraints of

Nasdaq’s systems, Nasdaq will endeavor to ensure

that the tape and historical record will be corrected

as soon as possible. Given that allegedly clearly

erroneous trades will now be brought to Nasdaq’s

attention within 30 minutes rather than within four

hours as was previously the case, it will be

significantly less likely that transactions voided or

modified as clearly erroneous will not be corrected

on the tape or historical record. Nasdaq also

represented that in 1997, when the time period was

still four hours, clearly erroneous transactions that

were modified or voided were almost always

corrected on the tape or historical record.

Conversation between Andrew S. Margolin, Office

of the General Counsel, Nasdaq, and Jeffrey R.

Schwartz, Special Counsel, Division of Market

Regulation, SEC, January 8, 1998.

21 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. The

proposed rule change likely will enhance the

efficiency and fairness of the process by which

clearly erroneous transactions are modified or

nullified. The proposal also should increase the

accuracy of transaction reports disseminated to the

public. The net effect of approving the proposed

rule change will be positive. 15 U.S.C. § 78c(f).

22See Securities Exchange Act Release No. 38196,

supra note 4.

23 15 U.S.C. § 78s(b)(2).

24 17 CFR 200.30-3(a)(12).

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

2The Commission has modified the text of the

summaries submitted by NSCC.

III. Discussion

The Commission finds the proposed

rule change, by helping to ensure that

clearly erroneous transactions are

quickly corrected or nullified and

properly reported to the public, is

consistent with the Exchange Act and in

particular with Sections 15A(b)(6) and

11A(a)(1)(C) of the Exchange Act.

Among other things, Section 15A(b)(6)

requires that the rules of a national

securities association be designed 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. Section 15A(b)(6) also

provides that the rules of the association

not be designed to permit unfair

discrimination between customers,

issuers, brokers, or dealers. Section

11A(a)(1)(C) provides that, among other

things, it is in the public interest to

assure the availability to brokers,

dealers, and investors of information

with respect to quotations for and

transactions in securities.

In the proposed rule change, the

NASD provides greater specificity in the

procedures for resolving clearly

erroneous transactions and greater

flexibility to Nasdaq officials to remedy

such errors expeditiously. The

Commission believes that the

amendments to the NASD’s procedures

to review these transactions should

benefit market participants by

promoting fair and efficient resolution

of disputes involving clearly erroneous

transactions. In addition, the proposed

rule change—in particular the provision

for appeal to the MORC—addresses

concerns raised by the Commission in

its August 8, 1996, Report Pursuant to

Section 21(a) of the Securities Exchange

Act of 1934 Regarding the NASD and

The Nasdaq Stock Market regarding the

fairness of the clearly erroneous review

process. The NASD believes, and the

Commission agrees, that with these

amendments the process for resolving

clearly erroneous transaction

complaints would become fairer and

more efficient. In this regard, the

proposal is consistent with Exchange

Act Section 15A(b)(6) because it helps

to ensure that NASD Rule 11890 does

not permit unfair discrimination

between customers, issuers, brokers, or

dealers.

Further, it is important for the proper

functioning of the securities markets

that investors be able to rely on reported

transactions as accurately reflecting the

current state of the market and actual

executions. When clearly erroneous

transactions are publicly reported, it is

important that, whenever possible,20

Nasdaq correct these clear errors and

correct the inaccurate information that

was disseminated in the market about

these transactions as quickly as

possible.

For the foregoing reasons, the

Commission finds that the proposed

rule change is consistent with the

requirements of the Exchange Act and

the rules and regulations thereunder

applicable to national securities

association and, in particular, the

requirements of Sections 15A(b)(6) and

11A(a)(1)(c) and the rules and

regulations thereunder.21

Finally, the Commission finds good

cause for approving Amendment No. 2,

3, and 4 to the proposed rule change

prior to the thirtieth day after the date

of publication of notice of filing thereof.

The Exchange’s proposal was published

in theFederal Register for the full

statutory period.22 Amendment Nos. 2,

3, and 4 are technical amendments that

clarify the operation of the rule to

enhance market participants’

comprehension and compliance with

these procedures. The Amendments do

not diminish the rights of any

prospective party with respect to

resolving clearly erroneous transactions.

Consequently, the Commission finds

that there is good cause, consistent with

the Exchange Act, to accelerate approval

of Amendment Nos. 2, 3, and 4.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Exchange Act,23

that the proposed rule change (SR–

NASD–96–51) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.24

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–1975 Filed 1–27–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39563; File No. SR–NSCC–

97–14]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing of a

Proposed Rule Change to Modify

NSCC’s Procedures Regarding its

Trade Comparision 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

December 9, 1997, the National

Securities Clearing Corporation

(‘‘NSCC’’) filed with the Securities and

Exchange Commission (‘‘Commisssion’’)

the proposed rule change (File No. SR–

NSCC–97–14) as described in Items I, II,

and III below, which items have been

prepared primarily by NSCC. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change will modify

NSCC’s procedures regarding its trade

comparison system for over-the-counter

(‘‘OTC’’) securities.

II. Self-Regulatory Organizations’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),

and (C) below, of the most significant

aspects of such statements.2