Federal Register / Vol. 63, No. 18 /Wednesday, January 28, 1998 / Notices 4331

SUMMARY: The Pension Benefit Guaranty

Corporation (‘‘PBGC’’) is requesting that

the Office of Management and Budget

(‘‘OMB’’) extend approval, under the

Paperwork Reduction Act, of a

collection of information in its

regulation on Allocating Unfunded

Vested Benefits (29 CFR part 4211)

(OMB control number 1212–0035). This

notice informs the public of the PBGC’s

request and solicits public comment on

the collection of information.

DATES: Comments should be submitted

by February 27, 1998.

ADDRESSES: Comments should be

mailed to the Office of Information and

Regulatory Affairs of the Office of

Management and Budget, Attention:

Desk Officer for Pension Benefit

Guaranty Corporation, Washington, DC

20503. Copies of the request for

extension (including the collection of

information) are available from the

Communications and Public Affairs

Department of the Pension Benefit

Guaranty Corporation, suite 240, 1200 K

Street, NW., Washington, DC 20005–

4026, between 9 a.m. and 4 p.m. on

business days.

FOR FURTHER INFORMATION CONTACT:

Deborah C. Murphy, Attorney, Office of

the General Counsel, Pension Benefit

Guaranty Corporation, 1200 K Street,

NW., Washington, DC 20005–4026, 202–

326–4024. (For TTY/TDD users, call the

Federal relay service toll-free at 1–800–

877–8339 and ask to be connected to

202–326–4024.)

SUPPLEMENTARY INFORMATION: The PBGC

administers the pension plan

termination insurance programs under

Title IV of the Employee Retirement

Income Security Act of 1974, as

amended (‘‘ERISA’’). Section

4211(c)(5)(A) of ERISA requires the

PBGC to prescribe by regulation a

procedure whereby multiemployer

pension plans can change the way they

allocate unfunded vested benefits to

withdrawing employers, subject to

PBGC approval. Approval of a change is

to be based on a determination that the

change will not significantly increase

the risk of loss to plan participants or

the PBGC.

The PBGC’s regulation on Allocating

Unfunded Vested Benefits (29 CFR part

4211) includes, in § 4211.22, rules for

requesting the PBGC’s approval of an

amendment to a plan’s allocation

method. Section 4211.22(d) prescribes

information that the PBGC needs to

identify the plan and evaluate the risk

of loss, if any, posed by the amendment

(and, hence, determine whether it

should approve the amendment).

Section 4211.22(e) requires the

submission of other information that the

PBGC may need to review the

amendment. (The regulation may be

accessed on the PBGC’s home page at

http://www.pbgc.gov.)

The collection of information under

the regulation has been approved by

OMB under control number 1212–0035.

The PBGC is requesting that OMB

extend its approval for three years. An

agency may not conduct or sponsor, and

a person is not required to respond to,

a collection of information unless it

displays a currently valid OMB control

number. The PBGC estimates that it

receives five submissions from plan

sponsors annually under the regulation;

that virtually all submissions are

prepared by outside consultants; that

the total annual hour burden of

engaging the services of such

consultants is one hour; and that the

total annual cost burden of having the

submissions prepared is $1,575.

Issued in Washington, DC, this 23d day of

January 1998.

David M. Strauss,

Executive Director, Pension Benefit Guaranty

Corporation.

[FR Doc. 98–2078 Filed 1–27–98; 8:45 am]

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[Investment Company Act Release No.

23005; 812–10514]

Merrill Lynch & Co., Inc., et al.; Notice

of Application

January 21, 1998.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application under

section 6(c) of the Investment Company

Act of 1940 (the ‘‘Act’’) for an

exemption from all provisions of the

Act.

SUMMARY OF THE APPLICATION:

Applicants request an order to permit

Merrill Lynch Preferred Funding I, L.P.

(the ‘‘First Partnership’’) and Merrill

Lynch Preferred Capital Trust I (the

‘‘First Trust’’) to sell securities and use

the proceeds to finance the business

activities of its parent company, Merrill

Lynch & Co., Inc. (‘‘ML & Co.’’), and

companies controlled by ML & Co.

APPLICANTS: ML & Co., the First Trust,

and the First Partnership.

FILING DATES: The application was filed

on January 28, 1997. Applicants have

agreed to file an amendment, the

substance of which is incorporated in

this notice, during the notice period.

HEARING OR 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 by 5:30 p.m. on

February 11, 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 writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicants, World Financial Center,

North Tower, 250 Vesey Street, New

York, NY 10281–1318.

FOR FURTHER INFORMATION CONTACT:

Kathleen L. Knisely, Staff Attorney, at

(202) 942–0517, or Christine Y.

Greenlees, Branch Chief, at (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 at the SEC’s

Public Reference Branch, 450 Fifth

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

(tel. 202–942–8090).

Applicants’ Representations

1. ML & Co. is a company

incorporated under Delaware law. It is

a holding company that, through its

subsidiaries, provides investment,

financing, insurance, and related

services on a global basis. Its principal

subsidiary, Merrill Lynch, Pierce,

Fenner & Smith Incorporated, is a

leading broker-dealer, investment

banking firm, and underwriter. Other

subsidiaries provide a variety of

financial services on a global basis,

including broker-dealer services, swap

activities, futures activities, banking,

investment banking, consumer and

mortgage lending, real estate activities,

and asset management. Applicants state

that ML & Co. is primarily engaged in

the business of a holding company, and

does not hold more than 40% of its

assets in ‘‘investment securities,’’ as

defined in section 3(a)(2) of the Act.

2. ML & Co. has formed a two-tier

structure, consisting of the First Trust

and the First Partnership, to provide

financing to itself and entities

controlled by ML & Co. (‘‘Controlled

Companies’’). To provide additional

financing, ML & Co. proposes to form

one or more two-tier structures
4332 Federal Register / Vol. 63, No. 18 /Wednesday, January 28, 1998 / Notices

1The First Trust and each future organized trust

is referred to herein as the ‘‘Trust’’ and the First

Partnership and each future organized partnership

is referred to herein as the ‘‘Partnership.’’

2See, e.g., Cleary, Gottlieb, Steen & Hamilton

(pub. avail. Dec. 23, 1985).

3Applicants are not seeking relief for the two-tier

structure. See KDSM Inc. and Sinclair Capital (pub.

avail. March 17, 1997).

substantially similar to the First Trust

and First Partnership 1 as well as one or

more finance subsidiaries that differ in

structure (each, an ‘‘Other Finance

Subsidiary’’).

3. Each Trust will be a statutory

business trust organized under the laws

of Delaware or another jurisdiction.

Each Partnership will be a limited

partnership organized under the laws of

Delaware or another jurisdiction. The

general partner interests in the

Partnership (the ‘‘General Partner

Interests’’) will be owned by ML & Co.

and/or one or more Controlled

Companies, which will be the sole

general partners of the Partnership (the

‘‘General Partners’’).

4. Each Trust will issue common

securities (‘‘Trust Common Securities’’)

and preferred securities (‘‘Trust

Preferred Securities’’). The Trust

Common Securities will represent

undivided beneficial interests in the

assets of the Trust and will be owned by

ML & Co. and/or one or more of its

Controlled Companies. The Trust

Preferred Securities will represent

preferred undivided beneficial interests

in the assets of the Trust and will entitle

the holders to receive cumulative cash

distributions accumulating from the

date of original issuance and payable

quarterly in arrears at a specified rate,

as well as a specified amount on

liquidation of the Trust, if, as, and when

the Trust has funds available for

payment. The distribution rate and

payment dates on the Trust Preferred

Securities will correspond to the

distribution rate and payment dates for

the Partnership Preferred Securities (as

defined below) which, as described

below, generally will be the only assets

of the Trust.

5. Each Partnership will sell the

General Partner Interests and limited

partnership interests (the ‘‘Partnership

Preferred Securities’’). The Partnership

Preferred Securities will provide

essentially for the same distributions

and liquidation payments as the Trust

Preferred Securities. The funds for

distributions on the Partnership

Preferred Securities will come primarily

from payments made to the Partnership

by ML & Co. and/or its Controlled

Companies.

6. Each Trust will use all of the

proceeds of its offering of Trust

Preferred Securities to purchase the

Partnership Preferred Securities. The

Trust will not invest or make loans to

any other company. Each Partnership

will make investments in or loans to ML

& Co. and/or its Controlled Companies

of at least 85% of any cash or cash

equivalent raised or to be raised from

the sale of the Partnership Preferred

Securities, within six months of the

receipt of such cash or cash equivalents.

Applicants anticipate that substantially

all of the proceeds from the sale of the

Partnership Preferred Securities (and

indirectly, from the sale of the Trust

Preferred Securities), together with the

capital contribution from the General

Partners, will be used by the Partnership

to purchase debentures or equity

securities of ML & Co. and/or one or

more of its Controlled Companies.

7. Amounts that are not loaned to ML

& Co. and/or its Controlled Companies

will consist of: (i) interest and dividends

receivable from such investments and

loans, cash on hand and demand

deposits, time deposits and certificates

of deposit, in no case having a maturity

of greater than nine months; (ii) United

States government securities; (iii)

repurchase agreements having a

maturity of no greater than nine months

with respect to United States

government securities; and (iv) other

debt securities (e.g., commercial paper)

which arise out of current transactions,

and which have maturities at the time

of issuance not exceeding nine months.

8. The payment of distributions by the

Trust or the Partnership and the

payments on liquidation of the Trust or

the Partnership will be guaranteed on a

subordinated basis by ML & Co. (the

‘‘Guarantee’’).2 If ML & Co. fails to make

a guarantee payment, a holder of either

Trust Preferred Securities or Partnership

Preferred Securities may institute

directly a proceeding against ML & Co.

for enforcement of the payment without

first proceeding against any other entity.

Applicants’ Legal Analysis

1. Applicants request an order

pursuant to section 6(c) of the Act

granting an exemption from all

provisions of the Act for the Trust, the

Partnership, and the Other Finance

Subsidiaries.3 Applicants state that rule

3a–5 under the Act provides an

exemption from the definition of

investment company for certain

companies organized primarily to

finance the business operations of their

parent companies or companies

controlled by their parent companies.

2. Rule 3a–5(b)(3)(i) in relevant part

defines a ‘‘company controlled by the

parent company’’ to be a corporation,

partnership, or joint venture that is not

considered an investment company

under section 3(a) or that is excepted or

exempted by order from the definition

of investment company by section 3(b)

or by the rules and regulations under

section 3(a). Certain of the Controlled

Companies do not fit within the

definition of ‘‘companies controlled by

the parent company’’ because they

derive their non-investment company

status from section 3(c)(2), 3(c)(3),

3(c)(4), 3(c)(5), or 3(c)(6) of the Act.

None of the Controlled Companies

which will receive loans from the

Partnership or the Other Finance

Subsidiary will be relying on section

3(c)(1), 3(c)(5)(C), or 3(c)(7) of the Act.

3. Applicants state that none of the

Controlled Companies engage primarily

in investment company activities. In

addition, if ML & Co. or the Controlled

Companies were themselves to issue the

securities that are to be issued by the

Trust or the Partnership and use the

proceeds for their own purposes, they

would not be subject to regulation under

the Act. While ML & Co. has chosen to

use the Trust, the Partnership, and the

Other Finance Subsidiaries as financing

vehicles, the Guarantee ensures that

holders of Trust Preferred Securities

will have direct recourse against ML &

Co.

4. Section 6(c) of the Act permits the

SEC to exempt any person or class of

persons from any provision of the Act

or from any rule under the Act, if such

exemption is necessary or appropriate

in the public interest, consistent with

the protection of investors, and

consistent with the purposes fairly

intended by the policy and provisions of

the Act. Applicants submit that the

relief requested satisfies the section 6(c)

standard.

Applicants’ Condition

Applicants agree that the order

granting the requested relief will be

subject to the following condition:

Applicants will comply with all of the

provisions of rule 3a–5 under the Act,

except that the Controlled Companies

will not meet the portion of the

definition of ‘‘company controlled by a

parent company’’ in rule 3a–5(b)(3)(i)

solely because they are excluded from

the definition of investment company

under section 3(c)(2), 3(c)(3), 3(c)(4),

3(c)(5), or 3(c)(6) of the Act, provided

that any such entity excluded from the

definition of investment company under

section 3(c)(5) of the Act will fall within

section 3(c)(5)(A) or section 3(c)(5)(B)

solely by reason of its holdings of

accounts receivable of either their own

customers or of the customers of other

ML & Co. subsidiaries, or by reason of
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]

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[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]

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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]

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[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