Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Notices 39621

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

6 15 U.S.C. 78s(b)(3)(A)(i).

7 17 CFR 240.19b–4.

8 17 CFR 200.30–3(a)(12).

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

applications, including Commission

registration material, to be filed in hard

copy form.

• Proxy material. The Exchange

conducts an immediate review of proxy

material, including preliminary

material, for a number of purposes. For

example, the Exchange reviews possible

changes to the company’s board of

directors. The Exchange also reviews

proxies to determine whether brokersdealers may vote certain routine items

pursuant to Exchange Rule 452. Until

the Exchange has more experience in

accepting filings through EDGAR, it

believes it can best expedite this review

if it continues to receive multiple paper

copies of the proxy material.

• Forms 8–K. Listed companies file

these ‘‘current reports’’ to provide

notice of certain material events.

Because these reports can provide an

early warning of material corporate

developments, the Exchange

preliminarily believes that it would be

appropriate to receive hard copy

delivery of this information.

The Exchange will monitor the

operation of this rule. Based on that

monitoring, the Exchange will consider

expanding the categories of reports and

other materials that listed companies

can file with the Exchange through

EDGAR, and will file a proposed rule

change with the Commission if it

determines to expand the operation of

the rule.

2. Statutory Basis

The NYSE believes the proposed rule

change is consistent with the

requirements of Section 6(b)(5) of the

Act 5 that an exchange have rules that

are 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.

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 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

The Exchange has not solicited, and

does not intend to solicit, comments on

this proposed rule change. The

Exchange has not received any

unsolicited written comments from

members or other interested parties.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Act

The foregoing rule change constitutes

a stated policy, practice, or

interpretation with respect to the

meaning, administration, or

enforcement of an existing rule of the

Exchange and therefore, has become

effective pursuant to Section

19(b)(3)(A)(i) of the Act,6 and

subparagraph (e) of Rule 19b–4

thereunder.7 The Exchange will not

implement the proposed rule change

until the Commission staff grants the

requested No Action Letter concurring

in the Exchange’s view that a company’s

filing of a report or other material

covered by this rule change through

EDGAR will satisfy the company’s

obligation under the Commission’s rules

to file the material with the Exchange.

At any time within 60 days of the

filing of such 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

purposes of the Act.

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 NW,

Washington, DC 20549. Copies of the

submissions, 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, 450 Fifth Street, NW,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the NYSE. All submissions

should refer to File No. SR–NYSE–98–

18 and should be submitted by August

13, 1998.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.8

Jonathan G. Katz,

Secretary.

[FR Doc. 98–19647 Filed 7–22–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

(Release No. 34–40212; File No. SR–OCC–

98–02)

Self-Regulatory Organizations; The

Options Clearing Corporation; Notice

of Filing and Order Granting

Accelerated Approval of a Proposed

Rule Change Clarifying Rules

Regarding the Unavailability of Current

Index Values

July 15, 1998.

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

Securities Exchange Act of 1934

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

February 20, 1998, The Options Clearing

Corporation (‘‘OCC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I and II

below, which items have been prepared

primarily by OCC. The Commission is

publishing this notice and order to

solicit comments on the proposed rule

change from interested persons and to

grant accelerated approval.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The purpose of the proposed rule

change is to clarify the application of

OCC’s by-laws relating to the

unavailability or inaccuracy of current

index values where there is an early

closing of the primary market for the

securities underlying an index option

valued at the close.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

OCC 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. OCC has prepared

summaries, set forth in sections (A), (B),
39622 Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Notices

2The Commission has modified parts of these

statements.

3Securities Exchange Act Release No. 37315

(June 17, 1996), 61 FR 32471 (ordering approving

proposed rule change.)

4 15 U.S.C. 78q-1.

5 15 U.S.C. 78q–1(b)(3)(F).

6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

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

OCC’s current by-laws relating to the

unavailability or inaccuracy of current

index values for stock index options and

for flexibly structured index options

denominated in foreign currencies (‘‘FX

flex index options’’) were instituted as

a result of a 1994 incident when a

delayed National Association of

Securities Dealers Automated Quote

System opening made it unclear when

or if OCC would be able to obtain

current index values for options valued

at the opening.3 OCC is now authorized

to delay exercise settlements until either

(i) the required current index value

becomes available or (ii) OCC fixes an

exercise settlement amount, which may

be based on the closing index value for

the preceding trading day.

These provisions were intended to

apply where the required index value,

whether opening or closing, was

unavailable to OCC either because the

market did not open on the relevant

date or because the reporting authority

had problems calculating or

disseminating the required value.

However, these provisions can be

misinterpreted as authorizing OCC to fix

an exercise settlement amount for index

options valued at the close when the

market closes early. OCC interprets the

current language of the by-laws as

referring to the actual close of trading,

not the scheduled close. There is no

reliable basis for estimating what the

current index value would have been if

the market had remained open until the

normal closing time. Even when OCC

has no alternative but to fix an exercise

settlement amount, the by-laws

expressly authorize it to base that

amount on the reported index level at

the close of trading on the last preceding

trading day for which a closing index

level was reported.

OCC believes that it is inappropriate

for OCC to fix an exercise settlement

amount if normal trading takes place

with opening and closing current index

values for a given day so long as it is

possible to obtain the required value

from the designated reporting authority.

The proposed rule change eliminates

any implications that the provisions

give OCC the authority to fix an exercise

settlement amount in such

circumstances.

OCC believes that the proposed rule

change is consistent with Section 17A of

the Act and the rules and regulations

promulgated thereunder because it will

facilitate the prompt and accurate

settlement of transactions in index

options and in FX flex index options.4

B. Self-Regulatory Organization’s

Statement on Burden on Competition

OCC 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

Written comments relating to the

proposed rule change have not been

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(F) 5 requires that

the rules of a clearing agency be

designed to promote the prompt and

accurate clearance and settlement of

securities transactions. The Commission

believes that OCC’s proposed rule

change is consistent with OCC’s

obligations under Section 17A(b)(3)(F)

because the proposal will clarify the

application of OCC’s by-laws relating to

the unavailability or inaccuracy of

current index values where there is an

early closing of the primary market for

the securities underlying an index

option valued at the close. The

Commission believes that this

clarification should add more certainty

to the settlement of index options.

Therefore, this proposed rule change

should facilitate the prompt and

accurate clearance and settlement of

securities transactions.

The Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of filing because

accelerated approval will allow OCC to

clarify its by-laws relating to exercise

settlement procedures in an expedient

fashion.

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 will also be available for

inspection and copying at the principal

office of OCC. All submissions should

refer to the File No. SR–OCC–98–02 and

should be submitted by August 24,

1998.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

OCC–98–02) be and hereby is approved

on an accelerated basis.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Jonathan G. Katz,

Secretary.

[FR Doc. 98–19570 Filed 7–22–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40222; File No. SR–Phlx–

98–19]

Self-Regulatory Organizations;

Philadelphia Stock Exchange, Inc.;

Order Approving Proposed Rule

Change Relating to When a Security is

Considered Open For Trading

July 16, 1998.

I. Introduction

On May 1, 1998, the Philadelphia

Stock Exchange, Inc. (‘‘Phlx’’ or

‘‘Exchange’’) filed with 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 to

clarify when a security is considered

open for trading. On May 26, 1998, the

Phlx filed Amendment No. 1 to the