Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Notices 11157

25See supra, note 17 and accompanying text.

26 If that person subsequently buys a different

options principal membership, the decision to ‘‘optout’’ would apply to that seat as well.

27See supra, note 26.

28However, in the event that such an individual

dies during the period after June 10, 1993 but before

the effective date of the changes, his beneficiaries

would receive a Gratuity Fund benefit under

existing requirements.

is, they would be deemed to have met

it, even if they never were active for a

two-year period. The grandfathering

provision would include those lessors

who are nominee-lessors on seats

beneficially owned by an organization.

A person grandfathered could lose his

right to participate in the Gratuity Fund

based on prior active status if there

should be any five-year period in which

he is not a lessor, lessee, nominee or

seat owner.25 As discussed above, for all

non-grandfathered individuals, the

‘‘active’’ requirement must be satisfied

after June 10, 1993.

Individuals who currently own

options principal memberships would

have a one-time opportunity to ‘‘opt-in’’

or ‘‘opt-out’’ of the Gratuity Fund. A

decision to ‘‘opt-out’’ would be

irrevocable for the rest of the person’s

life (unless the person subsequently

buys a regular membership).26 Options

principal members who ‘‘opt-in’’ would

be grandfathered with respect to the

‘‘active’’ requirement. Current lessees

(both regular and options principal

membership) would also have the right

to ‘‘opt-out’’ of the Gratuity Fund, but

such decisions would be effective only

for the duration of their current lease,

and new leases would require lessee

participation in the Gratuity Fund.

Lease renewals by the same two parties

would not be considered to be new

leases. Any new options principal

member seat owner (other than an

individual owner who previously chose

to ‘‘opt-out’’ irrevocably as discussed

above) 27 would be covered by the new

rules.

With respect to the ‘‘phase-in’’

requirement, all those who are

Participants in the Gratuity Fund on the

date these proposals become effective,

and all those who become Participants

by virtue of these amendments (e.g.,

lessees and options principal members),

would be deemed to be fully ‘‘phasedin,’’ regardless of how long such persons

have been Participants or Exchange

members. All who become Participants

thereafter would be subject to the

‘‘phase-in’’ requirements. If a lessee or

options principal member ‘‘opted out’’

of the Gratuity Fund, as described

above, and on some other basis later

becomes a Participant, he would at that

time be subject to the ‘‘phase-in.’’

While the foregoing grandfather

provisions are appropriate in most

cases, there was a concern that some

people might attempt to rush through

the ‘‘loopholes’’ referred to earlier by

becoming lessors prior to the date these

proposals finally become effective.

Accordingly, notwithstanding the above

provisions, an individual who was not

a regular member or a regular member

lessor as of the date of the Board

meeting at which these proposals were

approved by the Exchange Board of

Governors (June 10, 1993), and

subsequently became a regular member

lessor after June 10, 1993, would not be

grandfathered with respect to the twoyear active requirement.28 Similarly, an

individual who was not a regular or

options principal member or a regular or

options principal lessor as of June 10,

1993, and subsequently became an

options principal lessor after June 10,

1993, would not be allowed to ‘‘opt-in’’

to the Gratuity Fund. Such individuals

would be covered by the new rules.

Most of the above described changes

in membership structure would expand

the choices available to persons and

organizations in structuring their

relationships. However, the proposed

changes would eliminate the existing ab-c agreement, and certain individuals

and organizations may find that

disruptive. Accordingly, a member

organization would be permitted to

continue to utilize its existing a-b-c

agreements for so long as the respective

individual members remain on their

seats.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b) of the Act

in general and furthers the objectives of

Sections 6(b)(3), 6(b)(4) and 6(b)(5) in

particular in that it assures a fair

representation of Exchange members in

the administration of its affairs,

provides for the equitable allocation of

reasonable dues, fees and other charges

among members, and is designed to

prevent fraudulent and manipulative

acts and practices.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The proposed rule change will impose

no 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 were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the publication of

this notice in the Federal Register or

within such other 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 self-regulatory organization

consents, the Commission will:

(A) By order approve the 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, NW.,

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

Section, 450 Fifth Street, NW.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Amex. All submissions

should refer to File No. SR–Amex–95–

08 and should be submitted by March

22, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–4994 Filed 2–28–95; 8:45 am]

BILLING CODE 8010–01–M