Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Notices 20781

3 15 U.S.C. 78f and 78k (1988).

4 17 CFR 240.11b–1 (1994).

5See 1994 Approval Order, supra note 1, for a

description of Amex Rule 170 procedures and the

Commission’s rationale for approving those

procedures on a pilot basis. The discussion in the

aforementioned order is incorporated by reference

into this order.

6See supra note 1.

7 In the 1994 Approval Order, supra note 1, the

Commission requested that the Amex submit the

report in January 1995. Pursuant to the three-month

extension of the pilot being approved herein, the

Commission now requests that the Amex submit the

report in May 1995.

8See Securities Exchange Act Release No.

(August 25, 1993), 58 FR 45926 (August 31, 1993).

9See Securities Exchange Act Release No. 31797

(January 29, 1993), 58 FR 7277 (February 5, 1993).

10 15 U.S.C. 78s(b)(2) (1988).

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

3See Securities Exchange Act Release No. 35628

(April 19, 1995).

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, DC 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–

11 and should be submitted by May 18,

1995.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, with

sections 6(b)(5) and 11 of the Act.3 The

Commission believes the proposal is

consistent with the Section 6(b)(5)

requirements that the rules of an

exchange be designed to promote just

and equitable principles of trade,

remove impediments to and perfect the

mechanism of a free and open market,

and, in general, protect investors and

the public interest. The Commission

also believes that the proposal is

consistent with section 11(b) of the Act

and Rule 11b–1 thereunder,4 which

allow exchanges to promulgate rules

relating to specialists in order to

maintain fair and orderly markets.5

Under the current pilot program, a

specialist may liquidate a position by

selling stock on a direct minus tick or

by purchasing stock on a direct plus tick

only if such transactions are reasonably

necessary for the maintenance of a fair

and orderly market and only if the

specialist has obtained the prior

approval of a Floor Official.

Liquidations on a zero minus or a zero

plus tick, which previously required

Floor Official approval, can be effected

under the pilot procedures without a

Floor Official’s approval, but continue

to be subject to the restriction that they

be effected only when reasonably

necessary to maintain a fair and orderly

market. In addition, the specialist must

maintain a fair and orderly market

during the liquidation.

After the liquidation, a specialist is

required to re-enter the market on the

opposite side of the market from the

liquidating transaction to offset any

imbalances between supply and

demand. During any period of volatile

or unusual market conditions resulting

in a significant price movement in a

specialist’s specialty stock, the

specialist’s re-entry into the market

must reflect, at a minimum, his or her

usual level of dealer participation in the

specialty stock. In addition, during such

periods of volatile market conditions or

unusual price movements, re-entry into

the market following a series of

transactions must reflect a significant

level of dealer participation.

In our 1994 Approval Order,6 the

Commission asked the Amex to submit

a report setting forth the criteria

developed by the Exchange to determine

whether liquidating transactions

effected by specialists pursuant to the

pilot were necessary and appropriate in

connection with fair and orderly

markets. The Commission also asked the

Amex to provide information regarding

the Exchange’s monitoring of

liquidating transactions effected by

specialists on any destabilizing tick. In

addition, the Commission asked the

Amex to provide the following

information in its report: (1) A review of

all liquidating transactions effected by

specialists on any destabilizing ticks; (2)

a review of liquidating transactions by

specialists to determine that the

required Floor Official approval was

obtained where necessary; and (3) a

review of liquidating transactions in

light of dealer participation levels and

re-entry into the market in terms of

timing and support.7

During the three month extension of

the pilot, the Amex will prepare the

report discussed above and submit the

data to the Commission for its

consideration of whether the pilot

program should be granted permanent

approval. The Commission expects the

Amex to continue to monitor

compliance with the pilot program

procedures during the three month

extension and report any noncompliance with the rule and the action

the Amex has taken as a result of such

non-compliance.

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 thereof.

This will permit the pilot program to

continue on an uninterrupted basis. In

addition, the Exchange proposes to

continue using the identical procedures

contained in the pilot program. The rule

change that implemented the pilot

program was published in the Federal

Register for the full comment period,8

and no comments were received.

Furthermore, the Commission approved

a similar rule change for the NYSE also

without receiving comments on the

proposal.9

It Therefore is Ordered, pursuant to

Section 19(b)(2) of the Act,10 that the

proposed rule change is approved for a

three month period ending on July 21,

1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–10331 Filed 4–26–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35636; File No. SR–PSE–

95–03]

Self-Regulatory Organizations; Pacific

Stock Exchange, Inc.; Order Granting

Approval to Proposed Rule Change to

Establish New Listing Fees Applicable

to Small Corporate Offering

Registration (‘‘SCOR’’) Securities

April 21, 1995.

On February 13, 1995, the Pacific

Stock Exchange, Inc. (‘‘PSE’’ or

‘‘Exchange’’) submitted to 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

establish new fees applicable to Small

Corporate Offering Registration

(‘‘SCOR’’) securities.

The proposed rule change was

published for comment in Securities

Exchange Act Release No. 35395

(February 17, 1995), 60 FR 10626

(February 27, 1995). No comments were

received on the proposal.

The Commission has approved the

PSE’s proposal to create a separate

listing tier for SCOR securities on a

three year pilot basis.3 The Exchange is

adopting the following fee schedule for

listing securities pursuant to the SCOR

program:
20782 Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Notices

4 15 U.S.C. 78f(b) (1988).

5 15 U.S.C. 78f(b)(4) (1988).

6The PSE’s listing fees for Tier I and Tier II

securities were last amended in Securities Exchange

Act Release No. 34276 (June 29, 1994), 59 FR 34892

(July 7, 1994). The original listing fee for Tier I and

Tier II securities is $20,000. The original listing fee

for Tier I and Tier II preferred stock (secondary

issuers) is $2,500.

7There is no conversion fee for preferred stock

because the original listing fee for Tier I and Tier

II preferred stock is lower than the original SCOR

listing fee for preferred stock.

8 15 U.S.C. 78s(b)(2) (1988).

9 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

3Letters from Joan Conley, Corporate Secretary,

NASD, to Mark Barracca, Branch Chief, SEC (Mar.

3, 1995) and Thomas R. Gira, Assistant General

Counsel, Nasdaq, to Mark Barracca, Branch Chief,

SEC (Mar. 22, 1995). The NASD amended its filing

to provide, most significantly that: (1) To be eligible

to qualify for a higher position limit, the underlying

security must satisfy the initial listing standards for

standardized options trading; (2) to continue to be

eligible to qualify for a higher position limit, the

underlying security must satisfy the maintenance

criteria for standardized options trading; and (3) if

the position limit is lowered, members will not be

required to liquidate their position but will be

prohibited from increasing it if it is above the new

limit.

4Under NASD rules, exercise limits placed on

options trading equal the limits imposed for options

positions. NASD Manual, Rules of Fair Practice,

Art. III, Sec. 33(b)(3)(A), (CCH) ¶ 2183.

5A conventional option is any option contract not

issued, or subject to issuance, by The Options

Clearing Corporation. NASD Manual, Rules of Fair

Practice, Art. III, Sec. 33(b)(1)(GG), (CCH) ¶ 2183.

6Position limits impose a ceiling on the number

of option contracts in each class on the same side

of the market (i.e., aggregating long calls and short

puts and long puts and short calls) that can be held

or written by an investor or group of investors

acting in concert. Exercise limits restrict the

number of options contracts which an investor or

group of investors acting in concert can exercise

within five consecutive business days. Under NASD

Rules, exercise limits correspond to position limits,

such that investors in options classes on the same

side of the market are allowed to exercise, during

any five consecutive business days, only the

number of options contracts set forth as the

SCOR Marketplace—Listing Fee

Schedule

Original Listings

The Original Listing fees are fixed fees

and issues are not charged by the

number of shares being listed.

Common Stock: $5,000.00

Preferred Stock: 5,000.00

Processing Fee

*Per Original Listing Application:

$500.00

Name change: 250.00

Change in Par Value: 250.00

*This is a fixed charge for the review

of potential listings and is nonrefundable. Issues approved for listing

may have this charge credited toward

the original listing fee.

Substitution of Original Listing

Per Application: Fixed charge of

$750.00

Substitution may occur as a result of

a change in state of incorporation,

reincorporation under laws of same

state, a reverse stock split,

recapitalizations, or similar events.

Listing of Additional shares

Per Application: $.0025 per share

Minimum charge of $500.00

Maximum charge of $2,500.00

Maximum charge of $5,000.00 per

annum

Annual Maintenance Fee

For one issue: $1,000.00

For each additional issue: 500.00

Payable January of each year

following listing.

Conversion Fee

Conversion from the SCOR Market

place to Tiers I or II.

Common Stock $15,000.00

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, with the

requirements of Sections 6(b).4 In

particular, the Commission believes the

proposal is consistent with the Section

6(b)(4) requirements that the rules of an

exchange provide for the equitable

allocation of reasonable dues, fees, and

other charges among its members,

issuers, and other persons using the

Exchange’s facilities.5 The Commission

believes that the fee schedule for the

initial and continued listing of SCOR

securities is equitable because the fees

should not result in an excessive

allocation of PSE fees on its issuers as

opposed to members and other persons

using its facilities.

The Commission notes that, except for

the SCOR original listing fees, the fee

schedule for SCOR securities is

consistent with the Exchange’s fee

schedule for Tier I and Tier II

securities.6 The Commission believes

that it is reasonable for the Exchange to

impose a lesser initial listing fee for

common stock SCOR listings because

these issuers will be smaller companies

listing single classes of securities. The

Commission also believes that it is

reasonable for the Exchange to apply the

original listing fee for SCOR preferred

stock and common stock because it is

likely that the costs incurred by the

Exchange in processing the listing

applications for common and preferred

stock will be the same. Additionally, the

Commission believes that the

conversion fee for common stock that

moves from the SCOR list to the Tier I

or Tier II lists is reasonable because,

when added to the SCOR original listing

fee, SCOR issuers will have paid the

same amount for listing as those that

listed common stock on the PSE directly

under Tier I or Tier II.7

It is Therefore Ordered, pursuant to

Section 19(b)(2) of the Act,8 that the

proposed rule change (SR–PSE–95–03)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–10330 Filed 4–26–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35634; File No. SR–NASD–

94–54]

Self-Regulatory Organizations;

National Association of Securities

Dealers, Inc.; Order Granting Approval

and Notice of Filing and Order

Granting Accelerated Approval of

Amendments No. 1 and 2 of Proposed

Rule Change Relating to Position and

Exercise Limits for Equity Options

Overlying Equity Securities Not

Subject to Standardized Options

Trading

April 20, 1995.

I. Introduction

On October 12, 1994, 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 (‘‘Act’’)1 and Rule

19b–4 thereunder.2 On March 3 and 22,

1995, and NASD submitted

amendments to the proposal.3 The

NASD proposes to amend its Rules of

Fair Practice to allow, under certain

circumstances, members to increase the

applicable position and exercise limits 4

for conventional options 5 overlying

those equity securities that are not

subject to standardized options trading.6