Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24941

3See Securities Exchange Act Release No. 34249

(June 23, 1994), 59 FR 33565 (June 29, 1994) (order

approving File No. SR–PHLX–94–13). 4 17 CFR 200.30–3(a)(12) (1994).

1More specifically, customized FCOs provide

investors with the ability, within specified limits,

to trade FCOs with customized strike prices, crossrate FCOs on any two approved currencies, and

FCOs where the U.S. dollar is the underlying

currency. In addition, FCO participants may

express quotes for customized FCOs as a percentage

of the underlying currency, in addition to quoting

in terms of the base currency per unit of the

underlying currency. See Securities Exchange Act

Release No. 34925 (November 1, 1994), 59 FR 55720

(November 8, 1995) (‘‘Exchange Act Release No.

34925).

reinstatement of the dress code. The

PHLX notes that this waiver provision is

similar to a provision enacted recently

into PHLX Regulation 2, ‘‘Food, Liquids,

and Beverages,’’ regarding the ability of

the floor committee chairperson to

waive the general prohibition against

food and beverages on the Exchange’s

trading floors.3

Accordingly, the PHLX believes that

the proposal is consistent with Section

6(b) of the Act, in general, and, in

particular, with Section 6(b)(5), in that

it is designed to promote just and

equitable principles of trade by

maintaining a decorous atmosphere on

the Exchange’s trading floor.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The PHLX does not believe that the

proposed rule change will impose any

inappropriate 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 either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Because the foregoing rule change: (1)

does not significantly affect the

protection of investors or the public

interest; (2) does not impose any

significant burden on competition; (3)

was provided to the Commission for its

review at least five days prior to the

filing date; and (4) does not become

operative for 30 days after May 1, 1995,

it has become effective pursuant to

Section 19(b)(3)(A) of the Act and Rule

19b–4(e)(6) thereunder. In particular,

the Commission believes that the

proposal does not significantly affect the

protection of investors or the public

interest and does not impose any

significant burden on competition. 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.

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 at

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

above-mentioned self-regulatory

organization. All submissions should

refer to the file number in the caption

above and should be submitted by May

31, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11507 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35677; International Series

Release No. 808; File No. SR–Phlx–95–21]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.,

Relating to the Trading of Customized

Foreign Currency Options on the

Spanish Peseta

May 4, 1995.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on April 5, 1995, the

Philadelphia Stock Exchange, Inc.

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which Items have been

prepared by the Phlx. 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 Phlx, pursuant to Rule 19b–4 of

the Act, proposes to trade customized

foreign currency options (‘‘FCOs’’) on

the Spanish peseta. The text of the

proposed rule change is available at the

Office of the Secretary, the Phlx, and at

the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

Phlx included statements concerning

the purpose of and basis for the 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. The Phlx has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements.

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and the

Statutory Basis for, the Proposed Rule

Change

Currently the Phlx offers listed FCOs

on the British pound, French franc,

Swiss franc, Japanese yen, Canadian

dollar, Australian dollar, German mark

and European Currency Unit. Since

November 1994, the Exchange has

offered the ability to trade ‘‘customized’’

FCOs on all of these currencies.1 The

Exchange now proposes to add the

Spanish peseta to the list of approved

currencies on which customized FCO’s

may be listed and traded pursuant to

Exchange Rule 1069. Thus, there would

be no continuously quoted series of

Spanish peseta contracts. Rule

1069(a)(1) provides that customized

FCOs may be traded on any approved

underlying foreign currency pursuant to

Exchange Rule 1009, so the Exchange

proposes to amend Rule 1009 to add the

Spanish peseta to the list of approved

underlying foreign currencies.

The Exchange represents that the

Spanish peseta accounts for a significant

portion of the inter-bank foreign

exchange market turnover. According to

the Bank for International Settlements

(‘‘BIS’’), the Spanish peseta represents

the twelfth most active inter-bank

currency traded against the U.S. dollar,

accounting for 1.7% or more of inter-
24942 Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices

2See BIS Central Bank Survey of Foreign

Exchange Market Activity in April 1992 (March

1993).

3 Id.

4The Commission notes that the margin level

review currently applicable to customized FCOs on

the Exchange’s existing approved foreign currencies

will also apply to customized FCOs involving the

Spanish peseta. See Exchange Act Release No.

34925, Supra note 1.

5 Id.

6 Id.

7Based on an exchange rate of 126.6 Spanish

pesetas/U.S. dollars on April 5, 1995, as published

in the Wall Street Journal, this would correspond

to an opening position for a Spanish peseta

customized FCO transaction (i.e., 200 contracts)

valued at approximately $7,900,000.

8Pursuant to Exchange Rule 1069(j)(1), quote

spread parameters for customized strike FCOs on

approved foreign currencies are twice those

provided in Rule 1014(c). Because the Phlx does not

list regular FCOs on the Spanish peseta (and will

not be able to list regular FCOs on the peseta

pursuant to this proposal), no quote spread

parameters for the peseta are specified in Rule

1014(c).

9Specifically, the Exchange is proposing a

minimum fractional change of $0. (0000) 01 for

Spanish peseta customized FCO’s. Telephone

conversation between Michele Weisbaum,

Associate General Counsel, Phlx, and Brad Ritter,

Senior Counsel, Office of Market Supervision,

Division of Market Regulation, Commission, on

May 4, 1995. The Commission notes that the

Exchange may be required to submit a rule filing

pursuant to Section 19(b) of the Act prior to altering

this minimum fractional change level.

10 17 CFR 200.30–3(a)(12) (1994).

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

bank trading.2 Moreover, over 91% of

the activity in the Spanish peseta is

against either the U.S. dollar (64%) or

the German mark (27%).3 The Spanish

peseta is not pegged to a rate of

exchange vis a vis the U.S. dollar.

Further, the United States has

substantial trade relations with Spain.

The Exchange represents that the

initial and maintenance customer

margin levels for the Spanish peseta

will initially be set at 4%, which would

cover 96.54% of all seven day price

movements over the last two years.4

Pursuant to Rule 1069(a)(1)(B), users

would be able to trade customized

FCO’s between the Spanish peseta and

any other approved foreign currency.

Currency pairs between the Spanish

peseta and the Australian dollar and

between the Spanish peseta and the

Canadian dollar have exhibited a

correlation of less than .25 over the

preceding two year period and will be

placed in Tier II under Exchange Rule

722, thereby requiring 6% margin.5 All

other currency pairs involving the

peseta would be placed in Tier I (4%

margin required) because their

correlations have exceeded .25.6

The contract size for the Spanish

peseta would be 5,000,000 pesetas.7 The

premiums will be quoted in

thousandths of a cent per unit for U.S.

dollar/Spanish peseta contracts and the

minimum premium would be $0. (0000)

01 per unit which equals $5.00.

Exchange Rule 1069(j)(1)(A) will be

added to provide that, because the

Exchange does to have continuously

quoted FCOs on the Spanish peseta,

there will be no quote spread

parameters applicable to customized

FCOs on the Spanish peseta.8

Consistent with the Phlx’s other

approved foreign currencies, Exchange

Rule 1033 will be amended to specify

the bid and offer rules for customized

FCOs based on the Spanish peseta.

Similarly, Rule 1034 will be amended to

provide that the Exchange will

determine the minimum fractional

change applicable to Spanish peseta

customized FCOs.9

The Exchange believes that the

foregoing rule change proposal is

consistent with Section 6 of the Act, in

general, and with Section 6(b)(5), in

particular, in that it is designed to

promote just and equitable principles of

trade, foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, and

processing information, and facilitate

transactions in securities, remove

impediments to and perfect the

mechanism of a free and open market

and a national market system, as well as

to protect investors and the public

interest by offering investors the ability

to trade options on a major international

currency in an auction market

environment with all of the attendant

protections as an alternative to trading

it in the over-the-counter market.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx does not believe that the

proposed rule change will impose any

inappropriate 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 date of

publication of this notice in the Federal

Register or within such longer 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 such 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, 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 in

the Commission’s Public Reference

Section, 450 Fifth Street NW.,

Washington, DC. Copies of such filing

will also be available for inspection and

copying at the principal office of the

Phlx. All submissions should refer to

File No. SR–Phlx–95–21 and should be

submitted by May 31, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11508 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35672; File No. SR–NYSE–

95–16]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the New York Stock Exchange, Inc.,

Relating to the Options Market Maker

Exemption From the NASD Short Sale

Bid Test for Certain Merger and

Acquisition Securities

May 4, 1995.

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

Securities Exchange Act of 1934

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

April 21, 1995, the New York Stock

Exchange, Inc. (‘‘NYSE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II, and III below, which Items

have been prepared by the NYSE. The

Commission is publishing this notice to