Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24945

13Under the PHLX’s minor rule plan, the

Exchange may impose a fine not to exceed $2,500

for violations of Advices in lieu of commencing a

disciplinary proceeding. In any action taken under

the minor rule plan, the PHLX must serve the

person against whom a fine is imposed with a

written statement setting forth (1) the Advice(s)

alleged to have been violated; (2) the act or

omission constituting each violation; (3) the fine

imposed for each violation; and (4) the date by

which the determination becomes final and the fine

becomes due and payable to the Exchange, or when

the determination must be contested. Any person

against whom a fine is imposed pursuant to the

minor rule plan may contest the Exchange’s

determination by filing an answer with the

Exchange department taking the action, when the

matter will be referred to the Exchange’s BCC for

their consideration.

14For example, the Exchange’s Market

Surveillance Department may request information

in connection with a particular trade or trades or

a customer complaint about the handling of an

order.

15 15 U.S.C. 78s(b)(2) (1982).

16 17 CFR 200.30–3(a)(12) (1994).

revised F–8 prompt compliance

requirement to matters involving

equities, equity options, index options,

and FCOs, and to extend the prompt

compliance requirement to information

requests made by the Exchange in

connection with any regulatory inquiry,

investigation, or examination in order to

expedite the Exchange’s investigations

and to provide consistent treatment for

all Exchange requests for information. In

addition, the Commission believes that

including Advice F–8 in the Exchange’s

minor rule plan will enable the PHLX to

impose immediate sanctions for failures

to respond to Exchange requests for

information, thereby encouraging timely

compliance with the provisions of

Advice F–8.13 Moreover, the

Commission believes that it is

appropriate to include Advice F–8 in

the Exchange’s minor rule plan because

failures to respond to Exchange requests

for information are objective in nature

and are easily verifiable, and thus lend

themselves to the use of expedited

proceedings.

The Commission believes it is

reasonable for the PHLX to require

members to provide information within

two business days for Examinations

Department requests, and within 10

business days for all other Exchange

requests for information. In this regard,

the Commission notes that

Examinations Department requests will

be made in connection with books and

records which members must maintain

on an ongoing basis and which should

be readily available. In contrast, other

information requests made by the

Exchange may involve events which

occurred in the past and for which

information may not be readily

available.14

The Commission believes that it is

reasonable for the PHLX to amend

Advice F–8 to reduce the fine for a first

violation of the Advice from $500 to

$200, and to provide that each

additional request for information not

furnished within the allotted time

period may be considered as a separate

occurrence for purposes of the Advice’s

fine schedule. The Commission believes

that this provision should help to deter

delays in compliance with Exchange

requests for information and result in

appropriate discipline, which should

further ensure the protection of

investors and the public interest.

The Commission finds good cause for

approving Amendment No. 1 to the

proposed rule change prior to the

thirtieth day after the date of

publication of notice of filing thereof in

the Federal Register in order to make

the treatment of equities under Advice

F–8 consistent with the treatment of

equity options, index options, and

FCOs. The Commission notes that the

portion of the proposal applicable to

equity options, index options, and FCOs

was subject to the full notice and

comment period and that no comments

were received on that portion of the

proposal. Since Amendment No. 1

makes the treatment of equities under

Advice F–8 consistent with the

treatment of options, Amendment No. 1

raises no new regulatory issues.

Accordingly, the Commission believes it

is consistent with Sections 6(b)(5) and

19(b)(2) of the Act to approve

Amendment No. 1 on an accelerated

basis.

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

1 to the proposed rule change. 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.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,15 that the

proposed rule change (File No. SR–

PHLX–94–61) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.16

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11510 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35678; International Series

Release No. 809; File No. SR–Phlx–95–20]

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

Italian Lira

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 Italian lira. 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

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. The Phlx has prepared

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

and (C) below, of the most significant

aspects of such statements.
24946 Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices

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).

2See BIS Central Bank 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

Italian lira. See Exchange Act Release No. 34925,

supra note. 1.

5 Id.

6 Id.

7Based on an exchange rate of 1,709.4 Italian lira/

U.S. dollars on April 5, 1995, as published in the

Wall Street Journal, this would correspond to an

opening position for an Italian lira customized FCO

transaction (i.e., 200 contracts) valued at

approximately $5,850,000.

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 Italian lira (and will not

be able to list regular FCOs on the lira pursuant to

this proposal), no quote spread parameters for the

lira are specified in Rule 1014(c).

9Specifically, the Exchange is proposing a

minimum fractional change of $0. (00000)01 for

Italian lira customized FCOs. 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.

(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

Italian lira to the list of approved

currencies on which customized FCOs

may be listed and traded pursuant to

Exchange Rule 1069. Thus, there would

be no continuously quoted series of

Italian lira 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 Italian lira

to the list of approved underlying

foreign currencies.

The Exchange represents that the

Italian lira accounts for a significant

portion of the inter-bank foreign

exchange market turnover. According to

the Bank for International Settlements

(‘‘BIS’’), the Italian lira represents the

ninth most active interbank currency

traded against the U.S. dollar,

accounting for 2.4% or more of interbank trading.2 Moreover, over 87% of

the activity in the lira is against either

the U.S. dollar (58%) or the German

Mark (29%).3 The Italian lira is not

pegged to a rate of exchange vis a vis the

U.S. dollar. Further, the United States

has substantial trade relations with

Italy.

The Exchange represents that the

initial and maintenance customer

margin levels for the Italian lira will

initially be set at 4%, which would

cover 98.58% 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 FCOs

between the Italian lira and any other

approved foreign currency. Currency

pairs between the Italian lira and the

Australian dollar and between the

Italian lira and the Canadian dollar have

exhibited a correlation or 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

lira would be placed in Tier I (4%

margin required) because their

correlations have exceeded .25.6

The contract size for the Italian lira

would be 50,000,000 lira.7 The

premiums will be quoted in

thousandths of a cent per unit for U.S.

dollar/Italian lira contracts and the

minimum premium would be

$0.(00000) 01 per unit which equals

$5.00. Exchange Rule 1069(j)(1)(A) will

be added to provide that, because the

Exchange does not have continuously

quoted FCOs on the Italian lira, there

will be no quote spread parameters

applicable to customized FCOs on the

Italian lira.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 Italian lira.

Similarly, Rule 1034 will be amended to

provide that the Exchange will

determine the minimum fractional

change applicable to Italian lira

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, 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
Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24947

10 17 CFR 200.30–3(a)(12) (1994).

1Form U–4 is used by the various securities SROs

as part of their registration and oversight of member

organization personnel. Specifically, Form U–4 is

the uniform form for licensing salespersons within

the states and various SROs. An individual

applying for registration must file Form U–4 with

the Central Registration Depository (‘‘CRD’’)

operated by the National Association of Securities

Dealers (‘‘NASD’’). Thereafter, the registered person

is obligated to update this information as changes

occur. The CRD is a computer data base containing

current registration information as well as the

regulatory and enforcement actions taken against

securities industry personnel for access by the

Commission, state regulators and certain SROs.

2Form U–5 contains information relating to the

circumstances surrounding the termination of an

applicant’s prior employment, and must be

completed and submitted to the NASD, and other

SROs requiring such a submission under their

Continued

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

Phlx. All submissions should refer to

File No. SR–Phlx–95–20 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. 95–11511 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

Requests Under Review by Office of

Management and Budget

Agency Clearance Officer: Michael E.

Bartell, (202) 942–8800

Upon written request copies available

from: Securities and Exchange

Commission, Office of Filings and

Information Services, 450 Fifth Street,

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

Extension:

Regulation 12B—File No. 270–70

Form 8–A—File No. 270–54

Notice is hereby given that pursuant

to the Paperwork Reduction Act of 1980

(44 U.S.C. 3501 et seq.), the Securities

and Exchange Commission

(Commission) has submitted to the

Office of Management and Budget

requests for approval of extension on

previously approved collections for the

following:

Regulation 12B sets forth instructions

and procedures to be followed by

persons filing registration statements

under Section 12 of the Exchange Act or

reports under Section 13 or 15(d) of the

Act. This regulation has been designated

as imposing an administrative burden of

one hour, because the actual regulatory

burdens are established by the

individual forms that refer to the items

in the regulation.

Form 8–A elicits material information

concerning securities to be registered on

national securities exchange or other

publicly-traded securities in order that

investors may make informed and

knowledgeable investment decisions. It

is estimated that Form 8–A is filed by

1,940 respondents at an estimated 7.5

burden hours per response for a total

annual burden of 14,550 hours.

Direct general comments to the

Clearance Officer for the Securities and

Exchange Commission at the address

below. Direct any comments concerning

the accuracy of the estimated average

burden hours for compliance with the

Commission rules and forms to Michael

E. Bartell, Associate Executive Director,

Office of Information Technology,

Securities and Exchange Commission,

450 Fifth Street, N.W., Washington, D.C.

20549 and the Clearance Officer for the

Securities and Exchange Commission,

Office of Management and Budget,

Project numbers 3235–0062 (Regulation

12B) and 3235–0056 (Form 8–A), Room

3208, New Executive Office Building,

Washington, D.C. 20503.

Dated: May 1, 1995.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11445 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35667; File No. SR–CHX–

95–06]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

The Chicago Stock Exchange,

Incorporated Relating to Article V, Rule

3, Which Pertains to the Registration

and Fingerprinting of Floor Employees,

and the Imposition of an Initial

Registration Fee on Clerks

May 3, 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 March 1, 1995, the

Chicago Stock Exchange, Incorporated

(‘‘CHX’’ 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 self-regulatory

organization (‘‘SRO’’). 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 Exchange proposes to add

interpretation and policies .10, .02

and.03 under Rule 3 of Article V of the

Exchange’s Rules and to add a new

clerk’s fee.

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

self-regulatory organization 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.

The self-regulatory organization 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

Statutory Basis for, the Proposed Rule

Change

1. Purpose

Rule 3 of Article V of the Exchange’s

rules states that employees of members

or member organizations may not be

admitted to the Floor unless such

employees are registered with and

approved by the Exchange. The

registration process currently requires

completion of an application card and

data sheet that call for disclosure of very

limited information. Currently, only

Floor employees that accept orders from

the public and applicants for

membership are required to submit a

completed Uniform Application for

Securities Industry Registration or

Transfer (‘‘Form U–4’’) to the

Exchange.1

Under the proposal, all Floor

employees will be required to submit a

Form U–4 in order to become registered.

The Form U–4 requires detailed

disclosure of background information,

including information regarding

employment and disciplinary history,

and is the standard industry form

submitted to SROs for individuals

required to be registered (including

securities salespersons and traders). The

Form U–4 also requires this information

to be updated whenever the information

submitted becomes inaccurate or

incomplete. The Exchange also has

imposed a requirement that a member

(or member organization) shall promptly

give written notice of termination of a

Floor employee to the Exchange on the

Uniform Termination Notice for

Securities Industry Registration (Form

U–5) 2 and concurrently provide a copy