3886 Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Notices

1The signatories to the Plan, i.e., the National

Association of Securities Dealers, Inc. (‘‘NASD’’),

and the Chicago Stock Exchange, Inc. (‘‘Chx’’)

(previously, the Midwest Stock Exchange Inc.),

Philadelphia Stock Exchange, Inc. (‘‘Phlx’’), and the

Boston Stock Exchange, Inc. (‘‘BSE’’), are the

‘‘Participants.’’ The BSE, however, joined the Plan

as a ‘‘Limited Participant,’’ and reports quotation

information and transaction reports only in Nasdaq/

National Market (previously referred to as ‘‘Nasdaq/

NMS’’) securities listed on the BSE. Originally, the

American Stock Exchange, Inc., was a Participant

to the Plan, but did not trade securities pursuant to

the Plan, and withdrew from participation in the

Plan in August 1994.

2The Commission notes that Section 12(f) of the

Act describes the circumstances under which an

exchange may trade by security that is not listed on

the exchange, i.e., by extending unlisted trading

privileges (‘‘UTP’’) to the security. Section 12(f) was

amended on October 22, 1994, 15 U.S.C. 12(f)

(1991) (as amended 1994). Prior to the amendment,

Section 12(f) required exchanges to apply to the

Commission before extending UTP to any security.

In order to approve an exchange UTP application

for a registered security not listed on any exchange

(‘‘OTC/UTP’’), Section 12(f) required the

Commission to determine that various criteria had

been met concerning fair and orderly markets, the

protection of investors, and certain national market

initiatives. These requirements worked in

conjunction with the Plan currently under review.

The recent amendment to Section 12(f), among

other matters, removes the application requirement

and permits OTC/UTP only pursuant to a

Commission order or rule. The order or rule is to

be issued or promulgated under essentially the

same standards that previously applied to

Commission review of UTP applications. The

present orders serves to meet this Section 12(f)

requirement.

3See Securities Exchange Act Release No. 28146

(June 26, 1990), 55 FR 27917 (‘‘1990 Approval

Order’’). For a detailed discussion of history of UTP

in OTC securities, and the events that led to the

present plan and pilot program, see 1994 Extension

Order, infra note 4.

4See Securities Exchange Act Release No. 34371

(July 13, 1994), 59 FR 37103 (‘‘1994 Extension

Order’’).

5 In the present filing with the Commission, the

NASD states that the parties have made substantial

progress in their negotiations but have not

concluded them and that, in order to conclude the

negotiations and provide sufficient time for

approval by their governing boards and the

Commission, the parties believe that an additional

seven months will be required. See letter from T.

Grant Callery, Vice President and General Counsel,

NASD, to Jonathan G. Katz, Secretary, Commission,

dated January 9, 1995.

6The Commission notes that the present filing

does not make clear that the two exemptions were

previously scheduled to expire on July 12, 1995.

Nevertheless, the filing requests an ‘‘identical

extension’’ of the relevant exemptions along with

their request that the effectiveness of the Plan be

extended through August 12, 1995. Accordingly,

this order extends the effectiveness of the relevant

exemptions from July 12, 1995, through August 12,

1995. See id.

these proceedings but may help the

Board and/or parties in their

deliberations as to the proper

boundaries of the issues to be

considered. During this prehearing

conference, such persons may make oral

limited appearance statements, on

Wednesday morning, February 1, 1995,

from 9:00 a.m. to 11:00 a.m. If more

persons than can be accommodated

during this period wish to make

statements, and to the extent that time

may be available after the conclusion of

the substantive portions of the

conference, the Board may elect to hear

additional statements. Written

statements, or requests to make oral

limited appearance statements, should

be submitted to the Secretary, U.S.

Nuclear Regulatory Commission,

Washington D.C. 20555, Attn: Docketing

and Service Branch. A copy of such

statement or request should be served

on the Chairman of this Atomic Safety

and Licensing Board, T3 F23, U.S.

Nuclear Regulatory Commission,

Washington D.C. 20555.

Documents relating to this proceeding

are available for public inspection at the

Commission’s Public Document Room,

2120 L St. N.W., Washington D.C.

20555.

For the Atomic Safety and Licensing

Board.

Charles Bechnoefer,

Chairman Administrative Judge.

[FR Doc. 95–1271 Filed 1–18–95; 8:45 am]

BILLING CODE 7590–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–35221; File No. S7–24–89]

Joint Industry Plan; Order Approving

Amendment No. 2 to Reporting Plan

for Nasdaq/National Market Securities

Traded on an Exchange on an Unlisted

or Listed Basis, Submitted by the

National Association of Securities

Dealers, Inc., and the Boston, Chicago

and Philadelphia Stock Exchanges

January 11, 1995.

On January 9, 1995, the National

Association of Securities Dealers, Inc.,

and the Boston, Chicago, and

Philadelphia Stock Exchanges

(collectively, ‘‘Participants’’) 1 submitted

to the Commission Amendment No. 2 to

a joint transaction reporting plan

(‘‘Plan’’) for Nasdaq/National Market

securities traded on an exchange on an

unlisted or listed basis.2 The

Commission is approving the proposed

amendment to the Plan and trading

pursuant to the Plan on a temporary

basis to expire on August 12, 1995. The

Commission also is soliciting comment,

among other matters, on whether

exchanges should be permitted to

extend UTP to more than 100 OTC

securities at any given time.

I. Extension of the Pilot Program

The Commission originally approved

the Plan on June 26, 1990.3 The Plan

governs the collection, consolidation

and dissemination of quotation and

transaction information for Nasdaq/

National Market securities listed on an

exchange or traded on an exchange

pursuant to UTP. The Commission

originally approved trading pursuant to

the Plan on a one-year pilot basis, with

the pilot period to commence when

transaction reporting pursuant to the

Plan commenced. Thereafter, the

Commission extended the effectiveness

of the Plan through January 12, 1995, as

requested by the Participants in

Amendment No. 1 to the Plan.4

Accordingly, the pilot period

commenced on July 12, 1993, and most

recently was scheduled to expire on

January 12, 1995.

As originally approved by the

Commission, the Plan required the

Participants to complete their

negotiations regarding revenue sharing

during the one-year pilot period. The

Participants, however, have not yet

come to an agreement concerning

revenue sharing for transactions effected

pursuant to the Plan. Proposed

Amendment No. 2 to the Plan extends

this negotiation period for an additional

seven months.5 The Commission

believes it is appropriate to extend the

effectiveness of the pilot program,

particularly in light of the reported

recent progress made by the Participants

concerning financial matters. At the

same time, however, the Commission

expects the Participants to conclude

those negotiations before January 31,

1995, and expects the Participants to

submit to the Commission a proposed

amendment to the Plan concerning

finances before February 15, 1995.

II. Extension of Certain Exemptive

Relief

In conjunction with the Plan, on a

temporary basis scheduled to expire on

July 12, 1995, the Commission granted

an exemption from Rule 11Ac1–2 under

the Act regarding the calculated best bid

and offer (‘‘BBO’’), and granted the BSE

an exemption from the provision of Rule

11Aa3–1 under the Act that requires

transaction reporting plans to include

market identifiers for transaction reports

and last sale data. At the request of the

Participants, this order extends these

exemptions through August 12, 1995,

provided that the Plan continues in

effect through that date pursuant to a

Commission order.6 The Commission

continues to believe that exemptive

relief from these provisions is

appropriate through August 12, 1995,

but at that time, the Commission will
Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Notices 3887

7 In the 1994 Extension Order, the Commission

requested views on numerous issues presented by

the pilot program, and requested that the

Participants submit reports to the Commission on

those issues by September 30, 1994. See Supra note

4. The Commission received a report from the

Philadelphia Stock Exchange as an attachment to its

proposed rule change requesting an extension of the

Phlx’s pilot procedures for OTC/UTP. See letter

from William W. Uchimoto, General Counsel, Phlx,

to Elizabeth Prout, Division of Market Regulation,

Commission, dated December 21, 1994 (attachment

to File No. SR–PHLX–94–70). The other

Participants have not complied with the

Commission order, and must respond to the

Commission request immediately.

8Prior to 1985, the Commission generally did not

permit exchanges to extend UTP to OTC securities.

In 1985, the Commission determined that it would

be appropriate to permit exchanges, on a temporary

basis and subject to certain limitations, to extend

UTP up to a maximum of 25 OTC securities. These

limitations included the requirement that the NASD

and exchanges seeking to extend UTP to OTC

securities enter into a plan for consolidated

transaction and quotation dissemination. See

Securities Exchange Act Release No. 22412

(September 16, 1985), 50 FR 38640. In 1986, the

Midwest Stock Exchange (currently the Chicago

Stock Exchange, or ‘‘Chx’’) entered into an interim

plan which subsequently was superseded by the

Plan currently operating on a pilot basis. In 1990,

the Commission expanded the maximum number of

eligible securities to 100. See 1990 Approval Order,

supra note 3.

9See letter from George T. Simon, Foley &

Lardner, to Katherine England, Assistant Director,

Commission, dated January 9, 1995. This letter also

concludes that, when the Plan is finally approved,

all NNM stocks would be eligible for trading.

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

2 17 CFR 240.19b–4 (1993).

3 In Amendment No. 1, the CBOE adds the

requirement that for a short sale in a Nasdaq/NM

security involved in an M&A to qualify as an

exempt hedge transaction pursuant to the current

proposal, the M&A must be publicly announced.

See letter from Michael L. Meyer, Schiff Hardin &

Waite, to Francois Mazur, Attorney, Division of

Market Regulation (‘‘Division’’), Commission, dated

September 29, 1994 (‘‘CBOE Amendment No. 1’’).

4 In Amendment No. 1, the PSE adds the

requirement that for a short sale in a Nasdag/NM

Continued

review the exemptive relief in light of

any comments received.

III. Outstanding Issues

In the 1994 Extension Order, the

Commission noted several areas of

unresolved issues concerning the Plan.7

These issues include, among other

matters, whether the Commission

should continue to limit the number of

OTC securities that may be traded on

exchanges pursuant to UTP. Currently,

exchanges may extend UTP up to a

maximum of 100 securities.8 To date,

the Commission has solicited comment

on this and other matters and has not

received evidence that expanding the

number of securities would have a

negative effect on the markets or the

protection of investors. Moreover, the

Commission recently received a letter

from the Chx requesting that the

Commission expand the number of

eligible securities from 100 to 500.9

Accordingly, the Commission solicits

comment specifically on whether it is

appropriate to permit exchanges to

extend UTP to a maximum of 500 OTC

securities for an interim period, and

whether all NNM securities should be

available for extensions of UTP if the

Commission determines that permanent

approval of the Plan is appropriate. The

Commission preliminarily believes that,

after consideration of comments

received, it may be appropriate to

expand the number of eligible securities

prior to the Commission’s review of

other matters associated with the Plan

in August 1995.

The Commission also notes other

areas for commenters to address: (1)

Whether the BBO calculation for the

relevant securities should be based on

price and time only (as currently is the

case) or if the calculation should

include size of the quoted bid or offer;

and (2) whether there is a need for an

intermarket linkage for order routing

and execution and an accompanying

trade-through rule.

IV. Solicitation of Comment

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 plan

amendment that are filed with the

Commission, and all written

communications relating to the

proposed plan amendment 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

Room. All submissions should refer to

File No. S7–24–89 and should be

submitted by February 9, 1995.

VI. Conclusion

The Commission finds that proposed

Amendment No. 2 to the Plan to extend

the financial negotiation period for an

additional seven months is appropriate

and in furtherance of Section 11A of the

Act. The Commission also finds that

extensions of the exemptive relief

requested through August 12, 1995, and

described above, also is consistent with

the Act and the rules thereunder.

Specifically, the Commission believes

that these extensions should serve to

provide the Participants with more time

to conclude their financial negotiations

and to evaluate the effects of the pilot

program and report their findings to the

Commission. This, in turn, should

further the objects of the Act in general,

and specifically those set forth in

Section 12(f) and 11A of the Act and in

Rules 11Aa3–1 and 11Aa3–2

thereunder.

It is therefore ordered, pursuant to

Sections 12(f) and 11A of the Act and

paragraph (c)(2) of Rule 11Aa3–2

thereunder, that Amendment No. 2 to

the Joint Transaction Reporting Plan for

Nasdaq/National Market securities

traded on an exchange on an unlisted or

listed basis is hereby approved, and

trading pursuant to the Plan is hereby

approved on a temporary basis through

August 12, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority, 17 CFR 200.30–3(a)(29).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–1230 Filed 1–18–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35211; File Nos. SR–Amex–

94–12, SR–CBOE–94–27; and SR–PSE–94–

23]

Self-Regulatory Organizations; Order

Approving Proposed Rule Changes by

the American Stock Exchange, Inc., the

Chicago Board Option Exchange, Inc.,

and Pacific Stock Exchange, Inc.;

Relating to Short Sales of Nasdaq/NM

Securities of Companies Involved in a

Merger or Acquisition

January 10, 1995.

I. Introduction

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

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

on October 14, 1994, the American

Stock Exchange, Inc. (‘‘Amex’’), on

August 4, 1994, the Chicago board

Options Exchange, Inc. (‘‘CBOE’’), and

on August 8, 1994, the Pacific Stock

Exchange, Inc. (‘‘PSE’’), respectively

(each individually referred to herein as

an ‘‘Exchange’’ and two or more

collectively referred to as ‘‘Exchange’’),

submitted to the Securities and

Exchange Commission (‘‘Commission’’)

proposed rule changes relating to

extending the market maker exemption

from the NASD’s short sale rule to

Nasdaq National Market (‘‘Nasdaq/NM’’

or ‘‘NM’’) securities involved in merger

and acquisition (‘‘NSA’’) transactions.

On September 29, 1994, the CBOE filed

Amendment No. 1 to its proposal,3 and

on October 14, 1994, the PSE filed

Amendment No. 1 to its proposal.4 The