32970 Federal Register / Vol. 66, No. 118 / Tuesday, June 19, 2001 / Notices

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

2 17 CFR 240.19b–4.

3 see NADS Rule 3020, Chicago Stock Exchange

Rule 6, NYSE Rule 319, American Stock Exchange

Rule 330, Philadelphia Stock Exchange Rule 705,

and Pacific Exchange rule 2.25(a).

exempting certain transactions of Aetna,

V A B, and Future Accounts of Aetna

from the provisions of Sections 2(a)(32),

22(c) and 27(i)(2)(A) of the Act and Rule

22c–1 thereunder to the extent

necessary to permit Aetna to recapture,

under specified circumstances, certain

bonuses applied to purchase payments

made under the V A B Contracts

described in the application for the

Existing Order (‘‘Prior Application’’)

(Investment Company Act Release No.

24629, dated Aug. 20, 2000, File No.

812–12098).

9. But for the depositor and issuing

separate account, the Account B

Contracts are identical to the V A B

Contracts described in the Prior

Application. Future Contracts will be

substantially similar in all material

respects to the V A B Contracts covered

in the Existing Order.

10. Additional Applicants will

recapture bonuses under the Contracts

under the same circumstances covered

by the Existing Order. The Existing

Order grants exemptions from Sections

2(a)(32), 22(c) and 27(i)(2)(A) of the Act

and Rule 22c–1 thereunder to the extent

necessary to permit Aetna to recapture

bonuses in the following three

instances: (i) Aetna will recapture all

bonuses if the Contract owner returns

the Contract for a refund during the 10-

day (or longer, if required) ‘‘free look’’

period; (ii) the amount of any account

value, step-up value or roll-up value

death benefit will not include any bonus

credited to a Contract owner’s account

after or within 12 months of the date of

death; and (iii) Aetna will recapture the

bonus according to the forfeiture

schedules described in the Prior

Application if the Contract owner

withdraws Year 1 Payment(s) during the

first seven account years.

Applicant’s Legal Analysis

1. Section 6(c) of the Act authorizes

the Commission to exempt any person,

security or transaction, or any class of

classes of persons, securities or

transactions from the provisions of the

Act and the rules promulgated

thereunder if and to the extent that such

exemption is necessary or appropriate

in the public interest and consistent

with the protection of investors and the

purposes fairly intended by the policy

and provisions of the Act. Applicants

request that the Commission, pursuant

to Section 6(c) of the Act, grant

exemptions summarized above with

respect to Account B and any Future

Account that the Life Companies have

established or may establish in the

future, in connection with the issuance

of Contracts that are substantially

similar in all material respects to the VA

B Contracts described in the Prior

Application and that are underwritten

or distributed by DSI, WSS, or Affiliated

Broker-Dealers. Applicants believe that

the requested exemptions are

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act.

2. Applicants submit that the

recapture of bonuses by Additional

Applicants will not raise concerns

under sections 2(a)(32), 22(c) and

27(i)(2)(A) of the Act, and Rule 22c–1

thereunder for the same reasons given in

support of the Existing Order. The

bonuses will be recapturable under the

same circumstances and on the same

basis as described in the Prior

Application.

Conclusion

Applicants submit, based on the

grounds summarized above, that their

exemptive request meets the standards

set out in Section 6(c) of the Act,

namely, that the exemptions requested

are necessary or appropriate in the

public interest and consistent with the

protection of investors and the purposes

fairly intended by the policy and

provisions of the Act, and that,

therefore, the Commission should grant

the requested order.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–15362 Filed 6–18–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44401; File No. SR–CBOE–

2001–23]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated Relating to Brokers’

Blanket Bonds

June 8, 2001.

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

Securities Exchange Act of 1934

(‘‘Exchange Act’’),1 and Rule 19b–4

thereunder,2 notice is hereby given that

on May 14, 2001, the Chicago Board

Options Exchange, Incorporated

(‘‘CBOE’’ 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 CBOE. 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 CBOE proposes to revise CBOE

Rule 9.22, ‘‘Brokers’ Blanket Bonds,’’ to

make its rule governing brokers’ blanket

bonds consistent with the rules of other

self-regulatory organizations (‘‘SROs’’).

The text of the proposed rule change

is available at the Office of the

Secretary, CBOE 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

CBOE 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 CBOE 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

CBOE Rule 9.22 requires members

approved to transact business with the

public and every clearing member

organization to carry brokers’ blanket

bonds covering officers and employees

of the organization in such form and in

such amounts as the Exchange may

require. This rule imposes requirements

on CBOE members that differ from those

required of members of other SRO’s.3

The purpose of the proposed rule

change is to amend CBOE Rule 9.22 to

make its requirements similar to those

of other SROs. By harmonizing CBOE

Rule 9.22 with the rules of other SROs,

CBOE intends to simplify compliance

with the requirements of CBOE rule 9.22

for its members who are also members

of other SROs.

Specifically, CBOE proposes to amend

CBOE Rule 9.22, Interpretation and

Policy .01(a)(2), to require minimum

Federal Register / Vol. 66, No. 118 / Tuesday, June 19, 2001 / Notices 32971

4 17 CFR 240.15c3–1.

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

6 15 U.S.C. 78f(b)(5).

7 15 U.S.C. 78s(b)(3)(A).

8 17 CFR 240.19b–4(f)(6).

9 15 U.S.C. 78s(b)(3)(A).

10 17 CFR 240.19b–4(f)(6).

11 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See May 30, 2001 letter from Edward S. Knight,

Executive Vice President and General Counsel,

Nasdaq, to Katherine A. England, Assistant

Director, Division of Market Regulation

(‘‘Division’’), SEC and attachments (‘‘Amendment

No. 1’’).

insurance coverage of not less than

$25,000 for all insuring agreements

required under Interpretation and Policy

.01(a). Proposed Interpretation and

Policy .01(a)(3) will specify that

members maintain required coverage for

Fidelity, On Premises, In Transit,

Misplacement, and Forgery and

Alternation insuring agreements of not

less than 120% of its required net

capital under Exchange Act Rule 15c3–

1 4 up to $600,000. Minimum coverage

for required net capital in excess of

$600,000 shall be determined by

reference to the following table:

Net capital requirement

under SEC rule 15c3–1

Minimum

coverage

$600,000–1,000,000 ....... $750,000

1,000,001–2,000,000 ...... 1,000,000

2,000,001–3,000,000 ...... 1,500,000

3,000,001–4,000,000 ...... 2,000,000

4,000,001–5,000,000 ...... 3,000,000

6,000,001–12,000,000 .... 4,000,000

12,000,001–and above ... 5,000,000

Proposed Interpretation and Policy

.01(a)(4) will require members to

maintain fraudulent trading coverage of

not less than the greater of $25,000 or

50% of the coverage required in

paragraph (a)(3), up to $500,000.

Proposed Interpretation and Policy

.01(a)(5) will require members to

maintain securities forgery coverage of

not less than the greater of $25,000 or

25% of the coverage required in

paragraph (a)(3), up to $250,000.

In addition, proposed Interpretation

and Policy .01(b)(3) will clarify that

members covered under the brokers’

blanket bond of an affiliate must deduct

from their net capital the amount of the

deductible in excess of the maximum

permissible amount described in

Exchange Act Rule 15c3–1.

Finally, the Exchange is making a

number of non-substantive word

changes to the rule to make its meaning

more clear.

2. Statutory Basis

The CBOE believes that the proposed

rule change is consistent with Section

6(b) of the Exchange Act 5 in general and

furthers the objectives of Section

6(b)(5)6 in particular in that it is

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

facilitating transactions in securities,

and to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

CBOE does not believe that the

proposed rule change will impose any

burden on competition not necessary or

appropriate in furtherance of the

purposes of the Exchange Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

The Exchange has neither solicited

nor received written comments with

respect to the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has been

filed as a ‘‘non-controversial’’ rule

change pursuant to Section 19(b)(3)(A)

of the Exchange Act 7 and subparagraph

(f)(6) of Rule 19b–4 thereunder.8

Because the foregoing rule change: (i)

Does not significantly affect the

protection of investors or the public

interest; (ii) does not impose any

significant burden on competition; and

(iii) by its terms, does not become

operative for 30 days after the date of

the filing, or such shorter time as the

Commission may designate if consistent

with the protection of investors and the

public interest; and the Exchange has

given the Commission written notice of

its intent to file the proposed rule

change at least five business days prior

to the filing date of the proposed rule

change, it has become effective pursuant

to Section 19(b)(3)(A) of the Exchange

Act 9 and Rule 19b–4(f)(6) thereunder.10

At any time within 60 days of the

filing of the 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 Exchange 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, NW.,

Washington, DC 20549–0609. 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. Copies of such filing will also

be available for inspection and copying

at the principal office of CBOE. All

submissions should refer to file number

SR–CBOE–2001–23 and should be

submitted by July 10, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–15399 Filed 6–18–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44411; File No. SR–NASD–

2001–36]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change and

Amendment Nos. 1 and 2 by the

National Association of Securities

Dealers, Inc. To Eliminate the Service

Desk Feature of the Automated

Confirmation Transaction Service

June 12, 2001.

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

Securities Exchange Act of 1934

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

notice is hereby given that on May 16,

2001, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its subsidiary,

The Nasdaq Stock Market, Inc.

(‘‘Nasdaq’’), filed with the Securities

and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I, II,

and III below, which Items have been

prepared by Nasdaq. Nasdaq amended

the proposal on May 31, 2001,3 which

amendment completely replaced and

superseded the original proposal. On