Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Notices 62911

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

6 15 U.S.C. 78s(b)(2) (1988).

7 17 CFR 200.30–3(a)(12) (1993).

1See Letter from William Floyd-Jones, Assistant

General Counsel, Amex, to Stephen M. Youhn, SEC,

dated Sept. 26, 1995. The amendment renumbers

two rule provisions that were misstated in the

original filing.

2See Securities Exchange Act Release No. 30768

(June 2, 1992). A Registered Trader under Rule 958

is also referred to as a Registered Options Trader

(‘‘ROT’’).

3Moreover, due to the derivative pricing of

currency warrants, the Exchange believes it is

Continued

futures and forward contracts also have

widened.

III. Discussion

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, the

requirements of Section 6(b)(5) 5 that the

rules of an exchange be designed to

promote just and equitable principles of

trade, prevent fraudulent and

manipulative acts, and, in general,

protect investors and the public interest

by providing a more efficient and

competitive market for foreign currency

options.

The Commission believes that the

recent significant rise in the value of the

yen in relation to the U.S. dollar

justifies amending the present

applicable quote spread parameters. As

the Japanese yen spot value (in relation

to the U.S. dollar) has increased, the

U.S. dollar value of each yen option

contract likewise has increased.

However, the quote spread parameters

have not previously been adjusted to

account for this movement. Setting

Japanese yen option quote spread

parameters as proposed by the Phlx

should continue to facilitate tightly

quoted markets without impairing Phlx

market makers’ ability to provide market

depth and liquidity. In addition, the

new quote spread parameters should

allow the Phlx and Phlx Japanese yen

option market makers to compete more

effectively with similar over-thecounter-based products.

Finally, the Commission notes that

under Phlx Rule 1014, ‘‘Obligations and

Restrictions Applicable to Specialists

and Registered Options Traders,’’

Japanese yen market makers are

required to maintain a fair and orderly

market and are not permitted to enter

into transactions or make bids or offers

that are inconsistent with such

obligations. Accordingly, the

Commission expects the Phlx to monitor

trading in Japanese yen options affected

by the proposal to ensure that there is

adequate market activity in those series

and to ensure that market makers are

meeting their obligations to maintain

fair and orderly markets.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,6 that the

proposed rule change (SR–Phlx–95–47)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–29776 Filed 12–6–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36535; File No. SR–AMEX–

95–38]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change and

Amendment No. 1 to Proposed Rule

Change by the American Stock

Exchange, Inc. Relating to

Transactions in Currency Warrants by

Registered Options Traders

November 30, 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 September 22,

1995, the American Stock Exchange,

Inc. (‘‘Amex’’ 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 selfregulatory organization. On September

26, 1995, the Amex filed Amendment

No. 1 (‘‘Amendment No. 1’’) to the

proposal.1 The Commission is

publishing this notice to solicit

comments on the proposed rule change,

as amended, from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Amex proposes to amend

Commentary .12 to Amex Rule 111

(Restrictions on Registered Traders).

Commentary .14 to Rule 114 (Registered

Equity Market Makers) and Commentary

.10 to Rule 958 (Options Transactions of

Registered Traders) to provide that

proprietary transactions on the Floor in

currency warrants shall be governed by,

and affected in accordance with, Rule

958. The text of the proposed rule

change is available at the Office of the

Secretary, Amex 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

Amex 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 Amex 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

The Amex proposes to amend

Commentary .12 to Rule 111

(Restrictions on Registered Traders),

Commentary .14 to Rule 114 (Registered

Equity Market Makers) and Commentary

.10 to Rule 958 (Options Transactions of

Registered Traders) to provide that

proprietary transactions on the Amex

Floor in currency warrants, shall be

governed by, and effected in accordance

with, Rule 958.

In 1992, the Exchange amended its

rules to permit regular members to

register as a Registered Trader under

Rule 958 to engage in supplemental

market making activity in stock index

warrants and certain other non-options

derivative products.2 The Exchange

enacted these changes to conform its

rules to those of other markets, and to

provide additional liquidity to the

market for the Exchange’s Portfolio

Depositary Receipts and LOR

SuperUnits. Due to the limited purpose

of the 1992 rule changes, the Exchange

did not seek at that time to extend this

treatment to the trading of listed

currency warrants by ROTs.

At present, currency warrants are

traded on the Floor by Registered Equity

Market Makers (‘‘REMMs’’) under the

Exchange’s equity trading rules,

pursuant to the provisions of Rule 114

(which includes applicable provisions

of Rule 111). Under the proposed rule

changes, regular members wishing to

engage in supplemental market making

activity in currency warrants may

register as Registered Traders under

Rule 958, and would trade for their own

account in such securities pursuant to

the provisions of that Rule.

In contrast to REMMs trading

pursuant to Rules 111 and 114, Rule 958

imposes continuous affirmative market

making obligations upon Registered

Traders.3 In recognition of this, such
62912 Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Notices

inappropriate to apply the stabilization

requirements applicable to REMMs to market maker

transactions in currency warrants.

4 17 CFR 200.30–3(a)(12) (1994).

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

2 17 CFR 240.19b–4 (1991).

3The Commission also received a separate, yet

identical proposed rule change relating to member

subscriber deposits for Nasdaq Level 2/3 service

and equipment which became effective upon

receipt by the Commission pursuant to Section

19(b)(3)(A) of the Act and subparagraph (e) of Rule

19b–4 thereunder because it established or changed

a due, fee or other charge imposed by the NASD on

its members. Securities Exchange Act Release No.

36396 (October 20, 1995), 60 FR 54896.

4Securities Exchange Act Release No. 36397

(October 20, 1995), 60 FR 54897.

5See supra note 3.

6Section 15A(b)(5) requires the Commission to

determine that a registered national securities

association’s rules provide for the equitable

allocation of reasonable dues, fees, and other

charges among members and issuers and other

persons using any facility or system which the

association operates or controls.

market makers are designated as

Specialists on the Exchange for all

purposes under the Act (See Rule 958,

Commentary .01), and are entitled to

good faith market maker margin with

respect to transactions on the Floor in

these assigned securities. The Exchange

anticipates that application of Rule 958

requirements to supplemental Exchange

market makers will encourage

additional competing market maker

activity in currency warrants, thereby

enhancing liquidity in such securities,

and eliminate an anomalous regulatory

disparity between currency warrant and

stock index warrant trading.

2. Statutory Basis

The Exchange believes the proposed

rule change is consistent with Section

6(b) of the Act in general and furthers

the objectives of Section 6(b)(5) in

particular in that it is designed to

prevent fraudulent and manipulative

acts and practices and to promote just

and equitable principles of trade, and is

not designed to permit unfair

discrimination between customers,

issuers, brokers and dealers.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes the proposed

rule change will impose no burden on

competition.

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 on the

proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the publication of

this notice in the Federal Register or

within such other period (i) as the

Commission may designate up to 90

days of such date if it finds such longer

period to be appropriate and publishers

its reasons for so finding or (ii) as to

which the self-regulatory organization

consents, the Commission will:

(A) By order approve the 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 at

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. 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-95–38

and should be submitted by December

28, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–29777 Filed 12–6–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36536; File No. SR–NASD–

95–48]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to Non-Member

Subscriber Deposits for Nasdaq Level

2/3 Service and Equipment

November 30, 1995.

I. Introduction

On October 11, 1995, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) 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 revise the nonmember subscriber deposit

requirements contained in Part VIII,

Paragraph G.1. and 2. of Schedule D to

the NASD By-Laws.3 The proposed rule

change reflects increased charges for the

provision of telecommunications

services and equipment and broadens

the language to encompass the various

fees associated with these services and

equipment.

Notice of the proposed rule change

appeared in the Federal Register on

October 26, 1995.4 No comment letters

were received on the proposal. The

Commission is approving the proposed

rule change.

II. Description of Proposal

The proposed rule change reflects

increased charges for the provision of

telecommunications services underlying

Nasdaq Workstation II service, and

clarifies the various component

functions encompassed within the

circuit installation fee so that the true

nature of the charge is made clear to

new subscribers. These requirements

would pertain only to new subscribers

or existing subscribers that have

defaulted on the payment of their

charges.

This proposed rule change applies to

subscribers who are not NASD

members. A companion filing, which

applies the proposed rule change to

member subscribers, was filed

separately for immediate effectiveness.5

The NASD represents that the

subscriber deposit requirement helps

hedge against uncollected balances

owed by firms for Level 2/3 or Nasdaq

Workstation equipment. The subscriber

deposit in part represents actual

expenses incurred by The Nasdaq Stock

Market, Inc. as obligations to

telecommunications providers.

III. Discussion

The Commission believes that the

proposed rule change is consistent with

the Act and the rules and regulations

promulgated thereunder. Specifically,

the Commission believes that approval

of the proposed rule change is

consistent with sections 15A(b)(5),6