62914 Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Notices

3 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

A second reason why the Exchange

has chosen to institute this policy is to

ensure that member organizations that

choose to employ a joint account for

their Exchange trading, rather than

using individual market-maker

accounts, are not disadvantaged in

participating in trades vis-a-vis those

member organizations that do employ

individual market-maker accounts.

Some member organizations choose to

have their various market-makers trade

in a joint account so that the member

organization’s positions can be more

easily monitored and managed. Under

the current equity policy regarding joint

accounts, however, these member

organizations would only be able to be

represented by one joint account

participant in a trading crowd at one

time. On the other hand, the member

organization using the individual

market-maker accounts would be able to

be represented by each market-maker’s

individual account. The proposed

change would eliminate the

disadvantage currently suffered by

member organizations using joint

account structures.

In addition to the regulatory circular,

one sentence will be deleted and

another added from Rule 8.16(a)(ii).

This rule currently prohibits more than

one joint account participant from using

the joint account for trading on RAES in

a particular option class unless the

Exchange’s Market Performance

Committee (‘‘MPC’’) provides an

exemption. However, because any joint

account participant trading in-person

would be entitled to participate on the

same side of a trade with his fellow joint

account participants in the same trading

crowd as a result of the proposed

regulatory circular, the Exchange

believes it is appropriate to no longer

require an exemption from the MPC to

have more than one participant use the

joint account for trading on RAES. In

any event, to participate on RAES, a

member must be present in the trading

crowd.

The Exchange represents that by

eliminating a distinction that currently

exists between member organizations

that manage their positions differently,

the proposed rule change furthers the

objectives of Section 6(b) of the Act in

general and Section 6(b)(5) in particular

by providing rules that perfect the

mechanisms of a free and open market

and that protect investors and the public

interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes the proposed

rule change will impose no

inappropriate 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 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 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, 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 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 CBOE. All submissions

should refer to File No. SR–CBOE–95–

65 and should be submitted by

December 28, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.3

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–29779 Filed 12–6–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36538; International Series

Release No. 894; File No. SR–Amex–95–44]

Self-Regulatory Organizations; Notice

of Filing of a Proposed Rule Change by

the American Stock Exchange, Inc.,

Relating to the Listing and Trading of

Equity Linked Term Notes on Non-U.S.

Securities

November 30, 1995.

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 November

9, 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 Exchange.

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 amend

Section 107B of the Amex Company

Guide to provide alternate criteria for

the listing and trading of certain hybrid

debt securities whose value is linked to

the performance of a non-U.S. company

which is traded in the U.S. market as

sponsored American Depositary Shares,

ordinary shares or otherwise. The text of

the proposed rule change is available at

the Office of the Secretary, the

Exchange, 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

Exchange included statements

concerning the purpose of and basis for

the proposed rule change. The test of

these statements may be examined at

the places specified in Item IV below.

The Exchange has prepared summaries,

set forth in Section (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

On May 20, 1993 and December 13,

1993, the Commission approved

amendments to Section 107 of the Amex

Company Guide to provide for the

listing and trading of Equity Linked
Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Notices 62915

3See Securities Exchange Act Release Nos. 32345

(May 20, 1993), 58 FR 30833 (May 27, 1993), and

33328 (December 13, 1993), 58 FR 66041 (December

20, 1993).

4See Securities Exchange Act Release No. 34549

(August 18, 1994), 59 FR 43873 (August 25, 1994). 5 17 CFR 200.30–3(a)(12).

Term Notes (‘‘ELNs’’).3 ELNs are

intermediate term (two to seven years),

non-convertible, hybrid debt

instruments, the value of which is

linked to the performance of a highly

capitalized, actively traded U.S. and

non-U.S. companies.

In August 1994, the Exchange

amended Section 107B of the Amex

Company Guide to permit the listing

and trading of ELNs linked to actively

traded non-U.S. companies which are

traded in the U.S. market as sponsored

American Depositary Shares, ordinary

shares or otherwise (‘‘non-U.S.

securities’’), provided that (1) the

Exchange has in place a comprehensive

surveillance sharing agreement with the

primary exchange on which the nonU.S. security trades; or (2) the trading

volume of the non-U.S. security in the

U.S. market represents at least 50% of

the world-wide trading volume in the

non-U.S. security (‘‘50% Test’’).4

The Exchange now proposes to amend

its ELNs on non-U.S. security listing

criteria by (1) revising the manner in

which the applicable percentage of

world-wide trading volume is calculated

under the 50% Test; and (2) adding new

criteria for the listing of ELNs on nonU.S. securities, based on the daily

trading volume in the U.S. Specifically,

the Exchange proposes to revise the

50% Test so that trading in non-U.S.

securities and other related non-U.S.

securities in any market with which the

Exchange has in place a comprehensive/

effective surveillance sharing agreement

will be added to U.S. market volume for

the purpose of determining whether the

50% Test has been met. Currently, only

trading in the U.S. market counts

toward satisfying the 50% Test.

In addition, the Exchange proposes to

add an alternate set of criteria under

which the Exchange may list ELNs on

non-U.S. securities (‘‘Daily Trading

Volume Standard’’). The new standard

will permit the Exchange to list ELNs on

non-U.S. securities if all of the following

conditions are satisfied: (1) the

combined world-wide trading volume

for the non-U.S. security in the U.S.

market or in any market with which the

Exchange has in place a comprehensive

surveillance sharing agreement

represents (on a share equivalent basis)

at least 20% of the combined worldwide trading volume in the non-U.S.

security and other related non-U.S.

securities over the six month period

preceding the date of selection of the

non-U.S. security for an ELN listing; (2)

the average daily trading volume for the

non-U.S. security in the U.S. market

over the six months preceding the date

of selection of the non-U.S. security for

an ELN listing is at least 100,000 shares;

and (3) the trading volume for the nonU.S. security in the U.S. market is at

least 60,000 shares per day for a

majority of the trading days for the six

months preceding the date of selection

of the non-U.S. security for an ELN

listing.

The Exchange believes that the

alternate criteria is appropriate in that it

limits the listing of ELNs linked to nonU.S. securities to those that have both a

significant amount of U.S. market

trading volume and a substantial

volume of trading covered by a

comprehensive/effective surveillance

sharing agreement, which gives the

Exchange the ability to inquire into

potential trading problems or

irregularities in a market place that

serves as a significant price discovery

market for the non-U.S. security. Thus,

the proposed requirement of observable,

high trading volumes, should ameliorate

any regulatory concern regarding

investor protection and, at the same

time, allow investors to trade ELNs

linked to more non-U.S. securities.

The Exchange also believes that the

proposed amendment will benefit

investors by expanding the number of

non-U.S. securities that may be linked

to ELNs, thereby providing investors

with enhanced investment flexibility.

The Exchange believes that it is

appropriate to now include additional

non-U.S. securities within the existing

regulatory framework because of the

significant level of U.S. investor interest

in both U.S. and non-U.S. highly

capitalized and actively traded reporting

companies.

The Exchange believes that 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, to promote just and

equitable principles of change, 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

The Exchange does not believe that

the proposed rule change will impose

any 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

proposal. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street NW., 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

the Commission’s Public Reference

Section, 450 Fifth Street NW.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

CBOE. All submissions should refer to

SR–Amex–95–44 and should be

submitted by December 28, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–29780 Filed 12–6–95; 8:45 am]

BILLING CODE 8010–01–M