Federal Register / Vol. 60, No. 241 / Friday, December 15, 1995 / Notices 64465

13 15 U.S.C. 78s(b)(2) (1988).

14 17 CFR 200.30–3(a)(12) (1994).

1The Commission notes that several of the

Exchanges’ rules, such as its order guarantee and

preferencing rules, distinguish between public and

professional agency orders. Thus, the proposed rule

change would affect certain orders in these contexts

as well. See, e.g., CSE Rules 11.9(c) and (u).

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,13 that the

portion of the proposed rule change

(SR–Amex–95–35) amending Amex

Rules 904 and 905 is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30529 Filed 12–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36569; File No. SR–SCE–

95–10]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

Cincinnati Stock Exchange, Inc.,

Relating to the Definitions of Public

and Professional Agency Orders

December 11, 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 November 29,

1995, the Cincinnati Stock Exchange,

Inc. (‘‘CSE’’ 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. 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 CSE hereby proposes to amend

the definition of public agency order

and professional agency order as

follows, with added language in italics

and deletions in brackets:

Rule 11.9 National Securities Trading

System

(a) No Change.

(1) through (6) No Change.

(7) The term ‘‘public agency order’’

means any order for an account covered

by Section 11(a)(1)(E) of the Securities

Exchange Act of 1934 [the account of a

person other than a member, an

Approved Dealer, or a person who could

become an Approved Dealer by

complying with this Rule with respect

to his use of the System], which is

represented, as agent, by a User.

(8) The term ‘‘professional agency

order’’ means an order entered by a User

as agent for the account of a brokerdealer or for an account which is not

covered by Section 11(a)(1)(E) of the

Securities Exchange Act of 1934.

(b) through (u) No Change.

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

CSE Rule 11.9(l) grants ‘‘public

agency’’ orders a special time priority

on the CSE, i.e., public agency orders

have priority over professional agency

orders at the same price. The intent of

the proposed rule change is to ensure

that the privilege of this super-priority

is granted only to those for whom it was

originally intended by clarifying the

distinction between ‘‘public agency’’

and professional agency’’ order flow.1

Paragraph (1)(E) in Section 11(a) of

the Act, which addresses certain issues

related to trading by Exchange members,

segregates for special treatment ‘‘any

transaction for the account of a natural

person, the estate of a natural person, or

a trust created by a natural person for

himself or another natural person.’’ The

New York Stock Exchange (‘‘NYSE’’)

utilizes this definition of public agency

business in NYSE Rule 80A, its rule for

limiting trading during significant

market declines. Specifically, NYSE

Rule 80A(e)(iii) defines an ‘‘account of

an individual investor’’ as ‘‘an account

covered by Section 11(a)(1)(E) of the

Securities Exchange Act of 1934.’’ The

CSE is proposing to incorporate Section

11(a)(1)(E) into its definition of public

and professional agency orders. The

Exchange believes that it is appropriate

to articulate definitions of agency

business that are consistent with the

general understanding and practice of

the securities industry.

2. Statutory Basis

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 promote just and equitable

principles of trade and to protect

investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The CSE 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

The CSE informed the other

Intermarket Trading System participants

of its intent to file this rule proposal,

and no comments were received.

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 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 forgoing.

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 rule

change that are filed with the

Commission, and all written

communications relating to the

purposed rule change between the

Commission and any person, other than

those that maybe 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 NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the CSE. All submissions
64466 Federal Register / Vol. 60, No. 241 / Friday, December 15, 1995 / Notices

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

2The Commission has modified parts of these

statements.

3Securities Exchange Act Release Nos. 27984

(May 2, 1990), 55 FR 19400 and 33852 (April 13,

1994), 59 FR 17634.

4Pursuant to NSCC’s shareholders agreement, one

director represents each of NSCC’s shareholders

(the New York Stock Exchange, the American Stock

Exchange, and the National Association of

Securities Dealers), one director represents

management, and the remaining directors are

selected from NSCC’s participants. Thus, the

additional director will be selected from NSCC’s

participants.

5The number of directors may be increased or

decreased at any time by amendment of the by-laws

by either a vote of the shareholders entitled to vote

for election of directors or by majority of the entire

board.

6 15 U.S.C. 78q–1 (1988). 7 15 U.S.C. 78q–1(b)(3)(C) (1988).

should refer to File No. SR–CSE–95–10

and should be submitted by January 4,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30530 Filed 12–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36570; File No. SR–NSCC–

95–14]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing and Order

Granting Accelerated Approval of a

Proposed Rule Change Amending

NSCC’s By-Laws to Provide for an

Additional Member of the Board of

Directors

December 11, 1995.

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

Securities Exchange Act of 1934 (the

‘‘Act’’),1 notice is hereby given that on

November 3, 1995, National Securities

Clearing Corporation (‘‘NSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I and II below, which items have

been prepared primarily by NSCC. The

Commission is publishing this notice

and order to solicit comments on the

proposed rule change from interested

persons and to grant accelerated

approval of the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change amends

Article II, Section 2.1 of NSCC’s by-laws

to allow for an additional member of its

board of directors.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NSCC 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. NSCC has prepared

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

and (C) below, of the most significant

aspects of such statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

When NSCC was originally formed,

the number of directors on its board was

sixteen. In order to provide a greater

representation by participants in the

management of NSCC, this number was

increase to seventeen in 1984, to

eighteen in 1989, and to nineteen in

1994.3 Since that time, NSCC has

continued to expand its list of

participants, and NSCC believes that it

is in its participants’ interest that the

number of directors again be increased.4

NSCC’s by-laws permit the number of

directors to be increased from time to

time.5 The proposed rule change

consists of an amendment to the by-laws

which increases the number of directors

on the board from nineteen to twenty.

The additional participant director will

further the opportunity for participants

to be represented on the board.

The proposed rule change is

consistent with Section 17A of the Act

in that it increases the opportunity for

NSCC’s participants to be involved in

the administration of NSCC’s affairs.6

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

NSCC does not believe that the

proposed rule change will have an

impact on or impose a 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 have been

solicited or received. NSCC will notify

the Commission of any written

comments received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(C) states that the

rules of a clearing agency must assure

fair representation of its shareholders

(or members) and participants in the

selection of its directors and

administration of its affairs.7 The

Commission believes that the proposed

increase in the number of directors on

the board is consistent with NSCC’s

obligations under Section 17A because

the result will be a board which better

reflects NSCC’s participants. As a result,

participants will be afforded additional

opportunities to raise, discuss, and help

resolve issues that affect them.

NSCC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing. The

Commission finds good cause for so

approving the proposed rule change

because it will give NSCC the

opportunity to have the additional

participant member elected prior to and

possibly participate in NSCC’s next

board meeting, which is scheduled for

December 14, 1995.

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, 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 N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the above-mentioned selfregulatory organization. All submissions

should refer to the file number SR–

NSCC–95–14 and should be submitted

January 5, 1996.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

NSCC–95–14) be and hereby is

approved.