Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices 65701

1See Securities Exchange Act Release Nos. 32345

(May 20, 1993) and 33328 (Dec. 13, 1993). 2 17 CFR 200.30–3(a)(12)(1994).

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

On May 20, 1993 and December 13,

1993, the SEC approved amendments to

Section 107 of the Amex Company

Guide (‘‘Section 107’’) to provide for the

listing and trading of ELNs.1 ELNs are

intermediate term, nonconvertible,

hybrid debt instruments, the value of

which is linked to the performance of a

highly capitalized, actively traded U.S.

common stock (‘‘linked security’’). In

order to list an ELNs product, Section

107B currently requires the linked

security to meet one of the following

criteria:

Market capitalizationAnnual trading

volume

$3 billion .............. and 2.5 million shares.

$1.5 billion ........... and 20 million shares.

$500 million ......... and 80 million shares.

Amex now proposes to amend Section

107(B) to provide for greater flexibility

in the listing criteria for ELNs. The

proposed rule change will lower the

trading volume requirements criteria

such that ELNs may be listed where the

linked security meets one of these

revised criteria:

Market

capitalization

Annual trading

volume

$3 billion .............. and 2.5 million shares.

$1.5 billion ........... and 10 million shares.

$500 million ......... and 15 million shares.

The Exchange believes this revision

strikes an appropriate balance between

the Exchange’s responsiveness to

innovations in the securities markets

and its need to ensure the protection of

investors and the maintenance of fair

and orderly markets. Moreover, the

Exchange believes that these changes

will not have an adverse impact on the

markets for the underlying linked

security in view of the requirements that

the linked security have a large

minimum market capitalization and a

fairly large trading volume over the

preceding twelve months. The Exchange

will continue to require that the issuer

have a minimum tangible net worth of

$150 million and that the total issue

price of the ELNs combined with all of

the issuers’s other listed ELNs shall not

be greater than 25% of the issuer’s

tangible net worth at the time of

issuance. The rule change will also

delete the current provision of the rule

that allows the Exchange to list ELNs

that do not meet these criteria if the

Division of Market Regulation of the

SEC concurs.

2. Statutory Basis

The basis under the Act for this

proposed rule change is the requirement

under Section 6(b)(5) that an exchange

have rules that are 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 regulating, clearing, settling,

processing information with respect to,

and facilitating transactions in

securities, to remove impediments to

and perfect the mechanism of a free and

open market and a national market

system, and, in general, to 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 burden on

competition that is not necessary or

appropriate in furtherance of the

purposes of the Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The Exchange has not solicited, and

does not intend to solicit, comments on

this proposed rule change. The

Exchange has not received any

unsolicited written comments from

members or other interested parties.

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, 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

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, NW.,

Washington, DC 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–

48 and should be submitted by January

10, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.2

Jonathan G. Katz,

Secretary.

[FR Doc. 95–30911 Filed 12–19–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36585; File No. SR–Amex–

95–49]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

American Stock Exchange, Inc.

Relating to the Exchange’s Gratuity

Fund

December 13, 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 December 7, 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 self-regulatory

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 Exchange is proposing to amend

the Admission of Members and Member

Organizations section of its rules to

require that all persons who are entitled

to make an election to either ‘‘opt-in’’ or

‘‘opt-out’’ of participation in the
65702 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices

1See Securities Exchange Act Release No. 35723

(May 16, 1995); 60 FR 27353 (May 23, 1995) (File

No. SR–AMEX–95–08).

2See Amex Constitution, Article IX, Section 23.

3New leases require lessee participation in the

Gratuity Fund.

4As of November 7, 1995, 452 individuals had

not completed the necessary paperwork or

indicated their election to the staff. Subsequently,

as a result of a concerted drive, an additional 216

individuals have indicated their election, leaving

236 individuals who have not done so as of

December 7, 1995.

5Because the pool of Participants is now variable,

the amount of each assessment is determined by

dividing $125,000 by the number of Participants.

6The Exchange will take the following steps to

notify affected persons of the deadline: A certified

letter will be sent to the latest address for each such

individual in the files of the Exchange’s

Membership Services Department, and if necessary

a second follow-up certified letter will be sent to

such address. In addition, unless an individual has

previously responded to such written notification,

if such person does business on the Floor of the

Exchange and can be found on the Floor of the

Exchange, an Exchange staff member will

personally speak to the individual to inform him or

her of the deadline. For all other individuals who

have not responded to a written notification, to the

extent the files of the Membership Services

Department contain a telephone number for such

individual, an Exchange staff member will place

one telephone call to such number to attempt to

orally notify the individual of the deadline.

7 15 U.S.C. 78f(b).

8 15 U.S.C. 78s(b)(3)(A).

9 17 CFR 240.19b–4(e)(6).

Gratuity Fund must make such an

election by March 29, 1996.

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

On May 16, 1995, the Commission

approved a number of changes to the

Amex Constitution and rules regarding

membership structure and

requirements, including significant

changes to the Gratuity Fund.1 The

changes with respect to the Gratuity

Fund increased the benefit to $125,000,

subject to a ‘‘phase-in’’ schedule for new

Participants, included an ‘‘active’’

requirement for participation, and

expanded the categories of individuals

who are included in the Gratuity Fund

to include both regular and options

principal member lessees, as well as

options principal members and some

lessors.

The changes also included a

grandfathering provision with respect to

the Gratuity Fund revisions.2 All regular

members and existing regular member

lessors were ‘‘grandfathered’’ with

respect to the ‘‘active’’ requirement (i.e.,

they would be deemed to have met it,

even if they were never active for a twoyear period). Individuals who owned

options principal memberships on May

16, 1995 were given a one-time

opportunity to elect to ‘‘opt-in’’ or ‘‘optout’’ of the Gratuity Fund, and those

who choose to ‘‘opt-in’’ are

grandfathered with respect to the

‘‘active’’ requirement as well. An

election to ‘‘opt-out’’ is irrevocable for

the rest of the person’s life, unless he or

she subsequently buys a regular

membership. In addition, those

individuals who were either regular or

options principal member lessees on

May 16, 1995 have the right to ‘‘opt-out’’

of the Gratuity Fund for the duration of

their lease (including any renewals).3

All individuals who have a right to

‘‘opt-in’’ or ‘‘opt-out’’ of the Gratuity

Fund have received extensive written

communications from the Exchange’s

Membership Services Department

requesting that such individuals

indicate their election thereof on the

appropriate form(s). In addition, for a

total of three weeks, staff members from

the Membership Services Department

were stationed in the Exchange lobby to

answer questions and distribute forms

and information, and signs have been

posted on the trading floor alerting the

affected membership of the need to

notify the staff of their election.

Notwithstanding this effort, as of

November 7, 1995, almost 40% of

eligible individuals4 had not completed

the necessary paperwork or indicated

their election to the staff.

In order to efficiently administer the

Gratuity Fund it is imperative that each

eligible individual’s status in this regard

be definitively resolved. The lack of

complete information has resulted in

significant record keeping problems in

terms of determining who is subject to

an assessment upon a Participant’s

death, as well as the amount that should

be assessed to other Participants.5

Moreover, interpretative difficulties are

presented by the death of an individual

who has not yet made an election.

Accordingly, the Exchange is

proposing to amend the Admission of

Members and Member Organizations

section of its Rules to require that all

individuals who have a right to elect to

‘‘opt-in’’ or ‘‘opt-out’’ of the Gratuity

Fund must make such election by

March 29, 1996. An individual who

does not make an election by that date

will be conclusively deemed to have

elected to ‘‘opt-out’’ of participation in

the Gratuity Fund. This date has been

selected to give the Exchange a period

of time during which persons can

receive ample warning of the new

deadline.6

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b) of the Act 7

in general and furthers the objectives of

Section 6(b)(4) in particular in that it is

designed to provide for the equitable

allocation of reasonable dues, fees, and

other charges among members.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

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

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

Because the foregoing proposed rule

change: (1) Does not significantly affect

the protection of investors or the public

interest; (2) does not impose any

significant burden on competition; (3)

does not become operative for 30 days

from December 7, 1995, the date on

which it was filed, and the Exchange

provided the Commission with written

notice of its intent to file the proposed

rule change at least five business days

prior to the filing date, it has become

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

of the Act 8 and Rule 19b–4(e)(6)

thereunder.9

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 Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.
Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices 65703

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

2 17 CFR 240.19b–4 (1994).

3See Securities Exchange Act Release No. 36455

(November 3, 1995), 60 FR 56624 (November 9,

1995).

4The Commission notes that the CBOE intends to

include this Interpretation in a Circular that will be

distributed to members and member organizations.

5Pursuant to the Telephone Consumer Protection

Act (1991), the FCC developed rules to protect the

rights of telephone consumers while allowing

legitimate telemarketing practices. The FCC rules

include a requirement that a person or entity

making telephone solicitations must maintain a donot-call list. In addition, the Telemarketing and

Consumer Fraud and Abuse Prevention Act (1994)

(‘‘Prevention Act’’), requires the Federal Trade

Commission (‘‘FTC’’) to adopt rules on abusive cold

calling. The Prevention Act also requires the

Commission to engage in its own rulemaking or,

alternatively, to require the self-regulatory

organizations to promulgate telemarketing rules

consistent with the legislation.

6 15 U.S.C. 78f(b) (1988).

7 15 U.S.C. 78s(b)(2) (1988).

8 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. § 78s(b)(1).

2 17 CFR 240.19b–4.

3 In a cross transaction, a member or member

organization that holds an order to buy and an order

to sell an equivalent amount of the same security

executes the orders against each other.

4See letter from David Rusoff, Foley & Lardner,

to Glen Barrentine, Team Leader, SEC, dated

Continued

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 Exchange. All submissions

should refer to File No. SR–Amex–95–

49 and should be submitted by January

10, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 95–30856 Filed 12–19–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36588; File No. SR–CBOE–

95–63]

Self-Regulatory Organizations; Order

Granting Approval to Proposed Rule

Change by the Chicago Board Options

Exchange, Inc., Relating to Adoption of

Rule 9.24 and an Interpretation With

Respect to Proposed Rule 9.24

December 13, 1995.

I. Introduction

On October 19, 1995, the Chicago

Board Options Exchange, Inc. (‘‘CBOE’’

or ‘‘Exchange’’) submitted to the

Securities and Exchange Commission

(‘‘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

adopt new Rule 9.24 and to add

Interpretation and Policy .01 thereunder

with respect to the meaning and

administration of proposed Rule 9.24.

The proposed rule change appeared in

the Federal Register on November 9,

1995.3 No comments were received on

the proposed rule change. This order

approves the CBOE’s proposal.

II. Description

The proposed rule would require

members and member organizations that

engage in telephone solicitations to

maintain a centralized list of persons

who do not wish to receive telephone

solicitations, and to refrain from making

telephone solicitations to persons

named on such list. The CBOE’s

proposal would also add an

interpretation concerning the meaning

and administration of proposed Rule

9.24 as well as serve as a reminder 4 that

members and member organizations are

subject to compliance with the relevant

Federal Communications Commission

(‘‘FCC’’) and Commission rules relating

to telemarketing practices.5

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, with the

requirements of Section 6(b).6

Specifically, the Commission believes

that the proposal is consistent with the

Section 6(b)(5) requirement that the

rules of an exchange be designed to

prevent fraudulent and manipulative

acts and practices. Proposed Rule 9.24

and the interpretation thereunder

require a specific practice, the

maintenance of a do-not-call list. The

purpose of maintaining such a list is to

prevent members and member

organizations from engaging in such

manipulative acts as persistently calling

investors who have expressed a desire

not to receive telephone solicitations.

The Commission also believes that the

proposal is consistent with the Section

6(b)(5) requirement that the rules of an

exchange be designed to protect

investors and the public interest.

Proposed Rule 9.24 and the

interpretation thereunder protect

investors and the public interest by

enforcing members’ and member

organizations’ compliance with

investors’ desire not to receive such

calls. In addition, the proposed

interpretation reminds members and

member organizations that they are

subject to the requirements of the rules

of the FCC and the Commission relating

to telemarketing practices and the rights

of telephone consumers.

IV. Conclusion

For the foregoing reasons, the

Commission finds that the CBOE’s

proposal to adopt a new rule concerning

telephone solicitation and recordkeeping is consistent with the

requirements of the Act and the rules

and regulations thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,7 that the

proposed rule change (SR–CBOE–95–

63) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Jonathan G. Katz,

Secretary.

[FR Doc. 95–30909 Filed 12–19–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36590; File No. SR–CHX–

95–24]

Self-Regulatory Organizations;

Chicago Stock Exchange,

Incorporated; Order Granting Approval

to Proposed Rule Change Relating to

Agency Crosses Between the

Disseminated Exchange Market

December 13, 1995.

On October 11, 1995, the Chicago

Stock Exchange, Incorporated (‘‘CHX’’

or ‘‘Exchange’’) 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 relating to the execution of

agency cross transactions at a price

between the disseminated Exchange

market.3 On October 17, 1995, the

Exchange submitted Amendment No. 1

to the proposed rule change.4