65696 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices

1The signatories to the Plan, i.e., the National

Association of Securities Dealers, Inc. (‘‘NASD’’),

and the Chicago Stock Exchange, Inc. (‘‘Chx’’)

(previously, the Midwest Stock Exchange, Inc.)

Philadelphia Stock Exchange, Inc. (‘‘Phlx’’) and the

Boston Stock Exchange, Inc. (‘‘BSE’’), are the

‘‘Participants.’’ The BSE, however, joined the Plan

as a ‘‘Limited Participant,’’ and reports quotation

information and transaction reports only in Nasdaq/

National Market (previously referred to as ‘‘Nasdaq/

NMS’’) securities listed on the BSE. Originally, the

American Stock Exchange, Inc., was a Participant

to the Plan, but did not trade securities pursuant to

the Plan, and withdrew from participation in the

Plan in August 1994.

2Section 12 of the Act generally requires an

exchange to trade only those securities that the

exchange lists, except that Section 12(f) of the Act

permits unlisted trading privileges (‘‘UTP’’) under

certain circumstances. For example, Section 12(f),

among other things, permits exchanges to trade

certain securities that are trade over-the-counter

(‘‘OTC/UTP’’), but only pursuant to a Commission

order or rule. The present order fulfills this Section

12(f) requirement. for a more complete discussion

of this Section 12(f) requirement, see November

1995 Extension Order, infra, at n. 2.

3Securities Exchange Act No. 36481 (November

13, 1995), 60 FR 58119 (‘‘November 1995 Extension

Order’’).

4See Securities Exchange Act Release No. 28146

(June 26, 1990), 55 FR 27917 (‘‘1990 Approval

Order’’). For a detailed discussion of the history of

UTP in OTC securities, and the events that led to

the present plan and pilot program, see 1994

Extension Order, infra note 5.

5See Securities Exchange Act Release No. 34371

(July 13, 1994), 59 FR 37103 (‘‘1994 Extension

Order’’). See also Securities Exchange Act Release

No. 35221, (January 11, 1995), 60 FR 3886 (‘‘January

1995 Extension Order’’), Securities Exchange Act

Release No. 36102 (August 14, 1995), 60 FR 43626

(‘‘August 1995 Extension Order’’), Securities

Exchange Act Release No. 36226 (September 13,

1995), 60 FR 49029 (‘‘September 1995 Extension

Order’’), Securities Exchange Act Release No. 36368

(October 13, 1995), 60 FR 54091 (‘‘October 1995

Extension Order’’), and the November 1995

Extension Order, supra note 3.

6 In the November 1995 Extension Order, the

Commission extended these exemptions through

December 12, 1995. Pursuant to a request made by

the NASD, this order further extends the

effectiveness of the relevant exemptions through

December 29, 1995. See letter from Robert E. Aber,

NASD, to Jonathan Katz, Commission, dated

November 9, 1995.

specified in Rule 145(a) and exchange

offers. There are approximately 95

registrants filing annually on Form N–

14. Approximately 58,900 hours are

used to meet the requirements of Form

N–14. This represents 620 hours per

registrant per year.

The estimate of average burden hours

is made solely for the purposes of the

Paperwork Reduction Act, and is not

derived from a comprehensive study or

even a representative survey or study of

the costs of SEC rules and forms.

Written comments are invited on: (a)

whether the proposed collection of

information is necessary for the proper

performance of the functions of the

agency, including whether the

information shall have practical utility;

(b) the accuracy of the agency’s estimate

of the burden of the proposed collection

of information; (c) ways to enhance the

quality, utility, and clarity of the

information to be collected; and (d)

ways to minimize the burden of the

collection of information on respondent,

including through the use of automated

collection techniques or other forms of

information technology. Consideration

will be given to comments and

suggestions submitted in writing within

60 days of this publication.

Direct your written comments to

Michael E. Bartell, Associate Executive

Director, Office of Information

Technology, Securities and Exchange

Commission, 450 5th Street NW.,

Washington, DC 20549.

Dated: December 13, 1995.

Jonathan G. Katz,

Secretary,

[FR Doc. 95–30857 Filed 12–19–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36589; File No. S7–24–89]

Joint Industry Plan; Solicitation of

Comments and Order Approving

Amendment No. 6 to Reporting Plan

for Nasdaq/National Market Securities

Traded on an Exchange on an Unlisted

or Listed Basis, Submitted by the

National Association of Securities

Dealers, Inc., and the Boston, Chicago

and Philadelphia Stock Exchanges

December 13, 1995.

On November 13, 1995, the National

Association of Securities Dealers, Inc.,

and the Boston, Chicago, and

Philadelphia Stock Exchanges

(collectively, ‘‘Participants’’) 1 submitted

to the Commission proposed

Amendment No. 6 to a joint transaction

reporting plan (‘‘Plan’’) for Nasdaq/

National Market securities traded on an

exchange on an unlisted or listed basis.2

Amendment No. 6 would extend the

effectiveness of the Plan through

December 29, 1995. On November 13,

1995, the Commission partially

approved Amendment No. 6 to the Plan

by extending its effectiveness through

December 12, 1995.3 The present order

approves the remainder of the proposal

by extending the effectiveness of the

Plan through December 29, 1995.

I. Background

The Commission originally approved

the Plan on June 26, 1990.4 The Plan

governs the collection, consolidation

and dissemination of quotation and

transaction information for Nasdaq/

National market securities listed on an

exchange or traded on an exchange

pursuant UTP. The Commission has

extended the effectiveness of the Plan

six times since then to allow the

Participants to trade pursuant to the

Plan while they finalize their

negotiations for revenue sharing under

the Plan.5

As originally approved by the

Commission, the Plan required the

Participants to complete their

negotiations regarding revenue sharing

during the one-year pilot period. The

January 1995 Extension Order approved

the effectiveness of the Plan through

August 12, 1995. Since January 1995,

the Commission has expected the

Participants to conclude their financial

negotiations promptly and to submit a

filing to the Commission that reflected

the results of the negotiations.

Moreover, the Commission’s August

1995 Extension Order required the

Participants to submit a filing

concerning revenue sharing on or before

August 31, 1995.

The Commission continues to urge

the Participants to comply with the

Commission’s request for the filing

promptly, and specifically requests that

the Participants submit to the

Commission, on or before December 20,

1995, a proposed revenue sharing

amendment, along with a proposed

amendment to extend the effectiveness

of the Plan through the pending

comment period for the financial

proposal. The Commission currently

believes it is appropriate to extend the

effectiveness of the Plan through

December 29, 1995, so that operation of

the Plan may continue while the

Commission awaits these amendments

and prepares them for publication in the

Federal Register.

II. Extension of Certain Exemptive

Relief

In conjunction with the Plan, on a

temporary basis scheduled to expire on

December 12, 1995, the Commission

granted an exemption from Rule 11Ac1–

2 under the Act regarding the calculated

best bid and offer (‘‘BBO’’), and granted

the BSE an exemption from the

provision of Rule 11Aa3–1 under the

Act that requires transaction reporting

plans to include market identifiers for

transaction reports and last sale data.

This order extends these exemptions

through December 29, 1995. Further,

this extension will remain in effect only

if the Plan continues in effect through

that date pursuant to a Commission

order.6 The Commission continues to

believe that this exemptive relief is

appropriate through December 29, 1995.
Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Notices 65697

1ProTrade, located in Mercer Island, Washington,

was incorporated under the laws of the State of

Washington in January, 1986. Joseph A. Zajac, the

company’s President, owns 100% of ProTrade’s

stock.

2 15 U.S.C. 78q–1 (1988).

3 17 CFR 240.17Ab2–1 (1995).

4For the definitions of ‘‘broker’’ and ‘‘dealer’’

under the Exchange Act, see Sections 3(a) (4) and

(5), 15 U.S.C. 78c(a) (4) and (5) (1988). See also,

Section 15 of the Exchange Act, 15 U.S.C. 78o

(1988), for broker-dealer registration requirements.

5 15 U.S.C. 77b(1) (1988). ProTrade’s options are

‘‘securities’’ as that term is defined in Section 2(1)

of the Securities Act, 15 U.S.C. 77b(1) (1988). As

securities, they must be registered pursuant to

Sections 5 and 6 of the Securities Act, 15 U.S.C. 77e

and 77f (1988), before they may be traded in

interstate commerce.

The issuer of the options for purposes of the

Securities Act will be ProTrade itself. For the

definition of ‘‘issuer,’’ see Section 2(4) of the

Securities Act, 15 U.S.C. 77b(4) (1988).

6For definition of ‘‘exchange,’’ see Section 3(a)(1)

of the Exchange Act, 15 U.S.C. 78c(a)(1) (1988). See

also, Section 6 of the Exchange Act, 15 U.S.C. 78f

(1988), for exchange registration requirements.

7ProTrade expects to have a net capital of

$250,000, the amount that ProTrade states it will

need to comply with Commission’s uniform net

capital rule, Rule 15c3–1, 17 CFR 240.15c3–1

(1995), as a broker-dealer that holds customers’

funds (i.e., a clearing broker-dealer). The

Commission has taken no position on ProTrade’s

interpretation of its requirements under the uniform

net capital rule.

III. Comments on the Operation of the

Plan

In the January 1995 Extension Order,

the August 1995 Extension Order, the

September 1995 Extension Order, the

October 1995 Extension Order, and the

November 1995 Extension Order, the

Commission solicited, among other

things, comment on: (1) whether the

BBO calculation for the relevant

securities should be based on price and

time only (as currently is the case) or if

the calculation should include size of

the quoted bid or offer; and (2) whether

there is a need for an intermarket

linkage for order routing and execution

and an accompanying trade-through

rule. The Commission continues to

solicit comment on these matters.

IV. Solicitation of Comment

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

Room. All submissions should refer to

File No. S7–24–89 and should be

submitted by January 10, 1996.

V. Conclusion

The Commission finds that proposed

Amendment No. 6 to the Plan to extend

the operation of the Plan and the

financial negotiation period through

December 29, 1995, is appropriate and

in furtherance of Section 11A of the Act.

The Commission finds further that

extension of the exemptive relief

through December 29, 1995, as

described above, also is consistent with

the Act and the Rules thereunder.

Specifically, the Commission believes

that these extensions should serve to

provide the Participants with more time

to conclude their financial negotiations

and to submit the necessary filings to

the Commission. This, in turn, should

further the objects of the Act in general,

and specifically those set forth in

Section 12(f) and 11A of the Act and in

Rules 11Aa3–1 and 11Aa3–2

thereunder.

It is therefore ordered, pursuant to

Sections 12(f) and 11A of the Act and

(c)(2) of Rule 11Aa3–2 thereunder, that

Amendment No. 6 to the Joint

Transaction Reporting Plan for Nasdaq/

National Market securities traded on an

exchange on an unlisted or listed basis

is hereby approved and trading

pursuant to the Plan is hereby approved

on a temporary basis through December

29, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority, 17 CFR 200.30–3(a)(29).

Jonathan G. Katz,

Secretary.

[FR Doc. 95–30913 Filed 12–19–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36587; File No. 600–28]

Self-Regulatory Organizations; ProTrade; Notice of Filing of Application

for Exemption From Registration as a

Clearing Agency

December 13, 1995.

On September 22, 1994, ProTrade 1

filed with the Securities and Exchange

Commission (‘‘Commission’’) a Form

CA–1 requesting exemption from

registration as a clearing agency

pursuant to section 17A of the

Securities Exchange Act of 1934

(‘‘Exchange Act’’) 2 and Rule 17Ab2–1

thereunder.3 Since the original filing,

ProTrade has supplemented the

information provided in its Form CA–1

filing with letters dated October 27,

1994, April 18, 1995, September 26,

1995, and October 2, 1995. The

Commission is publishing this notice to

solicit comments on the proposal from

interested persons.

I. Introduction

ProTrade proposes to introduce an

automated proprietary trading system

(‘‘System’’) for over-the-counter option

securities. ProTrade’s customers, the

users of the System, will be authorized

to enter bids and offers for these options

into the System. The System will

electronically match the bids and offers

and provide execution. Instantaneously

with each execution, the proceeds of the

transaction will be calculated, and the

accounts of the trading parties will be

debited and credited in settlement.

Accordingly, the System will combine

into a single electronic format several

functions that usually involve the

collective efforts of: (1) An option

broker-dealer, (2) an options exchange,

and (3) an options clearing agency.

ProTrade asserts that this unity of

functions will bring new efficiencies to

the options marketplace.

ProTrade has represented that its

System will not commence operations

before ProTrade: (1) has registered as a

broker-dealer pursuant to the Exchange

Act and has become a member of the

National Association of Securities

Dealers, Inc. (‘‘NASD’’),4 (2) has

registered the option securities that are

to be traded in the System pursuant to

the Securities Act of 1933 (‘‘Securities

Act’’),5 and (3) has received a no-action

letter from the Division stating that the

Division will not recommend

enforcement action if ProTrade does not

register as a securities exchange

pursuant to the Exchange Act.6

ProTrade believes that its proposed

operations would involve few, if any,

clearing agency activities within the

meaning of the Exchange Act. ProTrade

also believes that its proposed

registration as a broker-dealer, coupled

with the proposed registration of its

options under the Securities Act, will

satisfy the regulatory scheme of the

Exchange Act. ProTrade has stated that

such registrations under both the

Exchange Act and the Securities Act

would provide the necessary and

appropriate safeguards to protect

investors and the public interest.7

Accordingly, it is ProTrade’s belief that

an exemption from registration as a