Federal Register / Vol. 60, No. 33 / Friday, February 17, 1995 / Notices 9417

1The Commission notes that the Exchange has

filed a proposed rule change that would, among

other things, revise the criteria pursuant to section

106 for listing stock index and currency warrants.

These new standards will apply to Mexican Peso

Warrants issued following approval of that

proposed rule change. See Securities Exchange Act

Release No. 35086 (December 12, 1994), 59 FR

65561 (December 20, 1994) (notice of File No. SR–

Amex–94–38).

2See Securities Exchange Act Release Nos. 24555

(June 5, 1987), 52 FR 22570 (June 12, 1987)

(approval of listing requirements for single foreign

currency warrants), and 31627 (December 21, 1992),

57 FR 62399 (December 30, 1992) (approval of

listing requirements for multiple foreign currency

warrants).

3See, e.g., Amex Rule 411, Commentary .01.

4The Commission notes that the Amex will be

required to submit a draft of the circular to the

Commission staff for approval prior to distribution

to members.

5 17 CFR 200.30–3(a)(12) (1994).

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

2 17 CFR 240.19b–4.

U.S. dollar to foreign currencies.1 The

Amex currently trades foreign currency

warrants based upon the value of the

U.S. dollar in relation to a single foreign

currency (e.g., Japanese yen and German

mark) as well as warrants based on the

value of the U.S. dollar in relation to

multiple foreign currencies.2

The Exchange represents that

Mexican Peso Warrants will conform to

the listing guidelines under section 106

of the Guide, which provide, among

other things, that: (1) the issuer must

have assets in excess of U.S.

$100,000,000 and otherwise

substantially exceed the size and

earnings requirements in section 101(A)

of the Guide; (2) the term of the

warrants will be for a period ranging

from one to five years from the date of

issuance; and (3) the minimum public

distribution will be one million

warrants, together with a minimum of

400 public holders, and an aggregate

market value of at least U.S. $4,000,000

million.

Mexican Peso Warrants generally will

be direct obligations of their issuers and

will be cash-settled in U.S. dollars.

Mexican Peso Warrants will either be

exercisable throughout their life (i.e.,

American-style) or exercisable only

during a specified period immediately

prior to the expiration date (i.e.,

European-style). Upon exercise, the

holder of a warrant structured as a

‘‘put’’ will receive payment in U.S.

dollars to the extent that the value of the

Mexican peso has declined in relation to

the U.S. dollar below a pre-stated base

level. Conversely, upon exercise,

holders of a Mexican Peso Warrant

structured as a ‘‘call’’ will receive

payment in U.S. dollars to the extent

that the value of the Mexican peso has

increased in relation to the U.S. dollar

above a pre-stated base level. Mexican

Peso Warrants that are ‘‘out-of-themoney’’ at the time of expiration will

expire worthless.

Notwithstanding any other Amex

rule,3 the Exchange will require that

Mexican Peso Warrants be sold only to

customers whose accounts have been

approved for options trading pursuant

to Amex Rule 921. Additionally, the

options suitably standards in Amex

Rule 923 will apply to

recommendations in Mexican Peso

Warrants. Moreover, all discretionary

orders in Mexican Peso Warrants must

be approved and initialed by a Senior

Registered Options Principal or

Registered Options Principal. Further,

the Exchange will require that customer

positions in Mexican Peso Warrants be

subject to the margin requirements

applicable to foreign currency options.

Finally, prior to the commencement

of trading of Mexican Peso Warrants, the

Amex will distribute a circular to its

membership calling attention to specific

risks associated with Mexican Peso

Warrants.4

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 trade, and is not

designed to permit unfair

discrimination between customers,

issuers, brokers, or dealers.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The Amex 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

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.

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 coping in

the Commission’s Public Reference

Section, 450 Fifth Street, NW.,

Washington, DC. 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–95–04 and should be

submitted by March 10, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–4044 Filed 2–16–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35361 International Series

Release No. 784; File No. SR–NASD–94–

51]

Self-Regulatory Organizations;

National Association of Securities

Dealers, Inc.; Order Approving

Proposed Rule Change Relating to

Amendments to Parts VI and X of

Schedule C of the NASD By-Laws

Relating to Foreign Finders and

Foreign Associates

February 13, 1995.

On September 27, 1994, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) filed with

the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

a proposed rule change pursuant to

Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Act’’) 1 and Rule

19b–4 thereunder.2 The rule change

amends Parts VI and X of Schedule C of
9418 Federal Register / Vol. 60, No. 33 / Friday, February 17, 1995 / Notices

3 MASD Manual, Schedules to the By-Laws,

Schedule C, Parts VI and X, (CCH) ¶¶ 1787, 1791.

4NASD Manual, By Laws, Article II, Sec. 4, (CCH)

¶ 1124.

5Supra, note 3.

6Securities Exchange Act Release No. 34941

(November 4, 1994).

7 59 FR 56102 (November 10, 1994).

8Letter from Craig L. Landauer, Associate General

Counsel, NASD, to Mark P. Barracca, Branch Chief,

SEC, (Feb. 8, 1995).

9 Id.

10 15 U.S.C. Section 78o–3(b)(6).

11Supra, note 3.

12 17 CFR 200.30–3(a)(12).

1 15 U.S.C. § 78s(b)(1) (1988).

2For a description of the amendment to OCC’s

Restated Certificate of Incorporation providing for

public directors on OCC’s board of directors, refer

to Securities Exchange Act Release No. 30449

(March 6, 1992), 57 FR 8949 [File No. 92–02] (order

approving proposed rule change).

the NASD By-Laws 3 relating to foreign

finders and foreign associates.

Under the rule as amended, member

firms and persons associated with a

member will be permitted to pay

transaction-related compensation to

non-registered foreign persons based

upon the business of customers such

persons direct to member firms. The

following conditions must be met in

order for the ‘‘foreign finder’’ exemption

to apply: (1) the member firm must

assure itself that the non-registered

foreign person who will receive the

compensation (the finder) is not

required to register in the U.S. as a

broker/dealer nor is subject to a

disqualification as defined in Article II,

Section 4 of the NASD By-Laws;4 (2) the

member firm must further assure itself

that the compensation arrangement does

not violate applicable foreign law; (3)

the finder must be a foreign national or

a foreign entity domiciled abroad; (4)

the customers directed to the member

firm by the finder must be foreign

nationals or foreign entities domiciled

abroad transacting business in either

foreign or U.S. securities; (5) the

customers must receive a descriptive

document that discloses the

compensation being paid to the finder;

(6) the customers must provide written

acknowledgement of the existence of the

compensation arrangement to the

member firm and such

acknowledgement must be retained and

available for inspection by the

Association; (7) records reflecting

payments to the finder must be

maintained on the member firm’s books

and the actual agreement between the

member firm and the finder must be

available for inspection by the

Association; and (8) the confirmation of

each transaction must indicate that a

finder’s fee is being paid pursuant to a

compensation arrangement.

The amendment also will change the

requirements with respect to foreign

associates. Those persons designated as

foreign associates pursuant to Part X of

Schedule C of the NASD By-Laws 5 now

will be subject to U–4 registration but

still will not be required to pass a

qualification examination.

Notice of the proposed rule change,

together with its terms of substance was

provided by issuance of a Commission

release 6 and by publication in the

Federal Register.7 No comments were

received in response to the notice. This

order approves the proposed rule

change.

As the NASD indicated in its rule

filing, the scope of permissible business

activities and the associated regulatory

requirements differ between foreign

finders and foreign associates. The

NASD clarified these differences in a

letter to the Commission.8 The NASD

states that, ‘‘[t]he foreign associate will

be registered with the NASD and will be

deemed an associated person or

employee of the member. The foreign

associate would therefore be allowed to

act in any registered capacity on behalf

of the member [consistent with its

designation as a foreign associate]. This

could include acting as a trader or being

the registered person responsible for

servicing the accounts of [a] foreign

national. The foreign finder would not

be considered an associated person of

the member and [its] activities would,

therefore, be limited to those discussed

in the rule filing.9 Under the rule as

amended, the sole involvement of a

foreign finder in the business of a

member firm will be the initial referral

of non-U.S. customers to the firm.

The Commission has determined to

approve the NASD’s proposal. The

Commission finds that the rule change

is consistent with the requirements of

the Act and the rules and regulations

promulgated thereunder applicable to

the NASD, including the requirements

of Section 15A(b)(6) of the Act.10

Section 15A(b)(6) requires, in part that

the rules of a national securities

association be designated to prevent

fraudulent and manipulative acts and

practices; to promote just and equitable

principles of trade; 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.

The Commission finds that the

amendments to Parts VI and X of

Schedule C to the NASD By-Laws 11 are

consistent with the foregoing statutory

provision. The addition of Part VI,

Section 2 will allow member firms to

use foreign finders to expand overseas

business opportunities while requiring

the maintenance of necessary safeguards

for investor protection. Further, the

changes to Part X of Schedule C will

improve regulatory oversight of member

firms and their foreign associates.

Although foreign associates will

continue to be free of the requirement of

taking a qualification examination, the

amendment will require foreign

associates to be subject to U–4

registration.

It is therefore ordered, pursuant to

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

proposed rule change, SR–NASD–94–51

be, and hereby is, approved.

For the Commission, by the Division of

Market Regulation pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–4045 Filed 2–16–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35362; File No. SR–OCC–

94–13]

Self-Regulatory Organizations; The

Options Clearing Corporation, Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change Amending

the Stockholders Agreement

February 13, 1995.

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

Securities Exchange Act of 1934

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

December 28, 1994, The Options

Clearing Corporation (‘‘OCC’’) 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 primarily by OCC.

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

OCC proposes to amend Section 2 of

its Stockholders Agreement to extend

the voting agreement contained therein

for a term coextensive with the term of

the Stockholders Agreement and to

conform the Stockholders Agreement to

an amendment made to OCC’s Restated

Certificate of Incorporation providing

for public directors on OCC’s board of

directors.2 OCC also proposes to amend

its address and that of the Chicago

Board Options Exchange, Inc. as they

appear in the Stockholders Agreement.