9416 Federal Register / Vol. 60, No. 33 / Friday, February 17, 1995 / Notices

3See Securities Exchange Act Release No. 32140

(April 14, 1993), 58 FR 21327 (April 20, 1993).

4The NYSE acknowledges that under New York

State Common Law, a liability disclaimer such as

the instant one does not insulate the NYSE from

loss due to the gross negligence or willful

misconduct. Conversation between Steve Abrams

and Michael Simon, Milbank, Tweed, Hadley &

McCloy, Counsel to NYSE, and Amy Bilbija,

Attorney, Commission, dated December 2, 1994.

5For example, the Commission has approved

limited disclaimers of liability for licensors of the

indexes underlying index options. See, e.g.,

Securities Exchange Act Release Nos. 31382

(October 30, 1992), 57 FR 52802 (November 5, 1992)

(regarding options on Russell 2000 Index); and

19908 (June 24, 1983), 48 FR 30815 (July 5, 1983)

(regarding options on Standard & Poor’s 500 Stock

Price Index).

6 15 U.S.C. § 78f(b) (1988).

7 15 U.S.C. 78q–1 (1988).

8 15 U.S.C. § 78s(b)(2) (1988).

9 17 CFR 200.30–3(a)(12) 1994.

equities. As part of that licensing

agreement, the NYSE required that it be

protected from liability for damages

sustained by Amex members and

member organizations using the display

book on the Amex floor. Consequently,

the Amex adopted a policy statement

disclaiming NYSE liability for such

damages.3

Most recently, the Amex entered into

an agreement with the NYSE to integrate

the Amex’s Equity Intra-Day

Comparison System (‘‘IDC’’) into the

NYSE’s On-Line Comparison System

(‘‘OCS’’), so that Amex equity and bond

transactions can be compared through

OCS. This will enable members to

utilize the same computer terminal for

the comparison of both Amex and NYSE

securities and thus lessen the cost to the

member firm community. The

integration is being accomplished in

two steps. Amex listed corporate bonds

began to be compared through OCS on

October 21, 1994, and equities are

expected to be phased in by the end of

the first quarter of 1995.

As the Amex may enter into

additional agreements with the NYSE in

the future relating to the use of other

NYSE systems, services, or facilities by

Amex member firms, this proposal

would codify a liability disclaimer

provision to cover not only the current

situation involving the use of OCS, but

also all future situations where Amex

member firms are using other NYSE

facilities in accordance with similar

agreements with the NYSE.4 The Amex

plans to disseminate proposed

Commentary .02 to its Rule 60 to the

membership, upon SEC approval.

The Commission notes that the Amex

Constitution (Article IV, Section 2(e))

currently provides that the Exchange

shall not be liable for any damages

incurred by a member firm growing out

of its use of the facilities afforded by the

Exchange for the conduct of its business

(which includes the use of the

Exchange’s trading systems), except as

the Exchange may otherwise provide.

Further, the NYSE Constitution has a

similar provision regarding use of its

facilities by its members. Finally, the

Commission notes that the terms of the

proposed Commentary are merely a

codification of the contractual

agreements between the Amex and the

NYSE wherein the Amex has agreed to

disclaim NYSE’s liability under the

specified circumstances referred to

herein.

The Commission believes that it is

reasonable for the NYSE to be released

from liability for injuries sustained by

Amex members and member

organizations using the NYSE’s OCS. As

noted above, the proposed rule change

is similar to existing Amex and NSE

rules that limit exchange liability. In

addition, under similar circumstances,

the Commission has allowed licensee

exchanges to release licensors from

certain liability for damages resulting

from use of their product.5 Finally, the

Commission wishes to emphasize that

this disclaimer only affects NYSE

liability for losses sustained by Amex

members and member organizations

using OCS and does not extend to

customer-related losses.

III. Conclusion

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 In

particular, the Commission believes the

proposal is consistent with the Section

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

exchange be designed to promote just

and equitable principles of trade, and to

foster cooperation and coordination

with persons engaged in regulating,

clearing, settling, processing

information with respect to, and

facilitating transactions in securities.

The Commission also finds that the

proposal is consistent with Section

17A 7 in that it furthers the use of new

data processing and communications

techniques that should result in more

accurate clearance and settlement of

securities transactions.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,8 that the

proposed rule change (SR–Amex–94–

50) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–4043 Filed 2–16–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35363; International Series

Release No. 785 File No. SR–Amex–95–04]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change By

the American Stock Exchange, Inc.

Relating to the Listing of Warrants

Based on the Value of the U.S. Dollar

in Relation to the Mexican Peso

February 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 February 8, 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 Amex. 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 approve for

listing and trading under section 106 of

the Amex Company Guide (‘‘Guide’’)

warrants based on the value of the U.S.

dollar in relation to the Mexican peso

(‘‘Mexican Peso Warrants’’). The text of

the proposed rule change is available at

the Office of the Secretary, the Amex,

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 and discuss

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

Amex 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 the

Statutory Basis for, the Proposed Rule

Change

Under section 106 (Currency and

Index Warrants) of the Guide, the

Exchange may approve for listing

warrants based on the relation of the
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