8104 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices

4 17 CFR 200.30–3(a)(12) (1994).

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

2European-style options can be exercised only

during a specific time period prior to expiration of

the options.

3See Phlx Rules 1000A through 1103A, and 1000

through 1070.

4The formula for calculating the value of the

Index is the same as that previously approved by

the Commission for calculating the value of the

Phlx Big Cap Index. See Securities and Exchange

Act Release No. 33973 (April 28, 1994), 59 FR

23245 (May 5, 1994). Telephone conversation

between Michele Weisbaum, Associate General

Counsel, Phlx, and Brad Ritter, Senior Counsel,

Office of Market Supervision, Division of Market

Regulation, Commission, on February 2, 1995.

(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, 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 in

the Commission’s Public Reference

Room, 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 DTC. All submissions should

refer to File No. SR–DTC–95–04 and

should be submitted within March 3,

1995.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–3326 Filed 2–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35326; File No. SR–Phlx–

95–07]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange

Relating to the Listing and Trading of

Options on the Phlx USTOP Index

February 3, 1995.

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

Securities Exchange Act of 1934

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

January 30, 1995, the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’ 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 Phlx. 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 Phlx, pursuant to Rule 19b–4 of

the Act, proposes to list and trade

options on the Phlx USTOP 100 Index,

a broad-based index developed by the

Phlx and comprised of 100 highly

capitalized U.S. stocks representing a

variety of industries (‘‘USTOP 100

Index’’ or ‘‘Index’’). Exchange Rules

1001A, 1006A and 1101A respecting

position limits, exercise restrictions,

trading hours and far term strike prices

respectively will be amended to add

references to the USTOP 100 Index. The

test of the proposed rule changes is

available at the Office of the Secretary,

Phlx, and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and the

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

Phlx 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 Phlx 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

The Phlx proposes to list for trading

European-style options 2 on the Index, a

broad-based, capitalization-weighted

index composed of 100 highly

capitalized U.S. common stocks in a

variety of industries, including but not

limited to technology, manufacturing

and the service industries. USTOP 100

Index options will be traded pursuant to

current Phlx rules governing the trading

of index options.3

The Phlx represents that the Index

includes some of the largest and most

widely-held U.S. common stocks. As of

January 23, 1995, the Phlx represents

that the market capitalization of the

individual stocks in the Index ranged

from a high of $86 billion to a low of

$7.6 billion. The market capitalization

of all of the stocks in the Index was

approximately $2 trillion. As of that

same date, no one stock accounted for

more than 4.17% of the Index’s total

value and the percentage weighting of

the five largest issues in the Index

accounted for 17.28% of the Index’s

value. The percentage weighting of the

lowest weighted stock was 0.37% of the

Index’s value.

The formula for calculating the value

of the Index is as follows: 4

MV MV MV

Divisor

1 2 100 100 ( ) + ( ) + ( ) ×

L

Where:

MVn=Price × Shares outstanding for

each component of the Index

Divisor=Number calculated to achieve a

base value of 370 for the Index as

of the close of trading on December

14, 1994.

In order to maintain continuity in the

value of the Index, the index divisor

will be adjusted for changes in

capitalization of any of the component

issues resulting from, among other

things, mergers, acquisitions, delistings,

and substitutions. As the close of

trading on January 27, 1995, the Index

Value was 383.81.

The Index value will be updated

dynamically at least once every 15

seconds during the trading day. The

Phlx has retained Bridge Data, Inc. to

compute the value of the Index.

Pursuant to Phlx Rule 1100A, updated

Index values will be disseminated and

displayed by means of primary market

prints reported by the Consolidated

Tape Association and over the facilities

of the Options Price Reporting

Authority. The Index value will also be

available on broker/dealer interrogation

devices to subscribers of the option

information.

In accordance with Phlx Rule 1009A,

if any change in the nature of any stock

in the Index occurs as a result of

delisting, merger, acquisition or

otherwise, the Exchange will take

appropriate steps to delete that stock

from the Index and replace it with

another stock which the Exchange

believes would be compatible with the

intended market character of the Index.

In making replacement determinations,

the Exchange will also take into account
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices 8105

5The Phlx’s options listing standards, which are

uniform among the options exchanges, provide that

a security underlying an option must, among other

things, meet the following requirements: (1) The

public float must be at least 7,000,000 shares; (2)

there must be a minimum of 2,000 stockholders; (3)

trading volume in the U.S. must have been at least

2.4 million over the preceding twelve months; and

(4) the U.S. market price must have been at least

$7.50 for a majority of the business days during the

preceding three calendar months. See Phlx Rule

1009, Commentary .01.

6The Intermarket Surveillance Group (‘‘ISG’’) was

formed on July 14, 1983 to, among other things,

coordinate more effectively surveillance and

investigative information sharing arrangements in

the stock and options markets. See Intermarket

Surveillance Group Agreement, July 14, 1983. The

most recent amendment to the ISG Agreement,

which incorporates the original agreement and all

amendments made thereafter, was signed by ISG

members on January 29, 1990. See Second

Amendment to the Intermarket Surveillance Group

Agreement, January 29, 1990. The members of the

ISG are: the Amex; the Boston Stock Exchange, Inc.;

the Chicago Board Options Exchange, Inc.; the

Chicago Stock Exchange, Inc.; the National

Association of Securities Dealers, Inc.; the NYSE;

the Pacific Stock Exchange, Inc.; and the Phlx.

Because of potential opportunities for trading

abuses involving stock index futures, stock options,

and the underlying stock and the need for greater

sharing of surveillance information for these

potential intermarket trading abuses, the major

stock index futures exchanges (e.g., the Chicago

Mercantile Exchange and the Chicago Board of

Trade) joined the ISG as affiliate members in 1990.

7 15 U.S.C. 78f(b)(5) (1988). 8 17 CFR 200.30–3(a)(12) (1994).

the capitalization, liquidity, and

volatility of a particular stock.

The Exchange represents that all of

the stocks comprising the Index

currently are options eligible 5 and have

standardized options listed on them. If

at any time, less than 90% of the

components in the Index, by weight, are

options eligible, the Exchange will

submit a Rule 19b-4 filing for

Commission approval before opening

any new series of options on the Index

for trading. Further, the Exchange will

submit a Rule 19b-4 filing for

Commission approval prior to opening

any new series of options on the Index

if the number of stocks in the Index ever

increases to more than 120 or decreases

to less than 80.

The settlement value for Index

options will be based on the opening

values of the component securities on

the date prior to expiration. Index

options will expire on the Saturday

following the third Friday of the

expiration month, and the last day for

trading in an expiring series will be the

second business day (ordinarily a

Thursday) preceding the expiration

date.

The Phlx proposes to employ position

and exercise limits applicable to the

Exchange’s other broad-based indexes

pursuant to Phlx Rule 1001A(b)(i) and

1002A, respectively. Specifically, the

position limit will be $25,000 contracts

total, of which no more than 15,000

contracts can be in the nearest

expiration month.

Exercise price intervals will be set at

five point intervals in terms of the

current value of the Index except

exercise prices in the far-term series

shall be $25.00 unless demonstrated

customer interest exists at $5.00

intervals. The Exchange represents that

demonstrated customer interest will

include institutional (firm), corporate or

customer interest expressed directly to

the Exchange or through the customer’s

floor brokerage unit but not interest

expressed by a registered options trader

(‘‘ROT’’) with respect to trading for the

ROT’s own account. Exchange Rule

1101A, Commentary .02, which already

permits $25.00 intervals for the

Exchange’s other broad-based indexes,

will be amended to include this

treatment for the USTOP 100 Index.

Additional exercise prices will be added

in accordance with Phlx Rule 1101A(a).

As with the Exchange’s other indexes,

the multiplier for options on the USTOP

100 Index will be 100. Index options

will trade during the Exchange’s regular

trading hours (9:30 a.m. through 4:15

p.m., Eastern time).

The Phlx will trade consecutive and

cycle month series pursuant to Phlx

Rule 1101A. Specifically, there will be

three expiration months from the

March, June, September, and December

cycle plus two additional near-term

months so that the three nearest term

months will always be available.

Surveillance procedures currently

used to monitor trading in each of the

Exchange’s other index options will also

be used to monitor trading in options on

the Index. These procedures include

having complete access to trading

activity in the securities underlying the

Index, all of which are traded on either

the New York Stock Exchange (‘‘NYSE’’)

or the American Stock Exchange

(‘‘Amex’’), or are Nasdaq National

Market securities. In addition, the

Intermarket Surveillance Group

Agreement will be applicable to the

trading of options on the Index.6

The Exchange believes that the

proposed rule change is consistent with

Section 6 of the Act, in general, and

with Section 6(b)(5),7 in particular, in

that it is designed to prevent fraudulent

and manipulative acts and practices, to

facilitate transactions in securities, and

to remove impediments to and perfect

the mechanism of a free and open

market.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx 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, 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 in

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

Phlx. All submissions should refer to

File No. SR-Phlx-95–07 and should be

submitted by March 3, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8
8106 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices

1 Investment Company Act Release Nos. 19315

(March 5, 1993) (Notice) and 19367 (March 30,

1993) (order).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–3327 Filed 2–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

20882; 812–9356]

Nicholas-Applegate Mutual Funds, et

al.; Notice of Application

February 6, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Nicholas-Applegate Mutual

Funds (the ‘‘Trust’’), NicholasApplegate Capital Management (the

‘‘Adviser’’), and Nicholas-Applegate

Securities (the ‘‘Distributor’’).

RELEVANT ACT SECTIONS: Order requested

to amend a prior order under section

6(c) that granted an exemption from

sections 2(a)(32), 2(a)(35), 22(c), and

22(d), and rule 22c–1.

SUMMARY OF APPLICATION: Applicants

seek to amend an order permitting them

to assess a contingent deferred sales

charge (‘‘CDSC’’) on certain redemptions

of shares of certain series of the Trust.

The amended order would permit

applicants to impose a CDSC on

redemptions of shares of certain other

series of the Trust not covered by the

previous order.

FILING DATES: The application was filed

on December 9, 1994, and amended on

February 3, 1995.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

March 6, 1995, and should be

accompanied by proof of service on

applicants, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street, N.W., Washington, D.C. 20549.

Applicants, 600 West Broadway, 30th

Floor, San Diego, California 92101.

FOR FURTHER INFORMATION CONTACT:

James J. Dwyer, Staff Attorney, at (202)

942–0581, or C. David Messman, Branch

Chief, at (202) 942–0564 (Office of

Investment Company Regulation,

Division of Investment Management).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. The Trust and Nicholas-Applegate

Investment Trust (the ‘‘Master Trust’’)

are open-end management investment

companies organized as Delaware

business trusts. Under a ‘‘master-feeder’’

structure, each of the Trust’s portfolios

invests all of its assets in a

corresponding series of the Master

Trust. The Adviser is a registered

investment adviser that serves as

investment adviser to the Master Trust.

The Distributor serves as principal

underwriter of the shares of the

portfolios of the Trust.

2. On March 30, 1993, the SEC issued

an order (the ‘‘Existing Order’’) 1

permitting certain existing portfolios of

the Trust (the ‘‘Portfolios’’) to impose a

CDSC on certain redemptions and waive

the CDSC under certain circumstances.

The application for the Existing Order

sought, and accordingly the Existing

Order granted, relief on behalf of the

Trust only with respect to the Trust’s

Portfolio A Series, Portfolio B Series,

and Money Market Portfolio. The

Existing Order also applied to all other

open-end management investment

companies or series thereof that invest

substantially all of their assets in a

registered investment company for

which the Adviser serves in the future

as investment adviser and that are in the

same ‘‘group of investment companies’’

as the Portfolios, as defined in rule 11a–

3 under the Act, the shares of which

will be distributed on substantially the

same basis as those of the Portfolios.

3. Applicants seek to amend the

Existing Order to permit other portfolios

of the Trust (the ‘‘Portfolio C Series’’) to

impose a CDSC. Shares of the Portfolio

C Series would be offered at net asset

value without a front-end sales load.

The shares would be offered under a

distribution plan and shareholder

service plan, each adopted pursuant to

rule 12b–1 under the Act. Under the

distribution plan, each Portfolio C

Series may pay the Distributor an

amount equal to .75% of the average

daily net assets of the series to

compensate the Distributor for selling

the shares of the series. Under the

shareholder service plan, each series

pays the Distributor an annual fee of up

to .25% of the series’ average daily net

assets as reimbursement for certain

expenses incurred in connection with

shareholder services provided by the

Distributor.

4. If the shares of a Portfolio C CDSC

are redeemed within specified periods

after their purchase date, the

redemption proceeds will be reduced by

a percentage of the lesser of the value

of the shares redeemed or the total cost

of such shares. The percentage will vary

depending on the period the shares

were held, as set forth in the applicable

prospectus. The Distributor will retain

the CDSC as compensation for dealer

commissions paid with respect to sales

of shares of the series and to recover a

portion of the sales and marketing

expenses incurred in marketing such

shares. Applicants may in the future

reduce the CDSC percentage, shorten

the applicable holding period, or

temporarily or permanently discontinue

the CDSC.

5. No CDSC will be imposed on

exchanges of shares of a Portfolio C

Series for shares of other Portfolio C

Series or for shares of the Trust’s Money

Market Portfolio Series. No CDSC will

be imposed on the amount which

represents a capital appreciation of

shares, reinvestment of dividends, or

capital gains distributions. In

determining whether a CDSC is

applicable, it will be assumed that a

redemption is made first of shares not

subject to the CDSC, including shares

derived from reinvestment of dividends

or capital gains distributions, and then

of other shares in the order of purchase.

6. Applicants request relief to permit

each investment company or series

thereof that would assess a CDSC under

the requested order to waive or reduce

the CDSC in certain circumstances. Any

waiver or reduction will comply with

the conditions in paragraphs (a) through

(d) of rule 22d–1. In addition, applicants

will comply with rule 11a–3 with

respect to any exchanges of shares.

7. The Distributor will refund out of

its own assets any CDSC paid in

connection with a redemption of shares

of a Portfolio C Series upon

reinvestment in a Portfolio C Series

within 90 days of such redemption.

Applicants’ Legal Analysis

Section 6(c) provides that the SEC

may exempt any transactions from any

transactions from any provision of the

Act if such exemption is necessary or

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act. For the reasons set forth in the