Federal Register / Vol. 60, No. 35 / Wednesday, February 22, 1995 / Notices 9871

1 15 U.S.C. 77a et seq.

December 20, 1993 which included an

Environmental Report.

On March 29, 1994, in accord with 10

CFR 50.82(e), a Notice of Receipt of

Decommissioning Plan and

Environmental Report and Opportunity

for Public Comments was published in

the Federal Register, (59 FR 14689). Due

to public interest in the

decommissioning process, the Federal

Register Notice announced a local

meeting to provide the public an

opportunity to make comments on the

Plan. The meeting, an informal public

hearing, was held in August 1994 in

Franklin County and was transcribed.

The public comments have been

addressed in Appendix A to the

attached Safety Evaluation. In addition,

the staff held a second meeting, the day

after the meeting on the Plan, to give the

public an opportunity to present

concerns on issues outside the Plan.

This follow-up meeting was also

transcribed and the staff has provided

separate written responses to all of these

concerns by letters dated May 10 and

September 23, 1994.

The major concerns of the public are

the perceived impacts of Yankee Rowe

power generation and decommissioning

on the Deerfield River Valley and a

claim of denial of public participation

in the decommissioning process. This

latter concern is at issue in a case heard

before the U.S. Court of Appeals for the

First Circuit in Boston, Massachusetts

on January 10, 1995. A decision will be

rendered in the near future. In regard to

the first concern, the plant has been

required to comply with 10 CFR Part 20

throughout the 31 years of power

operation and during the

decommissioning process to date, and

based on many NRC and

Commonwealth of Massachusetts

inspections, the staff concludes that

there are no impacts resulting from

Yankee Rowe that have diminished

public health and safety in the Deerfield

River Valley.

III

The NRC has reviewed the YAEC Plan

with respect to the provisions of the

Commission rules and regulations and

has found the decommissioning as

stated in the YNPS Plan will be

consistent with the regulations in 10

CFR Chapter I, and will not be inimical

to the common defense and security or

to the health and safety of the public.

The staff concluded that this order

should contain a condition that

specifies the method by which the

licensee may make changes to the Plan,

the Final Safety Analysis Report, or the

facility.

IV

Accordingly, pursuant to Sections

103, 161b, 161i, and 161o, of the Atomic

Energy Act of 1954 (as amended), 10

CFR 50.82, the YNPS Decommissioning

Plan is approved and decommissioning

of the plant is authorized subject to the

following condition:

With the respect to changes to the facility

or procedures described in the updated FSAR

or changes to the Decommissioning plan, and

the conduct of tests and experiments not

described in the FSAR, the provisions of 10

CFR 50.59 shall apply.

Pursuant to 10 CFR 51.21, 51.30, and

51.35, the Commission has prepared an

Environmental Assessment and Finding

of No Significant Impact for the

proposed action. Based on that

assessment, the Commission has

determined that the proposed action

will not result in any significant

environmental impact and that an

environmental impact statement need

not be prepared.

V

For further details with respect to this

action see: (1) The application for

authorization of decommission the

facility, of December 20, 1993, as

supplemented August 5, August 22,

October 24 and October 26, 1994. These

documents are available for public

inspection at the Commission Public

Document Room, the Gelman Building,

2120 L Street NW., Washington, D.C.

20555, and at the Local Public

Document Room located at the

Greenfield Community College, 1

College Drive, Greenfield,

Massachusetts 01301.

Dated at Rockville, Maryland this 14th day

of February 1995.

For the Nuclear Regulatory Commission.

William T. Russell,

Director Office of Nuclear Reactor Regulation.

[FR Doc. 95–4268 Filed 2–21–95; 8:45 am]

BILLING CODE 7590–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 33–7137, File No. S7–6–95]

Securities Uniformity; Annual

Conference on Uniformity of Securities

Law

AGENCY: Securities and Exchange

Commission.

ACTION: Publication of release

announcing issues to be considered at a

conference on uniformity of securities

laws and requesting written comments.

SUMMARY: In conjunction with a

conference to be held on March 27,

1995, the Commission and the North

American Securities Administrators

Association, Inc. today announced a

request for comments on the proposed

agenda for the conference. This meeting

is intended to carry out the policies and

purposes of section 19(c) of the

Securities Act of 1933, adopted as part

of the Small Business Investment

Incentive Act of 1980, to increase

uniformity in matters concerning state

and federal regulation of securities, to

maximize the effectiveness of securities

regulation in promoting investor

protection, and to reduce burdens on

capital formation through increased

cooperation between the Commission

and the state securities regulatory

authorities.

DATES: The conference will be held on

March 27, 1995. Written comments

must be received on or before March 22,

1995 in order to be considered by the

conference participants.

ADDRESSES: Written comments should

be submitted in triplicate by March 22,

1995 to Jonathan G. Katz, Secretary,

Securities and Exchange Commission,

450 5th Street NW., Washington, DC

20549. Comments should refer to File

No. S7–6–95 and will be available for

public inspection at the Commission’s

Public Reference Room, 450 5th Street

NW., Washington, DC 20549.

FOR FURTHER INFORMATION CONTACT:

William E. Toomey or Richard K. Wulff,

Office of Small Business Policy,

Division of Corporation Finance,

Securities and Exchange Commission,

450 5th Street NW., Washington, DC

20549, (202) 942–2950.

SUPPLEMENTARY INFORMATION:

I. Discussion

A dual system of federal-state

securities regulation has existed since

the adoption of the federal regulatory

structure in the Securities Act of 1933

(the ‘‘Securities Act’’).1 Issuers

attempting to raise capital through

securities offerings, as well as

participants in the secondary trading

markets, are responsible for complying

with the federal securities laws as well

as all applicable state laws and

regulations. It has long been recognized

that there is a need to increase

uniformity between federal and state

regulatory systems, and to improve

cooperation among those regulatory

bodies so that capital formation can be

made easier while investor protections

are retained.

The importance of facilitating greater

uniformity in securities regulation was

endorsed by Congress with the
9872 Federal Register / Vol. 60, No. 35 / Wednesday, February 22, 1995 / Notices

2Pub. L. 96–477, 94 Stat. 2275 (October 21, 1980).

3NASAA is an association of securities

administrators from each of the 50 states, the

District of Columbia, Puerto Rico, Mexico and

twelve Canadian Provinces and Territories.

4Securities Act Release No. 7101 (October 13,

1994) (59 FR 52723).

5See Securities Act Rule 175, 17 CFR 230.175;

Securities Exchange Act Rule 3b–6, 17 CFR 240.3b–

6.

6Securities Act Release No. 6949 (July 30, 1992)

(57 FR 36442).

enactment of section 19(c) of the

Securities Act in the Small Business

Investment Incentive Act of 1980.2

Section 19(c) authorizes the

Commission to cooperate with any

association of state securities regulators

which can assist in carrying out the

declared policy and purpose of section

19(c). The policy of that section is that

there should be greater federal and state

cooperation in securities matters,

including: (1) Maximum effectiveness of

regulation; (2) maximum uniformity in

federal and state standards; (3)

minimum interference with the business

of capital formation; and (4) a

substantial reduction in costs and

paperwork to diminish the burdens of

raising investment capital, particularly

by small business, and a reduction in

the costs of the administration of the

government programs involved. In order

to establish methods to accomplish

these goals, the Commission is required

to conduct an annual conference. The

1995 meeting will be the twelfth such

conference.

II. 1995 Conference

The Commission and the North

American Securities Administrators

Association, Inc. (‘‘NASAA’’) 3 are

planning the 1995 Conference on

Federal-State Securities Regulation (the

‘‘Conference’’) to be held March 27,

1995 in Washington, DC. At the

Conference, representatives from the

Commission and NASAA will form into

working groups in the areas of

corporation finance, market regulation,

investment management, and

enforcement, to discuss methods of

enhancing cooperation in securities

matters in order to improve the

efficiency and effectiveness of federal

and state securities regulation.

Generally, attendance will be limited to

representatives of the Commission and

NASAA in an effort to promote frank

discussion. However, each working

group in its discretion may invite

certain self-regulatory organizations to

attend and participate in certain

sessions.

Representatives of the Commission

and NASAA currently are formulating

an agenda for the Conference. As part of

that process the public, securities

associations, self-regulatory

organizations, agencies, and private

organizations are invited to participate

through the submission of written

comments on the issues set forth below.

In addition, comment is requested on

other appropriate subjects sought to be

included in the Conference agenda. All

comments will be considered by the

Conference attendees.

III. Tentative Agenda and Request for

Comments

The tentative agenda for the

Conference consists of the following

topics in the areas of corporation

finance, investment management,

market regulation and oversight, and

enforcement.

(1) Corporation Finance Issues

a. Forward-looking Information

On October 13, 1994, the Commission

issued a concept release 4 regarding

disclosure of forward-looking

information and the effectiveness of the

safe harbor provisions for that type of

disclosure.5 The concept release

requests comment from the public on

various alternatives to the safe harbor

provisions that have been proposed by

several people. In addition, the

Commission will hold public hearings

in Washington, DC and in San

Francisco, California on February 13

and 16, 1995, respectively, concerning

these issues. The conference

participants will discuss and consider

the issues regarding the use of forwardlooking information in disclosure

documents and the Commission’s safe

harbor provisions.

b. Uniform Limited Offering Exemption

Congress specifically acknowledged

the need for a uniform limited offering

exemption in enacting section 19(c) of

the Securities Act and authorized the

Commission to cooperate with NASAA

in its development. The Commission

working with the states toward this goal,

developed Rule 505 of Regulation D, the

federal exemption for certain limited

offerings, while NASAA crafted the

complementary Uniform Limited

Offering Exemption (‘‘ULOE’’).

ULOE provides the framework for a

uniform exemption from state

registration for certain issues of

securities which would be exempt from

federal registration by virtue of

Regulation D. To date, more than half

the states have adopted some form of

ULOE. Both the Commission and

NASAA continue to make a concerted

effort toward its universal adoption. The

conferees will discuss the continued

usefulness of ULOE, as well as possible

steps to encourage its adoption by the

remaining states. Further, consideration

will be given to whether there are

alternative exemptive methods which

might be suitable for coordination

among the states and the federal system,

either within or outside of the ULOE

framework.

c. Small Business Initiative

On July 30, 1992, the Commission

adopted a number of rulemaking

changes, often described as the Small

Business Initiative, which were

designed to streamline and simplify the

Commission’s regulatory system

applicable to the public sale of

securities by small businesses, and to

provide new opportunities for investors,

consistent with the Commission’s

obligations to protect such investors.6

Among other things, the ceiling for the

Regulation A exemption was raised

from $1,500,000 to $5,000,000, and

issuers contemplating a Regulation A

offering were, for the first time,

permitted to use a written document to

‘‘test the waters’’ for investor interest

prior to assuming the expense of an

offering.

The participants will discuss the

impact of these changes, and the need

for any additional exemptive relief in

the small business area. The

participants will also review their

experience with amended Regulation A

and the use of ‘‘test the waters’’

documents.

Public comment is invited on the

efficacy of the Small Business Initiative

as a whole. Comment is also sought

with respect to any other exemptions

that might be developed to enhance the

ability of small issuers to raise capital,

while protecting legitimate interests of

investors.

d. Disclosure Policy and Standards

The Commission regularly reviews

and revises its policies with regard to

the most appropriate methods of

ensuring the disclosure of material

information to the public. Coordination

of this effort with the states has been

extremely helpful. Commenters are

invited to discuss areas, and particularly

whether or not there are particular

industries, where federal-state

cooperation in addressing disclosure

standards could be of special

significance as well as any ways in

which federal-state cooperation could

be improved. Comment is also sought

on the application of plain language

principles to disclosure documents that

are becoming increasingly lengthy and

complex.
Federal Register / Vol. 60, No. 35 / Wednesday, February 22, 1995 / Notices 9873

7Securities Act Release No. 7053 (April 19, 1994)

(59 FR 21644); Securities Act Release Nos. 7117,

1778, 7119 (December 13, 1994) (59 FR 65628, 59

FR 65632, 59 FR 65637).

8Securities Exchange Act Release No. 34961

(November 10, 1994) (59 FR 59390).

9Securities Exchange Act Release No. 33741

(March 9, 1994) (59 FR 12748).

10Securities Act Release No. 7086 (August 31,

1994) (59 FR 46314).

11See NASAA Reports (CCH) ¶ 4161 (1994).

12Securities Exchange Act Release No. 35224

(Jan. 12, 1995), (60 FR 4040).

13See NASD Notice To Members 94–94 (Dec.

1994).

14See Letter re: Chubb Securities Corporation

(Nov. 24, 1994).

15See Interagency Statement On Retail Sales Of

Nondeposit Investment Products, Board of

Governors of the Federal Reserve System, Federal

Deposit Insurance Corporation, Office of The

Continued

e. Multinational Securities Offerings

The Commission has recently adopted

a number of changes to its rules and

forms designed to facilitate access by

foreign issuers to the U.S. capital

markets. On April 19, and December 13,

1994, the Commission adopted

amendments designed to streamline the

registration and reporting process for

foreign companies accessing the U.S.

public markets by expanding the

availability of short-form and shelf

registration and streamlining the

reconciliation and reporting

requirements.7 Comment is specifically

requested on ways to coordinate federal

and state treatment of multinational

offerings.

f. Debt Market Initiatives

On November 10, 1994, the

Commission adopted amendments to

Rule 15c2–12 under the Securities

Exchange Act of 1934 (‘‘Exchange Act’’)

that are intended to improve disclosure

in the secondary market for municipal

securities.8 The amendments prohibit a

municipal securities dealer from

underwriting an issue of municipal

securities unless the issuer undertakes

to provide annual financial information

and notices of material events to the

market by lodging that information with

informational repositories. The

amendments also prohibit the

recommendation of a municipal security

unless the dealer has procedures in

place to provide reasonable assurance

that it will receive promptly any event

notices with respect to that security.

The amendments follow upon a

March 9, 1994 interpretive release

issued by the Commission that

addressed the disclosure obligations of

issuers and other market participants

under the antifraud provisions of the

federal securities laws in both the

primary and secondary markets for

municipal securities.9

The Conference participants will

discuss these developments and other

matters with respect to municipal

securities. In addition, they will discuss

the Commission’s recent proposals

concerning disclosure of security

ratings.10

g. Derivatives

Derivatives are financial or

commodity instruments which derive

their value from an interest rate, equity

price, market or other defined index,

foreign currency exchange rate,

commodity price of other identified

measure. While derivatives typically are

described as including futures,

forwards, swaps and options, other

instruments such as structured notes,

interest-only and principal-only strips,

inverse floaters and indexed debt and

equity instruments are included in the

broader definition of derivatives

because they have similar risk

characteristics. Recently published data

indicate that the notional amount of

derivatives worldwide exceeds $12

trillion.

Investments in derivative and similar

instruments expose investors to

potential gains or losses linked to the

changes in the underlying variable. The

increasing complexity and widespread

use of derivatives for trading and risk

management purpose has generated

widespread interest. In 1994 a number

of corporate issuers, investment

companies and municipalities

experienced significant losses on

derivative instruments and structured

instruments. The Commission has

undertaken a number of initiatives to

address disclosure, accounting and sales

practices involving derivatives and

similar instruments. Conferees will

discuss the application of federal and

state securities laws to derivatives and

similar instruments as well as

disclosure issues relating to issuances of

and investments in these instruments.

(2) Market Regulation Issues

a. Central Registration Depository

(‘‘CRD’’)

The CRD is a computerized filing and

data processing system operated by the

NASD that maintains information

concerning registered broker-dealers

and their associated persons. The NASD

is currently in the process of

implementing a comprehensive plan to

redesign the CRD. The redesigned

system, which is expected to be fully

operational in 1996, will be expanded to

enhance its regulatory function for use

by the states, self-regulatory

organizations, and the Commission.

Among the improvements anticipated

are (1) Streamlined presentation and

capture of data, (2) better access to

information (e.g., the ability to create

and retrieve standardized and

specialized computer searches), and (3)

electronic filing of uniform Forms U–4,

U–5, and BD, discussed below.

The participants will discuss the

status of the CRD redesign project, as

well as issues relating to operation of

the existing CRD system.

b. Forms Revision

In connection with the CRD redesign,

NASAA has adopted amendments to

Form U–4,11 the uniform form for

registration of associated persons of a

broker-dealer. The revisions to Form U–

4 respond to certain recommendations

addressed in the CRD redesign and

primarily are designed to facilitate the

conversion of data from the existing

CRD system to the newly designed CRD.

The Commission recently has proposed

for public comment similar

amendments to Form BD, the uniform

broker-dealer registration form under

the Exchange Act.12 The proposed

revisions to Form BD are intended to

facilitate retrieval of disciplinary

information by eliciting more precise

information about broker-dealers and

their securities business, and by

reorganizing disclosure items into

related categories.

The participants will discuss issues

relating to the revisions to Forms U–4

and BD, including the disclosure of

customer complaint history of registered

personnel of broker-dealers and issues

raised by the comment letters on the

proposed amendments to Form BD.

c. Bank Securities Activities

The NASD recently has proposed

rules that would govern the conduct of

member broker-dealers operating on

financial institution premises.13 The

proposed rules respond to concerns

expressed by NASD members about the

lack of clear guidance with respect to

the activities of bank-affiliated brokerdealers and third-party broker-dealers

operating on the premises of financial

institutions pursuant to a networking

arrangement. The NASD Notice to

Members states that, as proposed, the

rules adopt investor protection

principles similar to those set forth in a

recent no-action letter issued by the staff

of the Commission,14 and an

interagency statement issued by the four

banking regulators (‘‘Interagency

Statement’’).15 For example, consistent
9874 Federal Register / Vol. 60, No. 35 / Wednesday, February 22, 1995 / Notices

Comptroller of the Currency, and Office of Thrift

Supervision, (Feb. 15, 1994).

16See notes 8 and 9 supra and accompanying

text.

17Securities Exchange Act Release No. 34962

(Nov. 10, 1994), (59 FR 59612).

18Securities Exchange Act Release No. 34902

(Oct. 27, 1994), (59 FR 55006).

19Pub. L. No. 102–243, 105 Stat. 2394 (1991)

(codified at 47 U.S.C. 227 (1992)); 47 CFR 64.1200

(1992).

with the staff no-action letter and the

Interagency Statement, the rules would

require members to enter into a written

agreement with the financial institution

that describes the responsibilities of the

parties and the conditions of the

agreement, including the physical

location of the broker-dealer, customer

disclosures, compensation, supervisory

responsibilities, solicitation of

customers, and communications with

the public.

The participants will discuss these

proposed rules and other concerns

raised by sales of securities on the

premises of financial institutions,

including inspections by banking and

securities regulators and licensing of

financial institution salespersons.

d. Municipal Securities

The Commission has been working

with Congress, other regulators, and

industry participants on a number of

issues relating to the municipal

securities market, including ways of

improving dissemination of disclosure

in the primary and secondary markets.

As indicated in the Corporation Finance

portion of this tentative agenda, the

Commission recently adopted

amendments to Rule 15c2–12 in

furtherance of this goal.16

The Commission also adopted

amendments to Rule 10b–10,17 which

will require brokers-dealers to disclose

(1) When a debt security is not rated by

a nationally recognized statistical rating

organization; (2) if they are not members

of the Securities Investor Protection

Corporation (except, in limited

circumstances, for transactions in

mutual fund shares); (3) the availability

of information with respect to

transactions in collateralized debt

securities; and (4) the amount of any

mark-ups and mark-downs in certain

NASDAQ and regional exchange-listed

securities that are subject to last sale

reporting. In a related release, the

Commission adopted Rule 11Ac1–3 and

amendments to Rule 10b–10, which,

together, will require broker-dealers to

disclose on customer confirmations,

account statements, and new accounts

documents whether payment for order

flow is received by the broker-dealer for

transactions in certain securities and the

fact that the source and nature of the

compensation received will be

furnished upon written request.18

The participants will discuss how

Rule 11Ac1–3 and amendments to Rules

10b–10 and 15c2–12 will affect the

securities industry. In addition, the

participants will discuss the progress

made by the Municipal Securities

Rulemaking Board and the Public

Securities Association toward enhanced

price transparency in the municipal

securities market.

e. Sales Practice Activities

In May of last year, the Commission

released the findings of the Large Firm

Project. The Project involved a review of

the hiring, supervisory, and retention

practices at nine of the country’s largest

retail brokerage firms conducted by the

Commission, the NYSE and the NASD.

As a result of the Project, the

Commission staff proposed a number of

recommendations to strengthen brokerdealer compliance systems, enhance

SRO efforts, and reinforce the

Commission’s principal mandate of

investor protection. The participants

will discuss the status of those

recommendations, as well as other

initiatives resulting from the Large Firm

Project, including Commission policy

on re-entry into the securities industry

of individuals subject to a Commission

bar.

The Commission is in the process of

conducting another joint regulatory

examination sweep in coordination with

the NASD, the NYSE and NASAA.

Rather than focus on particular large

firms as the staff did during the Large

Firm Project, during this sweep the staff

will include firms of all sizes and will

target so-called ‘‘rogue’’ or problem

registered representatives throughout

the industry. Participants will report on

the status of the current sweep.

f. Cold Calling

Broker-dealers, like all firms engaged

in telemarketing, are subject to the

Telephone Consumer Protection Act of

1991 and a Federal Communications

Commission (‘‘FCC’’) rule promulgated

thereunder.19 Pursuant to the FCC rule,

telemarketers must establish time-of-day

restrictions, ‘‘do-not-call’’ lists, training

requirements, supervisory procedures,

and identification requirements.

Moreover, in August 1994, new

legislation entitled the Telemarketing

and Consumer Fraud and Abuse

Prevention Act was passed that will

require the Federal Trade Commission

(‘‘FTC’’) to enact cold-calling rules and

to direct the SEC to adopt substantially

similar rules within six months of the

FTC rules.

The Commission has been

considering various methods to curtail

abusive cold-calling practices in the

securities industry and will discuss

with participants what actions might be

taken in advance of the FTC rules.

g. Continuing Education

The Industry/Regulatory Council on

Continuing Education, composed of

representatives from the SROs, a crosssection of firms, and liaisons from

NASAA and the SEC, is developing a

continuing education curriculum to

improve practices throughout the

industry. Under the Council’s proposed

program, every broker-dealer will be

required to provide its registered

representatives and first-line

supervisors with annual continuing

education relating to products and

services. In addition, the Council

proposed that all registered

representatives who have been

registered less than ten years or who

have been the subject of serious

disciplinary action receive compliance,

ethics, and sales practice training. Two

working committees are developing the

elements of the program. The

committees have drafted enabling rules

and designed the program structure,

content, and delivery mechanisms. The

Council received approval of the rules

on February 8, 1995 and expects to

implement the program in July 1995.

Participants will discuss issues involved

in implementing the continuing

education program.

h. Three Day Settlement

In October 1993, the Commission

adopted Rule 15c6–1 which will

become effective June 7, 1995. The rule

establishes three business days as the

standard settlement time frame for most

broker-dealer transactions. Since the

date of adoption, many broker-dealers

have been encouraging their retail

customers to leave securities in street

name and to open up money

management accounts in order to meet

the three day settlement requirements.

While this practice is acceptable, it is a

misrepresentation to state that the rule

requires customers to leave assets with

broker-dealers. The participants will

discuss potentially abusive sales

practices used by broker-dealers

including misrepresentation of the

requirements of the rule.

(3) Investment Management Issues

a. Investment Company Disclosure

Over the last decade, investment

company assets—particularly assets
Federal Register / Vol. 60, No. 35 / Wednesday, February 22, 1995 / Notices 9875

20 Investment Company Act Release No. 20472

(Aug. 11, 1994) (59 FR 42187) (proposing

amendments to Rule 6–07 of Regulation S–X).

21 Investment Company Act Release No. 20614

(Oct. 13, 1994) (59 FR 52689).

22 Investment Advisers Act Release No. 1406

(March 16, 1994) (59 FR 13464). 1 15 U.S.C. 78s(b)(1) (1988).

invested in open-end investment

companies, or ‘‘mutual funds’’—have

grown steadily. The conferees will

discuss a number of Commission

initiatives aimed at improving

disclosure to mutual fund investors.

The conferees will discuss ways to

improve the quality of information

regarding mutual funds available to

investors, particularly less experienced

investors, as well as federal and state

efforts toward more uniform federal and

state investment company disclosure

requirements. The conferees will also

discuss the steps they are taking to

examine and to improve the clarity and

adequacy of mutual fund prospectuses.

In response to a request from certain

members of Congress, the Division of

Investment Management prepared a

study dated September 26, 1994 on the

use of derivatives by mutual funds. As

part of its study, the Division

recommended that the Commission

consider seeking public comment in

early 1995 on alternatives for improving

risk disclosure in mutual fund

prospectuses. The conferees are

expected to discuss issues relating to

investment company risk disclosure,

including the possible use of

quantitative risk measurement. In

addition, the conferees will discuss

ways to facilitate investor access to

information about portfolio securities

held by funds.

The Commission recently proposed

rule and form amendments relating to

the reporting of expenses by investment

companies.20 The proposed

amendments would require an

investment company to reflect as

expenses in its financial statement

certain liabilities of the company paid

by broker-dealers in connection with the

allocation of the company’s brokerage

transactions to the broker-dealers. The

amendments are intended to enhance

the information provided to investors so

that they may better assess investment

company expenses and performance.

The conferees are expected to discuss

this proposal and the comments that the

Commission has received.

In October of 1994, the Commission

adopted significant revisions to the

proxy rules applicable to funds.21 The

amended rules are the first significant

revisions to the fund proxy rules since

1960 and reflect the Commission’s

commitment to improved disclosure for

fund shareholders. The conferees are

expected to discuss the revised rules.

b. Investment Advisers

On March 16, 1994, the Commission

proposed two new rules under the

Investment Advisers Act of 1940

(‘‘Advisers Act’’).22 One of these rules

would expressly prohibit investment

advisers from making unsuitable

recommendations to clients; the other

proposed rule would prohibit registered

investment advisers from exercising

investment discretion over client

accounts unless they reasonably believe

that the custodians of those accounts

send account statements to the clients at

least quarterly. The conferees will

discuss the status of the proposed rules.

The conferees will also discuss ways

in which the Commission and the states

can coordinate their respective

investment adviser inspection programs

and efforts to identify investment

advisers that have failed to register as

such with the Commission or the

appropriate state authorities.

(4) Enforcement Issues

In addition to the above-stated topics,

the state and federal regulators will

discuss various enforcement-related

issues which are of mutual interest.

(5) Investor Education

Recently, the Commission announced

a number of initiatives to aid investors

in understanding how to invest wisely

and protect themselves from abusive

and fraudulent industry practices. The

States and NASAA have a longstanding

commitment to investor education and

the Commission is intent on

coordinating and complementing those

efforts to the greatest extent possible.

The participants at the conference will

discuss investor education and potential

joint projects in each of the working

group sessions. They will specifically

consider the results of recent

Commission activities in this area:

Information generated at a series of

town meetings and investor forums;

public reaction to a new toll-free

information line for investors and a new

electronic bulletin board which

provides information about the

Commission and its responsibilities; the

usefulness of other explanatory

informational materials, including new

pamphlets provided by the Commission

to the public; and the progress of

Commission efforts to develop ‘‘plain

English’’ instructions for mandatory

disclosure items, and guidelines for

simpler summaries of information in

required filings. Future projects to be

considered will include the following:

(1) Developing an ‘‘Investor Information

Kit’’ for novice or unsophisticated

investors that includes basic

information that every investor should

know in an easy-to-use format; (2)

developing a model curriculum for high

school classes and adult seminars on the

basics of how to invest wisely and what

to do if a problem arises; and (3)

designing a distribution plan for

Commission educational products to

assure that information is provided to

investors when they are in the process

of making major investment decisions

and most likely to need such

information.

(6) General

There are a number of matters which

are applicable to all, or a number, of the

areas noted above. These include

EDGAR, the Commission’s electronic

disclosure system, rulemaking

procedures, training and education of

staff examiners and analysts and sharing

of information.

The Commission and NASAA request

specific public comments and

recommendations on the abovementioned topics. Commenters should

focus on the agenda but may also

discuss or comment on other proposals

which would enhance uniformity in the

existing scheme of state and federal

regulations, while helping to maintain

high standards of investor protection.

Dated: February 15, 1995.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–4237 Filed 2–21–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35378; File No. SR–DTC–

95–02]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Order Granting Accelerated

Approval of Proposed Rule Change

Concerning Procedures Relating to

Rule 17Ad–16 and Order Designating

The Depository Trust Company as the

Approved Qualified Registered

Securities Depository

February 15, 1995.

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

Securities Exchange Act of 1934

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

January 13, 1995, The Depository Trust

Company (‘‘DTC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I and II

below, which items have been prepared

primarily by DTC. The Commission is