12800 Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices

23Letter from Springate & Company, supra note

7.

24Thomson asserts that rule G–15(d)(ii) precludes

vendors such as Thomson from competing with The

Depository Trust Company (‘‘DTC’’), a registered

clearing agency. Letter from Thomson, supra note

3. The self-regulatory organization confirmation

rules limit confirmation and acknowledgment of

institutional trades to the facilities of a registered

securities depository.

25 In an earlier letter, Thomson formally requested

P. Howard Edelstein, President, Electronic

Settlements Group, Thomson Trading Services, Inc.

(A Thomson Financial Services Company), to

Harold L. Johnson, Deputy General Counsel, MSRB

(June 24, 1994).

26Letter from Harold L. Johnson, Deputy General

Counsel, MSRB, to P. Howard Edelstein, President,

Electronic Settlements Group, Thomson Financial

Services (November 9, 1994).

27Securities Exchange Act Release No. 35332

(February 3, 1995), 60 FR 8102.

28 15 U.S.C. 78o–4 and 78q–1 (1988).

30 17 CFR 200.30–3(a)(12) (1994).

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

2Letter from Leopold S. Rassnick, Senior Vice

President, General Counsel and Secretary, PTC, to

Jonathan Katz, Secretary, Commission (February 1,

1995).

customer is less credit worthy.23 The

Commission believes that by educating

investors about the requirements of T+3

settlement, broker-dealer can limit such

customer confusion.

Another commenter, Thomson,

supports MSRB’s efforts to shorten the

settlement cycle for municipal securities

transactions. Thomson, however,

believes that the MSRB should amend

rule G–15(d)(ii), which requires the use

of a registered clearing agency’s

facilities for automated confirmation

and acknowledgement of all DVP/RVP

transactions.24 Since Thomson’s letter,25

the MSRB has issued a letter which

denied Thomson’s request and which

stated the MSRB’s believe that providers

of confirmation/acknowledgment

services should be subject to regulatory

oversight and should be linked into

other providers of such services.26

The Commission believes that the

issues raised by the Thomson letter

need not be resolved prior to the

approval of the proposed rule change.

Discussions regarding Thomson’s

concerns are underway among the

Commission, Thomson, and DTC. DTC

has submitted a rule filing that will

establish a linkage between DTC and

vendors such as Thomson.27 In denying

Thomson’s request, MSRB stated that it

would consider any proposals arising

from Thomson’s discussions with the

Commission. The Commission intends

to consider whether self-regulatory

organization rules should continue to

preclude use of private vendor systems

for confirmation/affirmation services in

DVP/RVP trades. However, the

Commission believes that T+3

settlement of municipal securities

should not be delayed while these

issues are being resolved.

As discussed above, Thomson’s letter

suggests that approval of the proposed

rule change without amendments to

MSRB rule G–15(d)(ii) raises

competitive concerns. Under the Act,

the Commission’s responsibility is to

balance the perceived anticompetitive

effects of a regulatory policy or decision

against the purpose of the Act that

would be advanced by the policy or

decisions and the costs associated

therewith. The Commission notes that

any anticompetitive effects pointed to

by Thomson are not caused by the

proposed rule change approved by this

order but rather by an existing MSRB

rule. The Commission is reviewing

Thomson’s claim but does not believe

that approval of this proposal will itself

create any burdens on competition.

Moreover, as discussed above, the rule

advances fundamental purposes under

the Act, namely the efficient clearance

and settlement of securities.

IV. Conclusion

For the reasons stated above, the

Commission finds that MSRB’s proposal

is consistent with Sections 15B and 17A

of the Act.28

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,29 that the

proposed rule change (File No. SR–

MSRB–94–10) be, and hereby is,

approved.30

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–5584 Filed 3–7–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35434; File No. SR–PTC–

95–01]

Self-Regulatory Organizations;

Participants Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Relating to the

Reduction of Certain Fees

March 2, 1995.

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

Securities Exchange Act of 1934 1

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

January 31, 1995, the Participants Trust

Company (‘‘PTC’’) 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 PTC. On February

7, 1995, PTC amended the proposal.2

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 text of the proposed rule change

is as follows:

italics indicate additions

[brackets] indicate deletions

Participants Trust Company Schedule of

Fees

FULL SERVICE PARTICIPANTS

[Effective April 1, 1995]

Service Fee

Account Maintenance:

First Six Business Accounts .............................................................. $[2,500.00] 2,000.00/month.

Additional Account ............................................................................. $250.00/account/month.

Book-Entry Delivery/Receipt*—(includes all DK’s and FTX Transactions).$[3.00] 2.00 each.

Repo Movement ........................................................................................ $[3.00] 2.00 each.

Seg Movement ($.50/side) ........................................................................ $1.00 each.

MVC (Bulk Seg Movement—regardless of number of positions) ............. $50.00 each.
Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices 12801

FULL SERVICE PARTICIPANTS—Continued

[Effective April 1, 1995]

Service Fee

Position Maintenance/P&I Disbursement (includes custody, P&I processing, redemptions and repo accounting).$[1.50] 1.25/security/month.

$.50/Serial Note/month.

Bulk Transfers (transfers of collateral into LPA accounts, or caused by

a Participant merger).

$50.00/transfer (regardless of number of positions).

Deposits .................................................................................................... $3.00/certificate.**

[Manual] ............................................................................................. [$4.00/certificate].

[Automated Bulk (200–1,000 pools)] ................................................. [$3.50/certificate].

[Automated Bulk (more than 1,000 pools)] ........................................ [$3.00/certificate].

Withdrawals ............................................................................................... $15.00 each.***

CLF/BFT Movements ................................................................................ $.50/position/side with a maximum charge of $50.00/side.

HIC Segregation ........................................................................................ $50.00 each.

Interim Accounting Adjustments ............................................................... $10.00 each side.

Publications (Participant Operating Guide, Data Entry Guide and PTC

Rules).

$50.00 each copy (first set free).

*Receive transaction fee waived for transfer of positions to a new Participant.

**Plus transfer agent fee, if applicable. GNMA MBS transfer agent fee is $10.00 per pool. PTC deposit fee is waived for new Participants.

***Plus transfer agent fee, if applicable. GNMA MBS transfer agent fees are: $50.00 per certificate for same day availability, $25,00 per certificate for next day availability or $10.00 per certificate for two-business day availability.

LIMITED PURPOSE PARTICIPANTS

[Effective April 1995]

Service Fee

Account Maintenance ................................................................................ $500.00/month.*

Book-Entry Delivery/Receipt**—(includes all DK’s and FTX Transactions).$[3.00] 2.00 each.

Seg Movement ($.50/side) ........................................................................ $1.00 each.

MVC (Bulk Seg Movement—regardless of number of positions) ............. $50.00 each.

Position Maintenance/P&I Disbursement (includes custody, P&I processing, redemptions and repo accounting).$[1.50] 1.25/security/month.

$.50/Serial Note unit/month.

Bulk Transfers (transfers of collateral into LPA accounts, or caused by

a Participant merger).

$50.00/transfer (regardless of number of positions).

Deposits .................................................................................................... $3.00/certificate.***

[Manual] ............................................................................................. [$4.00/certificate].

[Automated Bulk (200–1,000 pools)] ................................................. [$3.50/certificate].

[Automated Bulk (more than 1,000 pools)] ........................................ [$3.00/certificate].

Withdrawals ............................................................................................... $15.00 each.****

CLF/BFT Movements ................................................................................ $.50/position/side with a maximum charge of $50.00/side.

HIC Segregation ........................................................................................ $50.00 each.

Interim Accounting Adjustments ............................................................... $10.00 each side.

Publications (Participant Operating Guide, Data Entry Guide and PTC

Rules).

$50.00 each copy (first set free).

*A Limited Purpose Account opened by a Full Service Participant is subject to the fee schedule for a Full Service Participant.

** Receive transaction fee waived for transfer of positions to a new Participant.

***Plus transfer agent fee, if applicable. GNMA MBS transfer agent fee is $10.00 per pool. PTC deposit fee is waived for new Participants.

****Plus transfer agent fee, if applicable. GNMA MBS transfer agent fees are: $50.00 per certificate for same day availability, $25.00 per certificate for next day availability or $10.00 per certificate for two-business day availability.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, PTC

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. PTC 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

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed rule

change is to reduce PTC’s fees for five

of its services (i.e., Account

Maintenance, Book-entry Delivery and

Receipt, Repo Movement, Position

Maintenance/P&I Disbursement and

Deposits) and to include additional fees

with respect to certain incidental

services that are not frequently utilized

by PTC participants (i.e., Bulk Transfers

and Publications). This proposed rule

change will be effective April 1, 1995.

PTC believes that the modification is

appropriate based upon PTC’s projected

earnings and expenses, the desirability

of paying dividends on its outstanding

stock, and its level of capital.

PTC believes the proposed rule

change is consistent with the

requirements of the Act and specifically

with Section 17A(b)(3)(D) of the Act

because the proposal provides for the

equitable allocation of fees amount PTC

participants.

(B) Self-Regulatory Organizaton’s

Statement on Burden on Competition

PTC does not believe that the

proposed rule change will have an
12802 Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices

3 15 U.S.C. 78s(b)(3)(A)(ii) (1988).

4 17 CFR 240.19b–4(e)(2) (1994).

5 17 CFR 200.30–3(a)912) (1994).

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

2 17 CFR 240.19b–4 (1992).

3See Securities Exchange Act Release No. 35141

(December 22, 1994), 59 FR 67744 (December 30,

1994).

4See Letter from Gerald O’Connell, First Vice

President, Market Regulation and Trading

Operations, Phlx, to Michael Walinskas, Branch

Chief, Office of Market Supervision (‘‘OMS’’),

Division of Market Regulation (‘‘Division’’),

Commission, dated December 14, 1994.

5 In Amendment No. 2, the Phlx withdrew

Amendment No. 1, inserted the effective date of the

Two-for-One Split (as defined herein) into new Rule

1014(g)(ii), corrected an erroneous cross-reference

in new Rule 1014(g)(ii), and clarified that the

proposed exceptions to the Two-for-One Split are

mutually exclusive. See Letter from Gerald

O’Connell, First Vice President, Market Regulation

and Trading Operations, Phlx, to Michael

Walinskas, Branch Chief, OMS, Division,

Commission, dated February 9, 1995.

6See Securities Exchange Act Release No. 34109

(May 25, 1994), 59 FR 28570 (June 2, 1994)

(‘‘Exchange Act Release No. 34109’’). The New Unit

Split was subsequently expanded to include index

option specialists. See Securities Exchange Act

Release No. 35028 (November 30, 1994), 59 FR

63151 (December 7, 1994) (‘‘Exchange Act Release

No. 35028’’).

7The Two-for-One Split only applies to orders for

more than five contracts. Additionally, it applies to

all option classes listed after August 26, 1994, and

to 50% of each specialist unit’s issues listed prior

to that date. Specifically, each specialist unit’s

issues are divided into quartiles based on the most

recent quarterly contract volume; the specialist unit

may choose one-half of the issues in each quartile,

as long as the total number of issues does not

exceed 50% of the unit’s issues. See Securities

Exchange Act Release No. 34606 (August 26, 1994),

59 FR 45741 (September 2, 1994) (‘‘Exchange Act

Release No. 34606’’) As with the New Unit Split,

this provision was subsequently expanded to

include index option specialists. See Exchange Act

Release No. 35028, supra note 6.

8See Phlx Rule 1014(g) (Two-for-One Split) and

Commentary .17 thereto (New Unit Split).

9A controlled account is defined as ‘‘any account

controlled by or under common control with a

member broker-dealer.’’ See Phlx Rule 1014(g).

Customer accounts are all accounts other than

controlled accounts and specialist accounts. For

purposes of Rule 1014(g), discretionary accounts are

considered customer accounts. Telephone

conversation between Edith Hallahan, Special

Counsel, Phlx, and Brad Ritter, Senior Counsel,

OMS, Division, Commission, on February 28, 1995.

The Phlx represents that the rule will continue to

prohibit the application of any such enhancement

in instances that would lessen the pro rata

participation of customer orders on parity.

impact on or impose a 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 have been

solicited or received. PTC will notify the

Commission of any written comments

received by PTC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) 3 of the Act and pursuant

to Rule 19b–4(e)(2) 4 promulgated

thereunder because the proposal effects

a change in a dues, fee, or other charge

imposed by PTC. At any time within

sixty days of the filing of such rule

change, the Commission may summarily

abrogate such rule change if it appears

to the Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

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 copying in

the Commission’s Public Reference

Section, 450 Fifth Street, NW,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of PTC. All submissions should

refer to File No. SR–PTC–95–01 and

should be submitted by March 29, 1995.

For the Commission by the Division of

Market Regulations, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–5577 Filed 3–7–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35429; File No. SR–Phlx–

94–59]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval of Amendment

No. 2 to the Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Relating to Enhanced Specialist

Participation in Parity Options Trades

March 1, 1995.

On November 18, 1994, the

Philadelphia Stock Exchange, Inc.

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’),1 and Rule 19b–4

thereunder,2 a proposed rule change: (1)

clarifying when a specialist is entitled to

receive an enhanced participation on

parity equity and index options trades;

and (2) altering the size of the enhanced

specialist participation presently

available pursuant to Phlx Rule 1014(g).

Notice of the proposed rule change

appeared in the Federal Register on

December 30, 1994.3 No comment

letters were received on the proposed

rule change. The Exchange filed

Amendment No. 1 to the proposal on

December 20, 1994,4 and Amendment

No. 2 on February 9, 1995.5 This order

approves the Exchange’s proposal, as

amended.

On May 25, 1994, the Commission

approved an enhanced specialist

participation for ‘‘new equity option

specialist units trading newly listed

options classes where the specialist is

on parity with two or more registered

options traders (‘‘ROTs’’) (‘‘New Unit

Split’’).6 On August 26, 1994, the

Commission approved, on a one-year

pilot basis, an enhanced specialist

participation whereby an equity option

specialist on parity with one or more

ROTs is counted as two crowd

participants (‘‘Two-for-One Split’’).7

When either the New Unit Split or the

Two-for-One Split apply, no customer

order on parity is restricted to a smaller

participation than any other crowd

participant, including the specialist.8

At this time, the Exchange proposes to

amend both Rule 1014(g) and

Commentary .17 thereto to specify that

the enhanced splits apply where equity

and index option specialists are on

parity with controlled accounts, not just

with ROTs. The term ‘‘controlled

account’’ includes accounts controlled

by or under common control with a

member broker-dealer.9

In addition to defining the

circumstances under which the Twofor-One Split and the New Unit Split

will be applied, the current proposal

also serves to replace, in certain

situations, the Two-for-One Split with a

percentage distribution. Those

situations are where there are orders for

more than five contracts and where only

one or two controlled accounts are on

parity with the specialist for such

orders. In those cases: where there is

one controlled account on parity with