Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14043

5 15 U.S.C. 78f(b)(5) (1988).

6 17 CFR 200.30–3(a)(12) (1994).

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

2 17 CFR 240.19b–4 (1992).

3See Securities Exchange Act Release No. 35261

(January 23, 1995), 60 FR 5745 (January 30, 1995).

4See Securities Exchange Act Release No. 34925

(November 1, 1994), 59 FR 55720 (November 8,

1994) (‘‘Exchange Act Release No. 34925’’).

5The Exchange represents that the average value

of a 300 contract Customized FCO transaction, at

prevailing exchange rates, is approximately $15

million. Reducing the minimum opening

transaction size to 200 contracts would still result

in an average minimum transaction value of

approximately $10 million.

6 15 U.S.C. 78(b)(5) (1988).

7See supra note 5.

8See Securities Exchange Act Release No. 32781

(August 20, 1993), 58 FR 45360 (August 27, 1993).

9See Securities Exchange Act Release Nos. 32694

(July 29, 1993), 58 FR 41814 (August 5, 1993), and

31920 (February 24, 1993), 58 FR 12280 (March 3,

1993).

10See Securities Exchange Act Release No. 34364

(July 13, 1994), 59 FR 36813 (July 19, 1994).

to set the margin ‘‘add-on’’ percentage

for Mexican Peso Warrants at 12% for

both initial and maintenance margin,

with a minimum add-on for out-of-themoney warrants of 8%. If, as a result of

the Exchange’s routine monitoring of

margin adequacy, the CBOE determines

that a different percentage would be

appropriate, the Exchange will file a

proposal with the Commission pursuant

to section 19(b) of the Act to modify the

margin add-on percentages applicable to

Mexican Peso Warrants.

The Exchange believes that

Amendment No. 1 to the proposed rule

change is consistent with section 6 of

the Act, in general, and furthers the

objectives of section 6(b)(5) oft he Act,5

in particular, in that the proposal will

promote just and equitable principles of

trade and will contribute to the

protection of investors and the public

interest.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

Amendment No. 1 to 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

Written comments on Amendment

No. 1 to the proposed rule change were

neither solicited nor received.

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 Exchange consents,

the Commission will:

(a) By order approve such proposed

rule change, as amended, or

(b) Institute proceedings to determine

whether the proposed rule change, as

amended, should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

1 to the proposed rule change. 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, as amended, that are filed

with the Commission, and all written

communications relating to the

proposed rule change, as amended,

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. Copies of such filing

will also be available for inspection and

copying at the principal office of the

CBOE. All submissions should refer to

File No. SR–CBOE–95–12 and should be

submitted by April 5, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6351 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35464; International Series

Release No. 791; File No. SR–Phlx–95–03]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.,

Relating to Customized Foreign

Currency Options Transaction Size

March 9, 1995.

On January 17, 1995, 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 to

reduce the minimum transaction size for

customized foreign currency options

(‘‘Customized FCOs’’) from 300 to 200

contracts. Notice of the proposed rule

change appeared in the Federal Register

on January 30, 1995. 3 No comment

letters were received on the proposed

rule change. This order approves the

Exchange’s proposal.

On November 1, 1994, the

Commission approved the Exchange’s

proposal to trade Customized FCOs. 4

Presently, Phlx Rule 1069(a)(6) imposes

a 300 contract minimum for opening

Customized FCO transactions. The

Exchange represents that a number of

midsized corporations and institutions

have told the Exchange that the current

minimum contract value is too large for

their purposes. The Exchange, therefore,

proposed to reduce the minimum

opening transaction size for Customized

FCO transactions to 200 contracts.5

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, the

requirements of Section 6(b)(5) 6 in that

the proposal is designed to promote just

and equitable principles of trade, to

prevent fraudulent and manipulative

acts and practices, and to protect

investors and the public interest.

Specifically, the Commission believes

that the proposed rule change is

designed to make the Customized FCO

market accessible to smaller corporate

FCO users while maintaining the focus

of this market towards institutional

investors. As a result, the Commission

believes that the proposal may serve to

add liquidity to this market which

would benefit all users of Customized

FCO’s.

Moreover, even with lowering the

minimum opening transaction size to

200 contracts, the average value of an

opening Customized FCO transaction

will be approximately $10 million.7 The

Commission believes that this level is

sufficient to ensure that Customized

FCO market continues to be used almost

exclusively by institutional investors.

The Commission also notes that this

dollar value is equivalent to the

minimum opening transaction size that

the Commission required in approving

proposals by the American Stock

Exchange,8 the Chicago Board Options

Exchange,9 and the Pacific Stock

Exchange10 for trading flexible exchange

options (‘‘FLEX Options’’). As a result,

the Commission believes that this

proposal does not raise any regulatory

concerns that were not adequately

addressed by the Exchange when the
14044 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

11See Exchange Act Release No. 34925, supra

note 4.

12 15 U.S.C. 78s(b)(2) (1988).

13 17 CFR 200.30–3(a)(12) (1994).

1Applicants have undertaken to amend their

application during the Notice Period to include the

representation that Future Contracts will be

substantially similar ‘‘in all material respects’’ to

the Contract.

2Applicants are not requesting Commission

review of whether the Fixed Interest Option or any

other Credited Interest Option under the Contracts

are securities required to be registered under the

1933 Act. Applicants will not consider any order

issued as a result of this application to be an

expression of any view by the Commission on this

issue.

Commission approved the trading of

Customized FCOs.11

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,12 that the

proposed rule change (SR–Phlx–95–03)

is hereby approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6352 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–20948; No. 812–9074]

Aetna Insurance Company of America,

et al.

March 9, 1995.

AGENCY: Securities and Exchange

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

ACTION: Notice of application for an

order under the Investment Company

Act of 1940 (‘‘1940 Act’’).

APPLICANTS: Aetna Insurance Company

of America (‘‘Aetna’’); Variable Annuity

Account I of Aetna (‘‘Account I’’),

Variable Annuity Account II of Aetna

(‘‘Account II’’), and any other Separate

Accounts established in the future by

Aetna (‘‘Future Accounts,’’ and together

with Accounts I and II, ‘‘Separate

Accounts’’) to support certain group and

individual deferred variable annuity

contracts (‘‘Contracts’’) or other variable

annuity contracts that are substantially

similar in all material respects to the

Contracts (‘‘Other Contracts’’) and that

may be issued in the future by Aetna; 1

Aetna Life Insurance and Annuity

Company (‘‘ALIAC’’), the principal

underwriter of the Contracts; and Any

Member Broker-Dealer of the National

Association of Securities Dealers, Inc.

(‘‘NASD’’) That May In The Future

Serve As Principal Underwriter For The

Contracts (‘‘Future Underwriters’’).

RELEVANT 1940 ACT SECTIONS: Order

requested under Section 6(c) of the 1940

Act granting exemptions from the

provisions of Sections 26(a)(2)(C) and

27(c)(2) of the 1940 Act.

SUMMARY OF APPLICATION: Applicants

seeking an order permitting the

deduction of a mortality and expense

risk change from the assets of the

Separate Accounts in connection with

the issuance and sale of the Contracts or

Other Contracts.

FILING DATE: The application was filed

on June 24, 1994, and amended on

December 23, 1994 and February 23,

1995.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the Commission orders a

hearing. Interested persons may request

a hearing by writing to the

Commission’s Secretary and serving the

Applicants with a copy of the request,

personally or by mail. Hearing requests

should be received by the Commission

by 5:30 p.m. on April 3, 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 may request

notification of a hearing by writing to

the Commission’s Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street NW., Washington, DC 20549.

Applicants, c/o Aetna Insurance

Company of America, 151 Farmington

Avenue, Hartford, Connecticut 06156.

FOR FURTHER INFORMATION CONTACT:

Yvonne M. Hunold, Assistant Special

Counsel, or Wendy F. Friedlander,

Deputy Chief, at (202) 942–0670, Office

of Insurance Products (Division of

Investment Management).

SUPPLEMENTARY INFORMATION: Following

is a summary of the application; the

complete application is available for a

fee from the Commission’s Public

Reference Branch.

Applicants’ Representations

1. Aetna, a stock life insurance

company, is a wholly-owned subsidiary

of Aetna Life Insurance and Annuity

Company (‘‘ALIAC’’), which is, in turn,

a wholly-owned subsidiary of Aetna

Life and Casualty Company. Aetna is in

the process of qualifying to do business

and obtaining licenses to sell insurance

in all jurisdictions except New York.

2. The Separate Accounts are or will

be established by Aetna for the purpose

of funding variable annuity contracts.

The Separate Accounts are or will be

registered under the 1940 Act as unit

investment trusts. Assets of the Separate

Accounts will be allocated among the

shares of one or more registered openend investment companies (‘‘Funds’’),

some of which may be managed by

ALIAC or its affiliates.

3. ALIAC is the principal underwriter

of the Contracts and may act as

investment adviser to some of the

Funds. ALIAC is registered as a brokerdealer under the Securities Exchange

Act of 1934 and as an investment

adviser under the Investment Advisers

Act of 1940. ALIAC is a member of

NASD.

4. Non-tax qualified Contracts are

funded through Account I and Contracts

purchased and used in connection with

retirement plans under Sections 401(a)

or 403(b) of the Internal Revenue Code,

as amended (‘‘Code’’) are funded

through Account II. Individual

Contracts qualifying for favorable

federal income tax treatment under

Section 408 of the Code and Contracts

purchased by deferred compensation

plans under Section 457 of the Code

may be funded through either Account

I or Account II.

5. The Contracts may provide for,

among other things single or installment

premium payments, or a combination of

the two, and deferred or immediate

annuity payments on a fixed or variable

basis beginning on a date elected by the

Contract owners and in no event later

than certain contractually established

dates (‘‘Retirement Date’’). Additionally,

Contract owners may allocate premium

payments to: (a) One or more of the

Funds available under a Contract; (b) in

some Contracts to a fixed Interest

Option, which is part of Aetna’s general

account; and (c) in some Contracts to a

Credited Interest Option, with or

without a market value adjustment upon

redemption prior to the end of a

guaranteed term, and assets attributable

to such an option may be held in

Aetna’s general account or in a noninsulated, none-utilized separate

account of Aetna.2

6. The Contracts provide for the

payment of a standard death benefit

equal to the greater of (i) the cash value

of the Contract account, or (ii) the sum

of purchase payments less any

withdrawals, or (iii) the contract

holder’s account value at the most

recent seventh year anniversary of the

Contract adjusted for purchase

payments, withdrawals and amounts

applied to an annuity option. The

Contracts also provide for the payment

of an enhanced death benefit equal to

the greater of (i) the cash value of the

Contract account, or (ii) during the first

year of the Contract, the amount of

premiums paid (adjusted for any

withdrawals and any amount paid to an

annuity option), or (iii) during

subsequent years of the Contract, an