Federal Register / Vol. 60, No. 71 / Thursday, April 13, 1995 / Notices 18867

7 15 U.S.C. 78q–1(b)(3)(F) (1988).

8Telephone conversation between William R.

Stanley, Board of Governors, and Ari Burstein,

Division of Market Regulation, Commission (April

5, 1995).

9 17 CFR 100.30–3(a)(12) (1994).

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

2 17 CFR 240.19b–4 (1991).

3 In Amendment No. 1, the CBOE states that the

reference to Rule 24.17 in the original filing (see

infra note 4 and accompanying text) was intended

to be a reference to Rule 24.16, and amends the

proposal accordingly. In addition, Amendment No.

1 defines the term ‘‘brief interval,’’ as used to

describe the allowable period during which RAES

participants can leave the trading floor. See infra

note 7 and accompanying text. See also Letter from

Timothy Thompson, Attorney, CBOE, to John

Ayanian, Attorney, Office of Market Supervision

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

(‘‘Division’’), Commission, dated March 31, 1995.

(‘‘Amendment No. 1’’).

4See CBOE Rule 24.17 (‘‘RAES Eligibility in

OEX’’).

appropriate in furtherance of the

purposes of the Act.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

PTC has not solicited comments with

respect to the proposed rule change, and

none have been received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(F) of the Act 7

requires that the rules of a clearing

agency be designed to promote the

prompt and accurate clearance and

settlement of securities transactions.

The Commission believes that PTC’s

proposal to increase the percentage of

collected and available GNMA I P&I that

may be distributed to participants by

intraday fedwire transfer should help

promote prompt and accurate clearing

and settlement. The proposal enables

participants to have access to such

funds earlier in the day, allowing them

the use of the funds elsewhere, as

needed, which increases liquidity in

other markets.

PTC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing. In

order to assure that PTC can implement

the proposal commencing with the

April 1995 distribution, it is necessary

that PTC receive the appropriate

approval in advance of that date. The

Commission, therefore, finds sufficient

cause to accelerate approval of this

proposal. In addition, the staff of the

Board of Governors of the Federal

Reserve System (‘‘Board of Governors’’)

agrees with the accelerated approval.8

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. 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of PTC. All submissions should

refer to file number SR–PTC–95–02 and

should be submitted by May 4, 1995.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

PTC–95–02) be and hereby is approved

on an accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Jonathan G. Katz,

Secretary.

[FR Doc. 95–9076 Filed 4–12–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35579; File No. SR–CBOE–

95–17]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated Relating to its Retail

Automatic Execution System for

Transactions in SPX Options

April 7, 1995.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 30,

1995, the Chicago Board Options

Exchange, Incorporated (‘‘CBOE’’ 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 Exchange. The

Exchange subsequently filed

Amendment No. 1 to the proposed rule

change on April 3, 1995.3 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend its

rules respecting use of the CBOE’s Retail

Automatic Execution System (‘‘RAES’’)

for transactions in Standard & Poor’s

500 Index (‘‘SPX’’) options by

individual members, joint account

participants and nominees of member

organizations having multiple

nominees. The text of the proposed rule

change is available at the Office of the

Secretary, the Exchange, and at the

Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

Exchange included statements

concerning the purpose of and basis for

the proposed rule change. The text of

these statements may be examined at

the places specified in Item IV below.

The Exchange has prepared summaries,

set forth in Section (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 amend Rule 24.16 (‘‘RAES

Eligibility in SPX’’) in respect of use of

RAES by individual members, joint

account participants, and market-maker/

nominees associated with member

organizations. The amendments would

incorporate into Rule 24.16, provisions

respecting individual member use of

RAES and provisions respecting joint

account and member organization use of

RAES (the ‘‘group account’’ provisions)

presently contained in its rules

respecting use of RAES for transactions

in Standard & Poor’s 100 Index (‘‘OEX’’)

options.4 Currently, Rule 24.16 contains

fewer provisions regulating individual

members’ eligibility to use RAES for

SPX options than is the case under rule

24.17 for use of RAES for OEX options.

Similarly, Rule 24.16 contains only one

provision addressing RAES eligibility

for member organizations having

multiple market-maker/nominees, while

Rule 24.17 contains numerous

provisions respecting use of RAES by

participants in both types of group
18868 Federal Register / Vol. 60, No. 71 / Thursday, April 13, 1995 / Notices

5 See Amendment No. 1, supra note 3.

6 In this regard, references in current Rule 24.16

to the Market Performance Committee would be

replaced by references to the SPX Floor Procedures

Committee, which, as a more product-specific

committee, would henceforth have authority under

Rule 24.16.

7 The changes also would clarify that all

participants in a joint account may use the joint

account for trading on RAES in all series of SPX

options, and to that end would delete a contrary

provision in paragraph (a) of the current Rule 24.16.

In connection with approval of this rule change, the

Exchange will issue a regulatory circular amending

Regulatory Circular 92-47, to clarify that more than

one joint account member may participate on behalf

of the joint account on any joint account transaction

in SPX options, whether or not executed on RAES.

This clarification will unify the treatment of SPX

joint account trades with the treatment accorded

such trades in OEX options.

8 The Exchange agrees to restrict the term ‘‘brief

interval’’ to a period no longer than 10–15 minutes.

The purpose for the brief interval is to give

members time to attend to their personal needs. In

addition, the Exchange expects the trading crowd

and the Order Book Official (‘‘OBO’’) for a

particular trading post to police compliance with

the brief interval exception. OBOs will be

instructed to log off a member from RAES if he has

been absent from a trading crowd for more than a

brief interval. See Amendment No. 1, supra note 3.

accounts. The OEX RAES provisions

have worked well, and the Exchange

accordingly believes that the substance

of all the OEX provisions should now be

incorporated into the SPX RAES rules.

The proposed rule change would

incorporate, in the introductory clause

to paragraph (a) of Rule 24.16, the

provisions contained in subparagraph

(a)(i) of Rule 24.17, which, among other

things, requires individual market

makers to sign the RAES Participation

Agreement and complete the RAES

instructional program before they may

use RAES. The proposed rule change

also would incorporate in paragraph (a)

of Rule 24.16 the preconditions to use

of RAES that are contained in

subparagraph (a)(v) of Rule 24.17,

including the requirement that

individual members be engaged at

CBOE principally as market makers and

that they execute at least 75% of their

options contracts in SPX and at least

75% of their trades in SPX options in

person.

CBOE also proposes to add new

paragraphs (c) and (d) to Rule 24.16.5

Paragraph (c) would establish

preconditions to initial use of RAES by

joint account participants and would

impose minimum SPX trading activity

standards on joint account market

markers on RAES. Paragraph (c) would

also includes log-on and log-off

requirements for each joint account

market maker, as well as procedures for

obtaining relief from those

requirements, and would grant the SPX

Floor Procedures Committee authority

to restrict or condition a joint account

member’s participation in RAES.6 In

turn, paragraph (d) would contain

provisions, similar to those in proposed

paragraph (c), respecting access to RAES

by market makers associated with

member organizations having multiple

nominees.

All the foregoing changes would, in

general, conform SPX RAES

requirements to the corresponding OEX

RAES requirements.7 Several

differences, however, would remain.

Under the proposed SPX rules, a

member who has logged onto RAES

must log off RAES whenever he leaves

the trading crowd unless the departure

is for ‘‘a brief interval.’’8 THe OEX

RAES rules do not currently contain the

‘‘brief interval’’ exception, though the

Exchange anticipates filing an

amendment to Rule 24.17 that would

establish such an exception for OEX

RAES market makers.

In addition to the foregoing changes

in RAES eligibility and use

requirements, the proposed rule change

would establish group account size limit

standards. A new paragraph (e) would

authorize the SPX Floor Procedures

Committee to set such a limit at a

number not to exceed 331⁄3 percent of

the prior quarter’s average number of

RAES participants. This approach

contrasts somewhat with the OEX RAES

provisions, which permit a group

account to include as many as 50

participants, or 25 percent of the prior

quarter’s average, whichever is smaller.

The Exchange believes that the

proposed differences in approach and

applicable percentage limit are

appropriate to SPX RAES for several

reasons. First, the Exchange anticipates

that this rule change will make SPX

participation more attractive to

members, which should lead to higher

RAES participation levels. Increases in

participation levels may be substantial

and may well occur at unpredictable

rates. In such a context, a specific

numerical limit would be an

impediment to efficient administration

of the rule. The Exchange believes that

any specific number it selects at this

time would, at a later date, likely be

either artificially high (triggering the

application of the percentage limit) or

inappropriately low (requiring periodic

rule change filings as participation

levels rise). Accordingly, the Exchange

proposes to adopt only a percentage

limit for RAES use in SPX options, at

least until the projected SPX RAES

growth rates appear to stabilize.

Second, the SPX trading crowd is

considerably smaller at present than the

OEX trading crowd. About 20

participants, on average, use SPX RAES

on any given day, whereas about 150

participants use OEX RAES. Were the

proposed rule to use the 25 percent

limit that exists in the current OEX

RAES rule, no more than twelve

members could participate in one joint

account. The Exchange believes,

however, that a larger joint account base

should be encouraged in order to

increase SPX RAES participation levels.

The Exchange believes that the

proposed 331⁄3 percent limit would

enable expansion in the use of RAES

without permitting undue concentration

of trading interest. Although in theory

the 331⁄3 percent limit would allow all

SPX RAES participants to join one of

the three accounts (rather than one of

four as is permitted in OEX), that degree

of consolidation on SPX RAES is

unlikely. Moreover, were it to occur and

generate adverse effects, the SPX Floor

Procedures Committee would have

authority under proposed paragraph (e)

to reduce the applicable group size

limit.

Finally, the proposed rule change

includes a new paragraph (h) that would

incorporate in the SPX RAES rules the

fee schedule included in the OEX RAES

Rule 24.17 for failure to adhere to the

various RAES log-on and log-off

requirements. The provisions of

proposed paragraph (h) match those in

the OEX RAES Rule 24.17.

The Exchange believes that the

proposed rule change is consistent with

Section 6 of the Act, in general, and

furthers the objectives of Section 6(b)(5),

in particular, in that it is designed to

promote just and equitable principles of

trade, to foster cooperation with persons

engaged in facilitating and clearing

transactions in securities, and to protect

investors and the public interest.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any 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

Because the foregoing proposed rule

change: (1) Does not significantly affect

the protection of investors or the public

interest; (2) does not impose any

significant burden of competition; (3)

was provided to the Commission for its
Federal Register / Vol. 60, No. 71 / Thursday, April 13, 1995 / Notices 18869

9Because the Exchange filed Amendment No. 1

subsequent to the original filing date, the 30-day

period commences on the filing date of Amendment

No. 1.

10 17 CFR 200.30–3(a)(12) (1994).

review at least five days prior to the

filing date; and (4) does not become

operative for 30 days from April 3,

1995,9 the rule change proposal has

become effective pursuant to Section

19(b)(3)(A) of the Act and Rule 19b–

4(e)(6) thereunder. In particular, the

Commission believes the proposal

would qualify as a ‘‘noncontroversial

filing’’ in that the proposed standards

do not significantly affect the protection

of investors or the public interest and do

not impose any significant burden on

competition. At any time within 60 days

of the filing of the proposed 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 at

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 the CBOE. All submissions

should refer to SR–CBOE–95–17 and

should be submitted by May 4, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Jonathan G. Katz,

Secretary.

[FR Doc. 95–9147 Filed 4–12–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. IC–20991; File No. 812–9490]

Kemper Securities, Inc., et al.; Notice

of Application

April 6, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Kemper Securities, Inc.

(‘‘Sponsor’’); Kemper Tax-Exempt

Insured Income Trust, Kemper TaxExempt Income Trust, Ohio Tax-Exempt

Bond Trust, Kemper Insured Corporate

Trust, Kemper Government Securities

Trust (U.S. Treasury Portfolio), Kemper

Government Securities Trust (GNMA

Portfolio), Kemper Bond Enhanced

Securities Trust, Kemper Equity

Portfolio Trusts, Kemper Defined Funds

U.S. Treasury Portfolio, Kemper Defined

Funds GNMA Portfolio, Kemper

Defined Funds Insured Corporate,

Kemper Defined Funds Corporate

Income, Kemper Defined Funds Insured

National, Kemper Defined Funds

Insured State, Kemper Defined Funds

(the ‘‘Trusts’’).

RELEVANT ACT SECTIONS: Order requested

under section 6(c) for exemptions from

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

26(a)(2)(C) of the Act and rule 22c–1

thereunder, and under section 11(a) for

relief from section 11(c).

SUMMARY OF APPLICATION: Applicants

request an order that would permit the

Trusts to impose deferred sales charges,

waive the deferred sales charge in

certain cases, and exchange units with

deferred sales charges.

FILING DATES: The application was filed

on February 21, 1995, and was amended

on March 31, 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

May 1, 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 the

date of a hearing may request

notification by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicants, 77 West Wacker Dr.,

Chicago, IL 60601; cc: Mark J. Kneedy,

Chapman and Cutler, 111 West Monroe

St., Chicago, IL 60603.

FOR FURTHER INFORMATION CONTACT:

Bradley W. Paulson, Staff Attorney, at

(202) 942–0147, or Robert A. Robertson,

Branch Chief, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application is

available for a fee from the SEC’s Public

Reference Branch.

Applicants’ Representations

1. Each Trust is a unit investment

trust sponsored by the Sponsor. Each

Trust has one or more separate series

(‘‘Series’’) created by a trust indenture

among the Sponsor, an evaluator, and a

banking institution or trust company

serving as trustee. The Sponsor acquires

a portfolio of securities and deposits

them with the trustee in exchange for

certificates representing fractional

undivided interests in the portfolio of

securities (‘‘Units’’). Units currently are

offered to the public through the

Sponsor and other underwriters and

dealers at a price based upon the

aggregate offering side evaluation of the

underlying securities plus an up-front

sales charge. The sales charge currently

ranges from 5.5 percent to 1 percent of

the public offering price, and is subject

to reduction as permitted by rule 22d–

1.

2. Applicants request an order

permitting them, future series of the

Trusts, and future trusts sponsored by

the sponsor to impose sales charges on

Units on a deferred basis and waive the

deferred sales charge in certain cases.

Under applicants’ proposal, the Sponsor

will continue to determine the amount

of sales charge per Unit at the time

portfolio securities are deposited in a

Series. The Sponsor will have the

discretion to defer collection of all or

part of this sales charge over a period

following the purchase of Units. The

Sponsor will in no event add to the

deferred amount initially determined

any additional amount for interest or

any similar or related charge to reflect

or adjust for such deferral.

3. The Sponsor anticipates collecting

a portion of the total sales charge

immediately upon purchase of Units. A

portion of the outstanding balance will

be deducted periodically by the trustee

from distributions on the Units and paid

to the Sponsor until the total amount of

the sales charge is collected. If

distribution income is insufficient to

pay a deferred sales charge installment,