Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Notices 18765

1Applicants represent that they will amend the

application during the notice period to include the

Other Accounts.

payments received that have not been

previously surrendered; minus (3) the

Free Withdrawal Amount, if applicable.

To determine the amount of any

Surrender Charge, surrenders will be

deemed to be taken first from any

applicable Free Withdrawal Amount,

next from purchase payments (on a firstin, first-out basis), and finally from

contract earnings (in excess of any Free

Withdrawal Amount). The Company

does not expect that the Surrender

Charge will cover sales and distribution

expenses incurred in connection with

the Contracts.

13. Prior to a Contract’s maturity date,

all or part of the contract value may be

transferred between the subaccount

without penalty, fee, or charge.

Although there currently are no

restrictions on the frequency of

transfers, the Company reserves the

right to limit transfers to no more than

one in any six-month period.

Applicants’ Legal Analysis

1. Section 6(c) of the 1940 Act

authorizes the SEC to grant an

exemption from any provision, rule or

regulation of the 1940 Act to the extent

that it is necessary or appropriate in the

public interest and consistent with the

protection of investors and the purposes

fairly intended by the policy and

provisions of the 1940 Act to do so.

2. Sections 26(a)(2)(C) and 27(c)(2) of

the 1940 Act, in relevant part, prohibit

a registered unit investment trust, its

depositor or principal underwriter, from

selling periodic payment plan

certificates unless the proceeds of all

payments, other than sales loads, are

deposited with a qualified bank and

held under arrangements which prohibit

any payment to the depositor or

principal underwriter except a

reasonable fee, as the SEC may

prescribe, for performing bookkeeping

and other administrative duties

normally performed by the bank itself.

3. Applicants seek an order under

Section 6(c) of the 1940 Act granting

exemptions from Sections 26(a)(2)(C)

and 27(c)(2) of the 1940 Act to the

extent necessary to permit the

deduction of a mortality and expenses

risk charge from the assets of the

Accounts under the Contracts.

4. Applicants state that the terms of

the relief requested with respect to any

Future Contracts funded by the

Accounts are consistent with the

standards set forth in Section 6(c) of the

1940 Act. Applicants represent that the

Future Contracts to be funded by the

Accounts will be materially similar to

the Current Contracts. Applicants state

that without the requested relief, the

Company would have to request and

obtain exemptive relief for the Accounts

to fund each Future Contract.

Applicants assert that these additional

requests for exemptive relief would

present no issues under the 1940 Act

not already addressed in this

application, and that the requested relief

is appropriate in the public interest

because the relief will promote

competitiveness in the variable annuity

market by eliminating the Applicants’

need to file redundant exemptive

applications, thereby reducing

administrative expenses and

maximizing efficient use of resources.

5. Applicants represent that the

1.25% mortality and expense risk

charge for the Contracts is reasonable in

relation to the risks assumed by the

Company under the Contracts, and is

within the range of industry practice for

comparable annuity contracts, based on

a review of the publicly available

information regarding products of other

companies. The Company represents

that it will maintain at its principal

offices, and make available upon request

to the Commission or its staff, a

memorandum detailing the variable

annuity products analyzed, and the

methodology used in, and the results of,

the comparative review.

6. Applicants acknowledge that the

Surrender Charge may be insufficient to

cover all distribution costs, and that if

a profit is realized from the mortality

and expense risk charge, all or a portion

of such profit may be offset by

distribution expenses not reimbursed by

the Surrender Charge. Notwithstanding

this, the Company has concluded that

there is a reasonable likelihood that the

proposed distribution financing

arrangements made with respect to the

Contracts will benefit Fund ABD II, the

Other Accounts,1 and Contract owners.

The basis for such conclusion is set

forth in a memorandum which will be

maintained by the Company at its home

office and will be available to the

Commission or its staff upon request.

7. The Company also represents that

the Accounts will invest only in

underlying mutual funds which have

undertaken to have a board of directors

or a board of trustees, as applicable, a

majority of whom are not ‘‘interested

persons’’ of such Accounts within the

meaning of Section 2(a)(19) of the 1940

Act, formulate and approve any plan

under Rule 12b–1 (under the 1940 Act)

to finance distribution expenses.

Conclusion

For the reasons set forth above,

Applicants represent that the

exemptions requested are necessary and

appropriate in the public interest and

consistent with the protection of

investors and purposes fairly intended

by the policy and provisions of the 1940

Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–10469 Filed 4–26–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37138; File No. SR–Amex96–14]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange, Inc.

Relating to the Exchange Board of

Governors

April 23, 1996.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on April 18, 1996, the

American Stock Exchange, Inc.

(‘‘Amex’’ 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 Amex. 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 Amex proposes to amend Articles

II, III, and XII of the Exchange

Constitution relating to the Board of

Governors (‘‘Board’’), including the

appointment of a second ViceChairman, the inclusion of the second

highest ranking Exchange executive

officer on the Board, and the eligibility

of Governors for nomination to a third

term. The text of the proposed rule

change is available at the Office of the

Secretary, the Amex, 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 and discussed

any comments it received on the
18766 Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / Notices

1The Exchange is also proposing to amend

Article XII, Section 2 of the Exchange Constitution,

Composition of the Emergency Committee

(‘‘Committee’’). This Section currently provides that

the Committee is to be composed of the Chairman

of the Board of Governors, the Vice-Chairman of the

Board, and the three senior members of the Board

who are regular, options, principal, associate or

allied members of the Exchange (‘‘Trading

Members’’). The proposed amendment would

change the composition of the Committee such that

any Executive Vice-Chairman or President would be

on the Committee, and thus only two Trading

Members would be on the Committee. 2 17 CFR 200.30–3(a)(12).

proposed rule change. The text of these

statements may be examined at the

places specified in Item IV below. The

Amex 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

1. Purpose

Board Position Amendments

Article II, Section 2 of the Exchange

Constitution currently calls for the

appointment of one Vice-Chairman from

among the Exchange members serving

on the Board, and it has been customary

over the years to rotate between the

trading floor and ‘‘upstairs’’

communities as the source of that ViceChairman. Given the importance of both

these communities to the Exchange, it is

desirable to be able to have one ViceChairman from each constituency.

Accordingly, the proposed amendments

will permit (but not require) the

appointment of two member ViceChairmen, and will specify that if there

are two Vice-Chairmen, one must come

from the trading floor and one from

upstairs.

The Exchange would also like to

create a new position of Executive ViceChairman, who will be the second

highest ranking officer of the Exchange

and who will serve as a member of the

Board of Governors. If the Executive

Vice-Chairman position is not filled and

the Exchange has a President, then the

President will serve on the Board.1 If at

any time neither of those offices are

filled, then the Chief Executive would

be the only non-elected member of the

Board.

Third Term Amendment

It has become apparent that at times

the special limitations in the

Constitution relating to which kind of

Governors can serve third terms at any

given time could be a limitation on

having the best possible slate of public

Governor candidates. Accordingly, it is

proposed that the Exchange increase

from two to three the maximum number

of third term Governors who can be

representatives of the public. There is

no change to the overall limitation that

no more than four third-term Governors

may be serving at one time.

2. Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b) of the Act, in general, and

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

in particular, in that it protects investors

and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Amex does not believe that the

proposed rule change will impose any

inappropriate burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

90 days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which the self-regulatory

organization consents, the Commission

will:

(A) By order approve such proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change between the

Commission and any person, other than

those that may be withheld from the

public in accordance with the

provisions of 5 U.S.C. 552, will be

available for inspection and copying in

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

Amex. All submissions should refer to

File No. SR–Amex–96–14 and should be

submitted by May 20, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.2

[FR Doc. 96–10493 Filed 4–26–96; 8:45 am]

BILLING CODE 8010–01–M

SOCIAL SECURITY ADMINISTRATION

Privacy Act of 1974; Computer

Matching Program (SSA/Health Care

Financing Administration (HCFA))

AGENCY: Social Security Administration.

ACTION: Notice of Computer Matching

Program.

SUMMARY: In accordance with the

provisions of the Privacy Act, this

notice announces a computer matching

program that SSA plans to conduct with

HCFA.

DATES: SSA will file a report of the

subject matching program with the

Committee on Governmental Affairs of

the Senate, the Committee on

Government Reform and Oversight of

the House of Representatives and the

Office of Information and Regulatory

Affairs, Office of Management and

Budget (OMB). The matching program

will be effective as indicated below.

ADDRESSES: Interested parties may

comment on this notice by either telefax

to (410) 966–5138 or writing to the

Associate Commissioner for Program

and Integrity Reviews, 860 Altmeyer

Building, 6401 Security Boulevard,

Baltimore, MD 21235. All comments

received will be available for public

inspection at this address.

FOR FURTHER INFORMATION CONTACT: The

Associate Commissioner for Program

and Integrity Reviews as shown above.

SUPPLEMENTARY INFORMATION:

A. General

The Computer Matching and Privacy

Protection Act of 1988 (Public Law

(Pub. L.) 100–503), amended the Privacy

Act (5 U.S.C. 552a) by establishing the

conditions under which computer

matching involving the Federal

Government could be performed and

adding certain protections for

individuals applying for and receiving

Federal benefits. Section 7201 of the

Omnibus Budget Reconciliation Act of