Federal Register / Vol. 61, No. 81 / Thursday, April 25, 1996 / Notices 18451

1As a practical matter, the ability of Holdings to

compete, through Energy-Related Companies in

wholesale electric power markets in the Southern

system’s franchised service territories is limited by

the Codes of Conduct submitted to the Federal

Energy Regulatory Commission (‘‘FERC’’) in

connection with the market-based wholesale rate

application filed by Southern Energy Marketing,

Inc. (‘‘Southern Energy’’), a subsidiary of Holdings

and an exempt wholesale generator. In addition,

under current FERC interpretations of section 32 of

the Act, Southern Energy cannot engage in fuel

marketing or in other expanded fuel-related

activities.

2006.15 will apply to comments

received. Comments must be in English

and provided in fifteen copies. Pursuant

to 15 CFR § 2006.15, confidential

business information must be clearly

marked ‘‘BUSINESS CONFIDENTIAL’’

in a contrasting color ink at the top of

each page.

Pursuant to section 127(e) of the

URAA, USTR will maintain a public file

on this dispute settlement proceeding,

which will include a list of comments

received, in the USTR Reading Room:

Room 101, Office of the Untied States

Trade Representative, 600 17th Street,

N.W., Washington DC 20508. An

appointment to review the docket

(Docket WTO/D–3, ‘‘United States—EC:

EC Banana Regime’’), may be made by

calling Brenda Webb, (202) 395–6186.

The USTR Reading Room is open to the

public from 10 a.m. to 12 noon and 1

p.m. to 4 p.m., Monday through Friday.

Jennifer Hillman,

General Counsel.

[FR Doc. 96–10168 Filed 4–24–96; 8:45 am]

BILLING CODE 3190–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26508]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

April 19, 1996.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated thereunder. All interested

persons are referred to the application(s)

and/or declaration(s) for complete

statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments thereto is/are available

for public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

May 13, 1996, to the Secretary,

Securities and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing shall

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

SEI Holdings, Inc. (70–8823)

SEI Holdings, Inc. (‘‘Holdings’’), 900

Ashwood Parkway, Suite No. 500,

Atlanta, Georgia, 30338, a whollyowned non-utility subsidiary of The

Southern Company (‘‘Southern’’), a

registered holding company, has filed

an application pursuant to sections 9(a)

and 10 of the Act and rule 54

thereunder.

By order dated February 2, 1996

(HCAR No. 26468) (‘‘Order’’), Holdings

was authorized, through December 31,

2000, to acquire directly, or indirectly

through one or more other subsidiaries

(‘‘Intermediate Subsidiaries’’), the

securities of or other interests in one or

more energy-related businesses or

facilities (‘‘Energy-Related Companies’’).

The Energy-Related Companies could

include companies that derive

substantially all of their revenues from

brokering or marketing of electric

power, provided that the purchaser or

seller, or both the purchaser and seller,

were located within the Southeastern

Electric Reliability Council (‘‘SERC’’).1

Holdings now requests that the

Commission eliminate the restriction

imposed under the Order on the

geographic region in which such

marketing and brokering activities may

be conducted. Holdings also requests

that the Commission expand the terms

of the Order to allow Holdings, through

one or more Energy-Related Companies

(‘‘Marketing Subsidiaries’’), to broker or

market other forms of energy

commodities, in addition to electric

power, to include, without limitation,

natural gas, oil and coal, and to provide

related services to customers. No other

modification to the Order is requested.

In particular, Holdings proposes to

engage in wholesale electric power

marketing on a national scale. Holdings

also proposes to provide related ‘‘value

added’’ services to customers, such as

fuel management, storage and

procurement services. Although the

Marketing Subsidiaries might acquire

physical assets that are necessary and

appropriate to the conduct of such

business, such as oil and storage

facilities, gas reserves, gas pipeline

facilities and coal, Holdings represents

that no Marketing Subsidiary will

acquire any assets if, as a result thereof,

it would be or become an ‘‘electric

utility company’’ or a ‘‘gas utility

company’’ under the Act.

The Marketing Subsidiaries would

engage in various types of marketing

activities. These activities would

include (i) electric power and/or fuel

arbitrage transactions, which involve

simple exchanges of fuel for electric

power; (ii) dispatch control of energy

assets, which involves fixed-price

electric power in exchange for dispatch

control of electric power generation

facilities; (iii) sales of options on

capacity or energy; and (iv) national

energy supply agreements, which

involve retail sales to large energy

consumers, with facilities in many

different locations, that wish to

‘‘outsource’’ all of their energy needs to

achieve volume discounts and to

eliminate the high cost of separate

procurement programs.

Holdings proposes that the Marketing

Subsidiaries be authorized to engage in

such activities without regard to

location or identity of customers

provided that the customers exclude the

electric public utilities within the

Southern system and Southern

Company Services, Inc., a subsidiary

service company of Southern. Holdings

also states that the Marketing

Subsidiaries will not sell electric power

at retail unless such sale is approved or

allowed under applicable state law.

All activities, to include the fuel-forenergy and energy commodity brokering

and marketing activities, will generally

be carried on by personnel employed by

Southern Electric International, Inc., a

wholly-owned subsidiary of Holdings.

Those personnel are already

experienced in the day-to-day electric

power marketing activities of Southern

Energy and fuel procurement activities

of associate independent power projects

owned by Holdings.

It is anticipated that in the normal

course of business the Marketing

Subsidiaries would take appropriate

measures to hedge the risk associated

with electric power and fuel purchase or

sales contracts. Such measures could

include matches between long-term firm

or variable price electric power sales

contracts and long-term firm or variable

price fuel purchase contracts. The

Marketing Subsidiaries might may also

hedge fuel price risk through the
18452 Federal Register / Vol. 61, No. 81 / Thursday, April 25, 1996 / Notices

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

2Pursuant to a new rule numbering system for the

NSDA Manual anticipated to be effective no later

than May 1, 1996, the rules that are the subject of

this proposed rule change will become Rules 6530,

6540, and 6550 (regarding the OTC Bulletin Board

Rules); Rule 6100 (regarding the Automated

Confirmation Transaction Service); and new Rule

6900 series (regarding transaction reporting for

DPPs). See Securities Exchange Act Release No.

36698 (Jan. 11, 1996), 61 FR 1419 (approving new

NASD rule numbering system).

purchase of fuel or fuel reserves or

options on fuel reserves.

In addition, the Marketing

Subsidiaries might use available

hedging tools, such as gas futures

contracts and options on gas futures,

similar to those traded on the New York

Mercantile Exchange, and gas and oil

price swap agreements and other,

primarily commodity based, derivative

instruments. Holdings represents that

the Marketing Subsidiaries will not deal

in derivative products for purposes of

speculative trading.

Holdings might also offset price risk

exposure under a purchase or sales

contract through an opposite position to

that purchase or sale. Similarly, in a

portfolio of purchase and sales

contracts, risk could also be limited

through an appropriate mix of long-term

and short-term contracts.

Ultimately, the Marketing

Subsidiaries will seek to manage a

‘‘book’’ of various energy contracts

involving purchases, sales and trades of

oil, gas and electric power. The

Marketing Subsidiaries will seek to

hedge the risk associated with these

contracts through a combination of

physical assets, balanced physical

purchases and sales, purchases and

sales on futures markets, or other

derivative risk management tools.

The aggregate investment made by

Southern to finance the investments of

Holdings in the Marketing Subsidiaries

will be subject to all of the limitations

applicable to investments in EnergyRelated Companies imposed by the

Order. Similarly, Holdings anticipates

that guarantees of performance by the

Marketing Subsidiaries could be

required from time to time. Holdings

will count the amount of such

guarantees against the overall limitation

set forth in the Order to the extent that

the guarantees are directly or indirectly

made by Southern itself.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 96–10242 Filed 4–24–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37131; File No. SR–NASD–

96–08]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the National Association of Securities

Dealers, Inc. Relating to the Quotation

of Direct Participation Programs in the

OTC Bulletin Board Service

April 19, 1996.

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

Securities Exchange Act of 1934

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

March 12, 1996, the National

Association of Securities Dealers Inc.

(‘‘NASD’’ or ‘‘Association’’) 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 selfregulatory organization. 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 NASD is herewith filing a

proposed rule change to permit the

quotation of Direct Participation

Programs (‘‘DPPs’’) in the OTC Bulletin

Board Service (‘‘OTCBB’’ or ‘‘OTC

Bulletin Board’’) and to require the

reporting of transactions in DPPs

through the Automated Confirmation

Service (‘‘ACT’’). The text of the

proposed rule change is available at the

NASD and at the Commission.2

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

NASD 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. The NASD 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

The purpose of the proposed rule

change is to increase transparency and

provide for more efficient price

discovery in the secondary market for

limited partnerships, also known as

DPPs, by permitting these securities to

be quoted in the OTC Bulletin Board

and requiring transactions in DPPs to be

reported through ACT.

a. Background

In 1990, at the direction of the

NASD’s Direct Participation Programs

Committee (‘‘Committee’’), the staff

undertook a study of the nature and

functioning of the secondary market for

limited partnership securities. Data

gathered and interviews conducted

during the study revealed that

approximately $90 billion was invested

in public direct participation programs.

The programs were organized to invest

in a variety of industries including, but

not limited to, real estate, oil and gas,

cable television, commodities, and

equipment leasing. Although these

securities were not intended to be liquid

and tradeable, the NASD estimated at

that time that approximately two dozen

participants act as principal or agent for

customers in a fragmented secondary

market that in the aggregate transfers

ownership of an estimated $250 to $300

million worth of limited partnership

securities annually. The NASD noted

that the majority of transactions that

occur in the market are necessitated by

triggering events that force the sale of

the partnership unit upon the limited

partner. Such events include estate sales

by trustees due to the death of a limited

partner, liquidation of IRA accounts,

divorce, and unexpected or

extraordinary expenses such as major

medical or post-secondary education.

Thus, the inefficiencies of the

fragmented market tend to

disproportionately impact investors

who need liquidity, rather than

investors who are merely seeking

liquidity.

In response to the developing

secondary market, the NASD has

directed its regulatory focus to ensuring

that NASD members active in the

market comply with NASD rules,

federal securities laws and state laws

relating to advertising and sales

literature, suitability and

recommendations to customers,

solicitation and tender offers,

prospectus disclosure, transactions with

non-members, net capital, and escrow.