20302 Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Notices

3 15 U.S.C. 78o–3.

Temporary Effectiveness

(h) This Section 46 shall remain in

effect [for one year from May 2, 1995]

until August 1, 1996 unless modified or

extended prior thereto by the Board of

Governors.

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

The Procedures for Large and

Complex Cases, adopted effective May

2, 1995, for a one-year pilot test and

codified at Rule 10334 of the Code

(formerly Section 46) will expire on

May 2, 1996. Since Rule 10334 became

effective, the Rule has been used on

occasion by parties to large and complex

cases.

In addition, the NASD’s Arbitration

Policy Task Force, which issued its

report on ‘‘Securities Arbitration

Reform’’ in January 1996, has

recommended that the one-year pilot

test of Rule 10334 be extended in order

to permit the NASD to gather additional

data and analyze the low usage rate of

the procedures.

The NASD believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(6) of the

Act 3 because it permits the NASD to

continue to specify procedures in the

Code for large and complex cases. This

serves the public interest by enhancing

the satisfaction and perceived fairness

of such proceedings by the parties to

such proceedings. To the extent the

parties to such proceedings express

increased satisfaction with the

resolution of eligible matters, the goal of

providing the investing public with a

fair, efficient and cost-effective forum

for the resolution of disputes is

advanced.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The NASD does not believe that the

proposed rule change will result in any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, as amended.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments were neither

solicited nor received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The NASD has requested that the

Commission find good cause pursuant

to Section 19(b)(2) for approving the

proposed rule change prior to the 30th

day after publication in the Federal

Register. The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to the NASD and, in

particular, the requirements of Section

15A and the rules and regulations

thereunder. The Commission finds good

cause for approving the proposed rule

change prior to the 30th day after the

date of publication of notice of filing

thereof in that accelerated approval will

benefit users of the arbitration process

in that providing a temporary extension

of the procedures for large and complex

cases will permit arbitration

participants to continue to use the

procedures until a one-year extension is

submitted to the Commission for

approval.

Rule 10334 expires by its terms on

May 2, 1996. The NASD is asking that

the effectiveness of the Rule be

temporarily extended until August 1,

1996, in order to permit the NASD to

submit a proposed rule change to extend

the effectiveness of the rule for one year.

In addition, the application of the Rule

to any case submitted to arbitration is

voluntary. Thus, extending the

effectiveness of the Rule will not have

any adverse impact on the investing

public.

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

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to SR–NASD–

96–18 and should be submitted by May

27, 1996.

It is therefore ordered, pursuant to

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

proposed rule change SR–NASD–96–18

be, and hereby is, approved through

August 1, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority, 17 CFR 200.30–3(a)(12).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11229 Filed 5–3–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37151; File No. SR–NYSE–

96–10]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the New

York Stock Exchange, Inc. Relating to

Six-Month Extension of Pilot Program

To Display Price Improvement on the

Execution Report Sent to the Entering

Firm

April 29, 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 19, 1996, the

New York Stock Exchange, Incorporated

(‘‘NYSE’’ 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 self-regulatory

organization. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organizations’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change extends for

six months the program filed as a pilot

in Securities Exchange Act Release Nos.

36421 (October 26, 1995), 60 FR 55625

(November 1, 1995) (File No. SR–NYSE–

95–35) and 36489 (November 16, 1995),

60 FR 58123 (November 24, 1995) (File
Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Notices 20303

SM NYSE PRIME is a service mark of the New

York Stock Exchange, Inc.

1The Commission notes that member

organizations electing to receive NYSE PRIME

information are required to enter into an agreement

with the Exchange regarding the use of NYSE

PRIME information and the NYSE PRIME service

mark. Among other things, the agreement provides

that in any publication or use of NYSE PRIME

information (unless the Exchange otherwise agrees),

the member organization must employ the NYSE

PRIME service mark.

As of April 29, 1996, the following NYSE member

organization are receiving and utilizing NYSE

PRIME information: Merrill Lynch, Pierce, Fenner,

and Smith, Inc.; Charles Schwab & Co., Inc.; and

Kalb, Voorhis & Co.

2Also excluded from the NYSE PRIME feature are

booth entered or booth routed orders, booked

orders, combination orders (e.g., switch orders) and

orders diverted to sidecar.

3See Securities Exchange Act Release No. 27981

(May 2, 1990), 55 FR 19407 (May 9, 1990) (File No.

SR–NYSE–90–06). The BPQ is the highest bid and

lowest offer, respectively, disseminated by the

Exchange or another market center participating in

the Intermarket Trading System (‘‘ITS’’) at the time

the order is received by the Exchange. In order to

protect against the inclusion of incorrect or stale

quotations in the BPQ, however, the Exchange

includes quotations in a stock from other markets

only if: (1) the stock is included in ITS in that other

market; (2) the quotation size is for more than 100

shares: (3) the bid or offer is not more than onequarter point away from the NYSE’s bid or offer; (4)

the quotation conforms to NYSE Rule 62 governing

minimum variations; (5) the quotation does not

create a locked or crossed market; (6) the market

disseminating the quotation is not experiencing

operational or system problems with respect to the

dissemination of quotation information; and, (7) the

quotation is ‘‘firm’’ pursuant to Rule 11Ac1–1

under the Act, 17 CFR 240.11Ac1–1, and the

market’s rules.

4See NYSE Notice to Members (November 17,

1995).

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

6 15 U.S.C. 78s(b)(3)(A).

7 17 CFR 240.19b–4(e)(5).

No. SR–NYSE–95–37). This is a program

to calculate and display, on the

execution reports sent to member firms,

the dollar amounts realized as savings to

their customers as a result of price

improvement in the execution of their

orders on the Exchange.

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

self-regulatory organization 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 self-regulatory organization 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 this proposed rule

change is to extend for six months a

pilot program for calculating and

displaying, on execution reports sent to

member firms entering orders, the dollar

value saved by their customers as a

result of price improvement of orders

executed on the Exchange. The program

does not in any way affect the actual

execution of orders. The Exchange refers

to this calculated dollar savings as the

‘‘NYSE PRIMESM.’’

NYSE PRIME is available to all

member organizations 1 for intra-day

market orders entered via the

Exchange’s SuperDOT system that are

not tick-sensitive and are entered from

off the Floor.2 In calculating the dollar

value of price improvement, NYSE

PRIME utilizes the Best Pricing Quote

(‘‘BPQ’’) as approved by the

Commission in connection with the

Exchange’s pricing of odd-lot orders.3

Data from the operation of the pilot

during the first quarter of 1996 show

price improvement on 25.6% of the

execution reports for eligible postopening market orders entered on the

Exchange. The Exchange believes that

the NYSE PRIME enhances the

information made available to investors

and improves their understanding of the

auction market.

The initial NYSE PRIME pilot

program was commenced on October

24, 1995 4 and ran until April 24, 1996.

The proposed rule change extends the

pilot program for an additional six

months, to October 24, 1996.

2. Statutory Basis

The basis under the Act for this

proposed rule change is the requirement

under Section 6(b)(5) 5 that an exchange

have rules that are designed to promote

just and equitable principles of trade, to

remove impediments to and perfect the

mechanism of a free and open market

and a national market system and, in

general, to protect investors and the

public interest. This proposed rule

change is designed to perfect the

mechanism of a free and open market in

that it enhances the information

provided to investors by displaying to

them the dollar value of the price

improvement their orders may have

received when executed on the NYSE.

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 that is not

necessary or 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

The Exchange has neither solicited

nor received any written comments on

the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Because the foregoing proposed rule

change: (i) does not significantly affect

the protection of investors or the public

interest; (ii) does not impose any

significant burden on competition; and

(iii) does not have the effect of limiting

access to or availability of any Exchange

order entry or trading system, the NYSE

PRIME program has become effective

pursuant to Section 19(b)(3)(A) of the

Act 6 and subparagraph (e)(5) of Rule

19b–4 thereunder.7 At any time within

60 days of the filing of such 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, 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 at

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Exchange. All submissions

should refer to File No. SR–NYSE–96–

10 and should be submitted by May 28,

1996.
20304 Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Notices

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

2 17 CFR 240.19b–4 (1995).

3On March 11, 1996, the PSE provided additional

information concerning the purpose of the proposal.

Specifically, the PSE explained that the proposal is

designed to make Commentary .01 to PSE Rule

11.10(d), ‘‘Options Listing Committee,’’ easier to

follow and to prevent legal appeals of Options

Listing Committee (‘‘OLC’’) decisions on the

technical argument that the OLC was not authorized

to act because its composition did not conform to

the rigid requirements of PSE Rule 11.10(d),

Commentary .01. According to the PSE, such an

appeal could be made currently if, for example, a

non-floor broker is placed in one of the floor broker

slots on the OLC because of a shortage of floor

brokers willing to serve on the OLC, or if a floor

broker on the OLC becomes a market maker midyear and the OLC decides to retain that member on

the OLC. The PSE expects that, under the proposal,

the OLC will be composed as specified in

Commentary .01 under virtually all circumstances.

The Exchange represents that it intends to comply

with the spirit of the Commentary and anticipates

departures from this general rule only in

exceptionally rare circumstances. See Letter from

Michael D. Pierson, Senior Attorney, Market

Regulation, PSE, to Michael Walinskas, Branch

Chief, Options Regulation, Division of Market

Regulation, Commission, dated March 11, 1996

(‘‘Amendment No. 1’’).

4See Securities Exchange Act Release No. 36984

(March 18, 1996), 61 FR 12126.

5See Amendment No. 1, supra note 3.

6 15 U.S.C. §§ 78f(b)(3) and (b)(5) (1988).

7See Amendment No. 1, supra note 3.

8 15 U.S.C. 78s(b)(2) (1988).

9 17 CFR 200.30–3(a)(12) (1995).

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

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11143 Filed 5–3–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37148; File No. SR–PSE–

96–02]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

the Pacific Stock Exchange, Inc.,

Relating to the Composition of the

Exchange’s Options Listing Committee

April 29, 1996.

I. Introduction

On January 16, 1996, the Pacific Stock

Exchange, Inc. (‘‘PSE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’),

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

Securities Exchange Act of 1934

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

proposal to amend its rules relating to

the composition of the Options Listing

Committee (‘‘OLC’’). On March 11,

1996, the PSE amended its approval.3

The proposed rule change and

Amendment No. 1 were published for

comment in the Federal Register on

March 25, 1996.4 No comments were

received on the proposed rule change.

II. Description of the Proposal

Currently, Commentary .01 to PSE

Rule 11.10(d) provides that the OLC

shall be comprised of (i) four floor

brokers; (ii) five market makers or lead

market makers; and (iii) one member of

the PSE or a general partner or officer

of a member organization, or any other

person who is considered to be

qualified. The PSE proposes to amend

PSE Rule 11.10(d), Commentary .01, to

provide that the Exchange will attempt,

but will not be required, to maintain the

composition of the OLC as provided

currently under Commentary .01.

Specifically, the Exchange proposes to

amend Commentary .01 by eliminating

the phrase ‘‘shall be comprised of’’ and

replacing it with a provision stating that

‘‘attempts shall be made’’ in order for

the OLC to have a composition that

includes those currently specified in

subsections (i) through (iii).

The Exchange believes that

Commentary .01 is overly restrictive and

that the proposal is appropriate in order

to allow for greater flexibility in the

committee selection procedure and the

process for replacing committee

members who resign or change their

floor status. The proposal is designed to

make Commentary .01 easier to follow

and to prevent members from appealing

decisions of the OLC on the grounds

that the OLC was not authorized to act

because its composition did not

conform to the requirements of

Commentary .01. The PSE represents

that the Exchange will make every effort

to ensure that the OLC maintains the

composition specified in Commentary

.01. The Exchange expects that, under

the proposal, the composition of the

OLC will remain as specified currently

in Commentary .01 in virtually all

circumstances.5

III. Discussion

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, with

Section 6(b)(3) of the Act, in that the

proposal provides for a fair

representation of the Exchange’s

members in the administration of its

affairs, and also with Section 6(b)(5) of

the Act, in that the proposal is designed

to protect investors and the public

interest.6

The Commission believes that the

proposal will allow greater flexibility in

the composition of the OLC.

Specifically, the proposal provides that

the Exchange will attempt, but will not

be required, to maintain the

composition of the OLC as provided

currently under PSE Rule 11.10(d),

Commentary .01. The PSE expects that

the OLC will continue to be composed

as provided currently in Commentary

.01 in virtually all circumstances, and

the PSE represents that the Exchange

will attempt to ensure that the

composition of the OLC remains as

specified in Commentary .01.7

Accordingly, the Commission believes

that the proposal will provide flexibility

in the composition of the OLC while

ensuring that diverse interests are

represented on the OLC. In addition, the

proposal should simplify the process of

replacing a member who resigns from

the committee and allow the OLC to

retain a member who changes his status

(e.g., a floor broker who becomes a

maker) during his service on the

committee.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,8 that the

proposed rule change (SR–PSE–96–02)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11142 Filed 5–3–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37152; File No. SR–PTC–

96–02]

Self-Regulatory Organizations;

Participants Trust Company; Notice of

Filing and Order Granting Accelerated

Approval of Proposed Rule Change

Establishing on a Permanent Basis the

Margin and Pricing Methodology for

Collateralized Mortgage Obligations

April 30, 1996.

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

Securities Exchange Act of 1934

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

March 8, 1996, the Participants Trust

Company (‘‘PTC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change (File No. SR–PTC–96–02) as

described in Items I and II below, which

Items have been prepared primarily by

PTC. The Commission is publishing this

notice and order to solicit comments

from interested persons and to grant

accelerated approval of the proposed

rule change.