Federal Register / Vol. 61, No. 91 / Thursday, May 9, 1996 / Notices 21215

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

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 applicant 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 27, 1996, and should be

accompanied by proof of service on the

applicant, 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 SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicant, 805 Third Avenue, New

York, New York 10022.

FOR FURTHER INFORMATION CONTACT:

Sarah A. Wagman, Staff Attorney, at

(202) 942–0654, or Alison E. Baur,

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

may be obtained for a fee from the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant, a New York corporation,

registered as a closed-end investment

company under the Act by filing with

the SEC a notification of registration on

Form N–8A on November 26, 1985. On

July 25, 1986, applicant filed a

registration statement on Form N–5,

which became effective in December,

1986. In June, 1987, applicant issued

shares of its common stock through a

public offering. There has been no other

public offering of applicant’s securities,

and applicant presently does not intend

to make any other public offering of its

securities. Applicant is licensed and

regulated as a Specialized Small

Business Investment Company by the

United States Small Business

Administration (‘‘SBA’’) under the

Small Business Investment Company

Act of 1958 (‘‘SBICA’’).

2. Applicant states that there are 22

beneficial holders of its shares. As of

November 30, 1995, applicant also had

outstanding SBA-guaranteed debentures

in an aggregate principal amount of

approximately $4.1 million. These

Debentures are not convertible into,

exchangeable for, or accompanied by,

any equity security. Applicant’s

common stock is not traded on an active

market.

3. As of November 30, 1995, applicant

had assets aggregating $11,335,023. Of

that amount, $10,894,910 is attributable

to applicant’s loan portfolio, $85,813 is

attributable to real estate acquired in

foreclosure of delinquent loans, $40,906

is cash, $195,317 is accrued interest,

and $118,077 represents the value of

other assets. Applicant’s liabilities

consisted of approximately $4.1 million

in SBA debentures, $250,000 in deferred

income, and $1.7 million in other

liabilities. As of November 30, 1995,

shareholders’ equity consisted of

approximately $5.4 million in paid-in

capital.

4. Applicant presently is not a party

to any litigation or administrative

proceeding.

Applicant’s Legal Analysis

1. Section 8(f) of the Act provides that

whenever the SEC, upon application or

its own motion, finds that a registered

investment company has ceased to be an

investment company, the SEC shall so

declare by order. The registration of the

investment company ceases to be in

effect upon the taking effect of the order.

2. Section 3(c)(1) of the Act provides

that an issuer is not an investment

company within the meaning of the Act

if (a) its outstanding securities (other

than short-term paper) are beneficially

owned by not more than 100 persons,

and (b) it is not making and does not

presently propose to make a public

offering of securities.

3. Rule 3c–3 under the Act provides

that, for purposes of section 3(c)(1), the

holders of any debt securities offered

and sold by a small business investment

company licensed under the SBICA

shall be deemed to be one person if the

securities are (a) not convertible into,

exchangeable for, or accompanied by

any equity security and (b) guaranteed

as to timely payment of principal and

interest by the SBA and backed by the

full faith and credit of the United States.

Applicant believes that the holders of its

debentures are considered one person

under the provisions of rule 3c–3.

4. Applicant believes that, pursuant to

section 3(c)(1), it is no longer an

investment company as defined in

section 3 because, for purposes of the

Act, only 23 persons are beneficial

holders of its securities: 22 persons hold

its common stock, and one holds

debentures. Applicant is not making

and does not presently propose to make

a public offering of its securities.

Accordingly, applicant requests that the

SEC issue an order under section 8(f)

declaring that it has ceased to be an

investment company.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11538 Filed 5–8–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37165; File No. SR–Amex–

96–15]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

American Stock Exchange, Inc.

Relating to the Listing of Hybrid

Securities

May 3, 1996.

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

Securities Exchange Act of 1934

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

April 26, 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 and II 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 Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange is proposing to amend

Section 107A of the Amex Company

Guide to conform the Exchange’s listing

criteria for hybrid securities to those of

the New York Stock Exchange

(‘‘NYSE’’).

The text of the proposed rule change

is available at the Exchange and 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

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.
21216 Federal Register / Vol. 61, No. 91 / Thursday, May 9, 1996 / Notices

2See Securities Exchange Act Release No. 27753

(Mar. 1, 1990), 55 FR 8626 (Mar. 8, 1990).

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

4 17 CFR 240.19b-4(e)(6).

5The affected provisions currently prevent the

listing of (1) any cash settled product settled in any

currency other than U.S. dollars or (2) any product

that had a mandatory redemption price of less than

three dollars.

6See Securities Exchange Act Release No. 27753

(Mar. 1, 1990), 55 FR 8626 (Mar. 8, 1990) (order

approving File-No. SR–Amex–89–29). For example,

a stock index-linked note that was payable in a

foreign currency would raise important regulatory

issues among which might include the need to

address appropriate product term and risk

disclosure, customer suitability, and settlement

procedures. Accordingly, the Commission expects

the Amex to consult with it on the need to file a

Section 19(b) rule change to list a product with

such terms under the Rule 107A listing standards.

7 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3NASD Manual,. Schedules to the By-Laws,

Schedule D, Part II (CCH) ¶¶ 1803–06A.

4 Interim reports are reports that are voluntarily

distributed by an issuer as part of its shareholder

relations activities and do not include quarterly

financial reports required to be filed with the

Commission pursuant to Sections 13(a) and 15(d) of

the Act, 15 U.S.C. 78m(a), 78o(d).

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

In March 1990, the Commission

approved the adoption of Section 107 of

the Amex Company Guide containing

guidelines for listing securities that have

features common to both equity and

debt securities, yet do not fit within the

traditional definitions of such

securities.2 Sometimes referred to as

‘‘hybrids,’’ these securities can take a

variety of forms. For example, the

Exchange has listed under Section 107

a zero coupon intermediate term note,

which at maturity returns the face

amount of the note plus a percentage of

the appreciation, if any, in a well known

index such as the S&P 500, or a debt

security with a relatively high fixed

return, but whose value at maturity is

linked to the performance of an

unrelated common stock.

Section 107A currently specifies the

minimum issuer qualifications, the

minimum public distribution and

aggregate market value of the security

and other criteria to assist the Exchange

in its case by case review and

determination of the suitability of each

security prior to its approval for listing.

The Exchange now proposes to

conform its listing criteria for hybrid

securities to those of the NYSE by

eliminating the current requirements of

Section 107A that require a certain

minimum redemption price and only

allow cash settlement of covered

instruments if settled in U.S. dollars.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b) of the Act

in general and furthers the objectives of

Section 6(b) in particular in that it is

designed to promote just and equitable

principles of trade and to protect

investors and the public interest in that

it conforms the Exchange’s listing

standards for hybrid securities to those

of the NYSE.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The proposed rule change does not

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 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: (1) does not significantly affect

the protection of investors or the public

interest; (2) does not impose any

significant burden on competition; (3)

does not become operative for 30 days

from April 26, 1996, the date on which

it was filed, and the Exchange provided

the Commission with written notice of

its intent to file the proposed rule

change at least five business days prior

to the filing date, it has become effective

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

Act 3 and Rule 19b–4(e)(6) thereunder.4

The Commission notes that although

it is reasonable for the Exchange to

remove the affected provisions as

mandatory listing standards,5 proposals

that deviate from these standards might

raise novel or significant regulatory

issues that would require a proposed

rule change to list the product.6

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, 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 also will be available for

inspection and copying at the principal

office of the Exchange. All submissions

should refer to File No. SR–Amex–96–

15 and should be submitted by May 30,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–11624 Filed 5–8–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37163; File No. SR–NASD–

96–09]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to the

Distribution of Interim Reports to

Beneficial Owners and the Use of New

Technology to Communicate Such

Information to Shareholders

May 2, 1996.

On March 13, 1996, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) filed with

the Securities and Exchange

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

a proposed rule change pursuant to

Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Act’’) 1 and Rule

19b–4 thereunder.2 The rule change

amends Part II of Schedule D to the

NASD By-Laws (‘‘Schedule D’’) 3 by

adding precatory language

recommending that Nasdaq issuers

distribute interim reports to both

shareholders of record and beneficial

shareholders 4 to shareholders if they