Federal Register / Vol. 61, No. 16 / Wednesday, January 24, 1996 / Notices 1953

1See Commentary to Amex Rule 190.

2Since the Options Clearing Corporation (‘‘OCC’’)

is the issuer of all listed options and the ‘‘business

transaction’’ prohibition was intended as a

prophylactic measure to prevent the passage of nonpublic information between specialist and issuer,

the policy reason behind Rule 190(a) would not

have been advanced had the Exchange simply

prohibited business transactions between the OCC

and an options specialist.

3Like a specialist, a DPM has primary market

making responsibilities.

4See CBOE Rules 8.80 and 8.81, and Securities

Exchange Act Release Nos. 24934 (September 22,

1987), 52 FR 36122 (September 25, 1987) and 25151

(November 23, 1987), 52 FR 45417 (November 27,

1987). The CBOE’s rules provide that an integrated

broker-dealer affiliated with a DPM must establish

an exchange approved ‘‘Chinese Wall’’ between the

upstairs firm and the DPM and make certain

disclosures if it intends to issue recommendations

or research reports regarding DPM securities and

the underlying. There are no specific restrictions,

however, on DPM communications regarding their

specialty securities.

[Docket No. 50–029–DCOM; ASLBP No. 96–

713–01–DCOM]

Yankee Atomic Electric Company;

Establishment of Atomic Safety and

Licensing Board

Pursuant to delegation by the

Commission dated December 29, 1972,

published in the Federal Register, 37

F.R. 28710 (1972), and Sections 2.105,

2.700, 2.702, 2.714, 2.714a, 2.717, 2.721

and 2.772(j) of the Commission’s

Regulations, all as amended, an Atomic

Safety and Licensing Board is being

established in the following proceeding

to rule on petitions for leave to

intervene and/or requests for hearing

and supplemental petitions to intervene

and to preside over the proceeding in

the event that a hearing is ordered:

YANKEE ATOMIC ELECTRIC COMPANY

Yankee Nuclear Power Station

Decommissioning Plan

This Board is being established

pursuant to a notice published by the

Commission on October 27, 1995, in the

Federal Register (60 F.R. 55069). The

petitioners, Citizens Awareness

Network and New England Coalition on

Nuclear Pollution, seek to intervene and

request a hearing. The Commonwealth

of Massachusetts has also filed a notice

of participation in the proceeding.

The Board is comprised of the

following administrative judges:

G. Paul Bollwerk III, Chairman, Atomic

Safety and Licensing Board Panel,

U.S. Nuclear Regulatory Commission,

Washington, D.C. 20555

Dr. Jerry R. Kline, Atomic Safety and

Licensing Board Panel, U.S. Nuclear

Regulatory Commission, Washington,

D.C. 20555

Dr. Thomas S. Elleman, 704 Davidson

Street, Raleigh, NC 27609

All correspondence, documents and

other materials shall be filed with the

Judges in accordance with 10 CFR

2.701.

Issued at Rockville, Maryland, this 17th

day of January 1996.

B. Paul Cotter, Jr.,

Chief Administrative Judge, Atomic Safety

and Licensing Board Panel.

[FR Doc. 96–962 Filed 1–23–96; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–36726; File No. SR–Amex–

95–54]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange, Inc.

Relating to Restrictions on Specialists

January 17, 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 December 19, 1995,

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 Exchange proposes to amend

Exchange Rules 190 and 950 regarding

restrictions on specialists.

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

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

The Amex adopted most of its

restrictions on the activities of

specialists in the early 1960s. The effect

of these restrictions was to limit the

business activities of specialists (and

their affiliates) to acting as a ‘‘broker’s

broker’’ and as a dealer on the Exchange

Floor. These restrictions also precluded

specialists from making public

statements regarding their specialty

securities. In 1973, the Exchange added

a gloss on the public statement

restriction, prohibiting specialists from

making, ‘‘an advertisement identifying a

firm as a specialist in any security.’’ 1

Even though the New York Stock

Exchange (‘‘NYSE’’) and Amex generally

have comparable rules with respect to

restrictions on specialists, the NYSE

never adopted the 1973 gloss.

In 1975, with the implementation of

trading in standardized options, the

Exchange generally extended the

restriction on stock specialists to

options specialists. It modified,

however, the prohibition on business

transactions between specialists and the

issuer of a specialty security (Rule

190(a)), to prohibit business transactions

between an options specialist and the

issuer of the security underlying a

specialty option (Rule 950(k)).2

In 1987, the Chicago Board Options

Exchange (‘‘CBOE’’) instituted its

Designated Primary Market-Maker

(‘‘DPM’’) system for trading listed

options.3 While the CBOE adopted a

number of the restrictions applicable to

Amex options specialists, it did not

apply any of the restrictions applicable

to Amex specialist communications to

its DPMs.4

The discrepancy between the rules of

the Amex and the CBOE regarding

specialist communications had little

practical significance prior to the

general implementation of multiple

options trading. The Exchange is now

finding, however, that the disparate

regulation of specialists and DPMs has

placed it at a disadvantage in the

competition for order flow in a multiple

trading environment. The Amex,

accordingly, proposes to amend its rules

to lift the prohibition against

‘‘popularizing’’ an option or a derivative
1954 Federal Register / Vol. 61, No. 16 / Wednesday, January 24, 1996 / Notices

5The term ‘‘equity derivative’’ refers to an

underwritten security the value of which is

determined by reference to another security, or to

a currency, commodity, interest rate or index of the

foregoing. Such securities are commonly listed

pursuant to Amex Company Guide (‘‘Guide’’)

Sections 106 (‘‘Index and Currency Warrants’’), 107

(‘‘Other Securities’’), 118 (‘‘Investment Trusts’’), or

Amex Rule 1002 (‘‘Portfolio Depositary Receipts’’).

6 It is in the case of listings under sections 107

and 118A of the Guide that the underlying can be

a single security, so that restrictions analogous to

those applicable to equity options are appropriate.

7Exchange Rule 193 permits the affiliates of

specialists to obtain an exemption from most

specialist restrictions through the use of an

Exchange-approved ‘‘Chinese wall’’. 8 17 CFR 200.30–3(a)(12).

security. It will leave in place the

restriction against popularizing the

underlying security, subject of course to

the exceptions that have long been

contained in Amex Rule 950. This will

better conform the Amex rules to those

applicable to DPMs at the CBOE

regarding communications concerning

specialty securities.

In addition, the Exchange is also

proposing two other changes to the

restrictions on popularizing by

specialists. The Exchange seeks to

conform its rules to those of the NYSE

to eliminate generally the prohibition on

communications that simply identify a

firm as the specialist in a particular

security. Finally, the Exchange seeks to

amend its rules regarding equity

derivative5 specialists to harmonize

them with restrictions on options

specialists. Thus, the Exchange would

amend its rules to prohibit material

business transactions between certain

equity derivative specialists and the

issuer of the security underlying the

equity derivative.6

Of course, all options specialists

would remain subject to the rules

regulating the conduct and public

communications of members generally

(e.g., Exchange Rule 991, the ‘‘options

advertising’’ rule). In addition, all other

restrictions applicable to specialists and

their affiliates would remain in place.

Thus, specialists and their affiliates still

would be prohibited from trading a

specialist security outside the specialist

function (Rules 170(e) and 950(n)),

holding or granting an option on a

specialty stock (Rule 175), engaging in

a business transaction with either the

issuer of a specialty security or the

underlying security in the case of

options (Rules 190(a) and 950(k)), and

accepting orders from the issuer of a

specialty security, its insiders and

enumerated institutional investors

(Rules 190(b) and 950(k)).7

The Exchange represents that the

respective proposed rule changes either

seek to conform the Exchange’s rules to

those of the CBOE and NYSE, or

represent a rational harmonization of

the regulation of listed options and

equity derivatives. In addition, the

Exchange believes that changes in

market structure, the role of the

specialist in the secondary market, and

enhanced surveillance capabilities over

the last thirty years have eliminated the

need for continuation of at least certain

of the original specialist prohibitions.

This is most clearly true with respect to

the wholesale application of restrictions

on stock specialists to options

specialists, due to the derivative pricing

of the specialty securities. This is most

clearly demonstrated by the experience

of the CBOE, which has been able to

adequately regulate its DPMs without

the use of such wholesale restrictions.

Finally, the Exchange believes that the

experience of the NYSE demonstrates

that with respect to all specialists there

is no need to go so far as to preclude

even the public identification of a

particular firm as the specialist in

particular securities.

2. Basis

The Exchange believes that the

proposed rule change is consistent with

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

further the objectives of section 6(b)(5)

in particular, in that they are designed

to prevent fraudulent and manipulative

acts and practices, 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.

B. Self-Regulatory Organization’s

Statement on Burden 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, 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

Section, 450 Fifth Street, NW.,

Washington, DC. 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–95–54 and should be

submitted by February 14, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1030 Filed 1–23–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36733; File No. SR–Amex–

95–55]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

American Stock Exchange, Inc.

Relating to Fee Changes

January 17, 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 December 21, 1995,

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 self-regulatory organization. The

Commission is publishing this notice to