24976 Federal Register / Vol. 61, No. 97 / Friday, May 17, 1996 / Notices

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

2 17 CFR 240.19b–4.

3The Amex has clarified that the name of the

index will be the Select Technology Stock Index.

Telephone Conversation between Michael T.

Bickford, Vice President, Capital Markets Group,

Amex, and Matthew S. Morris, Attorney,

Derivatives Regulation, Office of Self-Regulatory

Oversight, Division of Market Regulation

(‘‘Division’’), Commission, on May 3, 1996.

4See Securities Exchange Act Release No. 37122

(April 17, 1996), 61 FR 17931 (April 23, 1996).

5 In Amendment No. 1, the Amex amended its

rule filing to clarify that the Commission will be

notified if: (1) the number of components in the

Index decreases to less than nine; (2) the three

highest weighted components represent more than

60 percent of the weight of the Index; or (3) the

trading volume of any of the components falls

below 500,000 shares for each of the last six

months. In Amendment No. 1, the Amex also

changed the manner in which the value of the Index

will be calculated from a price-weighted to an

equal-dollar weighted methodology. In addition, the

Amex replaced component securities C-Cube

Microsystems, Inc., Computer Sciences

Corporation, and General Motors Corporation (Class

E) with Adaptec Inc., Hewlett Packard Co., and Sun

Microsystems. See letter from Michael T. Bickford,

Vice President, Capital Markets Group, Amex, to

Michael Walinskas, Branch Chief, Derivatives

Regulation, Office of Self-Regulatory Oversight,

Division, Commission, dated May 2, 1996

(‘‘Amendment No. 1’’).

6 In Amendment No. 2, the Amex removed

Applied Materials, Inc. as a component security of

the Index. See letter from Michael T. Bickford, Vice

President, Capital Markets Group, Amex, to Michael

Walinskas, Branch Chief, Derivatives Regulation,

Office of Self-Regulatory Oversight, Division,

Commission, dated May 8, 1996 (‘‘Amendment No.

2’’).

contract for another. Exchanges are

permitted by Rule 11a–2 provided the

only variance from relative net asset

value is an administrative fee disclosed

in the offering account’s registration

statement, and a sales load or sales load

differential calculated according to

methods prescribed in the rule.

5. Applicants assert that the terms of

the proposed exchange offer would

satisfy all of the requirements of Rule

11a–2, except that SAFECO and

Principal Mutual are not affiliated and

Rule 11a–2 is limited by paragraph (b)

to affiliated offerors. The proposed

exchange would be made on the basis of

relative net asset values, i.e.,

immediately after the exchange the cash

value of a SAFECO Contract acquired

will be identical to the participant’s

cash value under the Principal Mutual

Contract immediately prior to the

exchange. No administrative fees or

sales load would be deducted at the

time of the exchange; and any CDSL

subsequently deducted upon surrender

of, or partial withdrawal from, a

SAFECO Contract acquired in an

exchange would be calculated as if: (i)

the contract holder of that SAFECO

Contract had been a contract holder

from the date on which he became a

participant under the Principal Mutual

Contract exchanged; and (ii) each

purchase payment for the Principal

Mutual Contract exchanged had been

made under the Principal Mutual

Contract. The total CDSL deducted

under a SAFECO Contract acquired by

exchange would not exceed 8.5% of the

sum of the purchase payments made for

the Principal Mutual Contract

exchanged and the SAFECO Contract

acquired.

6. Applicants assert that the proposed

exchange offer would be permitted

under Rule 11a–2 if SAFECO and

Principal Mutual were affiliated with

one another. Applicants also assert that

the staff of the SEC in a no-action letter

granted to Alexander Hamilton Funds

(pub. avail. July 20, 1994) has, in

interpreting Section 11(a), stated that

the lack of affiliation between two

investment companies and their

depositors creates fewer Section 11

concerns than the presence of affiliation

between two investment companies and

their depositors. Therefore, Applicants

argue that the lack of affiliation between

SAFECO and Principal Mutual does not

create any additional concerns under

Section 11 and the exchange offer

would be permitted under Rule 11a–2

were it not for their lack of affiliation.

7. Applicants argue that while the

CDSL for the SAFECO Contracts is

nominally higher than that of the

Principal Mutual Contracts for the first

four contract years, the SAFECO

Contracts permit up to 10% of contract

value to be withdrawn without the

imposition of a CDSL. Accordingly, the

CDSL actually imposed upon a full

surrender would be slightly greater for

the SAFECO Contracts only during the

first contract year, and even then it

might be less for the SAFECO Contracts

if investment performance were

sufficient to affect the guaranteed

maximum CDSLs of the two contracts.

Moreover, the CDSL for the SAFECO

Contracts endures for only eight years as

opposed to ten years for the CDSL of the

Principal Mutual Contracts.

8. Applicants also argue that the

expenses of the underlying investment

company portfolios to which Principal

Mutual Contract assets may be allocated

are somewhat lower than those to which

SAFECO Contracts assets may be

allocated, but the SAFECO Contracts

offer seven investment alternatives as

compared to only three for the Principal

Mutual Contracts. Accordingly,

individuals may differ in whether they

prefer the lower expenses of the funds

available under the Principal Mutual

Contracts or the broader range of

investment options of the funds

available under the SAFECO Contracts.

9. Applicants state that permitting

investors to evaluate the relative merits

of the two contracts and to select the

one that best suits their circumstances

and preferences is consistent with the

public interest and the protection of

investors. Therefore, Applicants assert

that the terms of the proposed offer of

exchange do not offer any of the

‘‘switching’’ abuses that led to the

adoption of Section 11 of the 1940 Act

and that approving the exchange offer

would be consistent with the precedent

established by the SEC’s adoption of

Rule 11a–2 thereunder.

Conclusion

For the reasons set forth above,

Applicants represent that approval of

the exchange offer 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.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–12466 Filed 5–16–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37195; File No. SR–Amex–

96–12]

Self-Regulatory Organizations; Order

Granting Accelerated Approval To

Proposed Rule Change and Notice of

Filing and Order Granting Accelerated

Approval to Amendments Nos. 1 and 2

To Proposed Rule Change by the

American Stock Exchange, Inc.,

Relating to Listing and Trading of

Warrants Based on the Select

Technology Stock Index

May 10, 1996.

I. Introduction

On April 9, 1996, the American Stock

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

submitted to the Securities and

Exchange Commission (‘‘Commission’’),

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

Securities Exchange Act of 1934

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

proposed rule change to list and trade

warrants based on the Select

Technology Stock Index (‘‘Index’’).3

The proposed rule change appeared in

the Federal Register on April 23, 1996.4

No comments were received on the

proposed rule change. The Amex

subsequently filed Amendment No. 1 to

the proposed rule change on May 2,

1996 5 and Amendment No. 2 on May 8,

1996.6 The Amex has requested
Federal Register / Vol. 61, No. 97 / Friday, May 17, 1996 / Notices 24977

7The component securities of the Index are as

follows: Adc Telecommunications, Inc.; America

Online, Inc.; Adaptec Inc.; Cisco Systems, Inc.;

Computer Associates International, Inc.; Dell

Computer Corporation; Digital Equipment

Corporation; First Data Corporation; Gateway 2000,

Inc.; Hewlett-Packard Co.; Informix Corporation;

Intel Corporation; International Business Machines

Corp.; Lsi Logic Corporation; Microsoft Corporation;

Oracle Systems Corporation; Qualcomm, Inc.; Sun

Microsystems; Tencor Instruments; Texas

Instruments, Inc.; Vishay Intertechnology, Inc.;

Xerox Corporation; and Xilinx Inc.

8See Amex Rule 915. Currently, 100 percent of

the components are eligible for standardized

options trading.

9See Section 106 of the Amex Company Guide.

10See Amex Rules 1107 and 1108.

11See Amex Rule 1110.

12See Section 106(f) of the Amex Company

Guide.

13See Section 106(e) of the Amex Company

Guide.

14See Amex Rule 462.

15See Amex Rule 1109.

accelerated approval for the proposal.

This order approves the Amex’s

proposal, as amended, on an accelerated

basis and solicits comments from

interested persons on Amendment Nos.

1 and 2.

II. Description

The purpose of the proposed rule

change is to permit the Exchange to list

and trade cash-settled index warrants

based on the Select Technology Stock

Index (‘‘Index Warrants’’). The

Exchange has represented that the

listing and trading of warrants based on

the Index will comply in all respects

with Amex Rules 1100 through 1110,

Amex Rule 462, and Section 106 of the

Amex Company Guide.

A. Design of the Index

The Exchange has also represented

that the Index is narrow-based and

comprised of the stocks of 23

technology companies.7 The Index is

equal-dollar weighted and is therefore

designed to ensure that each of the

component securities is represented in

an approximate ‘‘equal’’ dollar amount.

Accordingly, each of the 23 companies

included in the Index will represent

approximately 4.347 percent of the

weight of the Index at the time of

issuance of the warrant. The Index

multipliers will be determined to yield

the benchmark value of 100.00 on the

date the warrant is priced for initial

offering to the public.

The Exchange has stated that the total

market capitalization of the Index was

approximately $339.7 billion on April

29, 1996. The median capitalization of

the companies in the Index on that date

was $5.2 billion, and the average market

capitalization of these companies was

$14.8 billion. The individual market

capitalization of the companies ranged

from $730 million to $59 billion. In

addition, during the six-month period

from October 1995 through March 1996,

average monthly trading volume in the

Index stocks ranged from approximately

9.1 million shares to approximately

229.6 million shares.

It is currently contemplated that the

Select Technology Stock Index will be

used as the basis for only one index

warrant, which has a term of two-years.

If the Exchange wishes to list and trade

other products based on the Select

Technology Stock Index, including

other index warrants, the Exchange will

advise the Commission to determine

whether an additional filing pursuant to

Rule 19b–4 of the Act is necessary or

appropriate.

B. Maintenance of the Index

The Exchange represents that it will

monitor the component securities in the

Index on a monthly basis. In this regard,

the Exchange will notify the

Commission if: (1) Less than 75 percent

of the component securities are eligible

for standardized options trading; 8 (2)

the number of components in the Index

decreases to less than nine; (3) the three

highest weighted components represent

more than 60 percent of the weight of

the Index; or (4) the trading volume of

any of the components falls below

500,000 shares for each of the last six

months.

Shares of a component stock may be

replaced (or supplemented) with other

securities under certain limited

circumstances, such as the conversion

of a component stock into another class

of security or the spin-off of a

subsidiary. Accordingly, all replacement

or supplemental Index component

securities will be related to the original

component stock. Moreover, if a change

in the composition of the Index is

contemplated for reasons other than

those set forth above, the Exchange will

notify the Commission to determine

whether a rule filing pursuant to section

19(b) of the Act will be required.

If the stock remains in the Index, the

multiplier of that security may be

adjusted to maintain the component’s

relative weight in the Index

immediately prior to the corporate

action. In the event that a security in the

Index is removed due to a corporate

consolidation and the holders of such

security receive cash, the cash value of

such security will be included in the

Index and will accrue interest at LIBOR

to term.

C. Trading of the Index Warrants

The Index Warrant will be a direct

obligation of the issuer, subject to cashsettlement in U.S. dollars and either

exercisable throughout its life (i.e.,

American-style) or exercisable only

immediately prior to its expiration date

(i.e., European-style). If the Index

Warrant is structured as a ‘‘put,’’ upon

exercise (or at the warrant expiration

date if the warrant has an Europeanstyle exercise), the holder will receive

payment in U.S. dollars to the extent

that the value of the Index has declined

below a pre-stated cash settlement

value. Conversely, if the Index Warrant

is structured as a ‘‘call,’’ upon exercise

(or at the warrant expiration date if the

warrant has an European-style exercise),

the holder will receive payment in U.S.

dollars to the extent that the value of the

Index has increased above the pre-stated

cash settlement value. If the Index

Warrant is ‘‘out-of-the-money’’ at the

time of expiration it will expire

worthless.

D. Calculation and Dissemination of the

Value of the Index

The Index value will be continuously

calculated and will be publicly

disseminated every fifteen seconds over

the Consolidated Tape Association’s

Network B.

In addition, the multiplier of each

component stock remains fixed except

in the event of certain types of corporate

actions such as the payment of a

dividend other than an ordinary cash

dividend, stock distribution, stock split,

reverse stock split, rights offering,

distribution, reorganization,

recapitalization, or similar event. The

multiplier of each component stock may

also be adjusted, if necessary, in the

event of a merger, consolidation,

dissolution, or liquidation of an issuer,

or in certain other events such as the

distribution of property by an issuer to

shareholders.

E. Listing Standards and Customer

Safeguards

As stated above, the listing and

trading of the proposed warrants on the

Select Technology Stock Index will

comply in all respects with Amex Rules

1100 through 1110, Amex Rule 462, and

Section 106 of the Amex Company

Guide. These provisions will govern all

aspects of the listing and trading of the

Index Warrants, including, issuer

eligibility,9 position and exercise

limits,10 reportable positions,11

automatic exercise,12 settlement value,13

margin,14 and trading halts and

suspensions.15

Additionally, these warrants will be

sold only to accounts approved for the
24978 Federal Register / Vol. 61, No. 97 / Friday, May 17, 1996 / Notices

16See Amex Rule 1101.

17See Amex Rule 1102.

18See Amex Rule 1103.

19See 15 U.S.C. § 78f(b) (1988).

20Pursuant to Section 6(b)(5) of the Act, the

Commission must predicate approval of any new

securities product upon a finding that the

introduction of such product is in the public

interest. Such a finding would be difficult with

respect to a warrant that served no hedging or other

economic function, because any benefits that might

be derived by market participants likely would be

outweighed by the potential for manipulation,

diminished public confidence in the integrity of the

markets, and other valid regulatory concerns.

21The Commission also notes that the Amex is

presently only seeking the authority to list and

trade a single issuance of warrants on the Index

with a term of two-years and that if the Exchange

proposes to list and trade other products based on

the Index, including other index warrants, the

Exchange will advise the Commission in order to

determine whether a rule filing pursuant to Section

19(b) of the Act will be necessary or appropriate.

This limitation is important since the Index’s

maintenance criteria might present additional

issues if the Index was proposed to be used for

index options trading.

22The Commission notes that if the Amex

determines to maintain the Index with some

number of component securities other than 23, the

Exchange should notify the Commission. Telephone

Conversation between Michael T. Bickford, Vice

President, Capital Markets Group, Amex, and

Matthew S. Morris, Attorney, Derivatives

Regulation, Office of Self-Regulatory Oversight,

Division, Commission, on May 9, 1996.

23 In addition, as noted above, in the event that

a security in the Index is removed due to a

corporate consolidation and the holders of such

security receive cash, the cash value of such

security will be included in the Index and will

accrue interest at LIBOR to term.

24Telephone Conversation between Michael T.

Bickford, Vice President, Capital Markets Group,

Amex, and Matthew S. Morris, Attorney,

Derivatives Regulation, Office of Self-Regulatory

Oversight, Division, Commission, on May 9, 1996.

25 In the event the Exchange is unable to maintain

these requirements, the Exchange will consult with

the Commission regarding appropriate regulatory

responses.

26See Section 106 of the Amex Company Guide

which requires, among other things, that the issuer

have tangible net worth in excess of $250 million

and otherwise substantially exceed size and

earnings requirements in Section 101(A) of the

Company Guide or meet the alternative guideline in

paragraph (a).

trading of standardized options 16 and,

the Exchange’s options suitability

standards will apply to

recommendations regarding Index

Warrants.17 The Exchange’s rules

regarding discretionary orders will also

apply to transactions in Index

Warrants.18 Finally, prior to the

commencement of trading, the Amex

will distribute a circular to its

membership calling attention to specific

risks associated with warrants on the

Index.

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 the

requirements of Section 6(b).19

Specifically, the Commission finds that

the trading of warrants based on the

Select Technology Stock Index will

serve to protect the public interest and

will help to remove impediments to a

free and open market by providing

investors holding positions in some or

all of the securities underlying the Index

with a means to hedge exposure to the

market risk associated with their

portfolios.20

Nevertheless, the trading of warrants

on the Index raises several concerns

relating to the design and maintenance

of the Index, customer protection,

surveillance, and market impact. The

Commission believes, however, for the

reasons discussed below, that the Amex

has adequately addressed these

concerns.21

A. Design and Maintenance of the Index

The Commission finds that it is

appropriate and consistent with the Act

for the Amex to designate the Index as

narrow-based for warrant trading as the

Index is comprised of a limited number

of technology stocks.22 The Commission

also believes that the liquid markets,

large capitalizations, and relative

weightings of the Index’s component

stocks significantly minimizes the

potential for manipulation of the Index.

First, the stocks that comprise the Index

are actively-traded, of which nine trade

on the New York Stock Exchange, Inc.

(‘‘NYSE’’) and fifteen trade through the

facilities of the National Association of

Securities Dealers (‘‘NASD’’) Automated

Quotation system (‘‘Nasdaq’’) and are

reported national market system

securities (‘‘Nasdaq/NMS’’). During the

six-month period from October 1995

through March 1996, average monthly

trading volume in the Index stocks

ranged from approximately 9.1 million

shares to approximately 229.6 million

shares. Second, the market

capitalization of the stocks comprising

the Index are very large. Specifically,

the total capitalization of the Index, as

of April 29, 1996, was approximately

$339.7 billion, with the market

capitalization of the individual stocks in

the Index ranging from approximately

$730 million to approximately $59

billion. In addition, the median

capitalization of the companies in the

Index on that date was $5.2 billion, and

the average market capitalization of

these companies was $14.8 billion.

Third, no one particular stock

dominates the Index. Specifically, no

single stock accounts for more than

approximately 4.347 percent of the

Index’s value, and the percentage

weighting of the three largest issues in

the Index account for approximately

13.041 percent of the Index’s value.

The Commission notes that with

respect to the maintenance of the Index,

shares of a component stock will only

be replaced (or supplemented) under

certain limited circumstances, such as

the conversion of a component stock

into another class of security, or the

spin-off of a subsidiary. Accordingly, all

replacement or supplemental Index

component securities will be related to

the original component stock.23 In

addition, if a change in the composition

of the Index is contemplated for reasons

other than those set forth above, the

Exchange will notify the Commission to

determine whether a rule filing

pursuant to Section 19(b) of the Act will

be required.24

The Amex has also implemented

several safeguards in connection with

the listing and trading of the Index

Warrants that will serve to ensure that

the Index maintains its intended

character as a highly-capitalized and

actively-traded index. In this regard, the

Exchange will notify the Commission if:

(1) Less than 75 percent of the

component securities in the Index are

eligible for standardized options

trading; (2) the number of components

in the Index decreases to less than nine;

(3) the three highest weighted

components represent more than 60

percent of the weight of the Index; or (4)

the trading volume of any of the

components in the Index falls below

500,000 shares for each of the last six

months.25

B. Customer Protection

The Commission notes that the rules

and procedures of the Exchange

adequately address the special concerns

attendant to the trading of index

warrants. Specifically, the applicable

suitability, account approval,

disclosure, and compliance

requirements of the applicable Amex

provisions satisfactorily address

potential public customer concerns.

Moreover, the Amex plans to distribute

a circular to its membership calling

attention to specific risks associated

with warrants on the Index. Finally,

pursuant to the Exchange’s listing

guidelines, only companies capable of

meeting the Amex’s index warrant

issuer standards will be eligible to issue

Index Warrants.26
Federal Register / Vol. 61, No. 97 / Friday, May 17, 1996 / Notices 24979

27The ISG was formed on July 14, 1983 to, among

other things, coordinate more effectively

surveillance and investigative information sharing

arrangements in the stock and options markets. The

members of the ISG are: the Amex; the Boston Stock

Exchange, Inc.; the Chicago Board Options

Exchange, Inc.; the Chicago Stock Exchange, Inc.;

the NASD; the NYSE; the Pacific Stock Exchange,

Inc.; and the Philadelphia Stock Exchange, Inc. Due

to the potential opportunities for trading abuses

involving stock index futures, stock options, and

the underlying stock, as well as for the need for

greater sharing of surveillance information for these

potential intermarket trading abuses, the major

stock index futures exchanges (e.g., the Chicago

Mercantile Exchange and the Chicago Board of

Trade) have also joined the ISG as affiliate

members.

28The Commission notes that position limits for

narrow-based stock index warrants are set at a level

roughly equivalent to 75 percent of narrow-based

index options. As a result, position limits for

warrants based on the Index will be nine million.

See Securities Exchange Act Release No. 37007

(March 21, 1996), 61 FR 14165 (March 29, 1996)

(order approving establishment of uniform listing

and trading guidelines for narrow-based stock index

warrants) (SR–Amex–95–39).

29 15 U.S.C. § 78s (b)(2) (1988).

30 17 CFR 200.30–3(a)(12).

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

2On April 15, 1996, the Exchange amended its

proposal to indicate that, in connection with the

narrow-based index hedge exemption, the CBOE’s

Department of Market Regulation will monitor daily

to determine that each exempted option contract is

hedged by the equivalent dollar amount of

component securities and for unusual option and

stock activity. In addition, the CBOE notes that the

hedge exemption account must promptly notify the

Exchange of material changes in the portfolio. See

Continued

C. Surveillance

The Commission believes that a

surveillance sharing agreement between

an exchange proposing to list a security

index derivative product and the

exchange(s) trading the securities

underlying the derivative product is an

important measure for the surveillance

of the derivative and underlying

securities markets. Such agreements

ensure the availability of the

information necessary to detect and

deter potential manipulations and other

trading abuses, thereby making the

security index product less readily

susceptible to manipulation. In this

regard, the Amex, and the NYSE and the

NASD (where the component securities

of the Index are currently listed) are all

members of the Intermarket

Surveillance Group (‘‘ISG’’), which

provides for the exchange of all

necessary surveillance information.27

D. Market Impact

The Commission believes that the

listing and trading of warrants on the

Index will not adversely impact the

underlying securities. First, the Amex’s

existing index warrants surveillance

procedures will apply to warrants on

the Index. Second, the Index is

comprised of highly-capitalized

securities that are actively-traded.

Lastly, the Amex has established

reasonable position and exercise limits

for narrow-based stock index

warrants,28 which will serve to

minimize potential manipulation and

other stock market concerns.

The Commission finds good cause to

approve the proposed rule filing,

including Amendment Nos. 1 and 2,

prior to the thirtieth day after the date

of publication of notice of filing thereof

in the Federal Register. The

Commission notes that to date no

comments were received on the

proposal. The Commission also notes

that accelerated approval of this rule

filing is based, in part, on the following

facts: (i) The Amex is presently seeking

authority to list and trade only a single

issuance of warrants on the Index which

have a term of two-years; (ii) the Index’s

component securities are highlycapitalized and actively-traded; and (iii)

the Amex has represented that the

warrants on the Index will comply in all

respects with the Exchange rules

governing the listing and trading of

narrow-based warrants, including Amex

Rules 1100 through 1110, Amex Rule

462, and Section 106 of the Amex

Company Guide. Moreover, Amendment

No. 1 to the Amex’s proposal describes

details of certain Index maintenance

procedures and the Index calculation

methodology. In this regard, the

Commission believes that the

Exchange’s monthly review of the

Index’s component securities for

options eligibility, percentage weight,

and trading volume, as described above,

will help to ensure that the Index

maintains its intended market character

as well as remains an appropriate

trading vehicle for public customers. In

addition, the equal-dollar methodology

is a well-established index calculation

method and therefore does not present

any new or novel regulatory issues.

Lastly, although Amendment Nos. 1 and

2 change the Index’s component

securities, these modifications are minor

and consistent with the Index’s general

objective. In this context, the Index

continues to be comprised of activelytraded and highly-capitalized securities.

Accordingly, the Commission believes

that it is consistent with Section 6(b)(5)

of the Act to approve the proposed rule

change, including Amendment Nos. 1

and 2, on an accelerated basis.

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment Nos.

1 and 2. 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 Amex. All submissions

should refer to File No. SR–Amex–96–

12 and should be submitted by June 7,

1996.

IV. Conclusion

For the foregoing reasons, the

Commission finds that the Amex’s

proposal to list and trade warrants based

on the Select Technology Stock Index is

consistent with the requirements of the

Act and the rules and regulations

thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,29 that the

proposed rule change (SR–Amex–96–

12), as amended, is approved on an

accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.30

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–12383 Filed 5–16–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37196; File No. SR–CBOE–

96–18]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change and Amendment No. 1 to

the Proposed Rule Change by the

Chicago Board Options Exchange,

Inc., Relating to a Hedge Exemption for

Industry (Narrow-Based) Index Options

May 10, 1996.

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

Securities Exchange Act of 1934

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

March 18, 1996, the Chicago Board

Options Exchange, Inc. (‘‘CBOE’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change as described in Items I and II

below, which Items have been prepared

by the self-regulatory organization.2 The