Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Notices 2555

intended to cease providing depository services on

January 15, 1996, and that participants should make

arrangements for alternate depository services by

that date. The date was postponed to January 19,

1996. Note 2, supra. 6 15 U.S.C. 78q–1(b)(3)(F) (1988).

7Letter from Leland W. Hutchinson, Jr., Freeborn

& Peters, [counsel for Scattered Corporation and

Laura Bryant, members of CHX] to Richard R.

Lindsey, Director, Division of Market Regulation,

Commission (December 15, 1995).

8See, Securities Exchange Act Release No. 36684

(January 5, 1996), [File No. SR–MSTC–95–10]

(order approving MSTC’s proposal to withdraw

from the securities depository business).

9 17 CFR 200.30–3(a)(12) (1994).

membership category will terminate on

or before March 31, 1996, at which time

MSTC will definitively cease to act for

all TSPs. The only services that MSTC

will provide to TSPs is to provide access

to the facilities of DTC.

Under the proposed arrangement,

MSTC will maintain subaccounts at

DTC for each TSP. DTC will transmit

the settlement obligations of TSPs to

MSTC. Based on DTC’s final settlement

figures, MSTC will use funds received

by MSTC from a TSP or will initiate

payments against a TSP’s bank account

to satisfy a TSP’s payment obligation. In

this regard, each TSP will be required to

maintain funds that are sufficient for

purposes of settlement and that are

accessible to MSTC. If a TSP has a credit

balance, DTC will forward the credit to

MSTC, and MSTC will make available

to the TSP the amount of the credit

balance. Alternatively, upon notice to

and authorization by MSTC, TSPs can

settle directly with DTC.

TSPs will be required to contribute to

a temporary sponsored account fund.

The required contribution will consist

of the greater of $15,000 or 110% of the

required contribution to the participants

fund of DTC. MSTC also may require a

TSP to deposit a supplemental

contribution not based on a TSP’s usage

of MSTC’s services. All contributions to

the temporary sponsored account fund

must be in cash. All temporary

sponsored account fund contributions

not forwarded by MSTC to DTC may be

invested by MSTC. The sponsored

account fund may be used to cover

losses in a manner similar to that

provided for in the current MSTC

participants fund rules.

While TSPs will not be obligated to

comply with all of MSTC’s current

rules, TSPs will be obligated to comply

with the MSTC rules designated in

Article VIII as being applicable to TSPs.

Among other things, Article VIII

provides that TSPs must comply with

MSTC’s rules relating to losses,

indemnification, and MSTC’s ceasing to

act. TSPs also must comply with the

rules of DTC.

MSTC believes the proposed rule

change is consistent with Section 17A of

the Act in that it is designed to promote

the accurate clearance and settlement of

securities transactions and to assure the

safeguarding of securities and funds

which are in MSTC’s custody or control

or for which MSTC is responsible.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

MSTC does not believe the proposed

rule change will impose a 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

Written comments on the proposal

have not been solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(F) 6 of the Act

requires the rules of a clearing agency be

designed to promote the prompt and

accurate clearance and settlement of

securities transactions and to assure the

safeguarding of securities and funds

which are in the custody or control of

the clearing agency or for which it is

responsible. The Commission believes

the proposal is consistent with MSTC’s

obligations under Section 17A of the

Act because it should help ensure that

MSTC participants unable to find

alternative securities depository services

by January 19, 1996, will have access to

safe and efficient securities depository

services for a period of time that should

be sufficient to enable such participants

to obtain permanent alternate services.

This should help protect against

disruption in these participants’

businesses upon MSTC’s withdrawal

from the securities depository business.

Furthermore, MSTC’s coordination with

DTC in establishing securities

depository services for TSPs through

temporary sponsored accounts and the

requirement of a temporary sponsored

account fund to cover losses that could

be suffered by MSTC incident to the

operation of the temporary sponsored

accounts should help MSTC safeguard

the securities and funds which are in its

custody or control or for which it is

responsible.

MSTC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing. The

Commission finds good cause for so

approving the proposed rule change

because the proposal is critical to

MSTC’s orderly withdrawal from the

securities depository business with

minimal business disruption by its

announced deadline of January 19,

1996. Furthermore, because the

Commission received only one

comment letter 7 during the comment

period of MSTC’s proposal to withdraw

from the securities depository business,8

the Commission does not believe it will

receive negative comment letters on this

proposal.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submission

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

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, 450 Fifth Street, NW.,

Washington, DC. Copies of such filing

also will be available for inspection and

copying at the principal office of MSTC.

All submissions should refer to the file

number SR–MSTC–95–11 and should be

submitted by February 16, 1996.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

MSTC–95–11) be, and hereby is,

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1271 Filed 1–25–96; 8:45 am]

BILLING CODE 8010–01–M
2556 Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Notices

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

2See Securities Exchange Act Release Nos. 35821

(June 7, 1995), 60 FR 31337 (approving File No. SR–

NYSE–95–11); 35831 (June 9, 1995), 60 FR 31527

(approving File No. SR–NASD–95–13); and 36588

(Dec. 13, 1995), 60 FR 56624 (approving File No.

SR–CBOE–95–63).

3 15 U.S.C. 78f(b).

4 15 U.S.C. 78f(b)(5).

5 15 U.S.C. 78s(b)(3)(A).

6 17 CFR 240.19b–4(e)(6).

[Release No. 34–36748; File No. SR–Amex–

96–01]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

American Stock Exchange, Inc.

Relating to the Adoption of Rule 428

(‘‘Telephone Solicitation—

Recordkeeping’’) and an Interpretation

With Respect to Proposed Rule 428

January 19, 1996.

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

Securities Exchange Act of 1934

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

January 4, 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 adopt

new Rule 428 (‘‘Telephone

Solicitation—Recordkeeping’’) and a

new interpretation thereunder

concerning telephone solicitation and

recordkeeping.

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

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 the

Statutory Basis for, the Proposed Rule

Change

1. Purpose

In 1994, an industry Task Force,

comprised of representatives from the

Commission, the New York Stock

Exchange, Inc. (‘‘NYSE’’), and the

National Association of Securities

Dealers, Inc. (‘‘NASD’’) was formed to

review broker-dealer telemarketing

practices and compliance with the

Telephone Consumer Protection Act of

1991 (‘‘TCPA’’), the Federal

Communications Commission (‘‘FCC’’)

rules and regulations implementing that

law, and the Telemarketing and

Consumer Fraud and Abuse Act

(‘‘Prevention Act’’). The TCPA, FCC

rules, and the Prevention Act address

telemarketing practices and the rights of

telephone consumers. One of the

requirements contained in this

regulatory framework is that businesses,

including broker-dealers, that make

telephone solicitations to residential

telephone subscribers must institute

written policies and have procedures in

place for maintaining ‘‘do-not-call’’ lists.

The Prevention Act also requires the

Commission to engage in its own

additional rulemaking, or, alternatively,

to require the self-regulatory

organizations (‘‘SROs’’) to promulgate

telemarketing rules consistent with the

legislation.

After reviewing the TCPA, FCC rules,

and the Prevention Act, the Task Force

recommended that the SROs adopt

‘‘cold-calling’’ rules. The NYSE and

NASD adopted such rules in June 1995,

while the Chicago Board Options

Exchange adopted such a rule in

December 1995.2 Similarly, the

Exchange is proposing to adopt new

Rule 428 that will require members and

member organizations to make and

maintain a centralized list of persons

who have informed the member or

member organization that they do not

want to receive telephone solicitations.

The proposed interpretation to Rule 428

will be issued in an Information

Circular and will remind members and

member organizations that they are

subject to compliance with the

requirements of the relevant rules of the

FCC and the Commission relating to

telemarketing practices and the rights of

telephone consumers.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b) of the Act 3

in general and furthers the objectives of

Section 6(b)(5) 4 in particular because it

is designed to promote just and

equitable principles of trade, and, in

general, to protect investors and the

public interest, by addressing the

practices of Exchange members and

member organizations who make

telemarketing calls and the protection of

customers who have indicated a desire

not to receive such calls.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes the proposed

rule change will not impose any burden

on competition.

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 thirty

days from January 4, 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 5 and Rule 19b–4(e)(6) 6

thereunder.

At any time within sixty 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, 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
Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Notices 2557

7 17 CFR 200.30–3(a)(12).

1The rules initially were approved by the

Commission as an eight month pilot program on

May 21, 1987. See Securities Exchange act Release

No. 24496 (May 21, 1987), 52 FR 20183 (May 29,

1987). On February 23, 1988, the pilot program was

extended indefinitely until further action was taken

by the Commission. See Securities Exchange Act

Release No. 25388 (Feb. 23, 1988), 53 FR 6725 (Mar.

2, 1988). The rules were permanently approved on

June 26, 1991. See Securities Exchange Act Release

No. 29369 (June 26, 1991), 56 FR 30604 (July 3,

1991).

2At least one of the core committee members in

attendance must conduct a public securities

business.

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 in Washington, DC. 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–

01 and should be submitted by February

16, 1996.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1360 Filed 1–25–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36752; File No. SR–Phlx–

95–77]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Relating to the Rules of the Allocation,

Evaluation and Securities Committee.

January 22, 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 22, 1995,

the Philadelphia Stock Exchange, Inc.

(‘‘Phlx’’ 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 Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to update its

rules relating to the Allocation,

Evaluation and Securities Committee

(‘‘Committee’’). Specifically, Rules 500,

501, 505, 506, 508 and 511 are being

amended as well as By-Law Article X,

Section 10–7. The text of the proposed

rule change is available at the Exchange

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

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 the proposed rule

change is to update the Exchange’s 500

Series of rules, which govern the

allocation of specialist privileges. The

rules that are currently in place have not

been significantly amended since they

were adopted in 1987 as a pilot

program.1 as described below, almost all

of the rules are being revised in order

to address issues that have come up

over the past eight years. All of the

proposed changes are described below.

Composition of Allocation, Evaluation

and Securities Committee

Currently, the Committee has a

minimum nine member requirement but

has no maximum requirement. For

competitive reasons, the Committee is

often called upon to meet on short

notice and meets more frequently than

other committees that may only hold

monthly meeting. Having a large

committee makes it difficult to obtain a

quorum, and thus, conduct business.

Accordingly, By-Law Article X,

Section 10–7 and Rule 500 are being

amended to revise the Committee size

and structure. The By-Law section will

still require a minimum of nine

members on the Committee but would

add that a quorum will always be five

members. The Committee would also be

structured differently. Pursuant to

proposed new subsection (b) to Rule

500, for each meeting, the Committee

will be composed of five core committee

members and four members of a 20

member allocation panel. The core

committee, whose members would serve

for three year terms (no more than two

consecutive terms), would be created to

assure some continuity of membership

on the Committee. The allocation panel

would also be created, whose members

would serve for one-year terms, to allow

for new persons with fresh perspectives.

Rule 500 would be amended to

provide who may serve on the core

committee and allocation panel and

how many members of each must attend

meetings in order for a quorum to be

reached. Specifically, the core

committee would have five members:

three who conduct a public securities

business, one from the equity floor, and

one from the options floor. The

allocation panel would have twenty

members: six who conduct a public

securities business, five from the equity

floor, five from the options floor, and

four from the foreign currency options

(‘‘FCO’’) floor.

For each meeting, the Committee will

be composed of the five core committee

members and four members of the 20

member panel chosen on a rotating

alphabetical basis. The Chairman will,

however, have the discretion to also

specifically invite any other members of

the panel who he believes would have

particular knowledge or expertise

respecting the subject matter of the

meeting. For example, if a FCQ is being

allocated and the four alphabetically

chosen panel members for the meeting

happen to all be from the equity and

equity options floors, the Chairman

could also invite any or all of the four

FCO panel members to the meeting.

Additionally, all other members of the

panel will always be notified of

meetings and may attend and vote if

they so chose even if they are not at the

top of the rotation list. Finally, at least

two of the core committee members

must be part of the quorum at every

meeting in order to assure that there are

some experienced committee members

in attendance.2

Transfers of Specialist Privileges

Currently, a specialist does not have

to seek Committee approval when it

proposes to transfer all of its specialist

privileges, but it must do so in order to

transfer less than all of its privileges.

The Exchange has determined to amend

Rule 508 to now require that all

proposed transfers of specialist

privileges be subject to prior Committee

approval so that the Committee has the

ability to consider the qualifications of

all proposed transferees. The criteria

provided in Rule 511 that is currently

used for making allocation and

reallocation decisions would now also