29774 Federal Register / Vol. 61, No. 114 / Wednesday, June 12, 1996 / Notices

1 15 U.S.C. § 78s(b)(1) (1988).

2 17 CFR 240.19b–4.

For the Nuclear Regulatory Commission

Phillip F. McKee,

Director, Northeast Utilities Project

Directorate, Division of Reactor Projects—

I/II, Office of Nuclear Reactor Regulation.

[FR Doc. 96–14899 Filed 6–11–96; 8:45 am]

BILLING CODE 7590–01–P

POSTAL SERVICE

Privacy Act of 1974; System of

Records

AGENCY: Postal Service.

ACTION: Notice of the addition of a

routine use to an existing system of

records.

SUMMARY: This document publishes

notice of the addition of a routine use

to Privacy Act system of records USPS

050.020, Finance Records—Payroll

System. The routine use allows

disclosure of limited information to the

Department of Health and Human

Services (DHHS) for the purpose of

identifying postal employees who are

absent parents owing child support

obligations and/or parents involved in

parental kidnapping and child custody

cases.

This notice complies with subsection

(e)(11) of the Privacy Act (5 U.S.C.

552a), which requires agencies to

publish advance notice of any new use

of information in a system of records.

DATES: Any interested party may submit

written comments on the proposed

routine use. This proposal will become

effective without further notice July 22,

1996, unless comments received on or

before that date result in a contrary

determination.

ADDRESSES: Written comments on this

proposal should be mailed or delivered

to Payroll Accounting/Records, United

States Postal Service, 475 L’Enfant Plaza

SW, Room 8650, Washington, DC

20260–5242. Copies of all written

comments will be available at the above

address for public inspection and

photocopying between 8 a.m. and 4:45

p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT:

Betty E. Sheriff, (202) 268–2608.

SUPPLEMENTARY INFORMATION: Privacy

Act system of records USPS 050.020,

Finance Records—Payroll System,

contains records about current and

former postal employees. The records

are used for handling payroll and other

administrative functions. It is proposed

that the system be amended to add

routine use No. 31, which will allow the

Postal Service to disclose limited

information to the Department of Health

and Human Services (DHHS) for the

purpose of identifying postal employees

who are absent parents owing child

support obligations and/or individuals

involved in parental kidnapping and

child custody cases.

The Office of Child Support

Enforcement of the DHHS operates a

Federal Parent Locator Service (FPLS)

pursuant to section 653 of Title 42,

U.S.C. The FPLS was established to

locate absent parents and later

broadened to locate persons involved in

parental kidnapping and child custody

cases. The FPLS obtains from state child

support enforcement agencies

information about individuals who owe

child support obligations and/or

individuals who are involved in the

unlawful taking or restraint of a child.

It compares that information to federal

employment data and returns matching

records to the state child support

enforcement agencies for follow-up.

Proposed routine use No. 31 allows the

Postal Service to disclose to DHHS

information about current or former

postal employees for matching under

the FPLS. Information disclosed will be

limited to those data elements

considered relevant to that purpose.

The proposed routine use is

compatible with the purpose for

collecting the information; that is, for

handling all necessary payroll

functions. It is the policy of the Postal

Service that postal employees should

honor their parental responsibilities and

financial obligations. In implementing

that policy, the Postal Service helps

enforce court orders for child support by

garnishment of wages. Because

information within system USPS

050.020 is collected to handle payroll

functions, and wage garnishment is a

primary means of child support

enforcement, proposed routine use No.

31 is clearly compatible with the

purpose of the system.

Pursuant to 5 U.S.C. 552a(e)(11),

interested persons are invited to submit

written data, views, or arguments on

this proposal. A report of the proposed

routine use has been sent to Congress

and to the Office of Management and

Budget for their evaluation.

USPS Privacy Act system 050.020 was

last published in its entirety in the

Federal Register on December 4, 1992

(57 FR 57515–57519) and was amended

in the Federal Register on November 22,

1993 (58 FR 61718–61719). The Postal

Service proposes adding routine use No.

31 as shown below.

USPS 050.020

SYSTEM NAME:

Finance Records—Payroll System,

050.020.

* * * * *

ROUTINE USES OF RECORDS MAINTAINED IN THE

SYSTEM, INCLUDING CATEGORIES OF USERS AND

THE PURPOSES OF SUCH USES:

* * * * *

31. Disclosure of limited information

about current or former postal

employees, who are identified through

computer matching, may be made to the

Department of Health and Human

Services pursuant to 42 U.S.C. 653,

Parent Locator Service, for further

release to state child support

enforcement agencies when needed for

locating noncustodial parents in order

to establish and/or enforce child

support obligations and for locating

parents who may be involved in

parental kidnapping or child custody

cases.

Stanley F. Mires,

Chief Counsel, Legislative.

[FR Doc. 96–14917 Filed 6–11–96; 8:45 am]

BILLING CODE 7710–12–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–37280; File No. SR-Amex–

96–19]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange, Inc.,

Relating to the Elimination of Position

and Exercise Limits for FLEX Equity

Options

June 5, 1996.

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

Securities Exchange Act of 1934

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

notice is hereby given that on May 21,

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, II, and III below, which Items

have been prepared by the selfregulatory 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 Amex, pursuant to Rule 19b–4 of

the Act, proposes to amend Exchange
Federal Register / Vol. 61, No. 114 / Wednesday, June 12, 1996 / Notices 29775

3 In general, FLEX Equity Options provide

investors with the ability to customize basic option

features, including size, expiration date, exercise

style, and exercise price.

4See Securities Exchange Act Release No. 37053

(March 29, 1996), 61 FR 15537 (April 8, 1996) (File

No. SR-Amex–95–57) (notice of filing relating to the

listing and trading of Flexible Exchange Options on

specified equity securities). The Commission notes

that the FLEX Equity Option filing is currently

being reviewed.

5The Commission notes that issuers would, of

course, need to comply with all applicable

provisions of the federal securities laws in

conducting their share repurchase programs.

6The Commission notes that the new stories are

available for examination at the Amex or at the

Commission, as specified in Item IV below.

7Pursuant to Rule 13d–3 under the Act, a person

will be deemed to be the beneficial owner of a

security if that person has the right to acquire

beneficial ownership of such security within sixty

days, including the right to acquire through the

exercise of any option.

8 15 U.S.C. § 78f(b)(5) (1988).

Rule 906G to eliminate position and

exercise limits for FLEX Equity Options.

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

Amex 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

In December 1995, the Exchange filed

with the Commission a proposal to

expand its Flexible Exchange Option3

program to include FLEX options on

equity securities.4 That proposal sets

forth position limits for FLEX Equity

Options at three times the position

limits for the corresponding Non-FLEX

Equity Options. The Exchange now

proposes to eliminate position and

exercise limits for FLEX Equity Options.

The Exchange believes that the

elimination of such limits is appropriate

given the institutional nature of the

market for FLEX Equity Options.

Currently, according to the Exchange,

many large investors find the use of

exchange-traded options impractical

because of the constraints imposed by

position limits. In the alternative, in the

absence of position limits, additional

investors will be attracted to exchangetraded options, thereby reducing

transaction costs as well as improving

price efficiency for all exchange-traded

option market participants.

The Exchange also believes that FLEX

Equity Options, unconstrained by

position limits, may become an

important part of large investors’

investment strategies. For instance, in

the absence of position limits, investors

will be able to use options to implement

specific viewpoints regarding the

underlying common stock; viewpoints

that take into account specific near- and

long-term expectations for the

underlying stock price and judgments

on price volatility. Similarly, the ability

to execute large exchange-traded option

transactions will permit large investors

to implement transactions that reflect

the strength of their interest in buying

or selling the underlying shares, as well

as their concern or lack of concern for

the timing of the sale.

The Exchange also anticipates that

issuers of stocks underlying FLEX

Equity Options will use these options,

primarily through the sale of puts, as

part of their stock repurchase

programs.5 For example, General

Electric and Philip Morris each recently

announced corporate repurchase

programs of approximately 100 million

shares. Selling puts to implement these

programs would have required the use

of one million standardized option

contracts, an amount far in excess of the

position limits currently available for

options on these companies. Similarly,

the Amex attached to its proposal

twenty-seven news stories of companies

whose stocks underlie Amex traded

option contracts announcing other

corporate repurchase programs during

1995 and the first quarter of 1996.6 In

each instance, the announced size of the

buyback significantly exceeded the

number of shares that could be

repurchased under the position limits

currently imposed on FLEX Equity

Options. While the Exchange does not

expect that corporate issuers will use

the sale of put options to buy all the

securities that are covered by their

repurchase programs, FLEX Equity

Options without position limits will at

least provide issuers with a meaningful

alternative. The inability of corporations

to use the sale of exchange-traded equity

put options on a significant scale

relegates this activity to less transparent

markets.

The Exchange believes that making

the Exchange-traded options market

more accessible to large investors will

create more ‘‘complete’’ markets and

thereby better serve investors and

issuers. In addition, the Exchange

believes that institutional investors,

large individual investors, and corporate

issuers repurchasing their own shares

will find FLEX Equity Options without

position limits extremely attractive.

Moreover, this activity will occur in the

regulated, transparent domestic FLEX

Equity Option markets rather than in

offshore markets which do not come

under Commission oversight.

Pursuant to Section 13(d) of the Act

and the rules and regulations

thereunder, the inclusion of any option

position is required when reporting the

beneficial ownership of more than 5%

of any equity security.7 The integration

of options and reporting requirements in

the underlying security pursuant to

Section 13(d) makes large option

positions widely known and easily

monitored by regulators and other

market participants. In this light, FLEX

Equity Options trading will have the

transparency of any exchange-traded

option transaction or position (open

interest) plus the call market focus of

liquidity inherent in the Request For

Quote (‘‘REQ’’) process. Similar to nonFLEX options, positions in FLEX

options are required to be reported to

the Exchange when an account

establishes an aggregate same-side of the

market position of 200 or more FLEX

option contracts. The Exchange’s

proposal is based on the belief that

manipulation is best controlled through

active and transparent markets.

The Exchange recognizes the

theoretical opportunity for a would-be

manipulator to initiate a large FLEX

Equity Option RFQ with no intention of

actually trading. Such tactics, however,

would be patently obvious to Exchange

compliance officials as well as to the

Commission. Moreover, trading against

a bogus FLEX Equity Option RFQ seems

readily actionable under existing laws

and regulations.

2. Statutory Basis

The Amex believes that the proposed

rule change is consistent with Section

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

Section 6(b)(5) in particular,8 in that it

is designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, and is not designed to permit

unfair discrimination between

customers, issuers, brokers, or dealers.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Amex does not believe that the

proposed rule change will impose any

inappropriate burden on competition.
29776 Federal Register / Vol. 61, No. 114 / Wednesday, June 12, 1996 / Notices

9 17 CFR 200.30–3(a)(12).

1 15 U.S.C. § 78s(b)(1).

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 37138

(April 23, 1996), 61 FR 18765 (April 29, 1996).

4Proposed Article II, Section 2 provides that the

Board shall elect ‘‘one or more’’ Vice-Chairmen of

the Board. The Amex believes that when read

together with Article II, Section 3(b), it is clear that

there may be only two Vice-Chairmen. Indeed, this

approval order only permits the appointment of a

maximum of two Vice-Chairmen. The Exchange,

however, has represented that it will revise Article

II, Section 2 to clarify that a maximum of two ViceChairmen may be appointed. See Letter from

Claudia Crowley, Special Counsel, Legal &

Regulatory Policy, Amex, to Glen Barrentine,

Division of Market Regulation, Commission, dated

April 26, 1996.

5The term ‘‘non-elected’’ in this context means

not elected by the membership. The Chief

Executive, or Chairman of the Board, is elected by

the Board of Governors. See Amex Constitution,

Article II, Section 2.

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 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 Amex consents, the

Commission will:

A. by order approve the 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, 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–

19 and should be submitted by July 3,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–14811 Filed 6–11–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37281; File No. SR–Amex–

96–14]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

the American Stock Exchange, Inc.

Relating to the Exchange Board of

Governors

June 6, 1996.

I. Introduction

On April 18, 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

amend Articles II, III and XII of the

Exchange Constitution relating to the

Board of Governors (‘‘Board’’). The

proposed amendments would permit

the appointment of a second ViceChairman, allow for the inclusion of the

second highest ranking Exchange

executive officer on the Board, and

permit certain Governors to be eligible

for nomination to a third term. Notice of

the proposed rule change appeared in

the Federal Register on April 29, 1996.3

No comment letters were received on

the proposed rule change. This order

approves the Amex’s proposal.

II. Description of Proposal

A. Board Position Amendments

Article II, Section 2 of the Exchange

Constitution currently calls for the

appointment of one Vice-Chairman from

among the Exchange members serving

on the Board, and it has been customary

over the years to alternate between the

trading floor and ‘‘upstairs’’

communities as the source of that ViceChairman. Given the importance of both

these communities to the Exchange, the

Amex believes that it is desirable to be

able to have one Vice-Chairman from

each constituency. Accordingly, the

proposed amendments will permit (but

not require the appointment of two

member Vice-Chairmen, and will

specify that if there are two ViceChairmen, one must come from the

trading floor and one from upstairs.4

The Exchange would also like to

create a new position of Executive ViceChairman, who will be the second

highest ranking officer of the Exchange

and who will serve as a member of the

Board of Governors. The Executive ViceChairman would be appointed by the

Chairman of the Board, subject to

approval by the affirmative vote of a

majority of the entire Board. If the

Executive Vice-Chairman position is not

filled and the Exchange has a President,

then the President will serve on the

Board. If at any time neither of those

offices are filled, then the Chief

Executive would be the only nonelected 5 member of the Board.

B. Third Term Amendment

It has become apparent to the

Exchange that at times the special

limitations in the Constitution relating

to which kind of Governors can serve

third terms at any given time could be

a limitation on having the best possible

slate of public Governor candidates.

Accordingly, it is proposed that the

Exchange increase from two to three the

maximum number of third term

Governors who can be representatives of

the public. There is no change to the

overall limitation that no more than four

third-term Governors may be serving at

one time.

C. Committee Amendments

The Exchange is also proposing to

amend Article XII, Section 2 of the

Exchange Constitution, Composition of

the Emergency Committee. This Section

currently provides that the Emergency

Committee is to be composed of the

Chairman of the Board of Governors, the

Vice-Chairman of the Board, and the

three senior members of the Board who

are regular, options principal, associate

or allied members of the Exchange. The

proposed amendment would change the

composition of the Committee such that

any Executive Vice-Chairman or

President would be on the Committee.

Moreover, if there are two ViceChairmen, both would serve on this

Committee.

Finally, the Exchange is proposing to

amend Article II, Section 4(a) of the

Constitution, Executive Committee, to

ensure that if there are two ViceChairmen, both are included on the

Executive Committee.