30932 Federal Register / Vol. 61, No. 118 / Tuesday, June 18, 1996 / Notices

5 17 CFR 200.30–3(a)(12) (1995).

1An example of this would be an FCO which has

a custom strike price or is quoted as an inverse

option.

2Although custom-dated FCOs currently cease

trading at 9:00 a.m., the Phlx, as discussed below,

proposes to amend this time such that all

customized FCOs cease trading at 8:00 a.m.

3This transitional process will be similar to the

one used when the Exchange changed the

expiration from the Saturday preceding the third

(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, 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 in

the Commission’s Public Reference

Room, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to the file number SR–DTC–96–09

should be submitted by July 9, 1996.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–15349 Filed 6–17–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37287; File No. SR-Phlx–

96–13]

Self-Regulatory Organizations;

Philadelphia Stock Exchange, Inc.;

Notice of Filing of Proposed Rule

Change Relating to Trading Hours and

Expiration Times for Customized

Foreign Currency Options

June 7, 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 May 7, 1996, the

Philadelphia Stock Exchange, Inc.

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I, II,

and III below, which Items have been

prepared by the Phlx. 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 Phlx proposes to amend certain

Exchange rules to: (1) adjust the time

that all customized FCOs cease trading

on expiration day from 9:00 a.m. and

2:30 p.m. until 8:00 a.m.; (2) adopt a

uniform expiration time for all

customized FCOs of 10:15 a.m. (instead

of 11:59 p.m.) (all time references are to

eastern standard time); and (3) make all

customized FCOs subject to pro-rata

assignment.

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

Phlx 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. Phlx 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

The Exchange has different expiration

times and procedures and trading hours

for both regular and customized FCOs.

Regular non-customized FCOs cease

trading at 2:30 p.m., expire at 11:59 p.m.

on their expiration date, and are subject

to a random assignment process.

Customized FCOs which expire on any

trading day except a regular mid-month

or end-of-month expiration are referred

to as ‘‘custom dated FCOs.’’ Custom

dated FCOs currently cease trading at

9:00 a.m., expire at 10:15 a.m. on their

expiration date, and are subject to a prorata assignment process.

The third type of FCO (which is the

subject of this rule filing) is the

customized FCO which does not have a

custom date (i.e., the option expires on

a mid-month or end-of-month

expiration date).1 These option

contracts are treated the same as regular

expiring FCOs, i.e., they cease trading at

2:30 p.m., expire at 11:59 p.m., and are

subject to random assignment. The

Exchange proposes to change this

scheme to correspond with custom

dated FCOs. Accordingly, Phlx proposes

to alter the expiration times for

customized FCOs with mid-month or

end-of-month expirations so that they

cease trading at 8:00 a.m.,2 expire at

10:15 a.m. on their expiration date, and

are subject to pro-rata assignment. As a

result, all customized FCOs will have

the same expiration process regardless

of when they expire.

According to Phlx, customized FCOs

are mainly traded by institutional

customers who often by the options as

a hedge against over-the-counter

contracts. Because the over-the-counter

options typically expire at 10:00 a.m.,

these customers cannot effectively

hedge their risk with customized FCOs

unless they know their assignment

exposure at the same time. Thus,

custom dated options have been a very

useful trading vehicle for the

institutional market due to their 10:15

a.m. expiration (with pro-rata exercise

notification at 10:00 a.m.). Customized

FCOs with mid-month or end-of-month

expirations, however, have not been as

useful for offsetting purposes since

customers do not know their assignment

exposure until the following day. The

Exchange therefore believes that by

having all customized FCOs expire at

10:15 a.m., it will add liquidity to the

market and encourage institutions to

take advantage of all types of exchange

traded FCOs. Furthermore, the Phlx

believes that by revising the expiration

times on the mid-month and end-ofmonth expiration days, it will increase

the volume for customized FCOs and

thereby reduce the amount of

paperwork at expiration.

The Exchange proposes to implement

this change as of the August 1996 midmonth expiration. Currently, open

interest exists in customized FCO

contracts expiring on September 13,

1996 (mid-month expiration), December

13 1996 (mid-month expiration) and

March 27, 1997 (end-of-month

expiration). If this open interest still

exists at the time that this rule change

is approved, the Exchange will exempt

these expirations from the new

procedure (i.e., they will continue to

cease trading at 2:30 p.m., expire at

11:59 p.m., and be subject to random

assignment). This exemption will be

noted in Phlx Rule 1000(b)(21)(iv),

which defines the term Expiration Date

and will be publicized in numerous

memoranda to the membership.3
Federal Register / Vol. 61, No. 118 / Tuesday, June 18, 1996 / Notices 30933

Wednesday of the expiration month to the Friday

preceding the third Wednesday. See Securities

Exchange Act Release No. 32452 (July 13, 1993). 4 17 CFR § 200.30–3(a)(12).

Second, in order to facilitate back

office processing, the Exchange

proposes to extend by one hour the

amount of time between the period

when an option ceases trading and

expiration. Accordingly, Phlx proposes

to have all customized FCOs cease

trading at 8:00 a.m. (rather than at 9:00

a.m.) on the day of expiration. Presently,

member firms only have one hour

(between 9:00 a.m. and 10:00 a.m.) to

prepare and accept exercise instructions

and submit them to the Option Clearing

Corporation (‘‘OCC’’), which then

processes and disseminates a

preliminary indication of the percent of

contracts exercised for each series. The

contracts then expire at 10:15 a.m. and

a pro-rata assignment process is used.

By ceasing trading one hour earlier (8:00

a.m.), the firms and OCC would double

the amount of time in which they have

to process these instructions.

Basis

The basis under the Act for this

proposed rule change is the requirement

under Section 6(b)(5) that an exchange

have rules that 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 on Competition

The Exchange believes that the

proposed rule change will not result in

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 Other

Comments were neither solicited nor

received.

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 self-regulatory organization

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 in

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

above-mentioned self-regulatory

organization. All submissions should

refer to the rule number SR-Phlx–96–13

and should be submitted by July 9,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–15348 Filed 6–17–96; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Notice of Intent To Rule on Application

To Impose and Use the Revenue From

a Passenger Facility Charge (PFC) at

Charlottesville-Albermarle Airport,

Charlottesville, VA

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of intent to rule on

application.

SUMMARY: The FAA proposes to rule and

invites public comment on the

application to impose and use the

revenue from a PFC at CharlottesvilleAlbermarle Airport under the provisions

of the Aviation Safety and Capacity

Expansion Act of 1990 (Title IX of the

Omnibus Budget Reconciliation Act of

1990) (Public Law 101–508) and Part

158 of the Federal Aviation Regulations

(14 CFR Part 158).

DATES: Comments must be received on

or before July 18, 1996.

ADDRESSES: Comments on this

application may be mailed or delivered

in triplicate to the FAA at the following

address: Mr. Robert Mendez, Manager,

Washington Airports District Office, 101

West Broad Street, Suite 300, Falls

Church, Virginia 22046.

In addition, one copy of any

comments submitted to the FAA must

be mailed or delivered to Mr. Bryan O.

Elliott, Airport Manager of the

Charlottesville-Albermarle Airport at

the following address: CharlottesvilleAlbermarle Airport, 201 Bowen Loop,

Charlottesville, Virginia 22901.

Air carriers and foreign air carriers

may submit copies of written comments

previously provided to the

Charlottesville-Albermarle Airport

Authority under Section 158.23 of Part

158.

FOR FURTHER INFORMATION CONTACT:

Mr. Robert Mendez, Manager,

Washington Airports District Office, 101

West Broad Street, Suite 300, Falls

Church, Virginia, 22046 (Tel. (703) 285–

2570). The application may be reviewed

in person at this same location.

SUPPLEMENTARY INFORMATION: The FAA

proposes to rule and invites public

comment on the application to impose

and use the revenue from a PFC at

Charlottesville-Albermarle Airport

under the provisions of the Aviation

Safety and Capacity Expansion Act of

1990 (Title IX of the Omnibus Budget

Reconciliation Act of 1990) (Public Law

101–508) and Part 158 of the Federal

Aviation Regulations (14 CFR Part 158).

On May 1, 1996, the FAA determined

that the application to impose and use

the revenue from a PFC submitted by

the Charlottesville-Albermarle Airport

Authority was substantially complete

within the requirements of Section

158.25 of Part 158. The FAA will

approve or disapprove the application,

in whole or in part, no later than August

8, 1996.

The following is a brief overview of

the application.

Level of the proposed PFC: $3.00.

Proposed charge effective date:

February 1, 2002.

Proposed charge expiration date:

October 1, 2004.

Total estimated PFC revenue:

$3,745,504.

Brief description of proposed projects:

—Overlay and groove runway 3–21

including making and signage, paving