Federal Register / Vol. 61, No. 116 / Friday, June 14, 1996 / Notices 30265

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

2Securities Exchange Act Release No. 36931

(March 6, 1996), 61 FR 10050.

3This filing is made in conjunction with DTC’s

proposed rule change seeking to implement the IPO

Tracking System. The IPO Tracking System will

allow lead managers and syndicate members of

equity underwritings to monitor flipping of new

issues in an automated book-entry environment. For

a complete description of the IPO Tracking System,

refer to Securities Exchange Act Release No. 37208

(May 13, 1996), 61 FR 25253 (order approving a

proposed rule change seeking to implement the IPO

Tracking System).

4CNS Eligible securities are those securities that

are eligible for transfer on the books of a securities

depository registered with the Commission under

Section 17A of the Act and that are contained in

a list maintained by NSCC as subject to clearance

and settlement in its CNS system.

5Flipping occurs when a syndicate’s lead

manager is supporting the IPO with a stabilization

bid (i.e., the lead manager is purchasing shares in

the secondary market in order to keep the price of

the issue from dropping its initial offering price)

and when securities that had been distributed to

investors are resold by those investors in the

secondary market back to the syndicate. The lead

manager may wish to identify flipped transactions

so that underwriting concessions (the discount from

the offering price received by the syndicate

member) can be recovered from the appropriate

syndicate members.

6 15 U.S.C. 78q–1(b)(3) (A) and (F) (1988).

stockholders than the present listing on

the Amex because trading firms are

reluctant to trade or market securities

listed on the Amex and that this has

been a factor in the thin volume and

lack of interest in the Company’s

Security. Also, because firms have not

been interested in trading the

Company’s Security, it has been

difficult to obtain research coverage for

the Company. As a result, it is the

Board’s belief that the Company’s

investors have not been as well served

by an Amex listing as they are likely to

be by a NNM listing.

Any interested person may, on or

before July 1, 1996 submit by letter to

the Secretary of the Securities and

Exchange Commission, 450 Fifth Street,

N.W., Washington, D.C. 20549, facts

bearing upon whether the application

has been made in accordance with the

rules of the exchanges and what terms,

if any, should be imposed by the

Commission for the protection of

investors. The Commission, based on

the information submitted to it, will

issue an order granting the application

after the date mentioned above, unless

the Commission determines to order a

hearing on the matter.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 96–15109 Filed 6–13–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37290; File No. SR–NSCC–

96–05]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Order Approving

Proposed Rule Change Modifying the

Automated Customer Account

Transfer Service To Facilitate the

Transfer of Shares Being Tracked in

the Initial Public Offering Tracking

System

June 7, 1996.

On February 27, 1996, the National

Securities Clearing Corporation

(‘‘NSCC’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

a proposed rule change (File No. SR–

NSCC–96–05) pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) which modifies NSCC’s

Automated Customer Account Transfer

(‘‘ACAT’’) service.1 Notice of the

proposal was published on March 12,

1996, in the Federal Register to solicit

comments on the proposed rule

change.2 No comment letters were

received. For the reasons discussed

below, the Commission is approving the

proposed rule change.

I. Description

NSCC’s proposed rule change

modifies NSCC’s rules relating to its

ACAT service to facilitate the transfer of

shares which are purchased in an initial

public offering (‘‘IPO’’) and which are

being tracked in The Depository Trust

Company’s (‘‘DTC’’) IPO Tracking

System.3

NSCC, through its ACAT service,

currently provides an automated and

standardized service for the transfer of

assets in a customer account from one

brokerage firm to another. The proposed

rule change modifies NSCC’s Rule 50 to

state that shares to be transferred

through the ACAT system that are being

tracked through DTC’s IPO Tracking

System will not be entered into NSCC’s

Continuous Net Settlement (‘‘CNS’’)

accounting operation even if such

shares are CNS eligible.4 Rule 50 also

states that NSCC will prepare ACAT

receive and deliver orders for such

shares.

Under DTC’s IPO Tracking System,

broker-dealers will have IPO control

accounts at DTC for IPO shares and free

accounts for shares purchased in the

secondary market. The segregated

accounts aid in tracking the movement

of IPO shares. In NSCC’s CNS system,

deliver obligations must be made from

the free account. If IPO shares for which

there is an ACAT deliver obligation

were to settle in NSCC’s CNS system,

the shares would have to be moved out

of the DTC member’s segregated IPO

control account and into the DTC

member’s free account. The IPO

Tracking System would register the

movement from the IPO control account

into the free account as a flip 5 and

would no longer be able to track the

shares.

NSCC’s proposed rule change requires

IPO shares transferred through the

ACAT service to be delivered ex-CNS

(i.e., outside of the CNS system). The

shares will be delivered pursuant to

DTC’s new IPO customer account

transfer function where the shares will

continue to be tracked and will not

register as flipped even though they are

subject to an ACAT deliver obligation.

II. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder and

particularly with the requirements of

Sections 17A(b)(3) (A) and (F).6 Sections

17A(b)(3) (A) and (F) require that the

rules of a clearing agency be designed to

promote the prompt and accurate

clearance and settlement of securities

transactions. The Commission believes

that NSCC’s rule change meets this

standard because by implementing these

changes to its ACAT service, NSCC will

make it easier and more efficient to

transfer IPO securities held in customer

accounts at one broker-dealer to another

broker-dealer. Without this

enhancement, IPO shares transferred

through NSCC’s ACAT service from one

brokerage account to another would

register as a flip in DTC’s IPO Tracking

System. When shares register as a flip,

syndicate members may forfeit the

concession they earn from the initial

sale to the retail customer. As a result,

retail customers could be discouraged

from transferring their accounts during

the tracking period. As a result of this

rule change, transfers of customer IPO

securities through DTC’s IPO Tracking

System will be accurately recorded

thereby enhancing retail investors’

ability to transfer their accounts.

The proposed rule change is an

important component in creating an

accurate tracking system. The tracking

system is intended to reduce the

number of IPO transactions that settle

through delivery of physical certificates

and to increase the number of IMP

transactions settled through book entry.

By enhancing the IPO Tracking System

as described above, the proposal will

further promote the prompt and
30266 Federal Register / Vol. 61, No. 116 / Friday, June 14, 1996 / Notices

7CFR 200.30–3(a)(12) (1995).

accurate clearance and settlement of

securities transactions.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of the

Act and in particular with Sections

17A(B)(3) (A) and (F) of the Act and the

rules and regulations thereunder.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

NSCC–96–05) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–15182 Filed 6–13–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35–26530]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

June 7, 1996.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated thereunder. All interested

persons are referred to the application(s)

and/or declaration(s) for complete

statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments thereto is/are available

for public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

July 1, 1996, to the Secretary, Securities

and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing should

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

New England Electric System (70–8819)

New England Electric System

(‘‘NEES’’), 25 Research Drive,

Westborough, Massachusetts 05182, a

registered holding company, has filed

an application-declaration under

sections 6(a), 7, 9(a), 10, 12, and 13(b)

of the Act and rules 45, 90 and 91

thereunder.

The Federal Energy Regulatory

Commission (‘‘FERC’’) has recently

promulgated guidelines setting forth

requirements for open and comparable

transmission access. In response, NEES

seeks to establish a subsidiary to be

named NEES Transmission Services,

Inc. (‘‘NEES Trans’’), for the purpose of

operating the transmission assets owned

by, or subject to the control of, NEES’

utility subsidiaries (‘‘NEES

Transmission Assets’’).

In operating these assets, NEES will

serve as the interface between wholesale

electric customers and the NEES

transmission system as the transmission

service provider. NEES Trans will serve

both associates and nonassociates and

will charge the same tariff to each. NEES

Trans will make no retail sales of

electricity.

Rights to operational control over the

NEES Transmission Assets will be

provided by a Transmission and

Support Agreement (‘‘Agreement’’)

among NEES, NEES Trans, and NEES’

utility subsidiaries Massachusetts

Electric Company (‘‘MEC’’), The

Narragansett Electric Company

(‘‘NERC’’), Granite State Electric

Company (together with MEC and NEC,

‘‘Retail Companies’’) and New England

Power Company (‘‘NEP’’). Pursuant to

the Agreement, NEES Trans will have

operational control over the NEES

Transmission Assets only to the extent

necessary to accomplish a FERCjurisdictional transmission transaction.

The Agreement also grants NEES Trans

use of the distribution systems of the

Retail Companies as they may be

needed to support wholesale

transactions.

NEES does not propose to transfer

ownership of the NEES Transmission

Assets to NEES Trans at this time.

However, NEES will have the

responsibility of planning the expansion

of the transmission system and will

notify NEP of the need for additions to

the system. NEES Trans will have the

obligation to expand transmission

capacity as needed, to arrange for NEES

affiliates to license, engineer and

construct the necessary additions, and

to provide operational services

necessary to maintain transmission

system reliability.

NEES proposes to provide initial

financing for NEES Trans by the

purpose of one thousand shares of

common stock, par value $1.00 per

share, for a total purchase price of

$1,000. NEES then proposes to make

capital contributions and/or loans to

NEES Trans from time to time, in

amounts not to exceed $10 million in

the aggregate outstanding at any one

time. Any such loans will be in the form

of non-interest bearing subordinated

notes payable in twenty years or less

from the date of issue. NEES requests

authority to make such investments

through December 31, 1999.

NEES Trans additionally seeks

authority through October 31, 1997 to

borrow and lend money in the NEES

Money Pool, the terms of which are

described in an order of the Commission

dated October 25, 1995 (HCAR No.

25399), and to borrow from banks on a

short-term basis. NEES proposes that

NEES Trans have access to the NEES

Money Pool on the same priority as the

Retail Companies. The aggregate

principal amount of debt outstanding

under this authority will not at any time

exceed $15 million. Amounts owed

under the Money Pool would be payable

on demand. Amounts owned to banks

for short-term borrowings would be

payable within one year.

The proceeds from the proposed

borrowings are to be used (i) to pay then

outstanding notes initially issued to

banks and/or borrowings from the

Money Pool and (ii) for other cooperate

purposes relating to ordinary business

operations, including working capital,

and funds to cover timing differences in

payments received and payments due.

NEES’ utility subsidiaries and NEES’

service company subsidiary, New

England Power Service Company, may

assign certain technical and support

staff personnel to NEES Trans to work

on NEES Trans operations. Not more

than two percent of the total employees

of such companies would be assigned to

NEES Trans in any one year. All costs

associated with such staff (including

compensation, overheads, and benefits)

would be fully reimbursed by NEES

Trans in accordance with rules 90 and

91 of the Act.

Central Power and Light Company, et

al. (70–8869)

Central Power and Light Company

(‘‘CPL’’), 539 North Carancahua Street,

Corpus Christi, Texas 78401–2802,

Public Service Company of Oklahoma

(‘‘PSO’’), 212 East Sixth Street, Tulsa,

Oklahoma 74119–1212, and West Texas

Utilities Company (‘‘WTU’’), 301

Cypress, Abilene, Texas 79601

(collectively, ‘‘Applicants’’), each a