Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Notices 31573

8 15 U.S.C. 78s(b)(3)(A) (1988).

9As noted above, see supra note 4, pursuant to

the Generic Index Approval Order, the Exchange

must provide to the Commission written

representations that both the Amex and the OPRA

have the necessary systems capacity to support the

new series of options before the Amex may list and

trade options on the Index.

10 17 CFR 200.30–3(a)(12).

1See Letter from Karen Aluise, Assistant Vice

President, BSE, to Sharon Lawson, Senior Special

Counsel, SEC, dated June 11, 1996 (‘‘Amendment

No. 1’’). Amendment No. 1 corrects typographical

errors in the original filing as to the existing and

proposed program weight assigned to the

Turnaround Time measure. Amendment No. 1 also

adds a proposal to raise the overall score at which

a specialist will be deemed to have adequately

performed from 5.80 to 6.70 in order to account for

the proposed changes to the threshold levels and

weights.

2The SEC initially approved the BSE’s SPEP pilot

program in Securities Exchange Act Release No.

22993 (March 10, 1986), 51 FR 8298 (March 14,

1986) (File No. SR–BSE–84–04). The SEC

subsequently extended the pilot program in

Securities Exchange Act Release Nos. 26162

(October 6, 1988), 53 FR 40301 (October 14, 1988)

(File No. SR–BSE–87–06); 27656 (January 30, 1990),

55 FR 4296 (February 7, 1990) (File No. SR–BSE–

90–01); 28919 (February 26, 1991), 56 FR 9990

(March 8, 1991) (File No. SR–BSE–91–01); and

30401 (February 24, 1992), 57 FR 7413 (March 2,

1992) (File No. SR–BSE–92–01). The BSE was

permitted to incorporate objective measures of

specialist performance into its pilot program in

Securities Exchange Act Release No. 31890

(February 19, 1993), 58 FR 11647 (February 26,

1993) (File No. SR–BSE–92–04), at which point the

initial pilot program ceased to exist as a separate

program. The current pilot program was

subsequently extended in Securities Exchange Act

Release Nos. 33341 (December 15, 1993), 58 FR

67875 (December 22, 1993) (File No. SR–BSE–93–

16); 35187 (December 30, 1994), 60 FR 2406

(January 9, 1995) (File No. SR–BSE–94–12); and

36668 (January 2, 1996), 61 FR 672 (January 9,

1996) (File No. SR–BSE–95–16) (‘‘January 1996

Approval Order’’). SEC approval of the current pilot

program expires on December 31, 1996.

3The BSE’s SPEP currently consists of five

measures of performance, each accounting for a

certain percentage of a specialist’s overall

evaluation score: Turnaround Time (15%); Holding

Orders Without Action (15%); Trading Between the

Quote (25%); Executions in Size Greater Than BBO

(25%) and Questionnaire (20%). The Exchange has

set thresholds at which a specialist will have been

deemed to have adequately performed overall, and

with regard to each measure, on the SPEP: Overall

Evaluation Score—at or above weighted score of

5.80; Turnaround Time—below 21 seconds (8

points); Holding Orders Without Action—below

21% (7 points); Trading Between the Quote—at or

above 26.0% (5 points); Executions in Size Greater

Than BBO—at or above 76% (6 points); and

Questionnaire—at or above weighted score of 50.0

(4 points). For a detailed description of each of the

measures of performance and the review standards

applicable to specialists performing below the set

thresholds, see January 1996 Approval Order, supra

note 2.

Section 19(b)(3)(A) of the Act.8 Pursuant

to the Generic Index Approval Order,

the Amex may not list options for

trading on the Index prior to thirty days

after June 3, 1996, the date the proposed

rule change was filed with the

Commission.9 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, 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–

20 and should be submitted by July 11,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Jonathan G. Katz,

Secretary.

[FR Doc. 96–15771 Filed 6–19–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37308; File No. SR–BSE–

96–05]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Boston Stock Exchange, Inc.

Relating to Its Specialist Performance

Evaluation Program

June 12, 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 June 11, 1996, the

Boston Stock Exchange, Inc. (‘‘BSE’’ or

‘‘Exchange’’) filed with the Securities

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. On June 11,

1996 the Exchange submitted to the

Commission Amendment No. 1 to the

proposed rule change.1 The Commission

is publishing this notice to solicit

comments on the proposed rule change

and Amendment No. 1 thereto from

interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The BSE seeks to amend its Specialist

Performance Evaluation Program

(‘‘SPEP’’).2

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 modify the current SPEP

measures’ threshold levels, weights, and

review standards.3 The Exchange has

been continuously monitoring the

performance of its specialists in relation

to the current SPEP standards, and has

determined the following:

(1) The Trading Between the Quote

threshold level, currently at 26.0, should be

raised to 31.0;

(2) Executions in Size Greater Than BBO

threshold level, currently at 76.0, should be

raised to 81.0;

(3) The Turnaround Time program weight,

currently at 15%, should be increased to

20%;

(4) The Holding Orders Without Action

program weight, currently at 15%, should be

decreased to 5%;

(5) The Trading Between the Quote

program weight, currently at 25%, should be

increased to 35%;

(6) The Executions in Size Greater Than

BBO program weight, currently at 25%,

should be increased to 35%;

(7) The Questionnaire program weight,

currently at 20%, should be decreased to 5%;

(8) The standard for Performance

Improvement Action Committee review for
31574 Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Notices

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

1 15 U.S.C. § 78s(b)(1) (1988).

2The NASD initially filed the proposed rule

change on September 22, 1995 and, on November

9, 1995, the NASD filed Amendment No. 1. Notice

of the original filing and Amendment No. 1 was

provided by publication in the Federal Register.

Securities Exchange Act Release No. 36548 (Dec. 1,

1995), 60 FR 63092 (Dec. 8, 1995).

3Commission Note: The NASD’s use of the term

‘‘price improvement’’ in this proposal differs from

the use of the term in recent Commission releases.

Specifically, the Commission has used the term

when referring to the opportunity to receive a price

that is superior to best bid or offer. See, e.g., 17 CFR

11Ac1–3(a)(2); Securities Exchange Act Release No.

34902 (Oct. 27, 1994), 59 FR 55006 (Nov. 2, 1994)

at text accompanying n. 32. The NASD’s use of the

term in this proposal, on the other hand, refers to

the opportunity to receive a price that is better than

the best market maker quotation, which may not be

the best bid or offer to the extent NAqcess limit

orders are included. In its recent rule proposal

concerning the obligations of market makers

executing customer orders, the Commission asked

for comment on whether automated systems that

include the possibility of the interaction of market

orders with limit orders should be deemed to satisfy

the proposal’s requirement that market orders be

provided with an opportunity for price

improvement. Securities Exchange Act Release No.

36310 (Sept. 29, 1995), 60 FR 52792 (Oct. 10, 1995).

substandard performance in any one

objective measure, currently set at two out of

three consecutive review periods, will be

changed to the first instance of substandard

performance;

(9) The standard for Market Performance

Committee review for substandard

performance in any one objective measure,

currently set at three out of four consecutive

review periods, will be changed to two out

of three consecutive review periods;

(10) The standard for Market Performance

Committee review for substandard

performance on the overall program,

currently set at two out of three consecutive

review periods, will be changed to the first

instance of substandard performance; and

(11) The Overall Program score, currently

at 5.80, should be increased to 6.70 to

account for the proposed changes to the

threshold levels and weights.

The threshold levels for Turnaround

Time, Holding Orders Without Action

and the Questionnaire, as well as the

staff review standards, will remain

unchanged. The Exchange believes that

together, these modifications will

enhance the SPEP by providing:

(A) More appropriate threshold levels

when overall performance has improved

beyond the current limits;

(B) More effective measure weightings

which reflect the industry’s current market

quality focus; and,

(C) A more realistic approach to committee

review in view of the time horizon required

to address substandard performance.

In addition, the Exchange is currently

reviewing additional market quality

statistics in an effort to develop other

measures of performance for inclusion

in the SPEP, and hopes to file for

additional modifications to the program

in the near future.

2. Statutory Basis

The basis under the Act for the

proposed rule change is Section 6(b)(5)

of the Act 4 in that the SPEP results

weigh heavily in stock allocation

decisions and, as a result, specialists are

encouraged to improve their market

quality and administrative duties,

thereby promoting just and equitable

principles of trade and aiding in the

perfection of a free and open market and

a national market system.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any burden on competition that is not

necessary and 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

Comments on the proposed rule

change 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 at

the Commission’s Public Reference

Section, 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 the Exchange. All submissions

should refer to File No. SR–BSE–96–05

and should be submitted by July 11,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–15664 Filed 6–19–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37302; File No. SR-NASD–

95–42, Amendment No. 2]

Self-Regulatory Organizations; Notice

of Filing of Amendment No. 2 to

Proposed Rule Change by National

Association of Securities Dealers, Inc.

Relating to the NAqcess System and

Accompanying Rules of Fair Practice

June 11, 1996.

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

Securities Exchange Act of 1934

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

June 6, 1996,2 the National Association

of Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) an amended version of

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the NASD. 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

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

Act, the NASD and The Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’) propose to

amend the proposed rules governing the

operation of Nasdaq’s NAqcess system,

a new system that would offer

nationwide limit order protection and

price improvement 3 opportunities for

orders entered in the proposed system.

Specifically, the NASD is proposing

several amendments to NAqcess

designed to allow the entry into

NAqcess of: (1) Proprietary orders by

registered Nasdaq market makers and