Federal Register / Vol. 61, No. 128 / Tuesday, July 2, 1996 / Notices 34463

5The Commission notes that, while the present

proposal does not specify whether the ‘‘NBBO’’ for

the purposes of this rule is the best price at the time

the order is enter or at the time it is executed, the

Exchange plans to amend the proposal to clarify

that market and marketable limit orders in a

Nasdaq/NM security of a size equal to or less than

the auto-execution threshold are to be priced at the

NBBO at the time the order is entered into the MAX

system, and that the order must be executed at that

price or better. Telephone conversation on June 24,

1996 between David Rusoff, Attorney, Foley &

Lardner, and George A. Villasana, Attorney,

Division of Market Regulation, SEC.

The Commission further expects that these orders

will be provided an opportunity for price

improvement during the period between the time

that the order is entered and the time it is executed

which should include, at a minimum, an

opportunity to receive a better price if the NBBO

improves before the order is executed.

1MUNICIPAL SECURITIES INFORMATION

LIBRARY and MSIL are registered trademarks of the

Board. The MSIL system, which was approved in

Securities Exchange Act Release No. 29298 (June

13, 1991) 56 FR 28194, is a central facility through

which information about municipal securities is

collected, stored and disseminated.

require the auto-execution parameter to

be set at 1099 shares or greater and the

auto-acceptance parameter to be set at

2099 shares or greater. As proposed, the

auto-execution and auto-acceptance

parameters for Nasdaq/NM securities

will be set at 1000 shares or greater.

CHX Specialist Quoting at NBBO

When an Exchange specialist is

disseminating the best bid or offer in a

Nasdaq/NM security, market orders and

marketable limit orders in that security

will be automatically executed up to the

size of the specialist’s disseminated bid

or offer, as the case may be, and the size

of such bid or offer will automatically

be decremented by the size of the

execution. When the specialist’s quote

is exhausted, the system will generate

an autoquote at 1⁄8 point away from the

NBBO for 1000 shares.

CHX Specialist Not Quoting at NBBO

In the event that the CHX specialist is

not quoting a Nasdaq/NM security at the

NBBO, all MAX market and marketable

limited orders in that security that are

of a size equal to or less than the autoexecution threshold will automatically

be executed at the NBBO after a twenty

second delay unless the specialist elects

to manually handled the order in

accordance with the requirements set

forth in proposed Rule 43 (d) of Article

XX. In this regard, proposed Rule 43(d)

requires a specialist to either manually

execute the order at the NBBO or better

during this twenty second period or to

act as a agent for the order in seeking

to obtain the best available price for the

order on a marketplace other than the

Exchange.5 If the specialist decides to

act as agent for the order, the rule

requires the specialist to use order

routing systems where appropriate.

Market and marketable limit orders that

are greater than the auto-execution

threshold will not be subject to these

requirements.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b)(5) of the

Act in that it is designed to prevent

fraudulent and manipulative acts and

practices and to perfect the mechanism

of a free and open market.

B. Self-Regulatory Organization’s

Statement on Burden on Competition.

The CHX does not believe that the

proposed rule change will impose any

inappropriate burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants, or Others

No written comments were either

solicited or 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

Room. 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–CHX–96–16 and should be

submitted July 23, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–16772 Filed 7–1–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37361; File No. SR–MSRB–

96–4]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Municipal Securities Rulemaking

Board Relating to Fees for Annual

Subscription and Backlog Document

Collections of Its Official Statement/

Advance Refunding Document

Subsystem of the Municipal Securities

Information Library

June 25, 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 28, 1996, the

Municipal Securities Rulemaking Board

(‘‘Board’’ or ‘‘MSRB’’) filed with the

Securities and Exchange Commission

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

rule change (File No. SR–MSRB–96–4).

The proposed rule change is described

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

have been prepared by the Board. 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 Board is filing herewith a

proposed rule change to change certain

fees relating to the operation of its

Official Statement/Advance Refunding

Document (‘‘OS/ARD’’) subsystem of the

Municipal Securities Information

Library TM (‘‘MSIL TM ’’) system.1 The

Board is changing from $12,000 to

$14,000 (plus postage or delivery

charges) the annual subscription fee for

magnetic tapes of images of official

statements and advance refunding

documents. In addition, the Board is

establishing a price of $9,000 (plus

delivery or postage charges) for its 1995

document collection of official

statements and refunding documents,

sold as a ‘‘backlog’’ collection.
34464 Federal Register / Vol. 61, No. 128 / Tuesday, July 2, 1996 / Notices

2Rule G–36 requires underwriters to provide

copies of final official statements and advance

refunding documents within certain specified time

frames for most new issues issued since January 1,

1990.

3This fee was filed with the Commission. See

Securities Exchange Act Release No. 30306 (Jan. 30,

1992) 57 FR 4657.

4Currently, several business day’s worth of

documents are on each tape in an annual collection.

The backlog fee plus delivery costs for 1994 is

$7,000; 1993 is $9,000; 1992 is $7,000; 1991 is

$8,000; 1990 is $6,000. These fees were filed with

the Commission. See Securities Exchange Act

Release Nos. 35848 (June 14, 1995) 60 FR 32817

(1994 fee); 32482 (June 16, 1993) 58 FR 34115 (1992

and 1990 fees); 34602 (Aug. 25, 1994) 59 FR 45319

(1993 and 1991 fees). The fees for the backlog

collections vary based on the number of documents

received and processed in any given year.

5See Securities Exchange Act Release No. 28197

(July 12, 1990) 55 FR 29436.

II. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

In its filing with the Commission, the

Board 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 texts of these

statements may be examined at the

places specified in item IV below. The

Board has prepared summaries, set forth

in Section 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 OS/ARD subsystem, which was

activated on April 20, 1992, is a central

electronic facility through which

information collected and stored

pursuant to MSRB rule G–36 is made

available electronically and in paper

form to market participants and

information vendors.2 Since 1992, the

annual subscription fee for daily tapes

of images of current year documents

from the OS/ARD system has been

$12,000.3 The Board proposes to

increase the annual subscription fee to

$14,000 because of the rise in the cost

of operation of the system since the

subscription fee was first instituted.

The fees for backlog document

collections are substantially less than

fees for an annual subscription because

an annual subscription requires the

Board to send a computer tape to the

subscriber each business day, but a

backlog collection requires fewer tapes.4

The Board is establishing a price of

$9,000 (plus delivery or postage

charges) for the 1995 backlog collection.

The daily tape subscription service

currently has eight subscribers. The

$14,000 yearly subscription fee for the

daily tape of images will not cover the

complete costs of operation of the OS/

ARD system. In its prior filings with the

Commission, the Board stated that it

intends to use its general revenues to

help fund collecting, indexing and

storing the OS/ARD subsystem’s

documents. However, the Board states

its intention that the costs of producing

and disseminating magnetic tapes (and

paper copies) would be completely

covered by user fees.5 The Board is

increasing the annual subscription fee

and establishing the 1995 backlog fee to

defray its costs of disseminating the

collection tapes. This is consistent with

the Commission’s policy that selfregulatory organizations’ fees be based

on expenses incurred in providing

information to the public. The Board

believes that employing cost-based

prices is in the public interest since it

will ensure that a complete collection of

vital information will be available, at

fair and reasonable prices, for the life of

the municipal securities.

2. Statutory Basis

The Board believes the proposed rule

change is consistent with Section

15B(b)(2)(C) of the Act, which requires,

in pertinent part, that the Board’s rules

shall:

be designed to prevent fraudulent and

manipulative acts and practices, to promote

just and equitable principles of trade, to

foster cooperation and coordination with

persons engaged in regulating, clearing,

settling, processing information with respect

to, and facilitating transactions in municipal

securities, to remove impediments to and

perfect the mechanism of a free and open

market in municipal securities, and, in

general, to protect investors and the public

interest.

The MSIL system is designed to

increase the integrity and efficiency of

the municipal securities market by,

among other things, helping to ensure

that the price charged for an issue in the

secondary market reflects all available

official information about that issue.

The Board believes that the annual

subscription fee and the 1995 backlog

fee are fair and reasonable in light of the

costs associated with disseminating the

information, and that the services

provided by the MSIL system are

available on reasonable and

nondiscriminatory terms to any

interested person.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Board does not believe that the

proposed rule change will impose any

burden on competition not necessary or

appropriate in furtherance of the

purposes of the Act.

C. Self-Regulatory Organization’s

Statement of Comments on the

Proposed Rule Change Received from

Members, Participants, or Others

Written comments were neither

solicited nor received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The rule change is effective upon

filing pursuant to Section 19(b)(3)(A) of

the Act, because the proposal is

‘‘establishing or changing a due, fee or

other charge.’’ At any time within sixty

days of 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

submissions, 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. Copies of the filing will also be

available for inspection and copying at

the Board’s principal offices. All

submissions should refer to File No.

SR–MSRB–96–4 and should be

submitted by July 23, 1996. For the

Commission by the Division of Market

Regulation, pursuant to delegated

authority, 17 CFR 200.30–3(a)(12).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–16773 Filed 7–1–96; 8:45 am]

BILLING CODE 8010–01–M