Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Notices 32881

4See Phlx By-Laws, art. XII, § 12–11 (stating that

the Phlx is not liable for any damages incurred by

a member or member organization utilizing the

Exchange’s facilities to conduct its business).

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

6 15 U.S.C. 78f(b)(5). 7 17 C.F.R. 200.30–3(a)(12).

1See Securities Exchange Act Release No. 36369

(October 13, 1995), 60 FR 54274 (October 20, 1995).

the choice of calculating the settlement

value for 3–D options itself rather than

employing a designated market

information vendor as an agent of the

Exchange for that purpose. The

Exchange will use the same

methodology for calculating the

settlement value for 3–D options as

described in Phlx Rule 1057.

The Phlx believes that by calculating

its own settlement value for 3–D

options, the Exchange will be able to

exert more control over the calculation

of those values. The Exchange also

believes that the proposed rule change

will reduce the response time in the

event there is a problem in the

calculation or dissemination of the 3–D

options settlement values.

Secondly, the Exchange proposes to

amend Phlx Rule 1057 by including a

‘‘limitation of liability’’ clause similar to

the one contained in Phlx Rule 1102A

that limits the Exchange’s liability in the

calculation and dissemination of index

values. The limitation of liability clause

provides added protection to the

Exchange and alleviates the threat of

potential liability in calculating the 3–

D settlement values. If further serves as

a more explicit extension of the

limitation of liability contained in the

Exchange’s By-Laws.4

2. Statutory Basis

The Exchange believes the proposed

rule change is consistent with Section

6(b) 5 of the Act in general and furthers

the objectives of Section 6(b)(5) 6 in

particular in that it is designed to

facilitate transactions in securities, to

remove impediments to and perfect the

mechanism of a free and open market.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes the proposed

rule change will impose no burden on

competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants, or Others

The Exchange has neither solicited

nor received written comments.

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. Also, copies of

such filing will be available for

inspection and copying at the principal

office of the Phlx. All submissions

should refer to File No. SR–Phlx–96–11

and should be submitted by July 16,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–16065 Filed 6–24–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37319; File No. SR–Phlx–

96–17]

Self-Regulatory Organization; Notice of

Filing of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc. ØTo

Reduce the Value of the Super Cap

Index

June 18, 1996.

Pursusnat 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 24, 1996, the

Philadelphia Stock Exchange, Inc.

(‘‘Phlx’’ 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 self-regulatory 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 Exchange proposes to reduce the

value of its Super Cap Index (‘‘Index’’)

option (‘‘HFX’’) to one-third its present

value by tripling the divisor used in

calculating the Index. The Index is

comprised of the top five optionseligible common stocks of U.S.

companies traded on the New York

Stock Exchange, as measured by

capitalization. The other contract

specifications for the HFX will remain

unchanged.

The text of the proposed rule change

is available at the Office of the

Secretary, Phlx and at the Commission.

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. The 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 began trading the HFX

in November, 1995.1 The Index value

was created with a value of 350 on its

base date of May 31, 1995 which rose

to 430 on April 12, 1996. Thus, the

value of the Index has increased 23% in

less than one year. Consequently, the

premium for HFX options has also risen.

As a result, the Exchange proposed to

conduct a ‘‘three-for-one split’’ of the

Index, such that the value would be

reduced to one-third of its present

value. In order to account for the split,

the number of HFX contracts will be

tripled, such that for each HFX contract

currently held, the holder would receive

three contracts at the reduced value,

with a strike price one-third of the
32882 Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Notices

2See Phlx Rule 1001A(c).

3See Securities Exchange Act Release Nos. 36577

(December 12, 1995), 60 FR 65705 (December 20,

1995) (reducing the value of the Phlx National

Over-the-Counter Index); and 35999 (July 20, 1995),

60 FR 38387 (July 26, 1995) (reducing the value of

the Phlx Semiconductor Index).

4Specifically, because the Index value would be

less than 500, the applicable strike price interval

would be $5 in the first four months and $25 in the

fifth month and the long-term options. See Rule

1101A(a). 5 17 CFR 200.30–3(a)(12).

original strike price. For instance, the

holder of a HFX 420 call will receive

three HFX 140 calls. In addition to the

strike price being reduced by one-third,

the position and exercise limits

applicable to the HFX will be tripled,

from 5500 contracts 2 to 16,500

contracts, for a six month period after

the split is effectuated. The procedure is

similar to the one employed respecting

equity options where the underlying

security is subject to a two-for-one stock

split, as well as previous reductions in

the value of other Phlx indexes.3 The

trading symbol will remain HFX.

In conjunction with the split, the

Exchange will list strike prices

surrounding the new, lower index

value, pursuant to Phlx Rule 1101A.4

The Exchange will announce the

effective date by way of an Exchange

memorandum to the membership, also

serving as notice of the strike price and

position limit changes.

The purpose of the proposal is to

attract additional liquidity to the

product in those series that public

customers are most interested in

trading. For examples, a near-term, atthe-money call option series currently

trades at approximately $1,150 per

contract. The Exchange believes that

certain investors and traders currently

may be impeded from trading at such

levels. With the Index split, that same

option series (once adjusted), with all

else remaining equal, could trade at

approximately $300 per contract. The

Phlx believes that a reduced premium

value should encourage additional

investor interest.

The Exchange believes that Super Cap

Index options provide an important

opportunity for investors to hedge and

speculate upon the market risk

associated with the underlying stocks.

By reducing the value of the Index, such

investors will be able to utilize this

trading vehicle, while extending a

smaller outlay of capital. This, in turn,

should attract additional investors and

create a more active and liquid trading

environment.

The Exchange believes that the

proposed rule change is consistent with

Section 6 of the Act in general, and in

particular, with Section 6(b)(5), in that

it is designed to promote just and

equitable principles of trade, as well as

to protect investors and the public

interest, by establishing a lower index

value, which should, in turn, facilitate

trading in Super Cap Index options. The

Exchange believes that reducing the

value of the Index does not raise

manipulation concerns and would not

cause adverse market impact, because

the Exchange will continue to employ

its surveillance procedures and has

proposed an orderly procedure to

achieve the index split.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes the proposed

rule change will impose no

inappropriate burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

The Exchange has neither solicited

nor received written comments on 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 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 Phlx. All submissions

should refer to File No. SR–Phlx–96–17

and should be submitted by July 16,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–16066 Filed 6–24–96; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster Loan Area #2864]

Alaska; Declaration of Disaster Loan

Area

As a result of the President’s major

disaster declaration on June 7, 1996, I

find that Matanuska Susitna Borough

and the City of Houston in the State of

Alaska constitute a disaster area due to

damages caused by Wildland Fires

beginning on June 2, 1996 and

continuing. Applications for loans for

physical damages resulting from this

disaster may be filed until the close of

business on August 6, 1996, and for

loans for economic injury until the close

of business on March 6, 1997 at the

address listed below: U.S. Small

Business Administration, Disaster Area

4 Office, P. O. Box 13795, Sacramento,

CA 95853–4795 or other locally

announced locations. In addition,

applications for economic injury loans

from small businesses located in the

following contiguous areas may be filed

until the specified date at the above

location: Denali Borough, Kenai

Peninsula Borough, Regional Education

Attendance Area of Iditarod Area,

Regional Education Attendance Area of

Delta/Greely, Regional Education

Attendance Area of Cooper River, and

Regional Attendance Area of Chugach.

Interest rates are:

Percent

For Physical Damage:

Homeowners With Credit Available Elsewhere ........................ 7.625

Homeowners Without Credit

Available Elsewhere ................ 3.875

Businesses With Credit Available

Elsewhere ................................ 8.000

Businesses and Non-Profit Organizations Without Credit Available Elsewhere ........................ 4.000

Others (Including Non-Profit Organizations) With Credit Available Elsewhere ........................ 7.125