Federal Register / Vol. 66, No. 247 / Wednesday, December 26, 2001 / Notices 66489

30See December 13 Conversation, supra note 22. 31See Amendment No. 1, supra note 3. 32See, e.g., Securities Exchange Act Release Nos.

44913 (October 9, 2001), 66 FR 52469 (October 15,

2001) (order approving File No. SR–NASD–2001–

73) (approving the listing and trading of notes

issued by Morgan Stanley Dean Witter & Co. whose

return is based on the performance of the Nasdaq100 Index); 44483 (June 27, 2001), 66 FR 35677

(July 6, 2001) (order approving File No. SR–Amex–

2001–40) (approving the listing and trading of notes

issued by Merrill Lynch whose return is based on

a portfolio of 20 securities selected from the Amex

Institutional Index); and 37744 (September 27,

1996), 61 FR 52480 (October 7, 1996) (order

approving File No. SR–Amex–96–27) (approving

the listing and trading of notes issued by Merrill

Lynch whose return is based on a weighted

portfolio of healthcare/biotechnology industry

securities).

33See Order, supra note 12 (concluding that the

U.S. Bond Index is well-established and broadbased); and Securities Exchange Act Release No.

19907 (June 24, 1983), 48 FR 30814 (July 5, 1983)

(order approving File No. SR–CBOE–83–8)(noting

that the S&P 500 Index is a broad-based index).

34See 1999 Order, supra note 12.

35See Securities Exchange Act Release No. 44994

(October 26, 2001), 66 FR 55722 (November 2, 2001)

(order approving File No. SR–CBOE–2001–22)

(‘‘2001 Order’’). In the 2001 Order, the Commission

also noted that, as of October 2001, the market

capitalization of the S&P 500 Index was $9.81

trillion.

36 15 U.S.C. 78f(b)(5) and 78s(b)(2).

37 15 U.S.C. 78s(b)(2).

38 17 CFR 200.30–3(a)(12).

significantly less than $10 per Note if

the Balanced Strategy Index declines.

Distribution of the circular should help

to ensure that only customers with an

understanding of the risks attendant to

the trading of the Notes and who are

able to bear the financial risks

associated with transactions in the

Notes will trade the Notes. In addition,

the Commission notes that Merrill

Lynch will deliver a prospectus in

connection with the initial purchase of

the Notes.30

Second, the Commission notes that

the final rate of return on the Notes

depends, in part, upon the individual

credit of the issuer, Merrill Lynch. To

some extent this credit risk is

minimized by the Exchange’s listing

standards in Section 107A of the

Company Guide, which provide that

only issuers satisfying substantial asset

and equity requirements may issue

these types of hybrid securities. In

addition, the Exchange’s hybrid listing

standards further require that the Notes

have at least $4 million in market value.

Financial information regarding Merrill

Lynch will be publicly available.

Third, the Notes will be registered

under Section 12 of the Act. As noted

above, the Amex’s existing equity floor

trading rules will apply to the Notes,

which will be subject to the Amex’s

equity margin rules. The Amex will rely

on its existing surveillance procedures

for equities to monitor trading in the

Notes.31

Fourth, the Commission has systemic

concern that a broker-dealer, such as

Merrill Lynch, or a subsidiary providing

a hedge for the issuer will incur position

exposure. However, as the Commission

has concluded in previous approval

orders for other hybrid instruments

issued by broker-dealers,32 the

Commission believes that this concern

is minimal given the size of the Notes

issuance in relation to the net worth of

Merrill Lynch.

Fifth, the Commission believes that

the listing and trading of the Notes

should not unduly impact the market

for the securities underlying the

Balanced Strategy Index or raise

manipulative concerns. As discussed

more fully above, the Balanced Strategy

Index is based upon the return of the

Underlying Indexes. Each of the

Underlying Indexes will have a

weighting of 50% of the weight of the

Balanced Strategy Index, initially and

immediately following each annual

rebalancing of the Balanced Strategy

Index. Both of the Underlying Indexes

are well-established and broad-based,33

and the Commission has concluded

previously that the Underlying Indexes

are not readily susceptible to

manipulation. For example, in the 1999

Order, the Commission found that the

U.S. Bond Index, and the other bond

indexes reviewed in the 1999 Order,

were not readily susceptible to

manipulation based on the indexes’

issue size, market value, and the

representative nature of different sectors

of the fixed income securities market.34

Similarly, in approving a proposal to

eliminate position and exercise limits

for S&P 500 Index options, S&P 100

Index options, and Dow Jones Industrial

Index options, the Commission noted

that the enormous capitalization of and

deep, liquid markets for the underlying

securities contained in the indexes

significantly reduced concerns

regarding market manipulation or

disruption in the underlying market.35

In addition, the Amex’s surveillance

procedures should serve to deter as well

as detect any potential manipulation of

the Balanced Strategy Index.

Finally, the Commission notes that

the value of the Balanced Strategy Index

will be disseminated at least once every

fifteen seconds throughout the trading

day. The Commission believes that

disseminating the value of the Balanced

Strategy Index at least once every fifteen

seconds throughout the trading date is

useful and will benefit investors in the

Notes.

The Commission finds good cause for

approving the proposed rule change, as

amended, prior to the thirtieth day after

the day of publication of notice of filing

thereof in the Federal Register. The

Commission believes that the Notes will

provide investors with an additional

investment choice and that accelerated

approval of the proposal, as amended,

will allow investors to begin trading the

Notes promptly. Amendment No. 1

strengthens the Amex’s proposal by,

among other things, noting the

surveillance procedures that will apply

to trading in the Notes and requiring

members, member organizations, and

employees thereof recommending

transactions in the Notes to: (1)

Determine that the transaction is

suitable for the customer; and (2) have

a reasonable basis for believing that the

customer can evaluate the special

characteristics of, and is able to bear the

financial risks of, the transaction.

Accordingly, the commission believes

that there is good cause, consistent with

Sections 6(b)(5) and 19(b)(2) of the

Act 36 to approve the proposal and

Amendment No. 1 on an accelerated

basis.

The Commission is approving the

Amex’s proposed listing standards for

the Notes. The commission specifically

notes that, notwithstanding approval of

the listing standards for the Notes, other

similarly structured products will

require review by the Commission prior

to being listed and traded on the Amex.

V. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act37, that the

proposed rule change, as amended, (File

No. SR-Amex-2001-91) be, and it hereby

is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.38

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–31564 Filed 12–21–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–45162; File No. SR–NASD–

2001–89]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of a Proposed

Rule Change by the National

Association of Securities Dealers, Inc.

To Extend the Effectiveness of the

Pilot Injunctive Relief Rule

December 18, 2001.

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

Securities Exchange Act of 1934

66490 Federal Register / Vol. 66, No. 247 / Wednesday, December 26, 2001 / Notices

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

2 17 CFR 240.19b–4.

3On January 12, 2000, NASD Regulation, Inc.

filed a proposed rule filing, SR–NASD–00–02 to

amend Rule 10335 and to make it a permanent part

of the Code. See Securities Exchange Act Release

No. 42606 (April 3, 2000), 65 FR 18405 (April 7,

2000) (File No. NASD–00–02). The NASD has

amended the rule filing on several occasions, most

recently on August 9, 2001. The most recent

amendments were published for comment on

October 25, 2001. See Securities Exchange Act

Release No. 44950 (October 18, 2001), 66 FR 54041

(October 25, 2001).

4 15 U.S.C. 78o–3(b)(6).

5 In reviewing this proposal, the Commission has

considered its impact on efficiency, competition,

and capital formation. 15 U.S.C. 78c(f).

6 15 U.S.C. 78s(b)(2).

7 15 U.S.C. 78o–3.

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on December

7, 2001, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its whollyowned subsidiary NASD Dispute

Resolution, Inc. (‘‘NASD Dispute

Resolution’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) a proposed rule change

as described in Items I and II below,

which Items have been prepared by

NASD Dispute Resolution. For the

reasons discussed below, the

Commission is publishing this notice is

solicit comments on the proposed rule

change and to approve the proposal on

an accelerated basis.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

NASD Dispute Resolution is

proposing to amend Rule 10335 of the

Code of Arbitration (‘‘Code’’) of the

NASD, to extend the pilot injunctive

relief rule for six months, pending

Commission action on a pending rule

filing, SR–NASD–00–02, to amend Rule

10335 and make it a permanent part of

the Code. Below is the text of the

proposed rule change. Proposed new

language is in italics; proposed

deletions are in brackets.

1000. Code of Arbitration Procedure

***

10335. Injunctions

(a)–(h) Unchanged.

(i) Effective Date.

This Rule shall apply to arbitration

claims filed on or after January 3, 1996.

Except as otherwise provided in this

Rule, the remaining provisions of the

Code shall apply to proceedings

instituted under this Rule. This Rule

shall expire on [January 4, 2002] July 1,

20002, unless extended by the

Association’s Board of Governors.

***

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NASD Dispute Resolution 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 III below.

NASD Dispute Resolution 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

I. Purpose

Rule 10335, the NASD’s pilot

injunctive relief rule, provides

procedures for obtaining interim

injunctive relief in controversies

involving member firms and associated

persons in arbitration. The rule has

primarily been used in ‘‘raiding cases,’’

or cases involving the transfer of an

employee from one firm to another firm.

Rule 10335 took effect on January 3,

1996, for a one-year pilot period. The

SEC has periodically extended the

initial pilot period in order to permit the

NASD to assess the effectiveness of the

rule. The pilot rule is currently due to

expire on January 4, 2002.3

NASD Dispute Resolution believes

that it is in the interest of members and

associated persons that the effectiveness

of the pilot rule remain uninterrupted

pending final Commission action on

SR–NASD–00–02. Therefore, NASD

Dispute Resolution believes that the

pilot rule should be extended to July 1,

2002, or such earlier time as permitted

by Commission action on the permanent

rule filing, which makes clear that, if

approved, the amended rule would

supersede the pilot rule in its entirety.

2. Statutory Basis

NASD Dispute Resolution believes

that the proposed rule change is

consistent with the provisions of

Section 15A(b)(6) of the Act,4 which

requires, among other things, that the

Association’s rules be designed to

prevent fraudulent and manipulative

acts and practices, to promote just and

equitable principles of trade, and, in

general, to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

NASD Dispute Resolution does not

believe that the proposed rule change

will result in any burden on

competition that is not necessary or

appropriate in furtherance of the

purposes of the Act, as amended.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change is consistent with the Act.5

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW,

Washington, DC 20549–0609. 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. Copies of such filing will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to File No.

SR–NASD–2001–89 and should be

submitted by January 16, 2002.

IV. Commission Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

NASD Dispute Resolution has

requested that the Commission find

good cause pursuant to Section

19(b)(2) 6 for approving the proposed

rule change prior to the 30th day after

publication in the Federal Register. The

Commission finds that the proposed

rule change is consistent with the

requirements of the Act and the rules

and regulations thereunder applicable to

the NASD and, in particular, the

requirements of Section 15A of the Act

and the rules and regulations

thereunder.7 Rule 10335 is intended to

provide a pilot system within the NASD

arbitration forum to process request for

temporary injunctive relief. Rule 10335

is intended principally to facilitate the

disposition of employment disputes,

Federal Register / Vol. 66, No. 247 / Wednesday, December 26, 2001 / Notices 66491

8See supra note 3.

9 15 U.S.C. 78o–3

10 15 U.S.C. 78s(b)(2).

11 17 CFR 200.30–3(a)(12)

1 17 CFR 200.30–3(a)(12).

and related disputes, concerning

members who file for injunctive relief to

prevent registered representatives from

transferring their client accounts to their

new firms.

The Commission finds good cause for

approving the proposed rule change

prior to the 30th day after the date of

publication of notice of filing thereof in

that accelerated approval will permit

members to have the benefit of

injunctive relief in arbitration pending

Commission action on the rule filing

proposing to amend Rule 10335 and

make it a permanent part of the Code.8

The Commission believes, therefore,

that granting accelerated approval of the

proposed rule change is consistent with

Section 15A of the Act.9

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,10 that the

proposed rule change (SR–NASD–2001–

89) is approved on an acclerated basis

through July 1, 2002.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–31565 Filed 12–21–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–45138; File No. SR–NYSE–

2001–42]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

the New York Stock Exchange, Inc.,

Establishing the Fees for NYSE

OpenBookTM

December 18, 2001.

Correction

In FR Document 01–30879 beginning

on page 64895 for Friday, December 14,

2001, the release number for File No.

SR–NYSE–2001–42 should read 34–

45138.

For the Commission, by the Division of

Market Regulation, pursuant to the delegated

authority.1

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–31566 Filed 12–21–01; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Data Collection Available for Public

Comments and Recommendations

ACTION: Notice and request for

comments.

SUMMARY: In accordance with the

Paperwork Reduction Act of 1995, this

notice announces the Small Business

Administration’s intentions to request

approval on a new, and/or currently

approved information collection.

DATES: Submit comments on or before

February 25, 2002.

ADDRESSES: Send all comments

regarding whether these information

collections are necessary for the proper

performance of the function of the

agency, whether the burden estimates

are accurate, and if there are ways to

minimize the estimated burden and

enhance the quality of the collections, to

Saunders Miller, Senior Policy Advisor,

Office of Investment Division, Small

Business Administration, 409 3rd Street,

SW., Suite 6300, Washington DC 20416.

FOR FURTHER INFORMATION CONTACT:

Saunders Miller, Senior Policy Advisor,

(202) 205–3545 or Curtis B. Rich,

Management Analyst, (202) 205–7030.

SUPPLEMENTARY INFORMATION:

Title: SBIC License Application, Part,

1 Incorporating the Management

Assessment Questionnaire.

Form No: 2181.

Description of Respondents:

Applicants for SBIC Licenses.

Annual Responses: 90.

Annual Burden: 160.

Title: SBIC License Application, Part,

II, and Exhibits to the License

Application.

Form No: 2182.

Description of Respondents:

Applicants for SBIC Licenses.

Annual Responses: 60.

Annual Burden: 160.

Title: SBIC License Application, Part,

III, Exhibits to the Management

Assessment Questionnaire.

Form No: 2183.

Description of Respondents:

Applicants for SBIC Licenses.

Annual Responses: 90.

Annual Burden: 160.

Jacqueline White,

Chief, Administrative Information Branch.

[FR Doc. 01–31649 Filed 12–21–01; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

[Declaration of Economic Injury Disaster

#9N84]

State of Wyoming; Disaster Loan Area

Park County and the contiguous

Counties of Big Horn, Fremont, Hot

Springs, Teton and Washakie in the

State of Wyoming; and Carbon, Gallatin

and Park Counties in the State of

Montana constitute an economic injury

disaster loan area as a result of a forest

fire that closed the east entrance to

Yellowstone National Park from July 29

through August 13, 2001. Eligible small

businesses and small agricultural

cooperatives without credit available

elsewhere may file applications for

economic injury assistance as a result of

this disaster until the close of business

on September 17, 2002 at the address

listed below or other locally announced

locations:

U.S. Small Business Administration,

Disaster Area 3 Office, 4400 Amon

Carter Blvd., Suite 102, FT. Worth, TX

76155.

The interest rate for eligible small

businesses and small agricultural

cooperatives is 4 percent. The number

assigned for economic injury for this

disaster is 9N8400 for the State of

Wyoming and 9N8500 for the State of

Montana.

(Catalog of Federal Domestic Assistance

Program No. 59002)

Dated: December 17, 2001.

Hector V. Barreto,

Administrator.

[FR Doc. 01–31648 Filed 12–21–01; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

Region IV—North Florida District

Advisory Council; Public Meeting

The Small Business Administration

Region IV North Florida District

Advisory Council, located in the

geographical area of Jacksonville,

Florida, will hold a public meeting at 11

a.m. Eastern Standard Time on

Thursday, January 17, 2002, at the

Gainesville Technology Enterprise

Center, 2153 Hawthorne Rd,

Gainesville, FL 32641, to discuss such

matters as may be presented by

Advisory Council members, staff of the

Small Business Administration, and/or

others present.

Anyone wishing to make an oral

presentation to the Board must contact

Wilfredo J. Gonzalez, District Director,

in writing by letter or fax no later than

January 10th, 2002, in order to be put

on the agenda. Please direct requests to: