[Federal Register Volume 60, Number 210 (Tuesday, October 31, 1995)]
[Notices]
[Pages 55391-55399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26898]



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SECURITIES AND EXCHANGE COMMISSION
[Release Nos. 33-7236; 34-36412; International Series Release No. 875]


Exemptions From Rules 10b-6, 10b-7, and 10b-8 During 
Distributions of Certain Dutch Securities

October 25, 1995.
    Pursuant to delegated authority, on October 19, 1995, the Division 
of Market Regulation issued a letter granting class exemptions from 
Rules 10b-6, 10b-7, and 10b-8 (``Trading Practice Rules'') under the 
Securities Exchange Act of 1934 to facilitate distributions in the 
United States of the securities of certain highly capitalized Dutch 
issuers. The exemptions permit transactions that otherwise would be 
prohibited by the Trading Practice Rules, subject to certain 
disclosure, recordkeeping, record production, and notice requirements.
    The exemptions have been issued pursuant to the Commission's 
Statement of Policy contained in Securities Exchange Act Release No. 
33137 (November 3, 1993), and are published to provide notice of their 
availability.
Margaret H. McFarland,
Deputy Secretary.

October 19, 1995.
John D. Wilson, Esq.
Shearman & Sterling, 12 rue d'Astorg, 75008 Paris, France

Re: Distributions of Certain Dutch Securities File No. TP 95-439

    Dear Mr. Wilson: In regard to your letter dated October 16, 
1995, as supplemented by conversations with the staff, this response 
thereto is attached to the enclosed photocopy of your 
correspondence. By doing this, we avoid having to recite or 
summarize the facts set forth in your letter. Each defined term in 
this letter has the same meaning as defined in your letter, unless 
otherwise noted herein.

Response

    On the basis of your representations and the facts presented, 
the Commission hereby grants exemptions from Rules 10b-6, 10b-7, and 
10b-8 under the Securities Exchange Act of 1934 (``Exchange Act'') 
to distribution participants, as defined in Rule 10b-6(c)(6)(ii), 
and their affiliated purchasers, as defined in Rule 10b-6(c)(6)(i) 
(collectively, ``Relevant Parties''), in connection with 
transactions in Relevant Securities (as defined below) outside the 
United States during distributions of Qualified Dutch Securities (as 
defined below) subject to the following terms, conditions, and 
limitations:

I. Securities 

[[Page 55392]]


    A. The security being distributed (``Qualified Dutch Security'') 
must:
    1. be issued by (a) a ``foreign private issuer'' within the 
meaning of Rule 3b-4 under the Exchange Act incorporated under the 
laws of The Netherlands, which issuer (``Dutch Issuer'') has 
outstanding a component security of the Amsterdam EOE-Index 
(``AEX''); 1 or (b) a subsidiary of a Dutch Issuer described in 
paragraph I.A.1.a.; and

    \1\ References to the AEX refer to the composition of the index 
on the date of this letter; provided, however, that any security 
added to the AEX after the date of this letter also will be treated 
as a Qualified Dutch Security if its issuer satisfies the 
requirements in paragraph I.A.1. and such security has an aggregate 
market value that equals or exceeds the equivalent of NLG 1.6 
billion (which exceeded US$1 billion as of October 16, 1995) and an 
average daily trading volume that equals or exceeds the equivalent 
of NLG 8 million (which exceeded US$5 million as of October 16, 
1995) as published by ``foreign financial regulatory authorities'' 
(as defined below) and any U.S. securities exchanges or automated 
inter-dealer quotation systems, during a period (``Reference 
Period'') that is 20 consecutive business days in Amsterdam within 
60 consecutive calendar days prior to the commencement of the 
Covered Period as defined in paragraph III.A. below.
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    2. satisfy one of the following:
    a. be an equity security of a Dutch Issuer which security has an 
aggregate market value that equals or exceeds the equivalent of NLG 
1.6 billion (which exceeded US$1 billion as of October 16, 1995), 
and a worldwide average daily trading volume that equals or exceeds 
the equivalent of NLG 8 million (which exceeded US$5 million as of 
October 16, 1995), as published by foreign financial regulatory 
authorities (``FFRAs'') 2 and any U.S. securities exchanges or 
automated inter-dealer quotation systems during the Reference 
Period; or

    \2\ An FFRA is defined in Section 3(a)(51) of the Exchange Act, 
5 U.S.C. 78(c)(51), as any (A) foreign securities authority; (B) 
other governmental body or foreign equivalent of a self-regulatory 
organization empowered by a foreign government to administer or 
enforce its laws relating to the regulation of fiduciaries, trusts, 
commercial lending, insurance, trading in contracts of sale of a 
commodity for future delivery, or other instruments traded on or 
subject to the rules of a contract market, board of trade, or 
foreign equivalent, or other financial activities; or (C) membership 
organization a function of which is to regulate participation of its 
members in activities listed above. The Amsterdam Stock Exchange 
(``ASE'') together with the Stock Exchange Association (``SEA'') is 
considered to be an FFRA.
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    b. be a security that is convertible into, exchangeable for, or 
a right to acquire a security of a Dutch Issuer described in 
paragraph I.A.2.a. above.
    B. ``Relevant Security'' means:
    1. a Qualified Dutch Security; or
    2. a security of the same class and series as, or a right to 
purchase, a Qualified Dutch Security. 3

    \3\ You do not request and this letter does not grant any relief 
with respect to transactions in options effected on the Amsterdam 
EOE Optiebeurs.
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II. Transactions Effected in the United States

    All transactions in Relevant Securities effected in the United 
States shall comply with Rules 10b-6, 10b-7, and 10b-8.

III. Transactions Effected in the Netherlands

    A. All transactions during the Covered Period (as defined below) 
in Relevant Securities effected in The Netherlands shall be 
conducted in compliance with Dutch law and the rules of the ASE. For 
purposes of these exemptions, ``Covered Period'' means: (i) in the 
case of a rights distribution, the period commencing when the 
subscription price is determined and continuing until the completion 
of the distribution in the United States, and (ii) in the case of 
any other distribution, the period commencing three business days in 
Amsterdam before the price is determined and continuing until the 
completion of the distribution in the United States; provided, 
however, that the Covered Period shall not commence with respect to 
any Relevant Party until such person becomes a distribution 
participant.
    B. All transactions in Relevant Securities during the Covered 
Period effected in The Netherlands on a principal basis shall be 
effected or reported on the trading facilities of the ASE (including 
the Automatic Interprofessional Dealing System Amsterdam and the 
Amsterdam Stock Exchange Trading System).
    C. Disclosure of Trading Activities.4

    \4\ Unless subsequently modified by the Commission, this 
disclosure requirement shall not apply to distributions effected 
solely pursuant to Rule 144A under the Securities Act of 1933 
(``Securities Act'').
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    1. The inside front cover page of the offering materials used in 
the offer and sale in the United States of a Qualified Dutch 
Security shall prominently display a statement in substantially the 
following form, subject to appropriate modification where 
circumstances require. Such statement shall be in capital letters, 
printed in bold-face roman type at least as large as ten-point 
modern type and at least two points leaded:
    In connection with this offering, certain persons may engage in 
transactions for their own accounts or for the accounts of others in 
[identify relevant securities] pursuant to exemptions from rules 
10b-6, 10b-7, and 10b-8 under the Securities Exchange Act of 1934. 
See ``[identify section of offering materials that describes the 
transactions to be effected].''
    2. In addition, there shall be included in the identified 
section of the offering materials a comprehensive description of the 
activities that may be undertaken by the Relevant Parties in the 
Relevant Securities during the distribution.
    D. Recordkeeping and Reporting. 
    1. Each Relevant Party shall provide to the SEA the information 
described in paragraph III.D.2. below with respect to its 
transactions in Relevant Securities in The Netherlands; provided, 
however, that in the case of a distribution made pursuant to rights, 
such information is only required to be reported to the SEA during 
the period or periods commencing at any time during the Covered 
Period that the rights exercise price does not represent a discount 
of at least 10 percent from the then current market price of the 
security underlying the rights and continuing until (a) the end of 
the Covered Period or (b) until the rights exercise price represents 
a discount of at least 12 percent from the then current market price 
of the security underlying the rights. 5

    \5\ For purposes of these exemptions, unless stated otherwise, 
the market price for a security shall be the closing price on the 
ASE.
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    2. When required pursuant to paragraph III.D.1. above, the 
Relevant Parties will provide the following information to the SEA, 
in a Comma Delimited ASCII (American Standard Code for Information 
Interchange) format including a common record layout acceptable to 
the SEA and the Division of Market Regulation (``Division''), with 
respect to transactions during the Covered Period in Relevant 
Securities:
    a. name of the security, date, time (of execution and reporting, 
where available to the Relevant Party), price, and volume of each 
transaction; provided, however, that no information regarding a 
customer transaction need be provided unless such transaction has a 
value of NLG 500,000 or more (approximately US$315,000 as of October 
16, 1995);
    b. the exchange or inter-dealer quotation system on which the 
transaction was effected, if any;
    c. an indication whether such transaction was for a proprietary 
account or the account of a customer, provided that any transaction 
effected by an underwriter for a customer account for which it has 
exercised discretionary authority shall be reported as a proprietary 
trade; and
    d. the identity of a counterparty only where such counterparty 
is an underwriter or a selling group member.
    3. The SEA and the Relevant Parties shall keep all documents 
produced or prepared pursuant to paragraph III.D.2. above for a 
period of not less than two years.
    4. Upon the request of the Division, the SEA shall transmit the 
information provided by the Relevant Parties pursuant to paragraph 
III.D.2. above to the Division within 30 days of the request.
    5. If the information required to be produced in paragraph 
III.D.2. above is not available from the SEA, upon the request of 
the Division such information shall be provided by the Relevant 
Party and be made available to the Division at its office in 
Washington, DC.
    6. Representatives of a Relevant Party will be made available 
(in person at the office of the Division or by telephone) to respond 
to inquiries of the Division relating to its records.

IV. Transactions Effected in Significant Markets

    A. All transactions in Relevant Securities in a ``Significant 
Market,'' as defined below, shall be effected in accordance with the 
requirements of Rules 10b-6, 10b-7, and 10b-8, except as permitted 
by paragraph IV.B. below or by other available exemptions. For 
purposes of these exemptions, ``Significant Market'' means: (i) SEAQ 
International or any other dealer market outside the United States 
and The Netherlands for which price and volume information is 
published by an FFRA or (ii) any other securities market(s) in a 
single country other than the United States or The 

[[Page 55393]]
Netherlands to which a Dutch Issuer has applied for listing the 
Qualified Dutch Security and been accepted, if during the Reference 
Period the volume in either (i) or (ii) in such Qualified Dutch 
Security, as published by the relevant FFRA(s) in such securities 
market is 10 percent or more of the aggregate worldwide trading 
volume in that security published by all FFRAs in (i) and (ii), 
FFRAs in The Netherlands, and U.S. securities markets to which such 
Dutch Issuer has applied for listing such Qualified Dutch Security 
and been accepted.
    B. Any transactions by Relevant Parties in a ``Relevant SEAQ 
International Security,'' as defined in Letter regarding 
Distributions of Certain United Kingdom Securities and Certain 
Securities Traded on SEAQ International (January 10, 1995) (``United 
Kingdom Exemptions Letter''), that are effected in the United 
Kingdom shall be made subject to the terms and conditions of the 
United Kingdom Exemptions Letter.

V. General Conditions

    A. For purposes of these exemptions, a two business day cooling-
off period shall apply under Rule 10b-6(a)(4) (xi) and (xii) in the 
United States and each Significant Market, provided that trading in 
Relevant Securities in Significant Markets shall be subject to the 
exemptive relief then available in such market, if any, or the 
record maintenance and record production requirements contained in 
Letter regarding Application of Cooling-Off Periods Under Rule 10b-6 
to Distributions of Foreign Securities (April 4, 1994).
    B. The lead underwriter or the global coordinator or equivalent 
person shall promptly, but in any event before the commencement of 
the Covered Period, provide a written notice (``Notice'') to the 
Division containing the following information: (i) The name of the 
issuer and the Qualified Dutch Security; (ii) whether the Qualified 
Dutch Security is an AEX component security or information with 
respect to the market capitalization and the average daily trading 
volume of the Qualified Dutch Security to be distributed; (iii) the 
identity of the Significant Markets where the Qualified Dutch 
Security trades; (iv) if the Notice is for more than one entity, the 
identity of all underwriters and selling group members relying on 
these exemptions; 6 and (v) a statement that the Relevant 
Parties are aware of the terms and conditions of these exemptions. 
Reference is made to the notice requirement of the United Kingdom 
Exemptions Letter for any transactions in a Relevant Security that 
is a Relevant SEAQ International Security for purposes of that 
letter.

    \6\ Supplemental Notices shall be provided for underwriters and 
selling group members identified after a Notice has been filed.
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    C. Any person who fails to comply with the conditions of the 
exemptions, including a failure to provide requested information, 
would not be permitted to rely on the exemptions in future 
distributions. Upon a showing of good cause, however, the Commission 
or the Division may determine that it is not necessary under the 
circumstances that the exemptions be denied.
    The foregoing exemptions from Rules 10b-6, 10b-7, and 10b-8 are 
based solely on your representations and the facts presented, and 
are strictly limited to the application of those rules to the 
proposed transactions. Any different facts or representations might 
require a different response. Responsibility for compliance with any 
other applicable provisions of the federal securities laws must rest 
with the Relevant Parties. The Division expresses no view with 
respect to any other questions that the proposed transactions may 
raise, including, but not limited to, the adequacy of disclosure of 
any other federal or state laws to the proposed transactions.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Nancy J. Sanow,
Assistant Director.

October 16, 1995.
Division of Market Regulation
Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549, U.S.A.

Attention: Ms. Nancy J. Sanow, Assistant Director, Office of Trading 
Practices

Exemptions from Rules 10b-6, 10b-7 and 10b-8 for Distributions of 
Certain Dutch Securities

    Dear Ms. Sanow: We are acting as counsel to ABN AMRO Bank N.V. 
and the Amsterdam Stock Exchange (``ASE'') in connection with 
possible registered equity offerings of actively-traded securities 
of certain Dutch companies, involving a distribution of some or all 
of the equity securities of such companies in the United States. On 
behalf of ABN AMRO Bank N.V. and the ASE we hereby submit the 
following application to the Securities and Exchange Commission (the 
``Commission'') for exemptions from Rules 10b-6, 10b-7 and 10b-8 
(the ``Trading Rules'') under the Securities Exchange Act of 1934, 
as amended (the ``Exchange Act''), for distributions of qualified 
Dutch securities consistent with the Commission's International 
Series Release No. 606.
    We seek exemptions for distributions of Dutch securities that 
are component securities of the Amsterdam EOE-Index (the ``AEX'') 
1, where the Dutch issuer has a market capitalization that 
equals or exceeds U.S. $1 billion (approximately NLG 1.6 billion at 
October 16, 1995) 2 and a worldwide average daily trading 
volume that equals or exceeds $5 million (approximately NLG 8 
million at October 16, 1995), as more fully discussed below.

    \1\ The AEX is a continuously updated, market-capitalization-
weighted performance index based on the prices of shares of 25 
leading Dutch companies listed on the ASE. The AEX component 
securities are selected on the basis of their effective trading 
volumes on the ASE. See Exhibit 1 for a list of the AEX component 
securities on the date hereof.
    \2\ 1 NLG = U.S. 1.5979 (on October 13, 1995).
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I. Offerings By Dutch Companies

A. Primary and Secondary Offerings

    In primary offerings, Dutch companies can issue shares either 
pursuant to rights offerings or offerings of shares. Pursuant to 
Dutch corporate law, subject to certain exceptions, existing 
shareholders have pre-emptive rights to subscribe pro-rata to any 
capital increase or to sell their pre-emptive rights, which are 
separately tradeable securities, on the market. Dutch law also 
authorizes shareholders voting at a general shareholders' meeting to 
approve a capital increase and/or to restrict or exclude the current 
shareholders' pre-emptive rights. The general shareholders' meeting 
can also delegate authority to the issuer's management board or 
supervisory board, for up to five years, to decide in favor of a 
capital increase, set the terms of capital increases within an 
overall limit of authorized capital and restrict or exclude pre-
emptive rights. Restricted pre-emptive rights might, for example, 
limit the number of shares in the offering reserved for existing 
shareholders. In primary offerings in The Netherlands, pre-emptive 
rights are often restricted or excluded. In the context of an 
offering without pre-emptive rights the issuer and the underwriting 
syndicate can nevertheless agree to provide certain priority rights 
to existing shareholders.
    In primary offerings (other than rights offerings) and secondary 
offerings in The Netherlands, securities are typically distributed 
in the following manner. A syndicate of underwriters typically 
undertakes (in exchange for underwriters' compensation the terms of 
which vary from offering to offering) on a guaranteed basis to 
purchase and pay or procure purchasers and payment for the 
securities. In practice, the lead underwriter will normally have 
settled all major points (apart from price) with the issuer or the 
selling shareholder at least two or three weeks in advance of the 
issuer's or selling shareholder's decision to proceed with the 
offering. The lead underwriter typically advises the issuer or the 
selling shareholder and will guide the listing process. The 
publication of the preliminary prospectus (day 1) is followed by a 
period typically (but not always) lasting two weeks, during which 
the retail subscription is open and institutional bookbuilding is 
carried out. At the close of this period the offer price is decided 
following discussion between the lead underwriter, the issuer and 
any selling shareholders. On the next day, called ``impact day'', 
the offer price is announced, the underwriting agreement is signed, 
allocations are communicated to retail and institutional investors 
and trading in the securities commences. Closing and payment occurs 
three days later (day 18).
    Before and during the offering period, the lead underwriter will 
normally advise the issuer or the selling shareholders as to various 
aspects of the offering, will assist the issuer in obtaining a 
listing of the securities if they are not already listed, and will 
have knowledge of the seller's intentions with respect to timing and 
size of the offering. Although the lead underwriter will have price-
sensitive information regarding the securities and the offering, 
Article 10 of the Membership Rules SEA, together with the Code of 
Conduct on Confidential Information promulgated by the SEA in its 
Circulars numbered 91-30 and 91-43 dated March 28, 1991, require the 
underwriter's corporate 

[[Page 55394]]
finance division to comply with a code of confidentiality, and thus to 
keep such information confidential from its credit and stockbroking 
divisions.
    The Listing and Issuing Rules of the ASE require an application 
for the listing of shares in primary or secondary offerings to be 
made. This application must be submitted by both the issuer and a 
member of the Vereniging voor de Effectenhandel (Stock Exchange 
Association or ``SEA''), usually the lead underwriter, who supports 
the application. The documents to be filed must include, among other 
things, a copy of the prospectus relating to the issuer, and the 
audited annual accounts of the issuer for the last five financial 
years. In most cases, a draft of the prospectus will already have 
been reviewed and approved by the SEA before the application is 
submitted. The SEA will decide upon the application. In the event 
the SEA grants authorization for listing, the issuer and the SEA 
will enter into a listing agreement pursuant to which the issuer 
will be required to comply with the SEA's Listing and Issuing Rules, 
circulars in connection therewith and Dutch law.

B. Rights Offerings

    Offerings with pre-emptive rights permit the current 
shareholders in a Dutch company to participate in a capital increase 
pro rata or to sell their pre-emptive rights, which are securities 
separable from the shares, on the ASE. The structure and techniques 
of an offering with pre-emptive rights are similar to the structure 
and techniques as described under I.A. above of this letter.

II. The Amsterdam Market

    The ASE is an organized stock exchange operated by the SEA. The 
ASE is subject to Dutch law and is not registered under the Exchange 
Act in any capacity. The SEA was founded on May 17, 1876 and is an 
association established under Dutch law.
    The admission of equity securities to listing on the Official 
Market of the ASE is governed by the SEA's Listing and Issuing 
Rules, in addition to general Dutch law. Pursuant to the Listing and 
Issuing Rules, a company's stock may only be admitted to the 
Official Market of the ASE if the market value of the stock 
available for trading is at least NLG 50,000,000 (approximately 
USSec. 31,500,000 at October 16, 1995) and constitutes at least 5% 
of the company's issued capital. In addition, the available nominal 
amount of the stock must be at least 10,000 times larger than the 
smallest deliverable denomination of the stock. The Listing and 
Issuing Rules also include requirements as to prospectus disclosure 
and periodic reporting for companies listed on the ASE.
    Trading on the floor of the ASE takes place on a continuous 
basis from 9.30 a.m. to 4.30 p.m. (Amsterdam time) each business 
day. The ASE distinguishes between trading in and processing large 
wholesale orders and smaller retail orders. For each of the two 
market segments a separate system has been developed. Whether a 
market transaction is carried out in the wholesale market or the 
retail market depends on whether the ``wholesale limit'', a turnover 
limit determined per type of stock, is met. Orders that are below 
the wholesale limit set for a particular stock are generally 
executed in the retail segment of the market. Orders equal to or in 
excess of the wholesale limit set for a particular stock must be 
executed in the wholesale segment of the market.
    The retail market segment operates through a hoekman and the 
Limit Order Book system. Opening prices in major securities listed 
on the ASE are fixed by the relevant hoekman, who is member of the 
ASE and designated by the SEA to act as a specialist for the 
relevant security. The hoekman fixes the opening quotation by 
balancing the available supply and demand for a security against the 
bid and asked prices for a security. After fixing the opening price, 
continuous trading in the security commences. The hoekman indicates 
prices, takes and matches orders from exchange members and reports 
the prices of actual transactions. Each hoekman is familiar with the 
range of bid and asked prices being quoted and is expected, in 
accordance with ASE practice, to maintain a fair and orderly market 
in the security, using his own funds as required. All trades are 
reported immediately by the hoekman to the ASE, are shown on the 
ASE's screen and are disseminated worldwide by trading data vendors. 
The closing price for a security is fixed by the hoekman at the 
actual price of the last trade in the relevant security on a given 
day. The Order Book is an electronic system through which all retail 
orders for a particular security are collected, sorted and executed. 
The hoekman may match orders for a security with retail orders in 
his Order Book or with orders for a security in the wholesale 
market.
    Wholesale orders may be executed through the retail segment, by 
trading outside the ASE by telephone, or through two additional 
trading systems:

--The Automatic Interprofessional Dealing System Amsterdam 
(``AIDA''); and
--The Amsterdam Stock Exchange Trading System (``ASSET'').

    AIDA is a screen-based, quote-driven electronic trading system 
(comparable to the German IBIS system) through which ASE members can 
execute orders automatically for certain ASE designated securities. 
ASSET, comparable to the London-based SEAQ system, is a screen-
based, competitive market making system, which permits ASE members 
to advertise bids and offers for certain ASE designated securities. 
Trading on AIDA and ASSET form part of trading on the ASE and trades 
thereon are subject to compliance with the ASE's rules and 
regulations. ASSET information is communicated to non-members via 
trading data vendors. Approximately 40 of the most actively traded 
ASE securities are traded through AIDA and ASSET.
    Trading by telephone outside the ASE may take place between two 
ASE members, between an ASE member and an investor, or between an 
ASE member and a foreign intermediary. Most equity trades are, 
however, carried out through the ASE (i.e., on the trading floor or 
through AIDA).
    Details of all trades on the ASE (i.e., retail trades and 
wholesale trades), including the time, price and volume of each 
trade, are communicated to the SEA. The time, price and volume of 
retail and certain wholesale trades are reported on the ASE's 
screen-based information system. The time, price and volume of 
trades executed by an ASE principal and ``megatrades'' (trades far 
in excess of the wholesale trade threshold) must be reported within 
five minutes of the trade, to the Commissaris van de Notering 
(Commissioner of Quotation) of the SEA. Details of all trades on 
AIDA and ASSET are published by the SEA on the day following the 
trade.
    At the close of each trading day, the ASE publishes the 
Officiele Prijscourant (Official Price List) containing a summary of 
the total volume of all trading per share during the trading day, 
together with the average price per hour of retail trades only. In 
the case of megatrades, members of the ASE may apply to the 
Commissioner of Quotation for publication of a trade to be delayed 
until settlement has been made between the parties. The ASE also 
publishes weekly and monthly summaries of the total volume of all 
retail trades, wholesale trades and megatrades.

III. Securities Regulation in the Netherlands

A. The Act on the Supervision of Securities Trade and the 
Securities Board

    Securities regulation in The Netherlands is governed by the Wet 
Toezicht Effectenverkeer (the Act on the Supervision of the 
Securities Trade, or ``ASST'') and the implementing regulations 
thereunder. The Minister of Finance has delegated supervision of the 
securities regulation under the ASST to the Stichting Toezicht 
Effectenverkeer (the ``Securities Board'').
    The Securities Board, a foundation established under Dutch law, 
is an independent legal entity, governed by a four to six member 
Bestuur (the ``Governing Board''). Members of the Governing Board 
must be independent from operators of securities exchanges, brokers 
and underwriters in The Netherlands, and are appointed and dismissed 
by the Minister of Finance upon the recommendation of the Governing 
Board.
    The Securities Board supervises the securities exchanges, 
including the ASE. In connection with its supervisory functions, the 
Securities Board has the power to obtain information from a 
securities exchange and to investigate its operations to determine 
whether the content, application and enforcement of the exchange's 
rules and regulations properly ensure the orderly functioning of the 
securities markets and safeguard the interests of investors active 
on such markets. The Securities Board also is empowered to determine 
whether there are grounds for filing a complaint of insider trading. 
The Securities Board has similar powers of investigation with 
respect to members of a securities exchange and is empowered to 
determine whether members are in compliance with the ASST, and the 
rules and regulations of the relevant securities exchange.
    Securities exchanges in The Netherlands may only operate with 
the approval of the Minister of Finance. In order to obtain such 
approval, the securities exchange must 

[[Page 55395]]
demonstrate that its operations and the content, application and 
enforcement of its rules and regulations properly ensure the orderly 
functioning of the securities markets and safeguard the interests of 
investors active on such markets. Once such approval has been 
granted, Dutch securities exchanges operate as self-regulating 
organizations and listed securities and members of a securities 
exchange are subject to the rules and regulations of the relevant 
securities exchange. The ASE is an approved stock exchange and has 
its own rules and regulations. The Compliance Department of the ASE 
is currently authorized to act on the Securities Board's behalf in 
connection with its investigatory, compliance and enforcement 
functions.
    Failure by the operator of a securities exchange to comply with 
certain provisions of the ASST, including operating a securities 
exchange without the required approval, failure to comply with the 
terms and conditions of such approval, failure to comply with 
instructions given by the Securities Board or the Minister of 
Finance, or failure to provide information requested by the 
Securities Board or to cooperate with an investigation by the 
Securities Board, constitutes an economic offence under the Wet op 
de Economische Delicten (Financial Offenses Act) and may lead to 
imprisonment and/or a fine.

B. The Stock Exchange Association

    The SEA, as operator of the ASE, has adopted rules and 
regulations which apply to securities listed on the ASE. These rules 
and regulations include, but are not limited to, the Membership 
Rules, the Listing and Issuing Rules, the Securities Trading Rules, 
the Quotation Rules, and the Securities Complaints Rules. The SEA is 
responsible, among other things, for publishing price quotations, 
issuing a price list, providing general and specific information on 
securities trading, adopting rules and regulations for securities 
trading, and supervising observance of the rules and regulations 
(including adopting and administering measures of control and 
discipline, as well as penal provisions).

IV. Customary Market Activities of, and Trading Restrictions Imposed 
Upon, Underwriters During Offerings

A. Customary Market Activities During an Offering

    In The Netherlands, banks are the underwriters of securities. 
The vast majority of Dutch banks provide a full range of commercial, 
investment banking and securities services in the tradition of 
universal banking. The financial activities of Dutch banks include 
traditional deposit and credit activities, securities activities 
(such as brokerage, underwriting and custodial services) and 
investment advisory services. The majority of trading in Dutch 
securities and derivatives is conducted by Dutch banks (or their 
affiliates) either for their own accounts or for the accounts of 
customers.
    Subject to application of the trading restrictions described 
below, during an offering, the Dutch banks acting as underwriters 
would typically continue to engage in a wide range of trading 
activities in relation to the offered securities or derivative 
instruments related to such securities. These activities include 
trading in securities in the ordinary course for their own account, 
market making and marketing, as well as brokerage, custodial, and 
investment advisory services (including managing customers' 
portfolios on a discretionary basis and managing mutual funds).
    In addition, the lead underwriter would typically be involved in 
the maintenance of an orderly market in the securities during the 
distribution. Dutch underwriters manage their underwriting risks, 
and the lead underwriter manages the risks associated with 
maintaining an orderly market, in two principal ways: by going long 
or short, and by hedging through the Amsterdam EOE Optiebeurs. The 
underwriters may be active in trading all kinds of securities of an 
issuer, or derivative instruments related to such securities, in the 
cash market (i.e., common or preferred shares, bonds with equity 
warrants, convertible bonds and straight bonds) and in the options 
and futures market (i.e., equity options, futures, index options and 
index futures). In these markets, underwriters would both execute 
orders for customers and trade securities and derivatives for their 
own account. Other activities involve arbitrage trading between the 
various national and international exchanges where securities may be 
listed, index-arbitrage and basket-trading.

B. Trading Restrictions During an Offering

    The Securities Trading Rules generally forbid ASE members from 
manipulating the trading price of a particular stock or from 
cooperating in such price manipulation. The SEA has issued a 
guideline with regard to price manipulation. According to the 
guideline, price manipulation includes the dissemination of false 
information in order to affect the trading price of a particular 
stock and any act or action which creates a false or misleading 
impression of the market in a particular stock, taking into 
consideration the circumstances of the case. The act of purchasing 
or selling a security during a distribution does not by itself 
constitute price manipulation; certain additional factors must be 
present. The Securities Trading Rules do not specifically define 
those additional factors.
    The Securities Trading Rules provide, however, that trading 
activities during a permitted period (i.e., the period commencing on 
the date of the announcement of the offering until thirty days after 
the closing date), undertaken to stabilize the price of a security 
during an offering, will not constitute price manipulation, provided 
that such activities are carried out in accordance with the 
Securities Trading Rules' stabilization provisions. Stabilization 
activities carried out outside the permitted period may, under 
certain circumstances, be considered to be price manipulation.
    The rules on price stabilization define price stabilization as 
intervention in the market for the account of a syndicate within the 
framework of a securities transaction so as to correct market 
imbalances in supply and demand. Price stabilization must be carried 
out with the intention of promoting stable price behavior and a fair 
and orderly market in the interests of investors and issuers. Price 
stabilization must be conducted by designated stabilizing 
underwriters and must be limited to purchase and sale transactions 
in the relevant stock and its related securities, provided that such 
transactions are made for the account and at the risk of the 
syndicate. The price stabilization rules also apply to transactions 
in the relevant stock and its related securities made by the 
stabilizing underwriters and bookrunners for their own accounts.
    In principle, a stabilizing bid is allowed at any proposed 
price. However, price stabilization during the period commencing on 
the date of the announcement of the offering until the date of 
allocation of the securities is permitted only at or below the 
trading price at the time of the announcement of the offering (the 
``Reference Price'') or the last preceding official quotation, 
whichever is the higher. If the stock is already listed on the ASE, 
the Reference Price must be in line with the last preceding official 
quotation on the ASE.
    The underwriters' intention to engage in price stabilization 
must be disclosed prominently in the prospectus and on the Official 
Price List. If price stabilization commences before distribution of 
the prospectus, disclosure of the underwriters' intention to engage 
in price stabilization must be made to potential investors by 
alternative means on the date of the announcement of the offering.
    Bookrunners and stabilizing underwriters must maintain a 
register, recording the date, time, price, volume and other details 
of each stabilization transaction made for the account and at the 
risk of the syndicate and of each transaction made by the 
stabilizing underwriters or bookrunners for their own accounts. This 
register must be available for immediate inspection by the 
Compliance and Enforcement Department of the ASE. In addition, the 
lead underwriter must enter into a written agreement with all 
syndicate members who are not ASE members, obliging them to make all 
transaction data and records necessary to verify compliance with the 
stabilization rules and regulations immediately available to the 
Compliance and Enforcement Department. If the examination by the 
Compliance and Enforcement Department of transaction data and 
records furnished by a syndicate member that is not an ASE member 
strongly suggests non-compliance, the SEA shall request the relevant 
foreign authorities to conduct a further investigation and to take 
measures, if necessary. Lead underwriters and co-leads may request 
the Compliance and Enforcement Department to institute an 
investigation if there is reason to suspect that the regulations 
have not been adequately observed. On behalf of the syndicate, the 
lead underwriters will have full access to the findings of the 
Compliance and Enforcement Department. Accordingly, the obligation 
of that Compliance and Enforcement Department under the SEA to 
observe secrecy does not apply to the identity of syndicate 

[[Page 55396]]
members or to individual transaction information in the event of non-
compliance with the rules and regulations.
    In case of a primary or secondary offering of shares previously 
listed on the ASE, syndicate members not acting as stabilizing 
underwriters are required to refrain from active market making in 
the relevant stock during a specified restricted period. This 
prohibition applies from the date that written invitation to 
participate in the syndicate is received until the invitation to 
participate has been declined or until the lead underwriter has 
announced its decision to discontinue any stabilizing activities. 
The obligation to refrain from active market making applies to all 
syndicate members. With respect to non-members of the ASE, the lead 
underwriter will be obliged to ensure that the rules are complied 
with by stipulating observance of the rules in the invitation telex. 
ASE members not participating in the syndicate are prohibited from 
trading in an intermediary capacity for a syndicate member if such 
trading could reasonably be assumed to be in contravention of the 
prohibition against active market making by a syndicate member. The 
general prohibition on market making activities means facilitating 
activities are permitted only if they are performed at the request 
of clients. Accordingly, a syndicate member's activities must be 
confined to executing orders rather than building up its own 
position. Positions taken up must be reduced as soon as possible. 
During the restricted period, quotations on ASSET must be made 
conservatively.
    A breach of the Securities Trading Rules by underwriters who are 
ASE members may result in the imposition of penalties. Depending on 
the circumstances of the breach, such penalties may vary from a 
warning, reprimand, fine of up to NLG 500,000 (approximately US 
$315,000 at October 16, 1995), suspension from the ASE for up to six 
months (together with a fine, if appropriate) or expulsion from the 
ASE.
    Trading restrictions imposed on an issuer arise from the fact 
that Dutch law prohibits a Dutch company from purchasing its own 
shares, except in limited circumstances. These circumstances are set 
forth in Section 98 of Book 2 of the Dutch Civil Code (concerning 
Companies and Other Legal Persons) and are limited to purchases 
where (i) shareholders' equity less the payment required to make the 
acquisition does not fall below the sum of paid-up capital and any 
reserves required by Dutch law or the company's Articles of 
Association and (ii) the company would not thereafter hold (whether 
itself, as pledgee, or through a subsidiary) shares with an 
aggregate par value exceeding one-tenth of the company's issued 
share capital.

V. Availability of Trading Information

A. Record-Keeping Requirements

    Pursuant to the Membership Rules of the ASE and guidelines 
issued thereunder, members are required to keep adequate records and 
accounts of all transactions. In addition, when conducting a 
purchase or sale transaction in a listed security for its own 
account, an ASE member is required to report such transaction to the 
ASE's Trade Supervision Department providing certain information 
including the name and clearing code of the stock broking firm, the 
name of the stock, the ISIN code, the size of the transaction, the 
transaction time, the transaction price and the counterparty. These 
records and accounts must be sufficient to demonstrate compliance 
with the Securities Trading Rules. ASE members are required to 
record transaction information adequately and in verifiable form. 
The Chairman of the Governing Board of the SEA may issue 
instructions to a corporate member to remedy any inadequacies in the 
member's administrative system so as to comply with the above.
    The Articles of Association of the ASE require corporate members 
to allow the Compliance and Enforcement Department of the ASE, or 
external auditors or experts appointed by such Department, to verify 
such records. In addition, the ASST obliges brokers to allow an 
inspection of all books and documents relating to their business by 
the Securities Board or on its orders, and to provide all required 
assistance in any investigation.
    As described above, details of all trades on the ASE, including 
the time and price of each trade and the volume of shares traded, 
are communicated to the SEA.

B. Availability of Records

    Pursuant to the ASST, the Securities Board is generally 
authorized to provide information acquired in the course of 
enforcing the ASST to competent authorities responsible for 
supervising the securities industry in other states, provided that 
confidentiality is sufficiently ensured. In addition, where The 
Netherlands has entered into a treaty on the exchange of securities 
trading information with another state, the ASST specifically 
empowers the Securities Board to obtain information from and to 
investigate or order an investigation into the activities of any 
person for the purpose of implementing the treaty. The Kingdom of 
The Netherlands and the United States of America have entered into a 
treaty dated December 11, 1989 on mutual administrative assistance 
in the exchange of information in securities matters.

VI. Impact in the Netherlands of The U.S. Trading Rules

    Application of the Trading Rules to the activities of 
distribution participants and their affiliates outside the United 
States could seriously jeopardize the success of any offering in The 
Netherlands. In particular, application of the Trading Rules outside 
the United States would have, inter alia, the following 
consequences:
    1. Application of the Trading Rules would prevent distribution 
participants from fulfilling their normal market activities and 
dealings with customers who may wish to trade in the Relevant 
Securities (as defined in VII1.b. below) during an offering. 
Moreover, distribution participants might not be able to continue 
certain of their regular contacts with customers, such as 
discussions regarding investment strategies with respect to the 
Relevant Securities, and might not be permitted to buy and sell 
Relevant Securities, as either principal or agent, in connection 
with their customers' trading activities. Such restrictions would 
also conflict with an ASE member's duties, pursuant to the ASE Code 
of Conduct for Personal and Corporate Members, to ensure that the 
client's interests prevail and, pursuant to the Dutch General 
Banking Conditions, to act in the best interests of its clients.
    2. Distribution participants' risk management activities would 
be restricted to those permitted by Rule 10b-8.
    3. Distribution participants' customary proprietary trading 
activities, involving arbitrage and other trading strategies, would 
be curtailed.
    4. Accounts managed by distribution participants and their 
affiliates on a discretionary basis and investment funds for which 
they act as investment advisors could be considered ``affiliated 
purchasers'' under Rule 10b-6(c)(6)(i). Such affiliated purchasers 
would be subject to the same restrictions under Rule 10b-6 as the 
relevant distribution participant and would not be permitted to bid 
for or purchase Relevant Securities.
    5. Distribution participants, including the underwriters and in 
particular the lead underwriters, would be unable to maintain an 
orderly market in the Relevant Securities during an offering.
    6. Application of the Trading Rules could also distort the 
liquidity and depth of market for the Relevant Securities on the 
Dutch market. The Dutch securities market is highly concentrated and 
it is customary practice in The Netherlands that the majority of, if 
not all, major banks will participate in and share the risk of a 
large, highly-visible offering. Given that these same banks and 
their affiliates conduct the bulk of the trading in AEX's securities 
in The Netherlands, application of the Trading Rules to The 
Netherlands during an offering could cause the liquidity and depth 
of market for the Relevant Securities to be adversely affected. In 
addition, pricing of the Relevant Securities on the Dutch market 
could be adversely affected. Such an event could also distort the 
AEX and other market performance indices of which the Qualified 
Dutch Securities are a component.

VII. Scope and Conditions of Exemption

    We propose that the Commission grant exemptions to the effect 
that the Trading Rules shall not apply to distribution participants, 
as defined in Rule 10b-6(c)(6)(ii), and their affiliated purchasers, 
as defined in Rule 10b-6(c)(6)(i) (collectively, ``Relevant 
Parties'') in connection with transactions in Relevant Securities 
(as defined below) outside the United States during distributions in 
the United States of Qualified Dutch Securities (as defined below), 
subject to the following terms, conditions and limitations:

1. Securities

    a. The security being distributed (a ``Qualified Dutch 
Security'') must:
    (i) be issued by (aa) a ``foreign private issuer'' within the 
meaning of Rule 3b-4 under the Exchange Act, incorporated under 

[[Page 55397]]
the laws of The Netherlands, which issuer has outstanding a component 
security of the AEX 3 (a ``Dutch Issuer'') or (bb) a subsidiary 
of such a Dutch Issuer; and

    \3\ References to the AEX refer to the composition of the index 
on the date of this letter; provided, however, that any security 
added to the AEX after the date of this letter also will be treated 
as a Qualified Dutch Security if its issuer satisfies the 
requirements in VII1.a.
---------------------------------------------------------------------------

    (ii) satisfy one of the following:
    (aa) be an equity security of a Dutch Issuer, having an 
aggregate market capitalization equal to or greater than $1 billion 
(approximately NLG 1.6 billion at October 16, 1995) and a worldwide 
average daily trading volume that equals or exceeds $5 million 
(approximately NLG 8 million at October 16, 1995), as published by a 
foreign financial regulatory authority (``FFRA'') 4 and any 
U.S. securities exchanges or automated inter-dealer quotation 
systems during a period that is 20 consecutive business days in 
Amsterdam within 60 consecutive calendar days prior to the 
commencement of the Amsterdam Covered Period (as defined below) for 
Dutch Issuers; or

    \4\ An FFRA is defined in Section 3(a)(51) of the Exchange Act, 
5 U.S.C. 78(c)(51), as any (A) foreign securities authority; (B) 
other governmental body or foreign equivalent of a self-regulatory 
organization empowered by a foreign government to administer or 
enforce its laws relating to the regulation of fiduciaries, trusts, 
commercial lending, insurance, trading in contracts of sale of a 
commodity for future delivery, or other instruments traded on or 
subject to the rules of a contract market, board of trade, or 
foreign equivalent, or other financial activities, or (C) membership 
organization a function of which is to regulate participation of its 
members in activities listed above. For purposes of this letter, the 
ASE and the SEA are considered to be FFRA.
---------------------------------------------------------------------------

    (bb) be a security that is convertible into, exchangeable for, 
or is a right to acquire a security of a Dutch Issuer described in 
subparagraph (ii)(aa) above.
    b. ``Relevant Security'' means:
    (i) a Qualified Dutch Security; or
    (ii) a security of the same class and series as, or a right to 
purchase, a Qualified Dutch Security.5

    \5\ We are not requesting an exemption for trading in options on 
the Amsterdam EOE Optiebeurs.
---------------------------------------------------------------------------

2. Transactions Effected in the United States

    All transactions in Relevant Securities effected in the United 
States shall comply with the Trading Rules unless otherwise excepted 
or exempted from the operation of these rules.

3. Transactions Effected in The Netherlands

    a. All transactions during the Amsterdam Covered Period (as 
defined below) in Relevant Securities effected by the Relevant 
Parties in The Netherlands shall be conducted in compliance with 
Dutch law and the rules of the ASE. For the purposes of this 
exemption, ``Amsterdam Covered Period'' means (i) in the case of a 
rights offering, the period commencing when the subscription price 
is determined and continuing until completion of the distribution in 
the United States and (ii) in the case of any other distribution, 
the period commencing three Amsterdam business days before the price 
is determined and continuing until the completion of the 
distribution in the United States; provided, however, that the 
Amsterdam Covered Period shall not commence with respect to any 
Relevant Party until such person becomes a distribution participant.
    b. All transactions in Relevant Securities during the Amsterdam 
Covered Period effected in The Netherlands shall be effected on or 
reported to the ASE.
    c. Disclosure of trading activities:
    (i) The inside front cover page or forefront of the preliminary 
prospectus and the prospectus used in the offer and sale of a 
Qualified Dutch Security in the United States shall prominently 
display a statement in substantially the following form, subject to 
appropriate modification where circumstances require. Such statement 
shall be printed in capital letters in bold-face roman type at least 
as large as ten-point modern type and at least two points leaded:
    ``In connection with this offering, certain persons may engage 
in transactions for their own accounts or for the accounts of others 
in [identify relevant securities] pursuant to exemptions from rules 
10b-6, 10b-7 and 10b-8 under the Securities Exchange Act of 1934. 
See [identify section of offering materials that describes the 
transactions to be effected].''
    (ii) In addition, the ``Underwriting'' section of the 
preliminary prospectus and the prospectus used in the offer and sale 
of a Qualified Dutch Security in the United States shall include a 
description of the activities that may be undertaken by the Relevant 
Parties in the Relevant Securities during the distribution, 
substantially in the form of Exhibit B hereto.
    d. Record-keeping and reporting:
    (i) Each Relevant Party shall provide to the SEA the information 
described in paragraph 3.d (ii) below with respect to its 
transactions in Relevant Securities in The Netherlands during the 
Amsterdam Covered Period, provided that in the case of a 
distribution made pursuant to a rights offering, such information is 
only required to be reported to the SEA during the period or periods 
(aa) commencing at any time during the Amsterdam Covered Period that 
the rights exercise price does not represent a discount of at least 
10% from the then current market price of the security underlying 
the rights and continuing (x) until the end of the Amsterdam Covered 
Period or (y) until the rights exercise price represents a discount 
of at least 12% from the then current market price of the security 
underlying the right.6

    \6\ For the purposes of this exemption, unless stated otherwise 
the current market price for a Relevant Security shall be the 
closing price on the floor of the ASE.
---------------------------------------------------------------------------

    (ii) When required pursuant to paragraph 3.d (i) above, the 
Relevant Parties will provide the following information to the SEA 
in Comma Delimited ASCII (American Standard Code for Information 
Interchange) format including a common record layout acceptable to 
the SEA the Commission's Division of Market Regulation (the 
``Division''), with respect to transactions during the Amsterdam 
Covered Period in Relevant Securities:
    (aa) the name of the security, the date, time (of execution and 
reporting, where available to the Relevant Party), price and volume 
of each transaction, provided that no information regarding a 
customer transaction need be provided unless such transaction has a 
value of NLG 500,000 (approximately USSec. 315,000 at October 16, 
1995) or more;
    (bb) the exchange or inter-dealer quotation system on which the 
transaction was effected, if any;
    (cc) an indication of whether such transaction was for a 
proprietary account or for the account of a customer; provided, 
however, that any transaction effected by a Relevant Party for a 
customer account for which it has exercised discretionary authority 
shall be reported as a proprietary trade; and
    (dd) where the counterparty is an underwriter or a selling group 
member, the identity of the counterparty.
    (iii) The SEA and the Relevant Parties shall keep all documents 
produced or prepared pursuant to paragraph 3.d(ii) for a period not 
less than two years.
    (iv) Upon the request of the Division, the SEA shall transmit 
the information provided by the Relevant Parties pursuant to 
paragraph 3.d(ii) to the Division within 30 days of the request.
    (v) If the information required to be produced in paragraph 
3.d(ii) is not available from the SEA, upon the request of the 
Division such information shall be provided by the Relevant Party 
and be made available to the Division at its office in Washington, 
D.C. within 30 days of the request.
    (vi) Representatives of the affected Relevant Party will be made 
available (in person at the office of the Division in Washington, 
D.C., or by telephone) to respond to inquiries of the Division 
relating to the records provided by such Relevant Party.

4. Transactions Effected in Significant Markets

    All transactions in Relevant Securities in a significant market 
shall be effected in accordance with Rules 10b-6, 10b-7 and 10b-8, 
or other available exemptions. For the purpose of this exemption, 
the term ``significant market'' means any securities market in a 
country other than the United States or The Netherlands to which a 
Dutch Issuer has applied for a listing or obtained a quotation for a 
Qualified Dutch Security and has been accepted if, during a period 
that is 20 consecutive business days in Amsterdam within 60 
consecutive calendar days prior to the commencement of the Amsterdam 
Covered Period for the Qualified Dutch Security the volume in such 
Qualified Dutch Security, as published by the relevant FFRA in such 
securities market, is 10% or more of the aggregate worldwide trading 
volume in that security as published by all FFRAs in such 
significant markets, the Dutch market and the U.S. securities 
market.

5. General Conditions

    a. For purposes of these exemptions, a two business day cooling-
off period shall apply under Rule 10b-6(a)(4)(xi) and (xii) in the 
United States. Each significant market shall 

[[Page 55398]]
be subject to the exemptive relief then available in such market, if 
any, or the record maintenance and record production requirement in 
the letter regarding Application of Cooling-off Periods Under Rule 
10b-6 to Distributions of Foreign Securities (April 4, 1994).
    b. The lead underwriter, global co-ordinator or equivalent 
person shall promptly but in any event before the commencement of 
the Amsterdam Covered Period for the Qualified Dutch Security and 
within such time limitations as are prescribed by the ASE, provide 
written notice (``Notice'') to the SEA and the Division containing 
the following information:
    (aa) the name of the issuer and the Qualified Dutch Security;
    (bb) whether the Qualified Dutch Security is an AEX component 
security or information about the market capitalization and the 
world-wide average daily trading volume of the Qualified Dutch 
Security to be distributed;
    (cc) the identity of each significant market where the Qualified 
Dutch Security trades;
    (dd) if the Notice is for more than one entity, the identity of 
all underwriters and selling group members relying on these 
exemptions; and
    (ee) a statement that the Relevant Parties are aware of the 
terms and conditions of these exemptions;
    Supplemental Notices shall be made for underwriters and selling 
group members identified after a Notice has been filed.
* * * * *
    We believe that this proposed exemption would make it possible 
to maintain liquidity for shares of Dutch companies throughout a 
public offering, while minimizing the risk of abuses of the kind at 
which the Trading Rules are aimed.
    We appreciate your prompt attention to this matter. If you have 
any questions or comments relating to the above, please call 
(collect) the undersigned or Andrea K. Muller in our Paris office 
(telephone: 011-33-1-44-71-17-17).

        Very truly yours,
John D. Wilson.

Exhibit A

ABN AMRO Holding N.V.
AEGON N.V.
Koninklijke Ahold N.V.
Akzo Nobel N.V.
Koninklijke Bols Wessanen N.V.
CSM N.V.
DSM N.V.
Elsevier N.V.
Fortis Amev N.V.
Koninklijke Gist Brocades N.V.
Heineken N.V.
Koninlijke Nederlandse Hoogovens en Staalfabrieken N.V.
Internationale Nederlanden Groep N.V.
KLM N.V.
Koninklijke KNP BT N.V.
Koninkllijke PTT Nederland NV
Koninklijke Nedlloyd Groep N.V.*
Koninklijke Pakhoed N.V.*
Philips Electronics N.V.
Polygram N.V.
Koninklijke Nederlandse Petroleum Maatschappij
Stork N.V.*
Unilever N.V.
Verenigd Bzeit VNU N.V.
Wolters Kluwer N.V.

Exhibit B

    * Do not currently meet the market capitalization and worldwide 
average daily trading volume requirements described in this letter.
---------------------------------------------------------------------------

    The Dutch Underwriters (and their affiliates) will, and the 
Underwriters (and their affiliates) other than the Dutch 
Underwriters may, continue to engage in the transactions and other 
activities described below, in The Netherlands and elsewhere outside 
the United States, in respect of the Ordinary Shares, securities of 
the same class and series as the Ordinary Shares, and securities 
convertible into, exchangeable for, or giving a right to acquire, 
the foregoing securities, and derivatives thereof (collectively, the 
``Relevant Securities'') during the distribution period, in 
accordance with exemptions granted by the U.S. Securities and 
Exchange Commission (the ``Commission'') from the application 
outside the United States of Rules 10b-6, 10b-7 and 10b-8 under the 
U.S. Securities Exchange Act of 1934. Such exemptions are subject to 
certain exceptions, limitations and conditions set out in the 
Commission's exemptive order, including compliance with Dutch law 
and the rules of the Amsterdam Stock Exchange where applicable.
    The activities referred to above include (a) buying and selling 
Relevant Securities for the accounts of such Underwriters (or their 
affiliates), whether for purposes of risk management in connection 
with the offering, arbitrage, or otherwise, (b) buying and selling 
Relevant Securities on behalf of customers, (c) advising customers 
as to the purchase or sale of Relevant Securities including the 
publication of specific company and industry research reports, (d) 
engaging in securities lending transactions in Relevant Securities 
and (e) stabilizing the market (as described below). As a result of 
these activities the Underwriters may at any time be short or long 
in Relevant Securities.
    It is general market practice in The Netherlands for 
underwriters, and the lead underwriter in particular, to maintain an 
orderly market in subscription rights and existing shares, and it is 
expected that the lead underwriter will take measures to avoid 
extreme price fluctuations during the distribution period.
    The activities referred to above may result in the market prices 
of the Relevant Securities being different from those that might 
otherwise have prevailed in the open market if Rules 10b-6, 10b-7 
and 10b-8 had applied in The Netherlands and elsewhere outside the 
United States.
October 19, 1995.
Division of Market Regulation
Securities and Exchange Commission, 450 Fifth Street, N.W., 
Washington, DC 20549, U.S.A.

Attention: Ms. Nancy J. Sanow, Assistant Director, Office of Trading 
Practices

Amsterdam Stock Exchange
Beursplein 5, 1012 JW Amsterdam, The Netherlands

Attention: Mr. H.W. te Beest, General Manager, Compliance and 
Enforcement

The London Stock Exchange
Old Broad Street, London EC2N 1HP, United Kingdom

Attention: Paul Henderson

Exemptions from Rules 10b-6, 10b-7 and 10b-8 for the Secondary 
Offering of Shares of Koninklijke PTT Nederland NV

    Ladies and Gentlemen: We are writing on behalf of ABN AMRO Bank 
N.V. as global coordinator in connection with the proposed global 
equity offering by the State of The Netherlands of Ordinary Shares, 
par value NLG 10, or American Depositary Receipts evidencing 
American Depositary Shares, each of which represents the right to 
receive one Ordinary Share, of Koninklijke PTT Nederland NV, a Dutch 
corporation (the ``Issuer''). We are submitting this Notice to each 
of you in accordance with the requirements of the Letter regarding 
Exemptions from Rules 10b-6, 10b-7 and 10b-8 for Distributions of 
certain Dutch Securities (October 17, 1995):
    (aa) The name of the issuer is Koninklijke PTT Nederland NV. The 
Qualified Dutch Security is an Ordinary Share, par value NLG 10, of 
the Issuer.
    (bb) The Issuer's Ordinary Shares are an AEX component security. 
On the date hereof the Issuer had a market capitalization equal to 
NLG 25 billion (approximately U.S. 15.8 billion) 1 and a 
worldwide average daily trading volume 2 equal to NLG 48 
million (approximately U.S. 30.3 million).

    \1\ 1 NLG = U.S. 1.5835 (on October 17, 1995)
    \2\ Worldwide average daily trading volume is calculated using 
information published by a foreign financial regulatory authority as 
defined in Section 3(a)(51) of the Securities Exchange Act of 1934, 
as amended, and any U.S. securities exchange or automated inter-
dealer quotation system during a period that is 20 consecutive 
business days in Amsterdam within 60 consecutive calendar days prior 
to October 18, 1995.
---------------------------------------------------------------------------

    (cc) The Amsterdam Stock Exchange and SEAQ International are the 
only significant markets where the Qualified Dutch Security trades 
or is quoted.
    (dd) See Annex A hereto for the identity of all underwriters and 
selling group members relying on these exemptions.
    (ee) We hereby confirm that all distribution participants, as 
defined in Rule 10b-6(c)(6)(ii), and their affiliated purchasers, as 
defined in Rule 10b-6(c)(6)(i), are aware of the terms and 
conditions of the exemptions.
    If you have any questions relating to the above please call 
(collect) the undersigned or Andrea K. Muller in our Paris office 
(telephone 011-33-1-44-71-17-17).

        Very truly yours,
John D. Wilson

Annex A

ABN AMRO Bank N.V.
Internationale Nederlanden Bank N.V.
Rabo Effecten Bank N.V.
Morgan Stanley & Co. Incorporated
Swiss Bank Corporation
ABN AMRO Hoare Govett Corporate Finance Limited
CS First Boston Limited 

[[Page 55399]]

Kempen & Co. N.V.
MeesPierson N.V.
NIBStrating Financial Markets N.V.
KBW Effectenbank N.V.
F. van Lanschot Bankiers N.V.
SNS Bank Nederland N.V.
ABN AMRO Securities (USA) Inc.
Lehman Brothers Inc.
RBC Dominion Securities Corporation
Smith Barney Inc.
Alex. Brown & Sons Incorporated
CS First Boston Corporation
A.G. Edwards & Sons, Inc.
Baring Securities Inc.
Dean Witter Reynolds Inc.
Barclays de Zoete Wedd Limited
Cazenove & Co.
NatWest Securities Limited
Baring Brothers Limited
Credit Lyonnais Securities
Daiwa Europe Limited
Morgan Grenfell & Co. Limited
Banque Indosuez
Morgan Stanley & Co. International Limited
Banca Commerciale Italiana S.p.A.
Bank Brussel Lambert N.V.
Creditanstalt-Bankverein
DG BANK--Deutsche Genossenschaftsbank

[FR Doc. 95-26898 Filed 10-30-95; 8:45 am]
BILLING CODE 8010-01-P