[Federal Register Volume 61, Number 60 (Wednesday, March 27, 1996)]
[Notices]
[Pages 13553-13557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7397]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36994; International Release No. 953; File No. SR-NASD-
96-01]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval 
of Proposed Rule Change and Amendment No. 1 Thereto Relating to Listing 
Criteria for Selected Equity Linked Debt Securities (``SEEDS'')

March 20, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act``), 15 U.S.C. 78s(b)(1), notice is hereby given that on January 
4, 1996, the National Association of Securities Dealers, Inc. (``NASD'' 
or ``Association'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the NASD. On 
February 1, 1996, the NASD filed Amendment No. 1 (``Amendment No. 1'') 
to the proposed rule change to revise the trading volume requirement 
for securities underlying an issuance of SEEDS and to clarify issues 
relating to the issuance of SEEDS on non-U.S. companies that trade in 
the U.S. market as sponsored American Depositary Receipts (``ADRs''), 
ordinary shares, or otherwise.\1\ This Order approves the proposed rule 
change, as amended, on an accelerated basis and also solicits comments 
on the proposed rule change, as amended, from interested persons.

    \1\ Letter from Joan C. Conley, Corporate Secretary, NASD, to 
Michael Walinskas, SEC, dated January 29, 1996.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NASD is proposing to amend the listing standards for Selected 
Equity-Linked Debt Securities (``SEEDS'') \2\ found in Section 2(f) of 
Part III to Schedule D to the NASD By-Laws

[[Page 13554]]
(``Schedule D''). Specifically, the NASD proposes to amend Section 
2(f)(3)(A) of Part III to Schedule D to increase the number of 
securities eligible to underlie or be ``linked'' to SEEDS. The NASD 
also proposes to amend Schedule D to provide alternative criteria for 
the listing and trading of SEEDS linked to the performance of non-U.S. 
companies that trade in the U.S. market as ADRs, ordinary shares, or 
otherwise.

    \2\ ``SEEDS'' and ``Selected Equity-Linked Debt Securities'' are 
service marks of The Nasdaq Stock Market, Inc.
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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 NASD 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 NASD 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

    SEEDS are intermediate-term (i.e., two to seven years), non-
convertible hybrid securities, the value of which is based at least in 
part, on the value of another issuer's common stock, non-convertible 
preferred stock, or certain sponsored ADRs.\3\ SEEDS may pay periodic 
interest or may be issued as zero-coupon instruments with no payments 
to holders prior to maturity. SEEDS also may be subject to a ``cap'' on 
the maximum principal amount to be repaid to holders upon maturity, or, 
conversely, they may feature a ``floor'' on the minimum principal 
amount paid to holders upon maturity. A specific issue of SEEDS, for 
example, may provide holders with a fixed semi-annual interest payment, 
while capping the maximum amount to be repaid upon maturity at 135% of 
the issuance price, with no minimum floor guarantee on the principal to 
be repaid at maturity. Another issue of SEEDS might offer lower semi-
annual payments based upon a floating interest rate with a minimum 
floor for the repayment of principal of 75% of the issuance price. The 
flexibility available to an issuer of SEEDS permits the creation of 
securities which offer issuers and investors the opportunity to more 
precisely focus on a specific investment strategy.

    \3\ See Securities Exchange Act Release No. 34758 (September 30, 
1994), 59 FR 50943 (October 6, 1994).
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    There are four components to the NASD's listing standards for 
SEEDS: (1) Standards applicable to issuers of SEEDS; \4\ (2) standards 
applicable to the SEEDS offerings themselves; \5\ (3) standards 
applicable to the underlying linked security; \6\ and (4) limitations 
on the size of a particular SEEDS offering.\7\

    \4\ An issuer of a SEEDS must be an entity that is listed on the 
Nasdaq National Market or the NYSE, or an affiliate of a company 
listed on the Nasdaq National Market or the NYSE. Each issuer of a 
SEEDS must also have a net worth of $150 million. In addition, the 
market value of a SEEDS offering, when combined with the market 
value of all other SEEDS offerings previously completed by the 
issuer and traded on the Nasdaq National Market or a national 
securities exchange, may not be greater than 25 percent of the 
issuer's net worth at the time of issuance.
    \5\ Each issuance of a SEEDS must have: (1) a minimum public 
distribution of one million SEEDS; (2) a minimum of 400 holders of 
the SEEDS, provided, however, that if the SEEDS is traded in $1,000 
denominations, there must be a minimum of 100 holders; (3) a minimum 
market value of $4 million; and (4) a term of two to seven years 
(although a SEEDS on an ADR cannot have a term longer than three 
years).
    \6\ The securities linked to SEEDS must: (1) meet certain market 
capitalization and trading volume requirements, as discussed below; 
(2) be a U.S. reporting company under the Securities Exchange Act of 
1934 (``Act''); (3) be traded on Nasdaq or a national securities 
exchange; and (4) be subject to last sale reporting. In addition, as 
discussed below, SEEDS may also be linked to certain non-U.S. 
companies.
    \7\ SEEDS linked to a U.S. security may not exceed five percent 
of the total shares outstanding of such underlying security, absent 
approval by the SEC. Depending on the percentage of world-wide 
trading volume in the U.S. market, a SEEDS linked to a non-U.S. 
security or sponsored ADR may not exceed two, three, or five percent 
of the total shares outstanding of the non-U.S. security, as 
discussed below.
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    The NASD's instant rule proposal would modify the listing standards 
applicable to the underlying linked security. First, the NASD proposes 
to amend the trading volume criteria for securities eligible to be 
linked to SEEDS found in Section 2(f)(3)(A) of Part III to Schedule D. 
Currently, in order for a security to be eligible to be linked to a 
SEEDS, the linked security must, among other things, meet one of the 
following criteria: (a) Have a market capitalization of at least $3 
billion and a trading volume in the United States of at least 2.5 
million shares in the one-year period preceding the listing of the 
SEEDS; (b) have a market capitalization of at least $1.5 billion and a 
trading volume in the United States of at least 20 million shares in 
the one-year period preceding the listing of the SEEDS; or (c) have a 
market capitalization of at least $500 million and a trading volume in 
the United States of at least 80 million shares in the one-year period 
preceding the listing of the SEEDS.
    Under the proposal, the trading volume criteria for SEEDS-linked 
securities would be lowered such that a security could underlie a SEEDS 
if it: (a) had a market capitalization of at least $3 billion and a 
trading volume in the United States of at least 2.5 million shares in 
the one-year period preceding the listing of the SEEDS; (b) had a 
market capitalization of at least $1.5 billion and a trading volume in 
the United States of at least 10 million shares in the one-year period 
preceding the listing of the SEEDS; or (c) had a market capitalization 
of at least $500 million and a trading volume in the United States of 
at least 15 million shares in the one-year period preceding the listing 
of the SEEDS.
    The NASD believes this proposed trading volume criteria for SEEDS-
linked securities will provide qualified issuers greater flexibility to 
list SEEDS on the Nasdaq National Market. The NASD also notes that its 
proposal would delete a provision in the SEEDS listing standards that 
permits the NASD, with the concurrence of the staff of the Division of 
Market Regulation of the Commission, to list a particular SEEDS issue 
notwithstanding the fact that the underlying linked security does not 
meet the market capitalization and trading volume requirements noted 
above. With the increased flexibility that the proposed trading volume 
criteria will provide issuers, the NASD believes it no longer will be 
necessary to retain this provision of the SEEDS listing standards.
    Second, the NASD proposes to modify the SEEDS listing standard 
governing which non-U.S. companies are eligible to be linked to SEEDS. 
Presently, under Section 2(f)(3)(C) of Part III to Schedule D, SEEDS 
may be linked to actively traded non-U.S. companies which are traded in 
the U.S. market as sponsored ADRs, ordinary shares, or otherwise, 
provided that: (1) the NASD has a comprehensive surveillance sharing 
agreement in place with the primary foreign exchange on which the non-
U.S. security trades; or (2) the trading volume of the non-U.S. 
security in the U.S. market represents at least 50% of the world-wide 
trading volume in the non-U.S. security (``50% Test''). Under the 
proposal, the manner in which the applicable percentage of world-wide 
trading volume is calculated under the 50% Test would be modified and a 
new criteria for the listing of SEEDS on non-U.S. securities would be 
added. Specifically, the NASD proposes to revise the 50% Test so that 
trading in non-U.S. securities and other related non-U.S. securities in 
any market with which the NASD has a comprehensive

[[Page 13555]]
surveillance sharing agreement in place will be added to U.S. market 
volume for the purpose of determining whether the 50% Test has been 
met. Currently, only trading in the U.S. market counts toward 
satisfying the 50% Test.
    The NASD also proposes to add an alternative set of criteria to 
Section 2(f)(3)(C) to expand the number of non-U.S. securities upon 
which Nasdaq may list SEEDS. This new standard will be referred to as 
the 20% Test + Daily Trading Volume Standard (``20% Test + Daily 
Trading Volume Standard'') and will permit Nasdaq to list SEEDS on non-
U.S. securities if all of the following conditions are satisfied: (1) 
The combined world-wide trading volume for the non-U.S. security in the 
U.S. market represents (on a share equivalent basis) at least 20% of 
the combined world-wide trading volume in the non-U.S. security and in 
other related non-U.S. securities over the six-month period preceding 
the date of selection of the non-U.S. security for a SEEDS listing; \8\ 
(2) the average daily trading volume for the non-U.S. security in the 
U.S. market over the six-month period preceding the date of selection 
of the non-U.S. security for a SEEDS listing is 100,000 or more shares; 
and (3) the trading volume for the non-U.S. security in the U.S. market 
is at least 60,000 shares per day for a majority of the trading days 
for the six-month period preceding the date of selection of the non-
U.S. security for a SEEDS listing.

    \8\ See Amendment No. 1. The calculation for the 20% Test + 
Daily Trading Volume Standard does not include foreign markets with 
which the NASD has in place a comprehensive surveillance sharing 
agreement.
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    The NASD also proposes to amend Section 2(f)(4) in order to clarify 
the limitation on the number of SEEDS that may be linked to a 
particular security. Specifically, the issuance of SEEDS relating to 
any underlying non-U.S. security or sponsored ADR may not exceed 2% of 
the total shares outstanding worldwide if at least 20% of the worldwide 
trading volume occurs in the U.S. market during the six-month period 
preceding the date of designation.\9\ The NASD notes that this change 
is consistent with the 20% Test + Daily Trading Volume Standard 
requirement contained in Section 2(f)(3)(C) that requires at least 20% 
of the combined worldwide trading volume in the non-U.S. security to 
occur in U.S. markets.\10\

    \9\ The other size limitations in the NASD's rule remains 
unchanged. Accordingly, the size of SEEDS issuances linked to non-
U.S. securities will be limited to 3% of the total shares of the 
underlying security outstanding provided, however, at least 50% of 
the worldwide trading volume for the security for the six-months 
prior to listing occurred in the U.S. market, or 5% of the total 
shares of the underlying security outstanding provided at least 70% 
of the worldwide trading volume for the security for the six-months 
prior to listing occurred in the U.S. market.
    \10\ As with the 20% Test + Daily Trading Volume Standard, 
foreign markets with which the NASD has in place a comprehensive 
surveillance sharing agreement are not included in the calculation 
for purposes of determining the size of eligible SEEDS issuances.
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    The NASD believes that the alternate criteria for non-U.S. 
securities is appropriate because it will ensure that non-U.S. 
securities linked to SEEDS will have a significant amount of U.S. 
market trading volume and a substantial volume of trading covered by a 
comprehensive surveillance sharing agreement, which gives the NASD the 
ability to inquire into potential trading problems or irregularities in 
a marketplace that serves as a significant price discovery market for 
the non-U.S. security. Thus, the proposed requirement of observable, 
high trading volume should ameliorate any regulatory concern regarding 
investor protection and, at the same time, allow investors to trade 
SEEDS linked to more non-U.S. securities.
    The NASD also believes that the proposal will benefit investors by 
expanding the number of non-U.S. securities that may be linked to 
SEEDS, thereby providing investors with enhanced investment 
flexibility. The NASD believes that it is appropriate to now include 
additional non-U.S. securities within the existing regulatory framework 
for SEEDS because of the significant level of U.S. investor interest in 
non-U.S. companies that are highly capitalized and actively traded.
    For the foregoing reasons, the NASD believes the proposed rule 
change is consistent with Section 15A(b)(6) of the Act. Section 
15A(b)(6) requires that the rules of a national securities association 
be designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system and in general to protect investors and the public interest. In 
sum, the NASD believes the proposal strikes an appropriate balance 
between the NASD's need to adapt and respond to innovations in the 
securities markets and the NASD's concomitant need to ensure the 
protection of investors and the maintenance of fair and orderly 
markets.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The NASD believes that the proposed rule change will not result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Comments were neither solicited nor received.

III. Findings and Conclusions

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities association, and, in 
particular, the requirements of Section 15A(b)(6).\11\ In particular, 
the Commission believes the proposal is consistent with the Section 
15A(b)(6) requirements that the rules of a registered securities 
association be designed to promote just and equitable principles of 
trade and not to permit unfair discrimination among issuers.

    \11\ 15 U.S.C. 78o-3(b)(6) (1988).
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    The Commission finds that the proposal to reduce the trading volume 
requirement for eligible linked securities will expand the number of 
securities that can be linked to SEEDS while maintaining the 
requirement that the linked security be an actively traded, highly 
capitalized common stock, non-convertible preferred stock or ADR. While 
the proposal reduces the trading volume criteria for securities with 
market capitalizations in the $1.5 billion and $500 million tiers to 10 
million and 15 million shares, respectively (from 20 and 80 million 
shares, respectively), the Commission nevertheless believes that, 
together, the applicable capitalization and new trading volume 
requirements will continue to help ensure that SEEDS are only issued on 
highly liquid securities of broadly capitalized companies. Accordingly, 
the Commission believes that the market capitalization and trading 
volume requirements will continue to help reduce the likelihood of any 
adverse market impact on the securities underlying SEEDS.
    The Commission notes that the NASD has deleted the provision that 
allows it to list SEEDS on securities not meeting these criteria if the 
Division of Market Regulation of the SEC concurs. The revised criteria 
will expand the number of securities eligible for SEEDS trading. The 
increased flexibility in the SEEDS listing criteria should effectively 
reduce

[[Page 13556]]
or eliminate the need for additional discretion in this area, in 
addition to providing issuers and the NASD with specific and clear 
guidance on the applicable listing criteria for a security to underlie 
a SEEDS.
    The Commission also believes that the additional proposed 
amendments to the listing standards for SEEDS on non-U.S. securities 
will benefit investors by effectively increasing the number of 
available SEEDS-eligible non-U.S. securities. At the same time, as 
described below, the proposal provides safeguards designed to reduce 
the potential for manipulation and other abusive trading strategies in 
connection with the trading of non-U.S. security SEEDS and their 
underlying securities. Accordingly, the Commission believes that the 
proposal will extend the benefits associated with SEEDS on non-U.S. 
securities without compromising the effectiveness of the NASD's listing 
standards for such securities.
    Currently, the 50% Test allows the NASD to list SEEDS on a non-U.S. 
security in the absence of a comprehensive/effective surveillance 
sharing agreement with the primary exchange where the non-U.S. security 
trades if the combined trading volume of the non-U.S. security and 
other related non-U.S. securities occurring in the U.S. market during 
the six month period preceding the selection of the non-U.S. security 
for SEEDS listing represents (on a share equivalent basis) at least 50% 
of the combined world-wide trading volume in such securities.
    The Commission has previously concluded that the 50% Test helps to 
ensure that the relevant pricing market for non-U.S. securities 
underlying SEEDS (or other similar equity linked debt securities) 
occurs in the U.S. market.\12\ In such cases, the Commission has 
previously found that the U.S. market is the instrumental market for 
purposes of deterring and detecting potential manipulations or other 
abusive trading strategies in conjunction with transactions in the 
overlying non-U.S. security equity-linked market. Because the U.S. 
self-regulatory organizations which comprise the U.S. market for non-
U.S. securities are members of the Intermarket Surveillance Group,\13\ 
the Commission has concluded that there exists an effective 
surveillance sharing agreement to permit the NASD to adequately 
investigate any potential manipulations of the non-U.S. security SEEDS 
or their underlying securities.

    \12\ See Securities Exchange Act Release Nos. 34549 (August 18, 
1994), 59 FR 43873 (August 25, 1994) (SR-Amex-93-46); 34759 
(September 30, 1994), 59 FR 50939 (October 6, 1994) (SR-CBOE-94-04); 
34758 (September 30, 1994), 59 FR 50943 (October 6, 1994) (SR-NASD-
94-49); 34985 (November 18, 1994), 59 FR 60860 (November 28, 1994) 
(SR-NYSE-94-37); and 35479 (March 13, 1995), 60 FR 14993 (March 21, 
1995) (SR-Phlx-95-09) (``ELN Approval Orders'').
    \13\ The Intermarket Surveillance Group (``ISG'') was formed on 
July 14, 1983 to, among other things, coordinate more effectively 
surveillance and investigative information sharing arrangements in 
the stock and options markets. See Intermarket Surveillance Group 
Agreement, July 14, 1983. The most recent amendment to the ISG 
Agreement, which incorporates the original agreement and all 
amendments made thereafter, was signed by ISG members on January 29, 
1990. See Second Amendment to the Intermarket Surveillance Group 
Agreement, January 29, 1990. The members of the ISG are: the 
American Stock Exchange, Inc.; the Boston Stock Exchange, Inc.; the 
Chicago Board Options Exchange, Inc.; the Chicago Stock Exchange, 
Inc.; the NASD; the New York Stock Exchange, Inc.; the Pacific Stock 
Exchange, Inc.; and the Philadelphia Stock Exchange, Inc. Because of 
potential opportunities for trading abuses involving stock index 
futures, stock options, and the underlying stock and the need for 
greater sharing of surveillance information and for these potential 
intermarket trading abuses, the major stock index futures exchanges 
(e.g., the Chicago Mercantile Exchange and the Chicago Board of 
Trade) joined the ISG as affiliate members of 1980.
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    The NASD proposes to modify the 50% Test to include in the U.S. 
market volume calculation the trading volume in non-U.S. securities and 
other related non-U.S. securities that occurs in any market with which 
the NASD has in place a comprehensive/effective surveillance sharing 
agreement. The Commission believes that this proposed modification of 
the 50% Test is consistent with the Act and with the Commission's 
approach in the ELN Approval Orders because it will continue to ensure 
that the majority of world-wide trading volume in the non-U.S. security 
and other related non-U.S. securities occurs in trading markets with 
which the NASD has in place a comprehensive/effective surveillance 
sharing agreement. The existence of such agreements should deter as 
well as detect manipulations or other abusive trading strategies and 
also provide an adequate mechanism for obtaining market and trading 
information from the non-U.S. markets that the list the non-U.S. 
security underlying the NASD's SEEDS in order to adequately investigate 
any potential abuse or manipulation.
    Additionally, the Commission finds that the proposed 20% Test + 
Daily Trading Volume Standard is consistent with the Act and with the 
ELN Approval Orders. As noted above, the 20% Test + Daily Trading 
Volume Standard will allow the NASD to list SEEDS on a non-U.S. 
security if, over the six month period preceding the date of selection 
of the non-U.S. security for SEEDS trading (1) the combined world-wide 
trading volume for the non-U.S. security in the U.S. market represents 
(on a share equivalent basis) at least 20% of the combined world-wide 
trading volume in the non-U.S. security and other related non-U.S. 
securities; \14\ (2) the average daily trading volume for the non-U.S. 
security in the U.S. market is at least 100,000 shares; and (3) the 
trading volume for the non-U.S. security in the U.S. market is at least 
60,000 shares per day for a majority of the trading days.

    \14\ The U.S. notes that the 20% Test + Daily Trading Volume 
standard does not include worldwide trading volume in the non-U.S. 
security that takes place in a foreign market regardless of the 
existence of a comprehensive surveillance sharing agreement with the 
listing exchange. The 20% Test is a minimum U.S. market share 
trading test intended to permit the listing of SEEDS only on non-
U.S. securities that have active and liquid markets in the U.S.
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    The Commission believes that these requirements present a 
reasonable alternative to the 50% Test by limiting the actual listing 
of SEEDS on non-U.S. securities to only those non-U.S. securities that 
have a significant amount of U.S. market trading volume. This will 
ensure that the U.S. market is sufficiently active to serve as a 
relevant pricing market for the non-U.S. security and that the 
underlying foreign security is readily available to meet the delivery 
requirements upon exercise of the SEEDS. Accordingly, the Commission 
believes that the 20% Test + Daily Trading Volume Standard should help 
to ensure that the U.S. markets serve a significant role in the price 
discovery of the applicable non-U.S. security and are generally deep, 
liquid markets.
    Finally, the NASD believes, for similar reasons, that it is 
appropriate to reduce the minimum U.S. trading volume requirements for 
SEEDS issuances from 30% to 20%. As noted above, the Commission 
believes that the 20% Test + Daily Trading Volume Standard will ensure 
that an underlying non-U.S. security has deep and liquid markets to 
sustain a SEEDS listing. The Commission believes that it is appropriate 
to adjust the limitations on the size of the SEEDS issuance to 
correspond to this requirement. Accordingly, where the trading volume 
in the U.S. market for the underlying non-U.S. security is between 20% 
and 50% of the worldwide trading volume, the issuance will be limited 
to 2% of the total outstanding shares of the underlying security. The 
20% minimum U.S. trading volume requirement should continue to ensure 
that the U.S. market is significant enough to accommodate SEEDS 
trading. In this regard, the Commission believes that these

[[Page 13557]]
restrictions will minimize the possibility that trading in such 
issuances will adversely impact the market for the security to which it 
is linked.
    The Commission finds good cause for approving the proposed rule 
change and Amendment No. 1 to the proposed rule change prior to the 
thirtieth day after the date of publication of notice thereof in the 
Federal Register in order to allow the NASD to implement these changes 
to its SEEDS Listing Standards without delay. The proposal will provide 
the NASD with increased flexibility in the listing of SEEDS products on 
both U.S. and non-U.S. securities without compromising investor 
protection concerns. In addition, the NASD proposal is substantially 
similar to, and is being approved concurrently with, two American Stock 
Exchange proposals relating to equity linked notes listing standards, 
both of which were subject to the full notice and comment period.\15\ 
The Commission notes that no comment letters were received on these 
Amex proposals. Accordingly, the Commission does not believe the NASD 
proposal, as amended, raises any new or unique regulatory issues. For 
these reasons, the Commission believes there is good cause, consistent 
with Sections 15A(b)(6) \16\ and 19(b)(2) \17\ of the Act, to approve 
the proposed rule change and Amendment No. 1 to the proposal on an 
accelerated basis.

    \15\ See Securities Exchange Act Release Nos. 36538 (Nov. 30, 
1995) (notice of filing of SR-Amex-95-44) and 36578 (Dec. 13, 1995) 
(notice of filing of SR-Amex-95-48).
    \16\ 15 U.S.C. 78o-3(b)(6) (1988).
    \17\ 15 U.S.C. 78s(b)(2) (1988).
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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 in the 
Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. Copies of such filing will also be available for 
inspection and copying at the principal office of the above-mentioned 
self-regulatory organization. All submissions should refer to the file 
number of the caption above and should be submitted by April 17, 1996.
    It therefore is ordered, pursuant to Section 19(b)(2) of the 
Act,\18\ that the proposed rule change (SR-NASD-96-01) is approved, as 
amended.

    \18\ 15 U.S.C. 78s(b)(2) (1988)
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\19\

    \19\ 17 CFR Sec. 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-7397 Filed 3-26-96; 8:45 am]
BILLING CODE 8010-01-M