[Federal Register Volume 64, Number 105 (Wednesday, June 2, 1999)]
[Rules and Regulations]
[Pages 29550-29553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13927]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-41453, International Series Release No. 1198, File No. 
S7-4-99]
RIN 3235-AH68


Exemption of the Securities of the Kingdom of Sweden Under the 
Securities Exchange Act of 1934 for Purposes of Trading Futures 
Contracts on Those Securities

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission is adopting an 
amendment to Rule 3a12-8 that would designate debt obligations issued 
by the Kingdom of Sweden as ``exempted securities'' for the purpose of 
marketing and trading futures contracts on those securities in the 
United States. The amendment is intended to permit futures trading on 
the sovereign debt of Sweden.

EFFECTIVE DATE: June 2, 1999.

FOR FURTHER INFORMATION CONTACT: Joshua Kans, Attorney, Office of 
Market Supervision (``OMS''), Division of Market Regulation 
(``Division''), Securities and Exchange Commission, 450 Fifth Street, 
NW, Washington, DC 20549-1001, at 202/942-0079.

SUPPLEMENTARY INFORMATION:

I. Introduction

    Under the Commodity Exchange Act (``CEA''), it is unlawful to trade 
a futures contract on any individual security unless the security in 
question is an exempted security (other than a municipal security) 
under the Securities Act of 1933 (``Securities Act'') or the Securities 
Exchange Act of 1934 (``Exchange Act''). Debt obligations of foreign 
governments are not exempted securities under either of these statutes. 
The Securities and Exchange Commission (``SEC'' or ``Commission''), 
however, has adopted Rule 3a12-8 \1\ (``Rule'') under the Exchange Act 
to designate debt obligations issued by certain foreign governments as 
exempted securities under the Exchange Act solely for the purpose of 
marketing and trading futures contracts on those securities in the 
United States. As amended, the foreign governments currently designated 
in the Rule are Great Britain, Canada, Japan, Australia, France, New 
Zealand, Austria, Denmark, Finland, the Netherlands, Switzerland, 
Germany, the Republic of Ireland, Italy, Spain, Mexico, Brazil, 
Argentina, Venezuela and Belgium (the ``Designated Foreign 
Governments''). As a result, futures contracts on the debt obligations 
of these countries may be sold in the United States, as long as the 
other terms of the Rule are satisfied.
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    \1\ 17 CFR 240.3a12-8.
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    On February 23, 1999, the Commission issued a release proposing to 
amend Rule 3a12-8 to designate the debt obligations of the Kingdom of 
Sweden (``Sweden'') as exempted securities, solely for the purpose of 
futures trading.\2\ No comment letters were received in response to the 
proposal.
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    \2\ See Securities Exchange Act Release No. 41090 (February 23, 
1999), 64 FR 9948 (March 1, 1999) (``Proposing Release'').
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    The Commission today is adopting this amendment to the Rule, adding 
Sweden to the list of countries whose debt obligations are exempted by 
Rule

[[Page 29551]]

3a12-8. In order to qualify for the exemption, futures contracts on the 
debt obligations of Sweden would have to meet all the other existing 
requirements of the Rule.

II. Background

    Rule 3a12-8 was adopted in 1984 \3\ pursuant to the exemptive 
authority in section 3(a)(12) of the Exchange Act in order to provide a 
limited exception from the CEA's prohibition on futures overlying 
individual securities.\4\ As originally adopted, the Rule provided that 
the debt obligations of Great Britain and Canada would be deemed to be 
exempted securities, solely for the purpose of permitting the offer, 
sale, and confirmation of ``qualifying foreign futures contracts'' on 
such securities. The securities in question were not eligible for the 
exemption if they were registered under the Securities Act or were the 
subject of any American depositary receipt so registered. A futures 
contract on the covered debt obligation under the Rule is deemed to be 
a ``qualifying foreign futures contract'' if the contract is 
deliverable outside the United States and is traded on a board of 
trade.\5\
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    \3\ See Securities Exchange Act Release No. 20708 (``Original 
Adopting Release'') (March 2, 1984), 49 FR 8595 (March 8, 1984); 
Securities Exchange Act Release No. 19811 (``Original Proposing 
Release'') (May 25, 1983), 48 FR 24725 (June 2, 1983).
    \4\ In approving the Futures Trading Act of 1982, Congress 
expressed its understanding that neither the SEC nor the Commodity 
Futures Trading Commission (``CFTC'') had intended to bar the sale 
of futures on debt obligations of the United Kingdom of Great 
Britain and Northern Ireland to U.S. persons, and its expectation 
that administrative action would be taken to allow the sale of such 
futures contracts in the United States. See Original Proposing 
Release, supra note 3, 48 FR at 24725 (citing 128 Cong. Rec. H7492 
(daily ed. September 23, 1982) (statements of Representatives 
Daschle and Wirth)).
    \5\ As originally adopted, the Rule required that the board of 
trade be located in the country that issued the underlying 
securities. This requirement was eliminated in 1987. See Securities 
Exchange Act Release No. 24209 (March 12, 1987), 52 FR 8875 (March 
20, 1987).
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    The conditions imposed by the Rule were intended to facilitate the 
trading of futures contracts on foreign government securities in the 
United States while requiring offerings of foreign government 
securities to comply with the federal securities laws. Accordingly, the 
conditions set forth in the Rule were designed to ensure that, absent 
registration, a domestic market in unregistered foreign government 
securities would not develop, and that markets for futures on these 
instruments would not be used to avoid the securities law registration 
requirements. In particular, the Rule was intended to ensure that 
futures on exempted sovereign debt did not operate as a surrogate means 
of trading the unregistered debt.
    Subsequently, the Commission amended the Rule to include the debt 
securities issued by Japan, Australia, France, New Zealand, Austria, 
Denmark, Finland, the Netherlands, Switzerland, Germany, Ireland, 
Italy, Spain, Mexico, Brazil, Argentina, Venezuela and, most recently, 
Belgium.\6\
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    \6\ As originally adopted, the Rule applied only to British and 
Canadian government securities. See Original Adopting Release, supra 
note 3. In 1986, the Rule was amended to include Japanese government 
securities. See Securities Exchange Act Release No. 23423 (July 11, 
1986), 51 FR 25996 (July 18, 1986). In 1987, the Rule was amended to 
include debt securities issued by Australia, France and New Zealand. 
See Securities Exchange Act Release No. 25072 (October 29, 1987), 52 
FR 42277 (November 4, 1987). In 1988, the Rule was amended to 
include debt securities issued by Austria, Denmark, Finland, the 
Netherlands, Switzerland, and West Germany. See Securities Exchange 
Act Release No. 26217 (October 26, 1988), 53 FR 43860 (October 31, 
1988). In 1992 the Rule was again amended to (1) include debt 
securities offered by the Republic of Ireland and Italy, (2) change 
the country designation of ``West Germany'' to the ``Federal 
Republic of Germany,'' and (3) replace all references to the 
informal names of the countries listed in the Rule with references 
to their official names. See Securities Exchange Act Release No. 
30166 (January 8, 1992), 57 FR 1375 (January 14, 1992). In 1994, the 
Rule was amended to include debt securities issued by Spain. See 
Securities Exchange Act Release No. 34908 (October 27, 1994), 59 FR 
54812 (November 2, 1994). In 1995, the Rule was amended to include 
the debt securities of Mexico. See Securities Exchange Act Release 
No. 36530 (November 30, 1995), 60 FR 62323 (December 6, 1995). In 
1996, the Rule was amended to include debt securities issued by 
Brazil, Argentina, and Venezuela. See Securities Exchange Act 
Release No. 36940 (March 7, 1996), 61 FR 10271 (March 13, 1996). 
Finally, earlier in 1999, the Rule was amended to include debt 
securities issued by Belgium. See Securities Exchange Act Release 
No. 41116 (February 26, 1999), 64 FR 10564 (March 5, 1999).
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    OM Stockholm AB of Sweden (``OM''), and its British affiliate OMLX, 
The London Securities and Derivatives Exchange Limited (``OMLX''), have 
proposed that the Commission amend 3a12-8 to include the sovereign debt 
of Sweden. OM and OMLX (which will be collectively referred to as 
``OM'') have stated that they are listing standardized futures 
contracts on Swedish government securities for trading on their 
respective markets, beginning with a futures contract on the ten-year 
Swedish government bond. The applicants wish to make those futures 
contracts available to U.S. investors.\7\
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    \7\ See Letters from Philip McBride Johnson, counsel for OM and 
OMLX, to Jonathan Katz, Secretary, Commission, dated June 11, 1998; 
Memorandum provided by OM and OMLX to the Division of Market 
Regulation on July 6, 1998; Letter from Philip Johnson to Michael 
Walinskas, Deputy Associate Director, Division, Commission, dated 
July 24, 1998; Letters from Philip Johnson to Joshua Kans, Attorney, 
Division, Commission, dated August 20, September 11 and October 2, 
1998; Letter from Philip Johnson to Michael Walinskas, dated 
December 7, 1998; Letters from Philip Johnson to Joshua Kans, dated 
March 31 and April 19, 1999 (collectively ``OM petition'').
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    The Swedish National Debt Office submitted a letter supporting OM's 
application to amend the Rule.\8\ In 1988, the Commission proposed 
adding Sweden to the list of countries designated under the Rule,\9\ 
but rejected the proposal because of opposition from the Swedish 
government.\10\
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    \8\ See Letter from Tomas Magnusson, Director and General 
Counsel, Swedish National Debt Office, to Jonathan Katz, Secretary, 
Commission, dated June 29, 1998.
    \9\ See Securities Exchange Act Release No. 25998 (August 16, 
1988), 53 FR 31709 (August 19, 1988).
    \10\ The Embassy of Sweden submitted two letters in response to 
the 1988 proposal, noting that currency controls prohibiting non-
residents from holding Swedish kronor-denominated securities would 
preclude development of a market for physically settled futures on 
such securities, and stating that in any case it was not in the 
Swedish government's interest that such a market develop. As a 
matter of international comity, the Commission chose not to add 
Sweden to the Rule. See Securities Exchange Act Release No. 26217 
(October 26, 1988), 53 FR 43860 (October 31, 1988).
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    The Commission is amending Rule 3a12-8 to add Sweden to the list of 
countries whose debt obligations are deemed to be ``exempted 
securities'' under the terms of the Rule. Under this amendment, the 
existing conditions set forth in the Rule (i.e., that the underlying 
securities not be registered in the United States, that futures 
contracts require delivery outside the United States, and that 
contracts be traded on a board of trade) would continue to apply.

III. Discussion

    For the reasons discussed below, the Commission finds that it is 
consistent with the public interest and the protection of investors 
that Rule 3a12-8 be amended to include the sovereign debt obligations 
of Sweden. The Commission believes that the trading of futures 
contracts on the sovereign debt of Sweden could provide U.S. investors 
and dealers with a vehicle for hedging the risks involved in holding 
debt instruments of Sweden, and that the sovereign debt of Sweden 
should be subject to the same regulatory treatment under the Rule as 
that of the Designated Foreign Governments.
    When amending the Rule to include Belgium, the Commission stated 
that it would consider two types of evidence about whether there was an 
active and liquid secondary trading market for the security--credit 
rating (as indirect evidence) and trading data.\11\ Earlier, when 
amending the Rule to include Mexico, Brazil, Argentina, and

[[Page 29552]]

Venezuela, the Commission considered primarily whether market evidence 
indicated that an active and liquid secondary trading market exists for 
the sovereign debt of those countries.\12\ Prior to the addition of 
those countries to the Rule, the Commission considered principally 
whether the particular sovereign debt had been rated in one of the two 
highest rating categories \13\ by at least two nationally recognized 
statistical rating organizations (``NRSROs'').\14\
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    \11\ See Securities Exchange Act Release No. 41116 (February 26, 
1999), 64 FR 10564 (March 5, 1999).
    \12\ See, e.g., Securities Exchange Act Release No. 36530 
(November 30, 1995), 60 FR 62323 (December 6, 1995) (amending the 
Rule to add Mexico because the Commission believed that as a whole, 
the market for Mexican sovereign debt was sufficiently liquid and 
deep for the purposes of the Rule); Securities Exchange Act Release 
No. 36940 (March 7, 1996), 61 FR 10271 (March 13, 1996) (amending 
the Rule to add Brazil, Argentina and Venezuela because the 
Commission believed that the market for the sovereign debt of those 
countries was sufficiently liquid and deep for the purposes of the 
Rule).
    \13\ The two highest categories used by Moody's Investor 
Services (``Moody's'') for long-term debt are ``Aaa'' and ``Aa.'' 
The two highest categories used by Standard and Poor's (``S&P'') for 
long-term debt are ``AAA'' and ``AA.''
    \14\ See, e.g., Securities Exchange Act Release No. 30166 
(January 6, 1992) 57 FR 1375 (January 14, 1992) (amending the Rule 
to include debt securities issued by Ireland and Italy--Ireland's 
long-term sovereign debt was rated Aa3 by Moody's and AA-by S&P, and 
Italy's long-term sovereign debt was rated Aaa by Moody's and AA+ by 
S&P); and Securities Exchange Act Release No. 34908 (October 27, 
1994), 59 FR 54812 (November 2, 1994) (amending the Rule to include 
Spain, which had long-term debt ratings of Aa2 from Moody's and AA 
from S&P); See also Securities Exchange Act Release No. 36213 
(September 11, 1995), 60 FR 48078 (September 18, 1995) (proposal to 
add Mexico to list of countries encompassed by the Rule); Securities 
Exchange Act Release No. 24428 (May 5, 1987), 52 FR 18237 (May 14, 
1987) (proposed amendment, which was not implemented, that would 
have extended the Rule to encompass all countries rated in one of 
the two highest categories by at least two NRSROs).
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    Sweden meets the credit rating standard. Moody's has assigned 
Sweden a long-term local currency credit rating of Aa1 and a long-term 
foreign currency credit rating of Aa2. S&P has assigned Sweden a long-
term local currency credit rating of AAA and a long-term foreign 
currency credit rating of AA+.
    Market data also indicates that there exists an active and liquid 
trading market for Swedish issued debt instruments. As of February 28, 
1999, the total Swedish public debt outstanding was equivalent to 
approximately US$173 billion (1428 billion Swedish kronor 
(``SEK'')).\15\ The largest portion of this debt, Treasury bonds 
(Statsobligationslan) denominated in Swedish kronor, amounted to 
approximately US$94 billion (SEK 773 billion).\16\ Treasury bills 
(Statsskuldvaxlar) denominated in Swedish kronor amounted to 
approximately US$27 billion (SEK 227 billion).\17\
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    \15\ Data regarding the amount of outstanding debt was obtained 
from ``Den Svenska Statsskulden: The Swedish Central Government 
Debt,'' February 28, 1998, available from the website of the Swedish 
National Debt Office (http://www.sndo.se). U.S. dollar equivalents 
for the February 28, 1999 data about outstanding debt is based on 
the conversion rate of SEK 8.2538 for US$1.00 in effect as of March 
1, 1999.
    The last country added to the index, Belgium, had an outstanding 
public debt equal to approximately US$264 billion at the end of 
1997. See Securities Exchange Act Release No. 41116 (February 26, 
1999), 64 FR 10564 (March 5, 1999). The four countries last added to 
the list prior to Belgium--Mexico, Brazil, Argentina and Venezuela--
had lower amounts of public debt. See Securities Exchange Act 
Release No. 36530 (December 6, 1995), 60 FR 62323 (December 6, 1995) 
(outstanding Mexican government debt amounted to approximately 
US$87.5 billion face value as of March 31, 1995); Securities 
Exchange Act Release No. 36940 (March 7, 1996), 61 FR 10271 (March 
13, 1996) (public and publicly guaranteed debt of Brazil, Argentina 
and Venezuela amounted to approximately US$86 billion, US$55 billion 
and US$74 billion, respectively, as of December 31, 1993).
    \16\ The outstanding Treasury bonds include approximately US$79 
billion (SEK 654 billion) worth of benchmark bonds, approximately 
US$2.8 billion (SEK 23 billion) worth of non-benchmark bonds, and 
approximately US$11 billion (SEK 94 billion) worth of inflation 
linked bonds.
    \17\ Other types of Swedish currency-denominated debt included 
approximately US$6.8 billion (SEK 56 billion) worth of lottery 
bonds. A total of approximately US$132 billion (SEK 1086 billion) in 
Swedish government debt was denominated in Swedish kronor.
    Foreign currency-denominated debt amounted to approximately 
US$41 billion (SEK 342 billion). Foreign-currency denominated debt 
includes approximately US$32 billion (SEK 266 billion) worth of 
public issues, US$6.7 billion (SEK 56 billion) worth of private 
placements, and US$2.0 billion (SEK 16 billion) worth of commercial 
paper.
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    OM has submitted data indicating that secondary market trading in 
Treasury bonds amounted to approximately US$1.2 trillion (SEK 9079 
billion) in 1996, approximately US$1.3 trillion (SEK 10,550 billion) in 
1997, and approximately US$1.2 trillion (SEK 9098 billion) in 1998.\18\ 
The average daily trading volume during that period ranged from 
approximately US$2.1 billion (SEK 16.6 billion) for the month of July 
1998 to approximately US$8.3 billion (SEK 65.6 billion) for the month 
of October 1997. OM adds that there were approximately 109,100 
transactions in benchmark Treasury bonds in 1997 and 274,000 in 1998; 
27,500 transactions in non-benchmark Treasury bonds in 1997 and 7900 in 
1998; and 2000 transactions in inflation-linked Treasury bonds in 1997 
and 10,800 in 1998.\19\
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    \18\ OM petition, supra note 7. OM states that the statistics 
about secondary market trading in Swedish debt were derived from 
data specially prepared by the Swedish Central Securities 
Depository. Id.
    For the historical 1996 to 1998 secondary market trading data 
discussed in this release, U.S. dollar equivalents are based on the 
conversion rate of SEK 7.8565 for US$1.00 in effect as of September 
30, 1998. The exchange rate varied from 6.5340 to 7.0114 in 1996, 
from 6.8074 to 8.0780 in 1997, and from 7.5763 to 8.3397 in 1998.
    \19\ OM states that secondary market trading for Swedish 
government debt is primarily conducted on a phone-based and screen-
based over-the-counter market conducted by a number of dealers, with 
transactions in Treasury bonds and Treasury bills registered at the 
PMX Exchange at the end of the trading day. Id.
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    OM has also submitted data stating that secondary market trading in 
Treasury bills amounted to approximately US$440 billion (SEK 3452 
billion) in 1996, approximately US$488 billion (SEK 3831 billion) in 
1997, and approximately US$447 billion (SEK 3511 billion) in 1998. The 
average daily trading volume during that period ranged from 
approximately US$1.2 billion (SEK 9.3 billion) for the month of May 
1996 to approximately US$2.6 billion (SEK 20.7 billion) for the month 
of March 1997. OM adds that there were approximately 38,600 
transactions in Treasury bills in 1997 and 76,800 in 1998.\20\
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    \20\ OM states that secondary market trading in lottery bonds 
was equivalent to approximately US$512 million (SEK 4.03 billion) in 
1996, US$449 million (SEK 3.53 billion) in 1997, and US$213 million 
(SEK 1.67 billion) in the first half of 1998. OM has not provided 
secondary market trading data for other Swedish debt securities. 
According to OM, transaction data for Swedish government debt 
denominated in foreign currencies is extremely difficult to obtain. 
OM further contends that because a number of Swedish government debt 
securities denominated in U.S. dollars have been registered under 
the Securities Act of 1933, and therefore are not eligible for 
exemption under the Rule, secondary market data for securities 
denominated in non-kronor currencies is less significant. See id.
    OM states that it presently does not intend to list any futures 
on inflation-linked bonds, treasury bonds with repurchase 
agreements, lottery bonds or commercial papers. Id.
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    The Commission finds that this trading data, coupled with a high 
debt rating, provides sufficient evidence that there exists an active 
and liquid market for Swedish sovereign debt.

IV. Costs and Benefits of the Proposed Amendments

    The Commission believes that the amendment offers potential 
benefits for U.S. investors. As stated above, the amendment will allow 
U.S. and foreign boards of trade to offer in the United States, and 
U.S. investors to trade, futures contracts on the debt obligations of 
Sweden. Consistent with Congressional support for futures on foreign 
sovereign debt securities, the trading of futures on the sovereign debt 
of Sweden should provide U.S. investors with a vehicle for hedging the 
risks involved in the trading of the underlying sovereign debt of 
Sweden. The amendment does not impose any

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direct recordkeeping or compliance costs, and merely would provide a 
limited purpose exemption under the federal securities laws. The 
restrictions imposed under the amendment are identical to the 
restrictions currently imposed under the terms of the Rule and are 
designed to protect U.S. investors.

V. Effects of the Proposed Amendment on Competition, Efficiency and 
Capital Formation, and Other Findings

    Section 23(a)(2) of the Exchange Act \21\ requires the Commission, 
in adopting rules under the Exchange Act, to consider the competitive 
effects of such rules, if any, and to refrain from adopting a rule that 
would impose a burden on competition not necessary or appropriate in 
furthering the purposes of the Exchange Act. Moreover, section 3 of the 
Exchange Act \22\ as amended by the National Securities Markets 
Improvement Act of 1996 \23\ provides that whenever the Commission is 
engaged in a rulemaking and is required to consider or determine 
whether an action is necessary or appropriate in the public interest, 
the Commission shall consider, in addition to the protection of 
investors, whether the action will promote efficiency, competition and 
capital formation.
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    \21\ 15 U.S.C. 78w(a)(2).
    \22\ 15 U.S.C. 78c.
    \23\ Pub. L. 104-290, 110 Stat. 3416 (1996).
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    The Commission has considered the amendment to the Rule in light of 
the standards cited in sections 3 and 23(a)(2), and the Commission 
believes that adoption of the amendment will not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Exchange Act. As stated above, the amendment is designed to 
assure the lawful availability in this country of futures contracts on 
the government debt of Sweden that otherwise would not be permitted to 
be marketed under the terms of the CEA. The amendment thus serves to 
expand the range of financial products available in the United States 
and enhances competition in financial markets. The Commission has 
considered the amendment's impact on efficiency, competition, and 
capital formation and concludes that it would promote these three 
objectives, by making available to U.S. investors an additional product 
to use to hedge the risks associated with the trading of the underlying 
sovereign debt of Sweden.\24\ Insofar as the Rule contains limitations, 
they are designed to promote the purposes of the Exchange Act by 
ensuring that futures trading on government securities of Sweden is 
consistent with the goals and purposes of the federal securities laws 
by minimizing the impact of the Rule on securities trading and 
distribution in the United States.
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    \24\ 15 U.S.C. 78f(b).
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    Because the amendment to the Rule is exemptive in nature, the 
Commission has determined to make the foregoing action effective 
immediately upon publication in the Federal Register.\25\
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    \25\ 5 U.S.C. 553(d).
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VI. Administrative Requirements

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(h), the Chairman of the Commission has certified in 
connection with the Proposing Release that this amendment, if adopted, 
would not have a significant economic impact on a substantial number of 
small entities. The Commission received no comments on this 
certification.
    The Paperwork Reduction Act does not apply because the amendment 
does not impose recordkeeping or information collection requirements, 
or other collections of information which require the approval of the 
Office of Management and Budget under 44 U.S.C. 3501, et seq.

VII. Statutory Basis

    The amendment to Rule 3a12-8 is being adopted pursuant to 15 U.S.C. 
78a et seq., particularly sections 3(a)(12) and 23(a), 15 U.S.C. 
78c(a)(12) and 78w(a).

List of Subjects in 17 CFR Part 240

    Reporting and recordkeeping requirements, Securities.

Text of the Amendment

    For the reasons set forth in the preamble, the Commission amends 
part 240 of Chapter II, Title 17 of the Code of Federal Regulations as 
follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

    1. The authority citation for Part 240 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee, 
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k, 
78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d), 
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 
80b-11, unless otherwise noted.
* * * * *
    2. Section 240.3a12-8 is amended by removing the word ``or'' at the 
end of paragraph (a)(1)(xviii), removing the period at the end of 
paragraph (a)(1)(xix) and adding ``; or'' in its place, and adding 
paragraph (a)(1)(xx), to read as follows:


Sec. 240.3a12-8  Exemption for designated foreign government securities 
for purposes of futures trading.

    (a) * * *
    (1) * * *
    (xxi) The Kingdom of Sweden.
* * * * *
    Dated: May 26, 1999.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-13927 Filed 6-1-99; 8:45 am]
BILLING CODE 8010-01-P