# Self-Regulatory Organizations; Order Approving Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Extensions of Time for Payment or Delivery of Securities

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## Record

- **Collection:** Federal Register
- **Document type:** Uncategorized Document
- **Published:** May 24, 1994

## Text

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34073; File No. SR-NYSE-88-35]

Self-Regulatory Organizations; Order Approving Proposed Rule
Change by the New York Stock Exchange, Inc. Relating to Extensions of
Time for Payment or Delivery of Securities

May 17, 1994.

I. Introduction and Background

On November 16, 1988, the New York Stock Exchange, Inc. (``NYSE''
or ``Exchange'') submitted to the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'')\1\ and
Rule 19b-4 thereunder,\2\ a proposal to amend the NYSE Rules to add new
NYSE Rule 434 that would require all member organizations for which the
Exchange has been appointed the designated examining authority
(``DEA'') by the Commission pursuant to Rule 17d-1 under the Act\3\ to
submit requests for extensions of time for payment, under Regulation T
promulgated by the Federal Reserve Board (``FRB''),\4\ or delivery of
securities, pursuant to SEC Rule 15c3-3(n) under the Act,\5\ to the
Exchange.
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\1\15 U.S.C. 78s(b)(1) (1988).
\2\17 CFR 240.19b-4 (1993).
\3\17 CFR 240.17d-1 (1993).
\4\12 CFR 220.4(c) and 220.8(d) (1993).
\5\17 CFR 240.15c3-3 (1993).
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Notice of the proposal appeared in the Federal Register on December
9, 1988\6\ and again on December 30, 1992.\7\ The Commission determined
to republish the notice for comment because of the significant period
of time that had lapsed since the proposal initially was published in
the Federal Register and because of the number of comment letters that
were received concerning the proposal. In addition, in 1992, the
Federal Reserve Board issued advanced notice of proposed rulemaking to
modify Regulation T,\8\ and specifically noted the NYSE proposal in its
request for comments. The FRB has not yet acted on its proposal,
however, and has not published a timetable for doing so.
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\6\See Securities Exchange Act Release No. 26341 (December 5,
1988), 53 FR 49808 (December 9, 1988).
\7\See Securities Exchange Act Release No. 31634 (December 22,
1992), 57 FR 62409 (December 30, 1992).
\8\See 57 FR 37109 (August 18, 1992).
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The Commission received fifteen comment letters on the proposal in
1988\9\ as well as a letter from the NYSE responding to the comment
letters.\10\ The Commission received five comment letters on the
proposal in 1993\11\ as well as a letter from the NYSE responding to
the 1993 comment letters.\12\ This order approves the proposal.
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\9\See letters from: Richard E. Orie, Vice President-Director of
Compliance, Q & R Clearing Corporation, to Mary Revell, Branch
Chief, Exchange Regulation, Division of Market Regulation,
Commission, dated December 21, 1988 (``Q & R Clearing Letter''); J.
Craig Long, Vice President, General Counsel and Secretary, Midwest
Stock Exchange (now the Chicago Stock Exchange or ``CHX'') to
Jonathan Katz, Secretary, Commission, dated December 23, 1988
(``1988 CHX Letter''); David Colker, Vice President, Market
Regulation and General Counsel, Cincinnati Stock Exchange, to
Jonathan Katz, Secretary, Commission, dated December 28, 1988
(``1988 CSE Letter''); Donald E. Weston, Chairman, Gradison &
Company, Incorporated, to Jonathan Katz, Secretary, Commission,
dated January 11, 1989 (``Gradison Letter''); Bernard L. Finger,
Senior Vice President, Compliance Director, Securities Settlement
Corporation to Secretary, Commission, dated January 18, 1989
(``Securities Settlement Corp. Letter''); John F. Carsley, First of
Michigan, Corporation to Jonathan Katz, Secretary, Commission, dated
January 23, 1989 (``First of Michigan Letter''); Gerald L. Oaks,
Chief Financial Officer, Bartlett & Co. to Jonathan Katz, Secretary,
Commission, dated January 30, 1989 (``Bartlett & Co. Letter'');
David Colker, Vice President, Market Regulation and General Counsel,
Cincinnati Stock Exchange to Jonathan Katz, Secretary, Commission,
dated January 31, 1989 (``January 1989 CSE Letter''); David P.
Semak, Vice President-Regulation, Pacific Stock Exchange to Jonathan
Katz, Secretary, Commission, dated January 31, 1989 (``1989 PSE
Letter''); Richard T. Chase, Philadelphia Stock Exchange to Jonathan
Katz, Secretary, Commission, dated February 1, 1989 (``1989 PHLX
Letter''); J. Craig Long, Vice President, General Counsel and
Secretary, Midwest Stock Exchange to Jonathan Katz, Secretary,
Commission, dated February 1, 1989 (``1989 CHX Letter''); Laura
Homer, Securities Credit Officer, Board of Governors of the Federal
Reserve System to Howard Kramer, Assistant Director, Exchange and
Options Regulation, Division of Market Regulation, Commission, dated
March 8, 1989 (``FRB Letter''); John E. Pinto, Executive Vice
President Compliance, National Association of Securities Dealers to
Jonathan Katz, Secretary, Commission, dated March 22, 1989 (``1989
NASD Letter''); John Caffrey, Chairman of the Board, Financial
Clearing & Services, Corporation to Secretary of the Commission,
dated March 27, 1989 (``Financial Clearing & Services Corp.
Letter''); David Colker, Vice President Market Regulation and
General Counsel, Cincinnati Stock Exchange to Howard Kramer,
Assistant Director, Exchange and Options Regulation, Division of
Market Regulation, Commission, dated July 5, 1989 (``July 1989 CSE
Letter''). See infra for a discussion of the specific comments.
\10\See letter from James E. Buck, Senior Vice President and
Secretary, New York Stock Exchange to Mary Revell, Branch Chief,
Exchange Regulation, Division of Market Regulation, Commission,
dated May 31, 1989 (responding to comment letters by the Cincinnati
Stock Exchange, Midwest Stock Exchange, Pacific Stock Exchange,
Bartlett & Company, Gradison & Company, Incorporated, and Securities
Settlement Corporation).
\11\See letters from: Bear Stearns Securities Corp. to the
Commission, dated January 15, 1993 (``Bear Stearns Letter''); David
Colker, Executive Vice President, Cincinnati Stock Exchange to
Jonathan Katz, Secretary, Commission, dated January 20, 1993 (``1993
CSE Letter''); David P. Semak, Vice President Regulation, Pacific
Stock Exchange to Jonathan Katz, Secretary, Commission, dated
February 10, 1993 (``1993 PSE Letter''); David J. Diffenauer, Vice
President, Margin Department Manager, A.G. Edwards & Sons, Inc. to
Jonathan Katz, Secretary, Commission, dated February 26, 1993
(``A.G. Edwards Letter''); Richard T. Chase, Senior Vice President,
Associate General Counsel, Lehman Brothers to Jonathan Katz,
Secretary, Commission, dated March 3, 1993 (``Lehman Brothers
Letter''). See infra for a discussion of the specific comments.
\12\See letter from James E. Buck, Senior Vice President and
Secretary, NYSE to Diana Luka-Hopson, Branch Chief, Exchange Branch,
Division of Market Regulation, Commission, dated January 19, 1994.
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II. Description of the Proposal

Registered national securities exchanges and registered national
securities associations can grant broker-dealers extensions of time for
payment on purchases and for delivery on sales of securities pursuant
to Regulation T and Rule 15c3-3(n) under the Act. Such extensions may
be granted when the self-regulatory organization (``SRO'') is satisfied
that a creditor (broker/dealer/ is acting in good faith in making such
a request and when the creditor believes exceptional circumstances
warrant such action. The Exchange is proposing the addition of new Rule
434, which would require all member firms for which the NYSE has been
appointed the DEA under the Act to submit all requests for Regulation T
and Rule 15c3-3 extensions to the NYSE.
The NYSE has developed a computerized extension processing system
for reviewing extension requests. The Exchange system contains specific
criteria regarding acceptable reasons, number of days permitted per
extension, and limits on the number of extensions permitted. These
criteria facilitate the prompt collection of monies and securities due
and reduce exposure to losses for both customers and member
organizations. The Exchange system generates daily and monthly reports
which provide member organizations and Exchange staff with a means to
monitor the incidence and reasons for the extension, potential abuses,
compliance with appropriate regulations, and indications of possible
operational problems.
The NYSE believes it is appropriate to require submission of
extension requests to the DEA for several reasons. First, as the DEA
for most of its member, the NYSE is responsible for examining its
members for compliance with industry financial responsibility rules and
the Exchange believes that complete extension information is needed for
it to adequately perform its DEA functions under section 17(d) of the
Act.
Second, the only standards for extension requests under Regulation
T and Rule 15c3-3 are that the creditor grant the request in good faith
and that exceptional circumstances warrant an extension. Under this
broad standard, each SRO that processes extension requests\13\ has
developed its own parameters and procedures for evaluating, granting,
and controlling extension requests.\14\ The Exchange asserts that, as a
result, broker-dealers could forum-shop by applying for extensions from
several or all SROs to circumvent the special requirements or the
maximum number of extensions allowed by the NYSE. In the NYSE's view,
adoption of the rule would ensure uniform application of standards to
all customers of NYSE firms for which the NYSE is the DEA.
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\13\At the time the NYSE filed the proposed rule change, the
Boston, Cincinnati, Chicago, Pacific and Philadelphia Stock
Exchanges and the National Association of Securities Dealers
processed Regulation T extension requests. See Securities Exchange
Act Release No. 26341 (December 5, 1988), 53 FR 49808 (December 9,
1988).
\14\For example, acceptable reasons for the extension, number of
extensions permitted, special limitations and restrictions on
customers are not necessarily uniformly applied, and in some cases,
possibly, not applied at all.
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Third, the Exchange believes that complete extension information
would provide it with a valuable surveillance tool in detecting
manipulation and other illegal trading activities. Rule 434 would
ensure that credit extensions would be granted on the basis of complete
information about a broker-dealer's payment and delivery status. The
NYSE states that complete extension information would enable the NYSE
to better monitor for compliance with financial and customer related
rules, such as sales practice rules. Moreover, the NYSE believes that
complete extension information would be useful to a DEA as an early
indicator of operational difficulties at member firms.

III. Comments on the Proposal

The Commission received eighteen comment letters opposing or
suggesting substantial modifications to the NYSE proposal and two
comment letters expressing support for the proposal.

A. Competitive Concerns

Most of the commenters opposed to the NYSE proposal noted their
competitive concerns, citing either section 11A(a)(1) of the Act,\15\
which encourages automation and efficiency in the markets while
assuring fair competition,\16\ or section 6(b)(8) of the Act,\17\ which
requires that the rules of an SRO not impose a burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. In particular, commenters argue that competition among SROs
has led to technological improvements in extension granting procedures,
such as faster turnaround and customized reports generated, and that
competition has resulted in lower fees to broker-dealers. These
commenters assert that the proposal would be anti-competitive in that
the vast majority of all requests for extension of time for payment or
delivery of securities would go to the NYSE because the NYSE is the DEA
for virtually all of its member firms.\18\
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\15\15 U.S.C. 78k-1(a)(1) (1988).
\16\See e.g., January 1989 CSE Letter and Securities Settlement
Corp. Letter, supra note 9.
\17\15 U.S.C. 78f(b)(8) (1988).
\18\See e.g., Securities Settlement Corp. Letter, supra note 9.
The Securities Settlement Corp. Letter states that competition in
the area of extension processing is consistent with section
11A(a)(1)(C) which states that it is in the public interest and
appropriate for the protection of investors to assure fair
competition among exchange markets and between exchange markets.
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The CSE asserts that the proposal would grant the NYSE a monopoly
on extension processing, thereby imposing a chilling effect on
innovation and stifling any initiative by an SRO to contribute to more
efficient and effective market operations. The CSE further asserts that
the proposal would remove any incentive for an SRO to offer technical
enhancements to improve the ability of brokers-dealers to comply with
their legal obligations and manage the risk associated with extensions
of credit.\19\
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\19\The PHLX and the Securities Corp. also assert that the NYSE
proposal would lessen incentives for further improvements in
services. See 1989 PHLX Letter and Securities Settlement Corp.
Letter, supra note 9.
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As an example, the CSE asserts that it has responded to the
industry's need for better risk management tools and technical
innovations. The CSE states that it initiated customized supervisory
reports, batch transmission capability and next-morning electronic
access to disposition reports. The CSE believes that these enhancements
help to create a more efficient and orderly marketplace.\20\ Likewise,
Lehman Brothers asserts that the NYSE replaced a cumbersome and
manually intensive processing system only after competing automated
systems had been developed by the CSE and the CHX.\21\ Both the CHX and
CSE point out that they have expended considerable expense and effort
to develop a computerized extension processing system.
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\20\See January and July 1989 CSE Letters, supra note 9.
\21\See Lehman Brothers Letter, supra note 11. The letter states
that while Lehman Brothers submits its extension requests to the
NYSE, it has clearly benefited from the competition between the
exchanges and the NASD in the form of improved services.
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Various commenters assert that by contributing to the NYSE's
overall monopolistic position within the national marketplace, the
proposal will seriously impair other SROs' ability to complete with the
NYSE. For example, both the CSE and PSE state that the anti-competitive
effects of this proposal go beyond extension processing services to
impact on the larger concept of the entire regulatory package of
services that each exchange can provide, which is one of the factors
that firms look at when considering membership and the routing of order
flow.\22\
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\22\See 1993 CSE Letter and 1993 PSE Letter, supra note 11.
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Some commenters assert that the NYSE's concerns could be addressed,
and the anti-competitive effects diminished, through less restrictive
means. Some of these commenters suggest that the regulatory objectives
could be met through the development of uniform industry standards for
processing extension requests and by formalizing information sharing
arrangements.\23\
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\23\See e.g., January 1989 and July 1989 CSE Letters; 1989 CHX
Letter; 1989 PSE Letter, supra note 9, and Lehman Brothers Letter,
supra note 11. The CSE, PSE, CHX and Lehman Brothers Letters all
state that information sharing would be the appropriate alternative
to the proposal. The CSE, for example, states that it shares all of
its extension processing information with the DEAs.
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In addition to information sharing, commenters suggest that uniform
industry standards for processing extension requests could ameliorate
the NYSE's concerns. The CSE suggests that the Intermarket Surveillance
Group (``ISG''), in cooperation with the Commission, should develop
uniform industry standards for the processing of extensions since,
currently, there is no recognized way to evaluate individual extension
requests.\24\ The NASD suggests that broker-dealers should be able to
submit extension requests to any SRO as long as there are comparable
review criteria and the SRO has policies and procedures that make
regulatory use of the data.\25\
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\24\See January 1989 CSE Letter, supra note 9.
\25\See 1989 NASD Letter, supra note 9.
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Lehman Brothers and A.G. Edwards comment that, to the extent that
consistency is the NYSE's objective, the proposal is an incomplete
solution because it has no impact on the processing of margin extension
requests for non-NYSE firms.\26\ Lehman Brothers asserts that
consistency could be achieved more effectively by the FRB or Commission
dictating uniform processing criteria for all SROs although if does not
believe that they are necessary at the present time.
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\26\See Lehman Brothers Letter and A.G. Edwards Letter, supra
note 11.
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Some commenters conclude that it appears that competition has led
to lower extension fees for broker-dealers. These commenters assert
that the NYSE currently charges more than the other SROs granting
extension requests. These commenters also assert that if the proposal
is approved, the NYSE will not be subject to competition from other
SROs and thus it will be free to charge any amount it wishes for
extensions. For example, the Gradison Letter states that competition is
the key to keeping regulatory costs under control.\27\ Likewise, First
of Michigan states that it submits its extension requests to the CSE
and its costs have been reduced. The PHLX states that approval of the
NYSE proposal would leave as the only discipline on the NYSE's
extension fees Commission review of such fees pursuant to section
6(b)(4) of the Act to assure that there was ``equitable allocation of
reasonable dues, fees and other charges among its members * * *''\28\
The PHLX asserts that such review is inevitably inexact and is far less
preferable to relying on the competitive discipline of the market to
assure fair and appropriate fees.\29\
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\27\See Gradison Letter, supra note 9.
\28\15 U.S.C. 78f(b)(4) (1988).
\29\See 1989 PHLX Letter, supra note 9.
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B. The Viability of the Existing Process

Various SRO commenters assert that the NYSE proposal is unnecessary
because there has not been any showing that the current extension
approval process does not work.\30\ For example, both the CSE and
Gradison Letters assert that there is no evidence that the CSE has not
adequately monitored extensions.\31\ The CSE further argues that
adoption of the NYSE proposal is unnecessary because the Commission has
found that the CSE has a good extension program.\32\ Similarly,
Bartlett and Company states that the CSE has effectively monitored the
extension approval process and it would be inefficient, uneconomical,
and extremely inconvenient for it to submit its extension requests to
the NYSE.\33\ Securities Settlement Corporation states that it has been
filing extension requests with the CSE and it has concluded that the
CSE has provided cost effective service and financial reports that the
NYSE has not been able to provide.\34\
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\30\See Gradison Letter and July 1989 CSE Letter, supra note 9,
and January 1993 CSE Letter, supra note 11.
\31\See id.
\32\See January 1993 CSE Letter, supra note 11.
\33\See Bartlett and Co. Letter, supra note 9.
\34\See Securities Settlement Corp. Letter, supra note 9.
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Some commenters question the NYSE's portrayal of the current
regulatory environment, and claim that their extension processing
system is comparable to that of the NYSE. The CSE and PHLX, for
example, state that there is much more uniformity than the NYSE
proposal implies.\35\ The CSE states that it believes that it uses the
same parameters and procedures as the NYSE for evaluating, granting and
controlling extensions as well as the same acceptable reasons,
acceptable number of extensions permitted, special limitations and
restrictions on customers as the NYSE. The PHLX states that it grants
extensions for reasons similar to those accepted by the NYSE, and that
both the NYSE and the PHLX grant extensions for similar lengths of
time.\36\ The CHX also states that it applies the same parameters and
procedures for evaluating, granting and controlling extension requests
as are used by the NYSE.\37\st
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\35\See January 1989 CSE Letter and 1989 PHLX Letter, supra,
note 9.
\36\See February 1989 PHLX Letter, supra not 9.
\37\See 1989 CHX Letter, supra note 9.
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C. Inconsistency With the Act

Some commenters assert that the NYSE proposal is inconsistent with
the Act.\38\ These commenters state that Regulation T and SEC Rule
15c3-3 permit a broker-dealer to apply to any SRO for an extension.
Thus, broker-dealers should be free to choose an SRO on the basis of
convenience, service and cost efficiency.\39\ For example, the CHX
states that approval of the NYSE proposal would be contrary to the
intent of Regulation T and Rule 15c3-3, which is to provide flexible
SRO oversight of the processing of Regulation T extensions. Lehman
Brothers argues that the current extension procedures can only be
altered by petitioning the FRB or the Commission to make a rule change
since both Regulation T and Rule 15c3-3 permit broker-dealers to send
extension requests to any SRO.\40\
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\38\See e.g., 1989 CHX Letter; 1988 and January 1989 CSE
Letters; 1989 PHLX Letter, supra note 9; and 1993 CSE Letter and
Lehman Brothers Letter, supra note 11.
\39\See Bartlett and Co. Letter; 1989 PHLX Letter; 1989 PSE
Letter; 1989 NASD Letter; Securities Settlement Corp. Letter; First
of Michigan Letter; Gradison Letter; July 1989 CSE Letter, supra
note 9; and Lehman Brothers Letter; A.G. Edwards Letter, supra note
11.
\40\See Lehman Brothers Letter, supra note 11.
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D. Claims of Forum Shopping

The PHLX states that it is unaware of any instance in which a
broker-dealer changed from one SRO to another in order to circumvent an
SRO's extension guidelines. The PHLX states that the reasons that its
members have given for choosing to send extension requests to one SRO
over another are, inter alia, convenience, turn-around time and
information provided by the SRO, such as providing the number of
requests emanating from a particular branch.
Similarly, the CSE states that there is no evidence to support the
NYSE's assertions that several NYSE members began using the CSE for
extension processing after the NYSE took restrictive action against
them.\41\ The CSE states that, had it been aware of such restrictive
action by the NYSE, it would have cooperated in restricting the firm.
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\41\See July 1989 CSE Letter, supra note 9.
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E. Harm to the NASD That Would Result From Implementation of the NYSE
Proposal

The NASD's comment letter asserts that it would be harmed in a
number of unique ways if the NYSE proposal is approved.\42\ The NASD
states that it has significant regulatory and examination
responsibility for all of its members, and that extension information
is not relevant exclusively to financial and operational monitoring as
the NYSE seems to assert. The NASD believes that extension requests
contain valuable data which is useful to an SRO for general market
surveillance to detect possible market or trading abuses.
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\42\See 1989 NASD Letter, supra note 9.
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In addition, the NASD notes that a significant portion of customer
activities involving NASDAQ and OTC securities is handled by NASD/NYSE
members, and if it were mandated that such members file all extension
requests with the NYSE, then the NASD would be deprived of significant
important regulatory data involving the marketplace that it is required
to regulate. The NASD further asserts that the resulting fragmentation
of NASDAQ and OTC market data would be counterproductive to
establishing efficient regulation. It states that approval of the NYSE
proposal, therefore, would deprive the NASD of significant and
important regulatory data currently used to fulfill its SRO functions.

F. Miscellaneous Comments

Extension Requests Should be Granted by Broker-Dealers
The Bear Stearns and A.G. Edwards Letters assert that brokers-
dealers should not be required to submit requests for extensions of
time for payment or delivery of securities to any SRO. These commenters
esentially assert that broker-dealer is in the best position to know
when exceptional circumstances warrant an extension and, in any event,
assume the financial risk from such extensions. The Bear Stearns Letter
asserts that suitable procedures can be established for broker-dealers
to control the time periods within which payment or delivery of
securities are made, without the need for the formal submission of
requests for permission to extend the time periods. The A.G. Edwards
Letter disagrees with the FRB's concern that broker-dealers may grant
favorable extension review to certain customers. It believes that
broker-dealers should be required periodically to notify an SRO to act
as a monitor for abuses of the Rule and provide its members with
periodic reports.\43\
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\43\See A.G. Edwards, Letter, supra note 11. A.G. Edwards
submitted similar comments to the FRB in response to its 1992
request for comments.
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Fees from Extensions Help Defray the Cost of DEA Functions
The CSE states that it is relieving the NYSE of the cost of
processing extensions since the NYSE is allocated only the on-site
portion of the broker-dealer examination relating to extensions, and
the cost associated with the NYSE's DEA function is already covered by
the NYSE's fee structure in that, pursuant to NYSE Rule 142, the NYSE
charges its members $.42 per $1,000 gross revenue for regulatory
services. Therefore, according to the CSE, the NYSE has no need for
additional revenue to subsidize its DEA functions.\44\
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\44\See January 1989 CSE Letter, supra note 9. The fee cited by
the CSE was in effect as of January 1989.
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Discussion of Section 17(d) of the Act
Both the PHLX and the CSE argue that the NYSE misapprehends the
principal purpose of section 17(d) of the Act, which is to avoid
unnecessary regulatory duplication and, secondarily, to assure that
violations are not missed because they fall between the
responsibilities of different SROs. They state that submission of
extension requests by a broker-dealer to an SRO other than its DEA
results in no duplicative regulation or burdens on broker-dealers. The
PHLX states that, to the extent that processing of extension request by
multiple SROs could cause any one SRO's financial or regulatory
oversight to be incomplete, this can be addressed through the
coordination between SROs.\45\
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\45\The PHLX believes that extension requests are far less
useful indicators of potential broker-dealer financial or regulatory
concerns than other indicia such as an increased number of
uncompared or adjusted trades, net capital deficiencies or intra-day
monitoring of large trades or positions in active markets.
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The CSE asserts that the existence of a Rule 17d-2 agreement
between the CSE and the NYSE does not mean that the CSE has abrogated
its SRO authority to the NYSE. It asserts that under its Rule 17d-2
agreement with the NYSE, the CSE retains responsibility to enforce
compliance with the CSE's extension rule, and the NYSE is only
allocated the responsibility to conduct regular on-site examinations to
ensure compliance with this rule.
The CSE further asserts that the concept of sharing extension
request data between SROs and the DEA is not, as the NYSE claims,
inconsistent with the intent of SEC Rules 17d-1 and 17d-2. The CSE
states that, as an SRO, it could conduct its own special examinations
of, or participate in a joint regulatory effort with respect to firms
who file extensions with the Exchange. The CSE asserts that it has the
necessary examination responsibilities and ongoing regulatory
relationship with its extension firms to justify the continued
processing of extension requests. The CSE concludes that as a non-DEA
SRO, it is in a position to make a good faith and informed judgment
whether ``exceptional circumstances'' warrant the granting of
extensions.

G. Comments In Support of the Proposal

Two commenters express support for the proposal. Financial Clearing
and Services Corporation (``FCSC'')\46\ states that it agrees that the
NYSE proposal serves a valid regulatory purpose. FCSC notes, however,
that the Commission should remain cognizant of the fact that new rules
must not lessen competition nor should they adversely affect technical
innovation.\47\
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\46\FCSC carries accounts on a fully disclosed basis on behalf
of other introducing broker-dealers.
\47\See Financial Clearing Letter, supra, note 9.
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The FRB staff expresses support for the purposes behind the NYSE's
proposal. The FRB staff notes that the DEA is ultimately responsible
for monitoring those firms that it examines in other areas of the
securities business where credit may be a significant factor, such as
sales practices. The FRB staff further states that it questions the
propriety of an SRO with virtually no general examination
responsibility passing on extensions of time since such SROs may lack
the requisite experience in correlating credit extensions with other
areas of regulatory concern.\48\ The FRB staff believes that only SROs
with examination responsibilities of some kind should grant extensions
of time. In this regard, the FRB specifies that,
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\48\See FRB Letter, supra note 9.
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``In our view, it would be difficult, if not impossible, for an SRO
to meet the requirements of the present rule (12 CFR 220.4(c)(3)(ii))
unless the SRO has some ongoing regulatory relationship with the
applicant to support a belief as to the good faith of the applicant or
the sufficiency of the determination that ``exceptional circumstances''
warrant the extension.''\49\
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\49\See id at 3.
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The FRB Letter asserts that the FRB anticipated that the exceptions
to the Regulation T requirements governing payment for securities would
be minimal, and that, ``[n]o one ever perceived the granting of
extensions of time as a profit-making endeavor.''\50\ The FRB Letter
also states that, for the extension request process to be effective,
cooperation, and not competition, among SROs is essential. In this
regard, the FRB Letter states that it appears that the change in the
rule to allow any SRO to grant extension requests ``may have
inadvertently permitted regulatory concerns to be subordinated to the
profit motive.''\51\ The FRB staff also expresses the view that if the
extension-granting service is viewed as a profit center, it can only
encourage more extensions of time.\52\
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\50\See FRB Letter, supra note 9 at 1.
\51\FRB Letter, supra note 9 at 2. In 1980, the FRB revised Reg
T in its entirety. The Board broadened the scope of Reg T by
authorizing a self-regulatory organization or association to grant
extensions to any creditor regardless of membership affiliation. SEC
Rule 15c3-3(n) is similarly worded.
\52\See FRB Letter, supra note 9 at 2.
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IV. The NYSE's Responses

In May 1989, the NYSE submitted a letter to the Commission
responding to negative comments by the CSE, CHX, PHLX, PSE, Bartlett &
Company, Gradison & Company, and the Securities Settlement Corporation
with respect to the Exchange's proposed Rule 434. In January, 1994, the
NYSE submitted another letter responding to comments sent to the
Commission by the CSE, PSE, Bear Stearns Securities Corp, A.G. Edwards
& Sons, Inc. and Lehman Brothers after the Commission republished
notice of this proposal. The NYSE's responses to the commenters are
summarized below.

A. Burden on Competition

The NYSE acknowledges that some loss of revenue to other SROs may
result from its proposed rule, but disagrees that the proposal will
have a significant anti-competitive effect on the marketplace that is
not necessary or appropriate in furtherance of the purposes of the Act.
The NYSE also asserts that proposed NYSE Rule 434 is justified from a
regulatory perspective and that arguments regarding competition as they
relate to revenues are inappropriate.
In support of its contention that the proposed NYSE Rule 434 is
justified, the NYSE asserts first that, as DEA for most of its members,
the Exchange is charged with overseeing compliance by its members with
the applicable financial responsibility rules. The Exchange believes
that the information gathered in processing extension requests is
essential in carrying out its statutory oversight responsibilities.\53\
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\53\The Exchange also states that the FRB concurs that the DEA
has ultimate responsibility in monitoring those firms which it
examines, and that even the CSE acknowledges that this information
is important to the DEA.
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Second, pursuant to agreements with other SROs, the NYSE has
assumed responsibility to oversee compliance by its members with sales
practices and related rules of the NYSE and other SROs. Information
derived from extension requests is necessary to perform effective on-
site review as this is a significant means for detecting potential
sales practices problems.
Third, the NYSE believes that the proposal does not conflict with
federal laws permitting any SRO to approve extensions of time. The NYSE
states that while 1980 amendments to Regulation T and similar changes
to Rule 15c3-3 under the Act permitted any SRO to grant extensions, the
FRB issued a letter outlining procedures to be followed when a non-DEA
SRO considers such requests, including notification of the DEA. The
NYSE also notes that the FRB Comment Letter states that modern
technology has significantly altered the convenience benefits of the
1980 amendments, and that the authority of non-DEAs to grant extensions
should be on an exception basis.\54\
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\54\Along these lines, the NYSE's 1989 Comment Letter states
that 99.6% of all extension requests received by the Exchange are
transmitted electronically.
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Fourth, the NYSE asserts that concentrated regulatory
responsibilities under Exchange Act Rules 17d-1\55\ and 17d-2\56\
require that the NYSE obtain continuous first-hand information from its
DEA firms and process such information. The NYSE further asserts that,
because the Exchange already has 17d-1 and 17d-2 responsibility for
regulation of its members, it does not make good regulatory sense to
break out one aspect of regulation for the economic benefit of
individual SROs. The Exchange cites to the FRB Letter, which states:
``We certainly would question the propriety of an SRO with virtually no
general examination responsibilities passing on extensions of time as
experience might be lacking in correlating credit extensions with other
areas of regulatory concern.''\57\
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\55\Rule 17d-1--Examination for Compliance with Applicable
Financial Responsibility Rules--deals with designation of a SIPC
member to an SRO for purposes of examining such member for
compliance with applicable financial responsibility rules.
\56\Rule 17d-2--Program for Allocation of Regulatory
Responsibility--deals with the creation of plans between SROs to
allocate responsibility to receive regulatory reports from persons
who are members or participants of more than one SRO, to examine
such persons for compliance, or to enforce compliance by such
persons with specified provisions of the Act and the rules and
regulations thereunder.
\57\See FRB Letter, supra note 9 at 2.
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Finally, the NYSE asserts that arguments that the proposal violates
section 11A(a)(1) of the Act are ``ill conceived.'' The NYSE states
that section 11A(a)(1), pertaining to the national market system, is
basically concerned with efficient, effective and competitive trading
systems and not regulatory obligations.\58\ Moreover, the NYS does not
agree that proposed Rule 434 would have a negative impact on the
extension processing system in terms of efficiency or technical
innovation. The NYSE asserts that it has been a pioneer in developing
and computerizing the extension processing system, and that other SROs
copied its efforts. The NYSE states that it is committed to increasing
efficiency in the process, which is reflected through, e.g., its
committment of staff dedicated to monitoring extension requests.\59\
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\58\The NYSE cites: HR Report No. 94-229, 94th Congress, 1st
Session (1975) ``The Report of the Committee of Conference to
accompany S. 249'' and Senate Report No. 94-75, 94th Congress, 1st
Session (1975) ``Report of the Committee on Banking, Housing and
Urban Affairs, United States Senate to accompany S. 249,'' at 101.
\59\The NYSE stated, at the time of the 1989 response letter,
that it had a 5-person professional staff as well as a group of
about 128 examiners and 32 coordinators who add integral
surveillance support to the Credit Regulation Function, and that it
believed its staff to be unique to the industry.
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B. A Program of Sharing Information

The NYSE does not believe information sharing between SROs would be
practical. First, the NYSE states that it needs to have extension
information on-line. The NYSE states that it needs to make immediate
decisions in order to perform daily regulatory responsibilities.
Information and reports received after the fact would not be as
valuable.
Second, the NYSE states that current SRO systems are not compatible
and could not be linked because of different parameters and methods of
processing data. The NYSE also states that information provided by
other SROs would be of little use to the NYSE because each SRO makes
decisions based on its own standards.
Third, the NYSE states that the expense necessary to link current
SRO systems would be substantial and other SROs would look to the NYSE
to pay the majority of the cost associated with the changes since the
NYSE processes 85% of its members' extensions. The NYSE also states
that it does not believe that the expense is justifiable since it
performs all of the tasks associated with margin positions, and other
SROs have little or no need for this information. The NYSE asserts that
its regulatory costs should not be increased in order to justify the
non-regulatory purposes of other SROs, and that such costs will be
passed on to customers.
Finally, the NYSE states that the concept of sharing extension data
by other SROs with the DEA is inconsistent with the intent of Rules
17d-1 and 17d-2 under the Act. The DEA initiatives were adopted in
order to eliminate unnecessary duplication by concentrating regulatory
functions within one SRO and relieving all other SROs of their
responsibility to examine for compliance with relevant rules under the
Act.

C. Lack of Uniform Standards

In its comment letter, the NYSE maintains that there are no uniform
extension processing standards among the SROs, despite several SROs'
assertions that their standards are comparable to those of the NYSE.
The NYSE states that it does not believe that the CSE's standards for
extension review are comparable to those of the NYSE, and it cites
examples of situations taken from CSE extension reports that the NYSE
would find unacceptable.
The NYSE also believes that as long as filing extension requests
with a firm's DEA is not mandatory, the Exchange is constrained from
incorporating more effective regulatory tools into its system. The NYSE
believes that those firms that require the greatest scrutiny and
oversight will commence filing for extensions with another SRO if the
NYSE takes restrictive action. The NYSE cites examples of broker-
dealers that switched from the NYSE to the CSE after restrictive action
was filed against them. The NYSE believes that the impetus for these
switches was not efficiency or economics, as stated by the CSE, but
rather to avoid regulations intended to ensure extensions are granted
for legitimate purposes and to prevent excessive credit in the
securities markets.
Finally, the NYSE dismisses suggestions by some commenters that the
ISG should develop these standards in conjunction with the Commission.
The NYSE states that the purpose of ISG is to deal with market
operations related projects rather than with credit issues.

D. Miscellaneous Comments

The NYSE states that the CSE was in error when it asserted that the
cost associated with the Exchange's DEA function is already covered by
the Exchange's fee structure. The NYSE states that it charges its
members a regulatory service fee pursuant to Rule 129 for financial
oversight responsibilities but such fee does not cover regulatory
services with respect to sales practices which are a significant aspect
of monitoring credit extensions.
The NYSE disagrees with the CSE's assertion that extension
processing by the CSE relieves the NYSE of regulatory expense, because
the NYSE must conduct field examinations of all of its members,
including those who process extensions through the CSE. The NYSE
suggests that the CSE may be able to charge less per extension than the
NYSE because the CSE has no field examination capabilities to monitor
credit extension and thus, does not incur costs for maintaining an
examination program.
The NYSE disagrees with the concerns that approval of Rule 434
would give the NYSE monopoly power with respect to pricing. The NYSE
states that it would impose a price increase unless appropriate.
Moreover, the NYSE notes that any fee increase would be subject to
Commission review.
The NYSE states that it agrees with the FRB's conclusion that only
SROs with some examination responsibilities should grant extensions, as
well as its conclusion that it would be difficult or impossible to
comply with the Regulation T requirement that exceptional circumstances
warrant an extension if the SRO does not have an ongoing regulatory
relationship with the broker-dealer requesting the extension. The NYSE
also notes that it processes 85% of the extensions generated by its
members and thus economics is not its major consideration in proposing
Rule 434. The NYSE states that equal and effective regulation of its
members is the primary goal of the proposal.
The Exchange does not believe it is appropriate to allow a broker-
dealer to grant extensions of time to its own customers given the
potential for conflict between regulatory and customer service
considerations.
Finally, the NYSE states that, since its 1989 letter, it has
continued to undertake enhancements to its automated extension
processing system. In January, 1994, it implemented a system to
transmit daily extension reports back to member organizations.
According to the Exchange, over 99% of all extension requests received
by the Exchange are processed and returned electronically to member
organizations the same day so that extension data is available to them
before the start of the next business day. The NYSE is not aware of any
other SRO which provides this service.

V. Discussion

After careful consideration of the comments received as well as
applicable statutory provisions, the Commission believes that proposed
NYSE Rule 434, which would require all NYSE member firms for which the
NYSE is the DEA to submit their requests for extensions of time for
payment or delivery of securities to the NYSE, is consistent with the
ACT, and in particular, sections 6(b) (5) and (8) of the Act.\60\
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\60\15 U.S.C. 78f(b) (5) and (8) (1988).
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Section 6(b)(5) of the Act requires, among other things, that the
rules of an exchange be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to remove impediments to and perfect the mechanism of a free and open
market and, in general, to protect investors and the public interest.
The Commission believes that proposed NYSE Rule 434 will serve to
prevent fraudulent and manipulative acts and to protect investors and
the public interest by enhancing the NYSE's ability to monitor the
continued financial viability of its member firms where it is the DEA.
In addition, the proposed rule will help the NYSE to ensure its
members' compliance with the requirements of Regulation T and Rule
15c3-3 of the Act. The Commission also believes that NYSE Rule 434 will
help to effectuate uniform standards for NYSE members' requests for
extensions of time for payment or delivery of securities. The uniform
application of the NYSE's standards to a large majority of its member
firms' extension requests will promote fairness by helping to ensure
equal treatment for NYSE member firms.
As the DEA for most of its member firms, the NYSE is responsible
for examining such firms for compliance with the financial
responsibility rules.\61\ The Commission believes that information
about extensions for payment or delivery of securities is essential in
helping the NYSE carry out its DEA responsibilities under the Act.\62\
In particular, Regulation T and Rule 15c3-3 require that extensions be
granted only if the broker-dealer is acting in good faith and
exceptional circumstances exist to warrant an extension. As the DEA,
the NYSE must ensure that requests that are granted have met these
conditions. Under the current structure, however, another SRO may grant
numerous extensions without the NYSE being adequately informed as to
the nature of the requests and the conditions under which they are
being granted. This not only can impair the NYSE's ability to ensure
member firm compliance with financial responsibility rules but it can
affect the NYSE's ability to detect potential sales practice
problems.\63\
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\61\For firms where the NYSE is the DEA, the Exchange is
responsible for examining the firms' compliance with rules
pertaining to, among other things: Hypothecation or lending in
customer reserve accounts (under section 8 of the Act); the
maintenance of books and records (under section 17(a) of the Act);
capital, margin or recordkeeping (under section 17(d) of the Act);
broker-dealer balance sheets (under section 17(e) of the Act), or
any other Commission or SRO rules relating to the protection of
customer accounts or securities.
\62\The Commission agrees with the NYSE's claim that information
derived from extension requests is necessary, among other things, to
perform effective on-site review to detect potential sales practice
problems. See 1989 NYSE Letter, supra note 10.
\63\The Commission notes that the NASD has expressed concern
that this proposal would prevent the NASD from obtaining extension
information necessary to perform its SRO functions. The NASD states
that the proposal would prevent the NASD from obtaining information
regarding a large number of its members since a significant portion
of customer activities involving NASDAQ and OTC securities is
handled by NASD/NYSE members for whom the NYSE is the DEA. The
Commission finds this argument unpersuasive as the regulatory
structure already distinguishes between DEA SROs and non-DEA SROs
and this proposal merely follows this distinction.
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Further, the rule change will serve to eliminate the possibility of
forum shopping among SROs for extensions. For example, the NYSE's 1989
comment letter notes instances where a NYSE member firm began to send
its extension requests to another SRO after the NYSE took restrictive
action against it. Although some comment letters dispute the extent of
forum shopping, the Commission's experience in reviewing SRO compliance
programs leads it to believe that the potential for forum shopping for
extensions exists under the current scheme and that approval of the
NYSE proposal will diminish this.\64\
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\64\In this regard, other SROs may wish to adopt similar rule
proposals that would require those members for which the SRO is the
DEA to submit extension request to that SRO.
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In summary, given the NYSE's Rule 17d-1\65\ and Rule 17d-2\66\
responsibilities under the Act, it will improve regulatory oversight by
the NYSE if the Exchange receives extension request information for
firms for which it is the DEA so that it may have a complete picture of
each member's financial and regulatory situation. The proposed rule
change will accomplish this by enabling the NYSE to have all the
regulatory information necessary to get a complete view of each NYSE
member firm's activity so that the NYSE may more effectively prevent
members' financial difficulties or fraud.
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\65\See supra note 55.
\66\See supra note 56.
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The Commission also believes that implementing proposed NYSE Rule
434 is the simplest and quickest way to meet the goal of ensuring that
credit related financial restrictions placed upon a member firm are
based upon complete information. The Commission does not agree with
assertions that the Act's objectives could be better met by
implementing a uniform system of sharing extension information.
Although improved sharing of extension information would provide data
to the NYSE, it would not relay this information in time for the NYSE
to act before the receiving SRO decides on an extension request. In
addition, information sharing would involve two SROs reviewing
extension requests and result in substantial expense and modifications
of existing extension processing systems. This would necessarily
involve considerable duplication of efforts since two SROs would review
extension information. In contrast, the NYSE proposal is consistent
with the current regulatory structure of designating one SRO as the DEA
for firms that are members of more than one SRO. The DEA scheme was
adopted in order to eliminate unnecessary duplication of efforts in the
area of member regulation.\67\ As a result, the Commission does not
believe that the Act mandates that information sharing be utilized in
place of the NYSE's approach.
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\67\See SEC Rule 17d-1, 17 CFR 240.17d-1 (1993), which provides
that the Commission shall consider, inter alia, unnecessary
regulatory duplication when designating an SRO for purposes of
examination for compliance with financial responsibility rules.
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The Commission also believes that the regulatory benefits from NYSE
Rule 434 outweigh any competitive concerns raised by the commenters.
Under section 6(b)(8) of the Act, the Commission may not approve an
exchange rule if it imposes a burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act. For
the reasons discussed below, the Commission believes that any
competitive burden raised by NYSE Rule 434 is necessary and appropriate
under the Act.
First, the Commission believes that the NYSE, as the DEA for most
of its member firms, is in the best position to monitor extension
requests and to ensure that they do not affect the financial viability
of member firms. In this regard, the NYSE has a sound system for
monitoring extension requests and ensuring that member firms do not
exceed established parameters. We do not believe that approval of the
rule and the resulting lessening of competition for processing NYSE
members' requests will have a harmful effect on the system for handling
credit extension requests. In particular, because of the NYSE's
responsibility as the DEA, it will have a continuing responsibility to
ensure that firms are not receiving numerous credit extensions that may
indicate potential abuse and financial difficulties, and accordingly,
they will have an incentive to properly maintain their monitoring
systems.
Second, the Commission believes that the DEA may experience
difficulty in meeting its responsibilities when extensions are granted
by another SRO.\68\ Consistent and current information about firm
requests for extensions of time for payment or delivery of securities
will help the NYSE to measure the financial viability of the firm. As
the DEA, the NYSE is solely responsible for examining its members for
compliance with industry financial responsibility rules. Therefore, the
Exchange is best-suited to monitor and effectively impose restrictions
on the extension of credit by its members. If the NYSE obtains all
extension information, credit related financial restrictions placed
upon a member firm will be made based upon complete information,
comprising all extensions requested. Therefore, any potential burden on
competition stemming from the NYSE proposal is justified by the
overriding regulatory benefit.
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\68\See FRB Letter, supra note 9.
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Third, the Commission does not believe that the proposal reduces
competition in an inappropriate manner. The SRO's monitoring of margin
requirements, as with their other regulatory responsibilities, was not
and is not intended to act as a profit making arm of the market
activities of SROs. Provision of necessary regulatory services by the
DEA is an essential component of its statutory requirements, and should
not be impaired by price competition from other SROs who do not carry
DEA responsibilities.
Fourth, as with any regulatory fee, the Commission has the
authority under the Act to review and abrogate excessive fees. Even if
approval of the rule proposal eliminates fee competition, the
Commission will continue to exercise its statutory authority to ensure
that only reasonable fees for extension requests are imposed by the
NYSE on member firms.\69\
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\69\Section 6(b)(4) of the Act, 15 U.S.C. 78f(b)(4) (1988),
requires that the rules of an exchange provide for the equitable
allocation of reasonable dues, fees, and other charges.
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Accordingly, for all of the above reasons, the Commission believes
that to the extent that the proposal does impose a burden on
competition, such burden is justified as necessary and appropriate
under the Act.
The Commission also believes that it is appropriate to approve the
NYSE's proposal notwithstanding the fact that both Regulation T and
Rule 15c3-3 provide that a broker-dealer may go to any SRO for credit
extension requests, irrespective of whether the SRO is the broker-
dealer's DEA. In this regard, the NYSE proposal does not prevent other
SROs from granting extension requests, but simply narrows the choice
for firms for which the NYSE is the DEA. Firms for which the NYSE is
not the DEA can still use other SROs for their extension requests. In
addition, the FRB has stated that it supports the NYSE's proposal and
that it generally believes that only SROs with examination
responsibilities of some kind should grant extensions. The FRB noted
that the changes to Regulation T which were adopted in 1980 were
intended to accommodate firms who found it more convenient to send
extension requests to a nearby SRO and that this same need may not
still exist in the computer age. Finally, because the terms of the
proposal are not inconsistent with Regulation T and Rule 15c3-3, and
the proposal furthers the NYSE's responsibility under the Act, the
Commission believes that it is an appropriate exercise of the NYSE's
ability to adopt rules consistent with the Act.
The CSE also argues that the NYSE proposal should be disapproved
because there has been not showing that the current extension approval
systems have not been working.\70\ The Commission does not believe that
in order to approve a proposal there must be a showing that the current
system is not working, only a showing that the new rule would create
better procedures or a better system and that the proposal is
consistent with the Act. As discussed above, the NYSE's proposal will
improve the regulation of extension requests. In addition, however, the
Commission's review of extension request programs has indicated certain
inadequacies in the extension process at various SROs. These
inadequacies could be reduced if the NYSE proposal is approved.
Moreover, the current structure lacks uniform standards and as a result
can encourage forum shopping. Accordingly, the Commission believes that
the proposal will address these concerns and help to create a more
effective review of credit extensions. The Commission disagrees with
the assertions of some commenters that approval of the proposal would
be inconsistent with section 11A of the Act. Section 11A(a)(1)(C)
provides that it is in the public interest and appropriate for the
protection of investors to assure fair competition among exchange
markets and between exchange markets. The NYSE proposal will not
prevent competition among SROs in their role as markets, and it is
intended to make the extension request process consistent with the DEA
structure that the other SROs have already agreed to.
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\70\See July 1989 CSE Letter, supra note 9 and 1993 CSE Letter,
supra note 11.
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The Commission also disagrees with some commenters' argument that
approval of NYSE Rule 434 would greatly enhance the NYSE's power in the
marketplace. Rule 434 will merely make such that in instances in which
the NYSE is the DEA, the NYSE will obtain all pertinent regulatory
information about firm activities. The commenters have made no showing
that the rule would affect other markets' ability to compete for order
flow. Moreover, the DEA program, to which all the SROs have joined, is
intended to concentrate the provision of regulatory services into the
major SROs for efficiency and effectiveness. Proposed Rule 434 is a
logical adjunct to the DEA program.
Several commenters argue that broker-dealers should be able to
submit extension requests to any SRO which is convenient for them. The
Commission, however, believes that proximity is not a significant
factor because in today's electronic environment it would generally be
just as convenient to submit extension requests to the NYSE as it would
be to submit them to any other SRO.
Finally, the Commission does not agree with some commenters who
argue that broker-dealers should not be required to submit requests for
extensions of time for payment or delivery of securities to any
SRO.\71\ These commenters argue that broker-dealers should make such
determinations since it is their capital at stake. The Commission does
not need to address these arguments in the context of this rule
proposal which concerns the allocation of extension requests among the
SROs. The Commission, however, preliminarily believes that there is a
need for checks on the granting of such extensions by broker-dealers.
Without SRO review in this area, broker-dealers would be free to add
unwarranted risk to securities transactions by granting credit in
excess of what is reasonable or granting excessive extensions of time
in order to ensure that a transaction for which a commission is earned
is completed. The Commission, however, along with the FRB's ongoing
review of Regulation T, will continue to examine these issues.
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\71\See Bear Sterns and A.G. Edwards Letters, supra note 11.
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VI. Conclusion

For the reasons discussed above, we believe that the proposal is
consistent with the Act.
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\72\ that the proposed rule change (SR-NYSE-88-35) be, and hereby
is, approved.
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\72\15 U.S.C. 78s(b)(2) (1988).

For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\73\
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\73\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-12573 Filed 5-23-94; 8:45 am]
BILLING CODE 8010-01-M

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-12573. Public record. Not legal advice.