Self-Regulatory Organizations; Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Listing and Trading Broad InDex Guarded Equity-linked Securities on the Dow Jones Euro STOXX 50 Index

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40303; File No. SR-NYSE-98-22]

Self-Regulatory Organizations; Notice of Filing and Order

Granting Accelerated Approval to Proposed Rule Change by the New York

Stock Exchange, Inc. Relating to Listing and Trading Broad InDex

Guarded Equity-linked Securities on the Dow Jones Euro STOXX 50 Index

August 4, 1998.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that

on July 24, 1998, the New York Stock Exchange, Inc. (``NYSE'' or

``Exchange'') filed with the Securities and Exchange Commission

(``SEC'' or ``Commission'') the proposed rule change as described in

Items I and II below, which Items have been prepared by the NYSE. The

Commission is publishing this notice to solicit comments on the

proposed rule change from interested persons and to grant accelerated

approval to he proposed rule change.

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

\2\17 CFR 240.19-4.

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I. Self-Regulatory Organization's Statement of the Term of

Substance of the Proposed Rule Change

The Exchange proposes to list for trading BRoad InDex Guarded

Equity-linked Securities (``BRIDGES''),\3\ the return on which is based

upon the performance of a 50-company index (the ``Dow Jones Euro STOXX

50'' or ``DJES50'') that an affiliate of Dow Jones & Co.,Inc.

Publishes. The companies comprising the DJES5O are highly-capitalized,

``blue chip'' European companies.\4\

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\3\ ``BRoad InDex Guarded Equity-linked Security'' and

``BRIDGES'' are service marks of Morgan Stanley Dean Witter & Co.

(``MSDW'').

\4\ Appendix A to the NYSE's proposal, which is available at the

Office of the Secretary, NYSE and at the Commission, lists he 50

component companies of the DJES50 and identifies the home country

and industry sector for each company, each company's relative

weighting within the DJES50, each component company's price and

capitalization average daily share volume over the past 12 months

for each company.

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The text of the proposed rule change is available at the Office of

the Secretary, NYSE and at Commission.

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 NYSE included statements

concerning the purpose of and basis for the proposed rule change and

discussed any comments it receive on the proposed rule change. The NYSE

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

1. Purpose

Pursuant to the listing criteria set forth in Section 703.19 of the

Exchange's Listed Company Manual, the Exchange lists and trades

BRIDGES.\5\ BRIDGES are securities that entitle the holder to receive

from the issue upon maturity pre-established percentage of the

principal amount of the BRIDGES plus an amount based upon the increase

[[Page 42893]]

in the market value of a stock index or portfolio.\6\

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\5\ Currently, the Exchanged lists and trades BRIDGES on the S&P

500 and the Dow Jones Industrial Average.

\6\The Commission has previously approved the listing and

trading of hybrid securities similar to BRIDGES based upon

portfolios of securities or stock indices. See e.g., Securities

Exchange Act Release No 32840 (September 2, 1993), 58 FR 47485

(September 9, 1993); 33368 (December 22, 1993), 58 FR 68975

(December 29, 1993); 33495 (January 19, 1994), 59 FR 3883 (January

27, 1994); 34692 (September 20, 1994), 59 FR 49267 (September 27,

1994); 37533 (August 7. 1996), 61 FR 42075 (August 13, 1996); and

37744 (September 27, 1996), 61 FR 52480 (October 7, 1996) (``Term

Notes Approval Orders'').

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The Exchange is submitting the proposed rule change specifically to

enable the Exchange to list for trading BRIDGES on the DJES50 \7\

issued by MSD BRIDGES on the DJES50 will allow inventors to combine

protection of a pre-established portion of the principal amount of the

BRIDGES with potential additional payments based on an index of

securities of selected companies. The first issue of BRIDGES on the

DJES50 will provide that 100 percent of the principal amount thereof

will be repaid at maturity. The Exchange will not list an issue of

BRIDGES on the DJES50 with a pre-established repayment percentage of

less than 90 percent without first consulting with the Commission.

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\7\ The component stocks of the DOW Jones Euro STOXX 50 are:

ABN-AMRO Hdlg NV, Aegon NV, Ahold NV, Air Liquide SA, Akzo Nobel,

Alcatel Alsthom SA, Allianz, Allied Irish Bank, Assicurazioni

Generali S.p.A., AXA-UAP SA, Banco Bilbao Vicaya, Bayer AG,

Carrefour, Cie de St-Gobain, Credito Italiano, Dalmer-Benz AG,

Deutsche Bank, Deutsche Lufthansa, Deutsche Telecom, Electrabel SA,

ELF Aquitane, Elsevier NV, Endesa SA, ENI S.p.A., Fiat S.p.A.,

Fortis AG, France Telecom, ING Groep NV, Koninklijke PTT NV, LVMH

Moet-Hennesey Louis Vuitton, L'Oreal, Mannesmann AG, Meto AG, Nokia

AB Oy A, Parisbas,Petrofina SA, Philips Electronics, Portugal

Telecom SA, Repsol SA, Rhone-Poulenc A, Royal Dutch Petroelum, RWE

AG, Schneider SA, Siemens AG, Societe Generale, Telecom Italia,

Telefonica de Espana, Unilever NV, Veba AG, and Vivendi.

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The Security

BRIDGES on the DJES50 will be denominated in U.S. dollars \8\ and

will entitle the owner at maturity to receive the pre-established

percentage of the issue's principal amount plus an additional amount

(the ``Supplemental Redemption Amount'') that is based upon the

percentage increase, if any, between the ``Initial Index Value'' and

the ``Final Index Value,'' The Initial Index Value is the value of the

DJES50 on the date on which the issuer prices the BRIDGES issue for the

initial offering to the public. The Final Index Value will equal the

arithmetic average of the closing values of the DJES50 on each of

multiple determination dates spread out over the period prior to the

maturity of the BRIDGES issue. For instance, the first issuance of

BRIDGES on the DJES50 will have three determination dates spread out

over the two years prior to the issue's maturity date. Thus, the

Supplemental Redemption Amount requires the following calculation:

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\8\ The prices of the securities underlying the DJES50 are

quoted in currencies other than U.S. dollars. Therefore, investments

in securities indexed to the value of non-U.S. securities may

involve greater risks, subject to fluctuations of foreign exchange

rates, future foreign political and economic developments, and the

possible imposition of exchange controls or other foreign

governmental laws or restrictions applicable to such investments.

[GRAPHIC] [TIFF OMITTED] TN11AU98.002

If the Final Index Value of the DJES50 is below the Initial Index

Value of the DJES50, the owner will receive not less than the specified

percentage of the principal amount of the security. For instance, if

the market value of the DJES50 used to calculate the amount payable at

maturity has declined, the owners of the first issue of BRIDGES on the

DJES50 will still receive 100 percent of the principal amount of the

securities.\9\ The additional payment at maturity is based on changes

in the value of the DJES50.

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\9\ As noted above, the NYSE has stated that the first issue of

BRIDGES on the DJES50 will provide 100% principal guarantee. The

Commission notes that subsequent issues must guarantee at least 90%

of the principal unless a lesser amount is permitted after

consultation with Commission staff.

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As with other BRIDGES, BRIDGES on the DJES50 may not be redeemed

prior to maturity and are not callable by the issuer. Owners may sell

the security on the Exchange. The Exchange anticipates that the trading

value of the security in the secondary market will depend in large part

on the value of the DJES50 and also on other factors, including the

level of interest rates, the volatility of the value of the DJES50, the

time remaining to maturity, dividend rates and the creditworthiness of

the issuer.

In accordance with Section 703.19 of the Exchange's Listed Company

Manual, the Exchange only will list for trading BRIDGES on the DJES50

if there are at least one million outstanding securities, at least 400

shareholders, the issue has a minimum life of one year and at least a

$4 million market value and if the BRIDGES otherwise comply with the

Exchange's initial listing criteria.\10\ In addition, the Exchange will

monitor each issue to verify that it complies with the Exchange's

continued listing criteria.\11\

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\10\ The hybrid listing standards in Section 703.19 of the

Listed Company Manual are intended to accommodate listed companies

in good standing, their subsidiaries and affiliates, and non-listed

companies which meet the Exchange's original listing standards.

Issuers must also meet the earnings and net tangible assets criteria

set forth in Sections 102.01-102.03 of the Listed Company Manual.

Specifically, the minimum original listing criteria requires that

issuers have: (1) 2,000 shareholders holding 100 shares or more, or

have 2,200 shareholders and an average monthly trading volume of

100,000 shares for the most recent 6 months, or 500 shareholders and

an average monthly trading volume of 1,000,000 shares for the most

recent 12 months; (2) a public float of 1.1 million shares; (3) an

aggregate public market value of $40 million or total net tangible

assets of $40 million; and (4) earnings before taxes of $2.5 million

in the latest fiscal year and earnings before taxes of $2 million in

each of the preceding two fiscal years, or earnings before taxes of

$6.5 million in the aggregate for the last three fiscal years with a

$4.5 million minimum in the most recent fiscal year (all three years

are required to be profitable). See NYSE Listed Company Manual

Sec. 102.01.

\11\ The continued listing standards for Specialized Securities

provide that the NYSE will consider delisting a security when: (1)

the number of publicly-held shares is less than 100,000; (2) the

number of holders is less than 100; (3) the aggregate market value

of the securities outstanding is less than $1,000,000; or (4) in the

case of specialized securities which are debt, the issuer is not

able to meet its obligations on such debt. See NYSE Listed Company

Manual Sec. 802.00.

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MSDW will deposit registered global securities representing BRIDGES

on the DJES50 with its depositary, The Depository Trust Company, so as

to permit book-entry settlement of transactions by participants in The

Depository Trust Company.

BRIDGES on the DJES50 will trade on the Exchange's equity floor,

subject to the margin and other trading rules that apply to equity

trading on the Exchange. Specifically, pursuant to NYSE Rule 405, the

Exchange will impose a duty of due diligence on its members and member

firms to learn the essential facts relating to every customer prior to

[[Page 42894]]

trading BRIDGES on the DJES50.\12\

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\12\ NYSE Rule 405 requires that every member, member firm or

member corporation use due diligence to learn the essential facts

relative to every customer and to every order or account accepted.

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The Index

The DJES50 was launched by STOXX Ltd., a company jointly founded by

Schweizer Borse, SBF-Bourse de Paris, Deutsche Borse, and Dow Jones &

Co., Inc. (``STOXX'') on February 26, 1998, to create, distribute and

market European indexes and to market Dow Jones indexes. STOXX is not a

broker/dealer.

STOXX constructed the DJES50 to have an initial value of 1000 at

December 31, 1991 and designed it to measure the stock market

performance of highly-capitalized companies of countries that are

expected to participate in the European Economic and Monetary Union

(the ``EMU''), which is scheduled to commence on January 1, 1999. The

index is calculated and disseminated on a real-time basis every 15

seconds and is published daily in The Wall Street Journal.

The NYSE represents that the DJES50 consists of the common stock of

companies that are leaders in their industry sectors and are among the

largest in market capitalization, and the highest in liquidity, among

the companies of the eleven countries that are likely to be the initial

member states of the EMU. Currently, nine of those eleven countries are

represented in the DJES50. Each component company is a major factor in

its industry and its securities are widely held by individuals and

institutional investors.

The Exchange believes that adequate surveillance exists for the

component stocks as a result of ``Surveillance Information Sharing

Arrangements'' with appropriate entities in component stocks' home

countries. Surveillance Information Sharing Arrangements include

surveillance information-sharing agreements that the Exchange has

entered into with foreign markets, memoranda of understanding that the

SEC has entered into with foreign securities regulatory agencies and

similar agreements and arrangements between the United States or the

SEC and their counterparts in the home countries for companies whose

securities are components of the DJES50.

At present, in excess of 95 percent of the capitalization of the

DJES50 is subject to Surveillance Information Sharing Arrangements. The

Exchange will not list a new issue of BRIDGES on the DJES50 if either:

(i) The home countries of component securities representing more

than 50 percent of the capitalization of the DJES50 are not subject

to Surveillance Information Sharing Arrangements;

(ii) A home country of component securities representing more

than 20 percent of the capitalization of the DJES50 is not subject

to Surveillance Information Sharing Arrangements; or

(iii) Two home countries of component securities representing

more than 33\1/3\ percent of the capitalization of the DJES50 are

not subject to Surveillance Information Sharing Arrangements.

Companies are selected for inclusion in the calculation of the

DJES50 by its proprietor, STOXX. The companies that are included in the

DJES50 are representative of the broad market in the EMU and of a wide

array of European industries within the following industry sectors:

automobile; food and beverage; banking; industrial; chemical;

insurance; conglomerates; media; consumer goods; cyclical;

pharmaceutical; non-cyclical; retail; construction; technology; energy;

telecommunications; financial services; and utility.

The Supervisory Board of STOXX is responsible for adding and

deleting companies from the DJES50. That board selects stocks that they

believe, in their subjective discretion, to be representative of

highly-capitalized, highly-liquid blue chip companies that are

representative of a variety of industry sectors in the EMU countries.

Neither STOXX nor any of its founders is affiliated with MSDW.

The DJES50 is a capitalization-weighted index. The number of shares

outstanding and the share price for each class of stock are used to

determine each component company's market capitalization. No company

may comprise more than 10 percent of the value of the index. Currently,

Royal Dutch Shell represents 7.76 percent of the DJES50, more than any

other company. If any company exceeds 10 percent of the value of the

index, STOXX will cap that company's representation in the index at 10

percent and adjust the relative representation of the remaining

component stocks so that they represent the remaining 90 percent. In

order to avoid distortions, changes in the index for dividends, stock

splits, rights offerings, spin-offs, repurchases and the like are made

on a quarterly basis, unless the number of outstanding shares of a

component company changes by more than 10 percent, in which case the

adjustment is made immediately.

The market capitalization of the 50 companies that currently

represent the DJES50 differs significantly from a high of $180 billion

(Bayer AG) to a low of $7.7 billion (RWE AG), as do the market prices

of their common stock from a high of $591.64 (Carrefour) to a low of

$4.58 (Fiat Spa).\13\ The ten companies with the highest weighting in

the DJES50 represent 40.43 percent of the DJES50.\14\ The ten companies

with the smallest weighting in the DJES50 calculation represent 7.75

percent of the DJES50.

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\13\ These values are as of June 1, 1998.

\14\ As noted above, the highest weighted component of the

DJES50 represents 7.76 percent of the weight of the index. In

addition, the top 5 highest weighted securities in the index

represent 24.55 percent of the weight of the index.

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Also as of June 1, 1998, the nine countries that are represented in

the Index accounted for the following percentages of the Index: Germany

(27.28 percent); The Netherlands (26.22 percent); France (23.41

percent); Italy (10.06 percent); Spain (7.70 percent); Belgium (2.23

percent); Finland (1.77 percent); Ireland (0.70 percent); and Portugal

(0.63 percent).

Real-time prices from the primary market for each company in its

home country will be used to calculate DJES50 index values.\15\ Until

January 1, 1999, the value of the index will be determined in European

currency units (``ECU's''). The Telerate Reporting Service, at 11:45

a.m., New York time, will be used to convert the prices of component

stocks (initially reported in the currency of the company's primary

market) into ECU values. After the EMU introduces the euro currency on

January 1, 1999, the index will be calculated in euros, with currency

conversions made at the exchange rates prescribed by EMU law. As a

result, changes in exchange rates between the U.S. dollar and ECU's or

euros will not affect the percentage increase or decrease in the value

of the DJES50 over the life of the BRIDGES.

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\15\ Appendix A identifies those primary markets for all

component companies. See supra note 4.

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DJES50 index values will be disseminated every 15 seconds. Insofar

as a component security trades on its home country's primary market

during NYSE trading hours, each index calculation will use the last

sale price from that market for the security, the value of which will

be converted into ECUs or euros, as discussed above. Otherwise, the

most recent closing price on that primary market will be used. Prior to

trading BRIDGES on the DJES50, the Exchange will distribute a circular

to its membership highlighting the special risks associated with the

trading the product.\16\

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\16\ Telephone conversation between Vincent F. Patten, Assistant

Vice President, Investment Banking Division and New Products, NYSE:

James T. McHale, Special Counsel, Division of Market Regulation

(``Division''), SEC and David Sieradzki, Attorney, Division, SEC on

July 31, 1998.

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[[Page 42895]]

The Issuer

The Exchange has determined that the issuer of the BRIDGES on the

DJES50, MSDW, meets the listing criteria set forth in Section 703.19 of

the Exchange's Listed Company Manual.\17\ It is an Exchange-listed

company in good standing and has sufficient assets to justify the

issuance of BRIDGES offerings of the size contemplated by the proposed

rule change.

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\17\ See supra note 9.

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2. Statutory Basis

The basis under the Act for the proposed rule change is the

requirement under Section 6(b)(5)\18\ that an exchange have rules that

are 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

a national market system, and, in general, to protect investors and the

public interest.

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\18\ 15 U.S.C. 78f(b)(5).

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

The Exchange does not believe that the proposed rule change will

impose 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

The Exchange has neither solicited nor received written comments on

the proposed rule change.

III. Solicitation of Comments

Interested persons are invited to submit written data, views and

arguments concerning the foregoing, including whether the proposed rule

change is consistent with the Act. 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. Sec. 552, will be available for inspection and copying in

the Commission's Public Reference Room at 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such filing will also be available

for inspection and copying at the principal office at the NYSE. All

submissions should refer to File No. SR-NYSE-98-22 and should be

submitted by September 1, 1998.

IV. Commission's Findings and Order Granting Accelerated Approval

of Proposed Rule Change

The Commission finds that the proposed rule change is consistent

with the Act and the rules and regulations thereunder applicable to a

national securities exchange, and, in particular, with the requirements

of Section 6(b)(5) of the Act.\19\ Specifically, the Commission

believes that providing for exchange-trading of BRIDGES on the DJES50

\20\ will offer a new and innovative means of participating in the

market for securities of companies from countries that are expected to

participate in the EMU. In particular, the Commission believes that

BRIDGES on the DJES50 will permit investors to gain equity exposure in

such companies, while, at the same time, limiting the downside risk of

the original investment. Accordingly, for the same reasons as discussed

in the Term Notes Approval Orders,\21\ the Commission finds that the

listing and trading of BRIDGES on the DJES50 is consistent with the

Act.\22\

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\19\ 15 U.S.C. 78f(b)(5).

\20\ The Commission notes that this approval order is limited to

the BRIDGES product; separate Commission approval would be required

for the Exchange to list and trade any option or warrant product

based on the DJES50.

\21\ See Term Notes Approval orders, supra note 6

\22\ In approving this rule change, the Commission has

considered the proposed rule's impact on efficiency, competition,

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

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As with other derivative products similar to BRIDGES, BRIDGES on

the DJES50 are not leveraged instruments, however, their price will

still be derived from the based upon the underlying linked security.

Accordingly, the level of risk involved in the purchase or sale of

BRIDGES on the DJES50 is similar to the risk involved in the purchase

or sale of traditional common stock. Nonetheless, because the final rte

of return of BRIDGES is derivatively priced, based on the performance

of a portfolio of securities, there are several issues regarding the

trading of this type of product.

The Commission believes that the Exchange has adequately addressed

these issues. First, the Commission notes that the Exchange's rules and

procedures that address the special concerns attendant to the trading

of hybrid securities will be applicable to BRIDGES on the DJES50. In

particular, by imposing the hybrid listing standards, and the

suitability, disclosure, and compliance requirements noted above, the

Commission believes the Exchange has addressed adequately the potential

problems that could arise from the hybrid nature of BRIDGES on the

DJES50. Moreover, the Exchange will distribute a circular to its

membership calling attention to the specific risks associated with

BRIDGES on the DJES50. In particular, the circular will highlight,

among other things, that the BRIDGES on the DJES50 allow investors to

participate in appreciation only to the extent that the DJES50

outperforms the initial index value based on the average of 3 pre-

selected separate dates that occur throughout the life of the BRIDGES.

Second, BRIDGES on the DJES50 remain a non-leveraged product with

the issuer guaranteeing no less than 90 percent of principal

return.\23\ The Commission realizes that the final payout on the

BRIDGES on the DJES50 is dependent in part upon the individual credit

of the issuer. To some extent this credit risk is minimized by the

Exchange's listing standards in Section 703.19 of the NYSE's Listed

Company Manual which provide that only issuers satisfying substantial

asset and equity requirements may issue securities such as BRIDGES.\24\

In addition, the Exchange's hybrid listing standards further require

that the proposed indexed term notes have at least $4 million in market

value.\25\ In any event, financial information regarding the issuer, in

addition to information on the underlying securities, will be publicly

available to investors.

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\23\ As noted above, the NYSE may not list for trading BRIDGES

with less than a 90% principal guarantee without first consulting

with the Commission. For example, the Commission may determine that

BRIDGES with less than a 90% principal guarantee should only be sold

to customers meeting certain heightened account approval and

suitability requirements.

\24\ See supra note 9 and accompanying text.

\25\ See NYSE Listed Company Manual Sec. 703.19.

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Third, the component securities in the Index are highly-

capitalized, actively-traded European stocks. In addition, the

components are all publicly traded on the home country's primary

market.\26\ Accordingly, both the history and performance of these

securities, as well as current pricing trends, should be

[[Page 42896]]

readily available through a variety of public sources.

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\26\ See Appendix A.

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Further, the Commission notes that the value of the DJES50 will be

disseminated on a real time basis at least once every 15 seconds

throughout the trading day. The Commission believes that this

information will be extremely useful and beneficial for investors in

DJES50 BRIDGES. Although the BRIDGES are denominated in U.S. dollars,

as noted above, the index value, until January 1, 1999, will be derived

from converting the value of each security from its home currency into

ECUs. After the EMU introduces the euro currency on January 1, 1999,

the index will be calculated in euros, with currency conversions made

at the exchange rates prescribed by EMU law. The Commission believes

that valuing all the index components using the ECU or euros, as

appropriate, is permissible since the same methodology for valuing the

index will be used throughout the life of the BRIDGES. Nevertheless,

the fact that the index value does not reflect U.S. dollars and

contains currency risk will be highlighted in the circular to

members.\27\

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\27\ Telephone conversation between Vincent F. Patten, Assistant

Vice President, Investment Banking Division and New Products, NYSE;

James T. McHale, Special Counsel, Division, SEC and David Sieradzki,

Attorney, Division, SEC on July 31, 1998.

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Fourth, while the Commission has a systematic concern that a

broker-dealer or a subsidiary providing a hedge for the issuer will

incur position exposure, the Commission believes this concern is

minimal given the size of the proposed BRIDGES issuance in relation to

the net worth of the issuer.\28\

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\28\ See Term Notes Approval Orders, supra note 6.

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Finally, the Exchange's surveillance procedures will serve to deter

as well as detect any potential manipulation. As noted above, NYSE

represents that it has in place surveillance sharing arrangements with

the appropriate regulatory organizations in countries representing over

95 percent of the capitalization of the DJES50. Further, if the

surveillance coverage should fall below certain levels, as discussed

above, no new BRIDGES will be listed. This should help to ensure that

adequate surveillance mechanisms exist in the future.

The Commission finds good cause for approving the proposed rule

change prior to the thirtieth day after the date of publication of

notice thereof in the Federal Register. Specifically, the Commission

believes that the proposal does not raise any regulatory issues that

were not addressed by the Term Notes Approval Orders. In addition, to

the extent that the DJES50 has certain characteristics that differ from

the previous Term Notes Approval Orders, the Commission believes that

the NYSE has adequately addressed those issues. Accordingly, the

Commission believes that good cause exists, consistent with Section

6(b)(5) and Section 19(b)(2) of the Act, to grant accelerated approval

to the proposed rule change.\29\

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\29\ 15 u.S.C. 78f(b)(5) and 78s(b)(2).

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It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,

\30\ that the proposed rule change (SR-NYSE-98-22) is approved on an

accelerated basis.

\30\ 15 u.S.C. 78s(b)(2).

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For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\31\

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\31\ 17 CFR 200.30-3(a)(12).

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Jonathan G. Katz,

Secretary.

[FR Doc. 98-21478 Filed 8-6-98; 8:45 am]

BILLING CODE 8010-01-M