The Reserve Fund, on Behalf of Two of Its Series, the Primary Fund and the U.S. Government Fund; Order Temporarily Suspending Redemption of Investment Company Shares and Postponing Payment for Investment Company Shares Which Have Been Submitted for Redemption for Which Payment Has Not Been Made Pursuant to Section 22(E)(3) of the Investment Company Act of 1940, 55572-55573 [E8-22547]
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55572
Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Notices
(2) Devote the appropriate resources
and personnel to support such alternate
net capital treatment and supervision on
a consolidated basis, including any
additional conditions the Commission
may find to be necessary or appropriate
in the public interest or for the
protection of investors.
In addition, Barclays Capital stated in
its letter that, based on a pro-forma net
capital computation, it would have in
excess of $6.5 billion in Tentative Net
Capital, as defined.
In order to facilitate both a smooth
transition of the Lehman assets and
liabilities to Barclays Capital and
continued oversight of this business, the
Commission believes some additional
conditions are necessary, as follows:
(1) Until such time as the Commission
determines otherwise, Barclays Capital
must maintain at least $6 billion in
Tentative Net Capital;
(2) Until such time as the Commission
determines otherwise, the basic market
risk and credit risk computations for the
positions Barclays Capital acquires from
Lehman must be done using the
modeling infrastructure used by
Lehman prior to the transfer of
Lehman’s assets and liabilities to
Barclays Capital; and
(3) Until such time as the Commission
determines otherwise, the basic market
risk and credit risk computations must
be supervised by individuals who fully
understand the operation of Lehman’s
models (including the inputs and
techniques unique to Lehman’s models)
and the securities that Lehman has been
permitted to model, and that have at
least one year of experience working
with Lehman’s models. According to
Barclays Capital’s letter, it has agreed to
acquire substantially all personnel of
Lehman, such that it should have
employees that meet these requirements
on its staff to continue to meet this
condition for the exemption.
Barclays Capital will need to maintain
Tentative Net Capital of at least $6
billion. By increasing its Tentative Net
Capital to at least $6 billion, Barclays
Capital will significantly improve its
financial position. In addition, the
movement of these accounts from
Lehman to Barclays Capital will further
protect customers by providing for a
seamless transfer of customers’ accounts
from Lehman to a financially sound
broker-dealer. Further, this temporary
relief is specific to the business Barclays
Capital purchases from Lehman, using
models already reviewed and approved
by the Commission, and the
computations will be performed by
persons familiar to Lehman’s models
and processes. This relief will extend
only until the Commission acts on
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17:50 Sep 24, 2008
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Barclays Capital’s application to
compute market and credit risk capital
charges pursuant to Appendix E, which
Barclays Capital has agreed to submit
within 180 days of the bankruptcy
court’s approval of Barclays Capital’s
acquisition of Lehman’s assets. As such,
because of the special nature of Barclays
Capital’s business, its financial position,
and the safeguards it has established for
the protection of customers’ funds and
securities, the Commission finds that
approval of this request, subject to the
fulfillment by Barclays Capital and its
ultimate holding company Barclays
Group of these representations and
conditions, is appropriate in the public
interest or for the protection of
investors.
Accordingly,
It is ordered, under paragraph (b)(3) of
Rule 15c3–1 (17 CFR 240.15c3–1) under
the Exchange Act, that Barclays Capital
may calculate capital charges for the
positions it purchases from Lehman
Brothers Inc. using the market risk
standards of Appendix E to compute a
deduction for market risk on some or all
of the positions, instead of the
provisions of paragraphs (c)(2)(vi) and
(c)(2)(vii) of Rule 15c3–1, and using the
credit risk standards of Appendix E to
compute a deduction for credit risk on
the credit exposures arising from
transactions in derivatives instruments,
instead of the provision of paragraph
(c)(2)(iv) of Rule 15c3–1, subject to the
fulfillment by Barclays Capital and
Barclays Group of the representations
and conditions set forth above.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E8–22503 Filed 9–24–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 28386; File No. 812–13576]
The Reserve Fund, on Behalf of Two of
Its Series, the Primary Fund and the
U.S. Government Fund; Order
Temporarily Suspending Redemption
of Investment Company Shares and
Postponing Payment for Investment
Company Shares Which Have Been
Submitted for Redemption for Which
Payment Has Not Been Made Pursuant
to Section 22(E)(3) of the Investment
Company Act of 1940
September 22, 2008.
The Reserve Fund (the ‘‘Trust’’ or the
‘‘Applicant’’), an open-end management
investment company registered with the
Commission under the Investment
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Sfmt 4703
Company Act of 1940 (the ‘‘Act’’), has
filed an application on behalf of two of
its series, the Primary Fund and the U.S.
Government Fund (the ‘‘Funds’’), for a
temporary order pursuant to section
22(e)(3) of the Act permitting (a)
suspension of the right of redemption of
their outstanding redeemable securities,
and (b) postponement of payment for
shares which have been submitted for
redemption for which payment has not
been made.
Section 22(e) of the Act provides, in
relevant part, that no registered
investment company shall suspend the
right of redemption, or postpone the
date of payment upon redemption
except ‘‘(3) for such * * * periods as
the Commission may by order permit for
the protection of security holders of the
company.’’
Applicant represents that: (1) The
board, including a majority of directors
that are not interested persons of the
Trust: (a) Determined, on September 17,
2008, that a suspension of redemption is
in the best interest of each Fund’s
shareholders, and (b) determined, on
September 17, 2008, that a
postponement of payment for shares
which have been submitted for
redemption for which payment has not
been made is in the best interest of each
Fund’s shareholders, and (c) will create
a plan for the orderly liquidation of each
Fund’s assets to meet redemption
requests and for the appropriate
payments to each Fund’s shareholders,
including those whose redemption
orders have been received but not yet
paid, which plan is subject to
Commission supervision; (2) the Funds
have suspended sales; and (3) the Funds
will make and keep appropriate records
surrounding these events.
Based on the representations in the
application, including those relating to
the current extraordinary market
conditions, the Commission finds that
the temporary suspension of the right of
redemption and postponement of
payment for shares which have been
submitted for redemption for which
payment has not been made by the
Funds is necessary for the protection of
their security holders.
Accordingly, it is ordered, pursuant to
section 22(e)(3) of the Act, that the
requested exemption from section 22(e)
of the Act is granted until the markets
are liquid to a degree that enables each
Fund to liquidate portfolio securities
without impairing the net asset value of
each Fund, or the Commission, on its
own initiative, rescinds the order
granted herein. This order shall be in
effect as of September 17, 2008.
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Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Notices
By the Commission.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–22547 Filed 9–24–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58606; File No. SR–Amex–
2008–72]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by the
American Stock Exchange LLC
Temporarily Suspending the
Requirements of Its Rules Concerning
the Approval of New Member
Organizations in Order To Approve
Barclays Capital Inc. Immediately and
Provisionally as a New Member
Organization
September 19, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934, as
amended (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on September 19, 2008, the American
Stock Exchange LLC (‘‘Amex’’ 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 Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act,3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission.5 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to
temporarily suspend the requirements
of Article IV, Section 2 of the Amex
Constitution and related Amex rules
concerning the approval of new member
organizations in order to approve
Barclays Capital Inc. (‘‘BCI’’) as a new
associate member organization, subject
mstockstill on PROD1PC66 with NOTICES
1 15
U.S.C. 78s(b)(l).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 Amex gave the Commission written notice of its
intention to file the proposed rule change on
September 19, 2008. The Commission reviewed the
proposed rule change and gave Amex permission to
file the proposed rule change on the same day.
Amex asked the Commission to waive the 30-day
operative delay. See Rule 19b–4(f)(6)(iii). 17 CFR
240.19b–4(f)(6)(iii).
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17:50 Sep 24, 2008
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to BCI complying with Exchange rules
for a new member organization within
60 days of the date that BCI is
provisionally approved.
The text of the proposed rule change
is available on the Amex’s Web site at
https://www.amex.com, the Office of the
Secretary, the Amex and at the
Commission’s Public Reference Room.
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
Amex included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. The Amex 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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes this rule filing
to temporarily suspend the
requirements of Article IV, Section 2 of
the Amex Constitution and related
Amex rules concerning the approval of
new member organizations in order to
immediately approve as an Amex
associate member organization BCI,
which is the entity acquiring the assets
of Lehman Brothers Inc. (‘‘LBI’’).6 The
Exchange proposes this temporary
suspension on an emergency basis to
ensure that BCI will be able to
expeditiously complete its proposed
acquisition of certain LBI assets and
begin operating former LBI business
lines by September 22, 2008. This
proposed temporary suspension is
contingent upon BCI complying with all
requirements of a new Amex member
organization applicant within 60 days of
the date that BCI is provisionally
approved as an Amex member
organization under this rule filing.
a. Background
(i) Lehman Files for Bankruptcy
On September 15, 2008, Lehman
Brothers Holding Inc. (‘‘Lehman’’), after
a precipitous decline in its financial
condition, filed for bankruptcy
protection in the United States
Bankruptcy Court for the Southern
District of New York under Chapter 11
of the U.S. bankruptcy code. Lehman is
the parent holding company of LBI,
which is a registered broker dealer and
Amex member organization. Although
LBI did not file for bankruptcy
protection at that time, Lehman’s
Chapter 11 status impacted the ability of
LBI to continue operations.
On September 17, 2008, Barclays
Bank PLC (‘‘Barclays’’), a global
financial services provider, announced
that it had agreed to acquire the LBI
investment banking and capital markets
operations and supporting infrastructure
for $1.75 billion (the ‘‘proposed
acquisition’’). As part of the proposed
acquisition, Barclays would be
acquiring the LBI fixed income and
equities sales, trading and research, and
investment banking businesses (the
‘‘LBI businesses’’). Barclays would also
be acquiring approximately 10,000 LBI
employees, the Lehman headquarters
located at 745 Seventh Avenue in New
York City, and two data centers located
in New Jersey. The proposed acquisition
is subject to a number of conditions,
including approval by the United States
Bankruptcy Court for the Southern
District of New York and other
regulatory approvals and antitrust
review. Moreover, if the proposed
acquisition is not completed by
September 24, 2008, Barclays may
terminate the agreement to acquire LBI
businesses.
(ii) Barclays Will Transfer LBI Assets to
BCI
On September 19, 2008, Barclays
announced that certain LBI assets,
including its employees and businesses,
will be transferred to its wholly-owned
subsidiary, BCI. BCI is a registered U.S.
broker dealer and FINRA member, but
not currently approved as an Amex
member organization.
The Exchange understands that LBI
will likely file for some form of
bankruptcy protection on Friday,
September 19, 2008, and thus by the
close of business on Friday, LBI will be
in the control of a trustee. The Exchange
further understands that, subject to
approval by the bankruptcy court, as
part of the bankruptcy proceeding, LBI
assets will be sold to Barclays and
transferred to BCI. Accordingly, as early
as September 19, 2008, BCI may own
and control the LBI businesses.
6 LBI also was an associate member organization.
‘‘Associate’’ denotes that the member organization
has no floor presence and only accesses the
Exchange electronically.
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55573
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]]>Agencies
[Federal Register Volume 73, Number 187 (Thursday, September 25, 2008)]
[Notices]
[Pages 55572-55573]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-22547]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 28386; File No. 812-13576]
The Reserve Fund, on Behalf of Two of Its Series, the Primary
Fund and the U.S. Government Fund; Order Temporarily Suspending
Redemption of Investment Company Shares and Postponing Payment for
Investment Company Shares Which Have Been Submitted for Redemption for
Which Payment Has Not Been Made Pursuant to Section 22(E)(3) of the
Investment Company Act of 1940
September 22, 2008.
The Reserve Fund (the ``Trust'' or the ``Applicant''), an open-end
management investment company registered with the Commission under the
Investment Company Act of 1940 (the ``Act''), has filed an application
on behalf of two of its series, the Primary Fund and the U.S.
Government Fund (the ``Funds''), for a temporary order pursuant to
section 22(e)(3) of the Act permitting (a) suspension of the right of
redemption of their outstanding redeemable securities, and (b)
postponement of payment for shares which have been submitted for
redemption for which payment has not been made.
Section 22(e) of the Act provides, in relevant part, that no
registered investment company shall suspend the right of redemption, or
postpone the date of payment upon redemption except ``(3) for such * *
* periods as the Commission may by order permit for the protection of
security holders of the company.''
Applicant represents that: (1) The board, including a majority of
directors that are not interested persons of the Trust: (a) Determined,
on September 17, 2008, that a suspension of redemption is in the best
interest of each Fund's shareholders, and (b) determined, on September
17, 2008, that a postponement of payment for shares which have been
submitted for redemption for which payment has not been made is in the
best interest of each Fund's shareholders, and (c) will create a plan
for the orderly liquidation of each Fund's assets to meet redemption
requests and for the appropriate payments to each Fund's shareholders,
including those whose redemption orders have been received but not yet
paid, which plan is subject to Commission supervision; (2) the Funds
have suspended sales; and (3) the Funds will make and keep appropriate
records surrounding these events.
Based on the representations in the application, including those
relating to the current extraordinary market conditions, the Commission
finds that the temporary suspension of the right of redemption and
postponement of payment for shares which have been submitted for
redemption for which payment has not been made by the Funds is
necessary for the protection of their security holders.
Accordingly, it is ordered, pursuant to section 22(e)(3) of the
Act, that the requested exemption from section 22(e) of the Act is
granted until the markets are liquid to a degree that enables each Fund
to liquidate portfolio securities without impairing the net asset value
of each Fund, or the Commission, on its own initiative, rescinds the
order granted herein. This order shall be in effect as of September 17,
2008.
[[Page 55573]]
By the Commission.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-22547 Filed 9-24-08; 8:45 am]
BILLING CODE 8010-01-P
