[Federal Register Volume 59, Number 207 (Thursday, October 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26642]
[[Page Unknown]]
[Federal Register: October 27, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34869; File No. SR-Amex-94-25]
Self-Regulatory Organizations; American Stock Exchange, Inc.;
Order Granting Approval to Proposed Rule Change Relating to Increasing
the Share Parameters for Orders Entered Through PER
October 20, 1994.
On June 23, 1994, the American Stock Exchange, Inc. (``Amex'' 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'')\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to increase the share parameters,
from 5,099 to 30,099 shares, for orders entered through the Exchange's
Post Execution Reporting (PER) system.
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\1\15 U.S.C. 78s(b)(1) (1988).
\2\17 CFR 240.19b-4 (1991).
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The proposed rule change was published for comment in Securities
Exchange Act Release No. 34347 (July 11, 1994), 59 FR 36238 (July 15,
1994). No comments were received on the proposal.
The PER system provides member firms with the means to
electronically transmit equity orders up to volume limits specified by
the Exchange directly to the specialist's post on the Exchange Floor.
Market and marketable limit orders and preopening market orders are
placed on the specialist's electronic book. Once the PER order is
executed, the system transmits the execution report directly back to
the member firm.
Currently, the PER system accepts (1) up to 5,099 shares for all
eligible market and limit orders; (2) up to 25,000 shares for eligible
market and limit orders for Unit Investment Trust securities (such as
Standard & Poor's Depositary Receipts);\3\ and (3) up to 30,099 shares
for market and limit round lot orders for those securities included in
the S&P 500 Index.\4\
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\3\See Securities Exchange Act Release No. 32544 (June 29,
1993), 58 FR 36485, July 7, 1993.
\4\See Securities Exchange Act Release No. 34347 (July 11,
1994), 59 FR 36238 (July 15, 1994) (granting accelerated approval to
that portion of the current proposed rule change as it relates to
Amex securities in the S&P 500 Index) (``Amex Approval Order'').
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In the Amex Approval Order, the Commission granted partial
accelerated approval for that portion of the instant filing which
pertains to those Exchange-listed equity securities included in the S&P
500 Index. The Commission also stated in the Amex Approval Order that
if, after three months, the Exchange wishes to extend the PER
parameters to all other Exchange-listed equity securities, then it has
the option to do so. During the three-month pilot the Exchange has had
an opportunity to observe the level of increased utilization of PER and
factor that into its assessment of how best to implement the parameter
increase for the remainder of the Exchange-listed equity securities.
The Exchange represents that it has not experienced any systems
problems in processing the additional order flow through PER. The
Exchange now requests an extension of the PER parameters to all other
Exchange-listed equity securities.\5\
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\5\See letter from Ivonne Nagy, Special Counsel, Amex, to Amy
Bilbija, Commission, dated October 18, 1994. The letter confirms the
systems capabilities and the Amex's intention, upon Commission
approval, to extend the increased order size that may be routed
through PER to all other Exchange-listed equity securities to take
effect on November 1st.
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The Commission finds that the Amex's proposal to increase the PER
share parameters, from 5,099 to 30,099, for orders of the remaining
Exchange-listed equity securities (i.e., equity securities in addition
to those included in the S&P 500 Index), is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange. Specifically, the
Commission finds that the proposed rule change is consistent with the
requirements of Section 6(b)(5) of the Act\6\ because it will
facilitate transactions in securities by allowing for the timely
transmission of a larger number of orders to the Amex floor. The
proposal will also result in more efficient and effective market
operations, consistent with Section 11A(a)(1)(B) and will further the
maintenance of fair and orderly markets and the efficient execution of
securities transactions consistent with Section 11A(a)(1)(C) of the
Act.\7\
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\6\15 U.S.C. 78f(b)(5) (1988).
\7\15 U.S.C. 78f(b)(5) and 78k-1 (1988).
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Finally, based upon representations from the Amex, the Commission
is satisfied that the Exchange's PER system will have adequate computer
processing capacity to accommodate the increased order size
eligibility.\8\ The Commission notes, however, that if the Exchange
does not implement the expansion to all Exchange-listed equity
securities within six months of the approval date of this order, then
it cannot so implement without demonstrating to the Commission that the
systems capacity remains adequate to facilitate the additional order
flow.\9\
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\8\See note 5, infra.
\9\As of the date of this order, the Exchange has indicated that
it plans to expand the increased parameters for PER eligibility on
November 1, 1994.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-Amex-94-25) is approved.
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\10\15 U.S.C. 78s(b)(2) (1988).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\17 CFR 200.30-3(a)(12) (1991).
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Jonathan G. Katz,
Secretary.
[FR Doc. 94-26642 Filed 10-26-94; 8:45 am]
BILLING CODE 8010-01-M
