[Federal Register Volume 61, Number 220 (Wednesday, November 13, 1996)]
[Notices]
[Pages 58270-58271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29043]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37924; File No. SR-Amex-96-39]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc. Relating to Various Updates
to Amex Trading Rules and Company Guide Section 402
November 6, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 16, 1996, the
American Stock Exchange, Inc. (``Amex'' or ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Amex proposes to amend Exchange Rules 126, 132, 135, 152, 171,
340, 904, 950 and Section 402 of the Company Guide to update or clarify
those provisions.
The text of the proposed rule change is available at the Office of
the Secretary, the Amex, and at the 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 self-regulatory organization
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 self-regulatory organization
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
The following is a description of the proposed rule changes:
Amex Rule 126: Precedence of Bids and Offers
This rule specifies the rules of precedence with respect to bids
and offers. However, unlike Rule 108, which governs parity and priority
at openings, Rule 126 does not specify how securities to be executed
are to be divided between orders that are on parity. Rule 108 provides
that all orders entitled to precedence are first paired off, and the
balance of securities to be executed are divided as equally as
practicable between the specialist and the brokers on parity. However,
when the specialist has an accumulation of orders on his book
representing a substantial amount of the security at a limit equal to
the proposed opening price, the specialist is entitled to execution of
the following percentages of the limit orders to be executed: 60% when
there is one broker on parity, 40% when there are 2-5 brokers on
parity, and 30% when there are 6 or more brokers on parity. Although in
practice the Exchange has been using Rule 108 as a guideline for non-
opening situations, this has been confusing at times to members.
Therefore, the Exchange proposes that Rule 126 be amended to
incorporate such procedures.
Amex Rule 132: Price Adjustment of Open Orders on ``Ex-Date''
When a security is quoted ex-dividend, ex-distribution, ex-rights,
or ex-interest (except for stock dividends and distributions), Rule
132(a) provides that the specialist must generally reduce all open
orders to buy and open stop orders to sell by the cash value of the
payment or rights. However, there occasionally has been some confusion
concerning stop limit orders because the rule does not specifically
provide that both the limit and the stop price must be reduced.
Therefore, the Exchange proposes that paragraph (a) be amended to
provide such specificity. This change also will conform Rule 132 to New
York Stock Exchange (``NYSE'') Rule 118.
Miscellaneous
The Exchange also proposes that the following rules be amended to
make minor updating changes:
A. Rule 135--delete the reference to sales sheets published by
``Francis Emory Fitch, Inc.'' because the Exchange no longer utilizes
this company's service.
B. Rule 152--delete the reference to Rule 570 because Rule 570 was
rescinded.
C. Rule 340--change the reference to the Exchange's ``Market
Operations Division'' to the ``Exchange.''
D. Rule 171--remove the prohibition against specialist units of
less than three natural persons to conform with a comparable NYSE
provision.
[[Page 58271]]
E. Rule 904--change the reference to the Exchange's ``Membership
Compliance Division'' to the ``Exchange.''
F. Rule 950--delete Rule 170 from the list of rules that are
applicable in their entirety to option transactions because all of that
rule's commentary is not applicable (paragraph (n) of Rule 950 already
specifies which portions of Rule 170 are applicable).
G. Section 402 of the Company Guide--add Bloomberg Business News to
the list of approved services for disclosure of material information.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) \2\ of the Act in general and furthers the objectives of
Section 6(b)(5) \3\ in particular in that it is designed to promote
just and equitable principles of trade, remove impediments to and
perfect the mechanism of a free and open market, and, in general, to
protect investors and the public interest. The Exchange also believes
the proposed rule change is consistent with Section 11(b) \4\ of the
Act which allows exchanges to promulgate rules relating to specialists
in order to maintain fair and orderly markets.
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\2\ 15 U.S.C. 78f(b).
\3\ 15 U.S.C. 78f(b)(5).
\4\ 15 U.S.C. 78k(b).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposed rule change will impose no
burden on competition.
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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the publication of this notice in the Federal
Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. 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. 552, will be available for inspection and copying at the
Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Also, copies of such filing will be available
for inspection and copying at the principal office of the Amex. All
submissions should refer to File No. SR-Amex-96-39 and should be
submitted by December 4, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-29043 Filed 11-12-96; 8:45 am]
BILLING CODE 8010-01-M
