[Federal Register Volume 62, Number 230 (Monday, December 1, 1997)]
[Notices]
[Pages 63576-63577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31391]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39347; File No. SR-Amex-97-41]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc. Relating to Trading
Differentials for Options Contracts
November 21, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on November 3, 1997, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rules 952 and 951C to adopt a
procedure that would allow the Exchange to establish the minimum
fractional change (or trading increments) for options. The text of the
proposed rule change is available at the Office of the Secretary, 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
Currently, Exchange Rule 952 provides that the minimum fractional
change for stock options trading at $3.00 or higher shall be one-eighth
and for stock options trading under $3.00 shall be one-sixteenth.
Additionally, Rule 951C provides that the minimum fractional change for
stock index options shall be one-eighth for stock index options trading
at a premium greater than $300.00 and stock index options less than
$300.00 shall be one sixteenth. The Exchange now proposes to amend
Rules 952 and 951C to give the Board of Governors the authority to
establish the minimum fractional changes for options. Until such time
as the Board determines to use its authority to change the minimum
fractional changes the current rules described above will apply. The
proposal will allow the Exchange to revise its minimum fractional
changes quickly in response to changes adopted in the underlying stock
markets and at the other options exchanges. When the Board of Governors
has determined to change the minimum trading increments, the Exchange
will designate such a change as a stated policy, practice, or
interpretation with respect to the administration of Rules 952 and 951C
within the meaning of subparagraph (3)(A) of subsection 19(b) of the
Exchange Act and will file a rule change for effectiveness upon filing
with the Commission.
As derivatives securities, the prices of options are determined in
reference to the prices of the underlying securities. Consequently, the
Exchange believes that where practicable, the Exchange should have
minimum increments comparable to those applicable to the securities
underlying its options.\3\
---------------------------------------------------------------------------
\3\ See Exchange Act Rel. No. 38571 (May 5, 1997), 62 FR 25682
(May 9, 1997) (Commission order approving a change in the minimum
increment to \1/16\ for securities listed on the American Stock
Exchange); Exchange Act Rel. No. 38678 (May 27, 1997), 62 FR 30363
(June 3, 1997) (Commission order approving a change in the minimum
increment to \1/16\ for Nasdaq-listed securities); and Exchange Act
Rel. No. 38897 (Aug. 1, 1997), 62 FR 42847 (Aug. 8, 1997)
(Commission order approving a change in the minimum increment to \1/
16\th for NYSE listed-securities).
---------------------------------------------------------------------------
[[Page 63577]]
2. Statutory Basis
The Exchange represents that the proposed rule change is consistent
with Section 6(b)(5) of the Act \4\ in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, and is not designed to permit unfair
discrimination between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, participants, or Others
No written comments were either solicited or received.
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. Sec. 552, will be available for inspection and copying at
the Commission's Public Reference Room. Copies of such filing will also
be available for inspection and copying at the principal office of the
Exchange. All submissions should refer to File No. SR-Amex-97-41 and
should be submitted by December 22, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
---------------------------------------------------------------------------
\5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-31391 Filed 11-28-97; 8:45 am]
BILLING CODE 8010-01-M
