[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Notices]
[Pages 63884-63886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30613]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37973; International Series Release No. 1031; File No.
SR-AMEX-96-36]
November 22, 1996.
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change and Amendment No. 1 Thereto by the American Stock Exchange,
Inc., Relating to the Policy of the Amex Regarding Information Obtained
Pursuant to the SEC's Memorandum of Understanding With the CONSOB
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on October
2, 1996, the American Stock Exchange, Inc. (``Amex'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Amex. Amex
submitted Amendment No. 1 to the filing on November 12, 1996.\1\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ On November 12, 1996, Amex submitted Amendment No. 1 to its
proposed rule filing, making several clarifications to the original
filing. See Letter from Claire P. McGrath, Managing Director and
Special Counsel, Amex, to Michael Walinskas, Senior special Counsel,
Division, Commission , dated November 7, 1996.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Pursuant to Section 19(b)(1) of the Act, the Amex is submitting
this rule filing to adopt an official Exchange policy concerning the
circumstances and conditions under which the Exchange, in order to
carry out its market surveillance and enforcement functions for
derivative products containing Italian component securities, may obtain
access to information regarding activity on the Italian securities
market obtained by the SEC pursuant to the Commission's Memorandum of
Understanding (``MOU'') with the Commissione Nazionale per le Societa e
law Bortsa (``CONSOB'').
[[Page 63885]]
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 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
Statutory Basis for, the Proposed Rule Change
(1) Purpose
The Amex does not have a surveillance sharing agreement with the
Milan exchange which is an unincorporated association and is not able
under Italian law to enter into such an arrangement. Therefore, the
purpose of the proposed rule change is to enable the Amex to carry out
its market surveillance and enforcement functions for derivative
products containing Italian component securities by seeking the
necessary information about activity on the Italian securities markets
from the SEC pursuant to the SEC's MOU with CONSOB. The Exchange's
proposed policy details the circumstances and conditions under which
the Exchange may obtain access to such information from the SEC. By
adopting this policy, therefore, the Exchange believes it will be in a
position to list derivative products containing Italian component
securities because it will be able to have access to information on the
underlying securities which it may need for enforcement or market
surveillance purposes.\2\
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\2\ The Commission notes that all Amex-listed securities,
including options and other derivative securities products, must
meet all applicable listing and maintenance standards. This filing
only addresses trading requirements relating to necessary
surveillance sharing procedures.
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The Exchange's proposed policy provides that the Exchange will
advise the SEC of information it needs regarding activity on the
Italian securities markets for market surveillance and enforcement
purposes. The SEC, in turn, pursuant to the MOU, may request the
CONSOB's assistance in gaining access to such information. The Exchange
will use such information it may receive from the SEC only for the
purposes of conducting market surveillance and enforcement proceedings.
The Exchange will limit distribution of such information to officers
and directors of the Exchange and other employees directly responsible
for conducting market surveillance and enforcement proceedings relating
to the matter in connection with which the SEC provided the information
to the Exchange. The Exchange will also undertake to maintain the
confidentiality of the information and to take appropriate disciplinary
action in the event it learns of a breach of such confidentiality,
including referral to the SEC for any action the SEC deems necessary or
appropriate. In this regard, two articles of the MOU detail the
agreement on confidentiality:
Article 7: Permissible Use of Information
1. The requesting Authority may use the information furnished
solely:
(a) for purposes stated in the request, including ensuring
compliance with or enforcement of the legal provisions specified in
the request; or
(b) for purposes within the general framework of the use stated
in the request, including conducting a civil or administrative
enforcement proceeding; assisting with a self-regulatory enforcement
proceeding or market surveillance; and assisting in a proceeding,
including a proceeding whose purpose is to permit a subsequent
criminal prosecution or conducting any investigation related thereto
for any general charge applicable to the violation of the provision
specified in the request.
2. To use the information furnished for any purpose other than
those stated in paragraph 1 of this Article, the requesting
Authority must first inform the requested Authority of its intention
and provide it the opportunity to oppose the use. If, under such
conditions, the requested Authority does not oppose the use of the
information for purposes other than those stated in paragraph 1 of
this Article, it may subject to the use of the information to
certain conditions. If use of the information is opposed by the
requested Authority, the authorities intent to consult pursuant to
Article 9 concerning the reasons for the refusal and the
circumstances under which use of the information might otherwise be
allowed.
Article 8: Confidentiality of Requests
1. Each Authority shall keep confidential, to the extent
permitted by law, requests made within the framework of this
Understanding, the contents of such requests, and any other matters
arising during the operation of this Understanding, including
consultations between the Authorities.
2. The requesting Authority shall keep confidential any
information received pursuant to this Understanding to the same
extent as such information would be kept confidential in the
territory of the State of the requested Authority, except in the
case where the information provided must be disclosed in the course
of its use pursuant to Article 7 above.
3. The Authorities may, by mutual arrangement, make an exception
to the principles set forth in paragraphs 1 and 2 above, to the
extent permitted by the law applicable to each Authority.
By adopting a policy that provides access to information on the
underlying securities for market surveillance and enforcement purposes,
the Exchange will be able to list options and other derivative products
containing Italian component securities, provided that all other
applicable product listing standards are met. Therefore, the Exchange
believes that the proposed rule change could potentially provide
investors with the opportunity to invest in such products and hedge
their exposure to the Italian securities market.
(2) Basis
The proposed rule change is consistent with Section 6(b) of the Act
in general and furthers the objectives of Section 6(b)(5) in particular
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.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The Amex does not believe that the proposed rule change will impose
any 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 solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the date of 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 Amex consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
[[Page 63886]]
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 in the
Commission's Public Reference Section, 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 of the Amex. All
submissions should refer to File Number SR-AMEX-96-36 and should be
submitted by December 23, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\3\
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\3\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-30613 Filed 11-29-96; 8:45 am]
BILLING CODE 8010-01-M
