[Federal Register Volume 60, Number 244 (Wednesday, December 20, 1995)]
[Notices]
[Pages 65701-65703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30856]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36585; File No. SR-Amex-95-49]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange,
Inc. Relating to the Exchange's Gratuity Fund
December 13, 1995.
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 December
7, 1995, 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.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to amend the Admission of Members and
Member Organizations section of its rules to require that all persons
who are entitled to make an election to either ``opt-in'' or ``opt-
out'' of participation in the
[[Page 65702]]
Gratuity Fund must make such an election by March 29, 1996.
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
On May 16, 1995, the Commission approved a number of changes to the
Amex Constitution and rules regarding membership structure and
requirements, including significant changes to the Gratuity Fund.\1\
The changes with respect to the Gratuity Fund increased the benefit to
$125,000, subject to a ``phase-in'' schedule for new Participants,
included an ``active'' requirement for participation, and expanded the
categories of individuals who are included in the Gratuity Fund to
include both regular and options principal member lessees, as well as
options principal members and some lessors.
\1\ See Securities Exchange Act Release No. 35723 (May 16,
1995); 60 FR 27353 (May 23, 1995) (File No. SR-AMEX-95-08).
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The changes also included a grandfathering provision with respect
to the Gratuity Fund revisions.\2\ All regular members and existing
regular member lessors were ``grandfathered'' with respect to the
``active'' requirement (i.e., they would be deemed to have met it, even
if they were never active for a two-year period). Individuals who owned
options principal memberships on May 16, 1995 were given a one-time
opportunity to elect to ``opt-in'' or ``opt-out'' of the Gratuity Fund,
and those who choose to ``opt-in'' are grandfathered with respect to
the ``active'' requirement as well. An election to ``opt-out'' is
irrevocable for the rest of the person's life, unless he or she
subsequently buys a regular membership. In addition, those individuals
who were either regular or options principal member lessees on May 16,
1995 have the right to ``opt-out'' of the Gratuity Fund for the
duration of their lease (including any renewals).\3\
\2\ See Amex Constitution, Article IX, Section 23.
\3\ New leases require lessee participation in the Gratuity
Fund.
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All individuals who have a right to ``opt-in'' or ``opt-out'' of
the Gratuity Fund have received extensive written communications from
the Exchange's Membership Services Department requesting that such
individuals indicate their election thereof on the appropriate form(s).
In addition, for a total of three weeks, staff members from the
Membership Services Department were stationed in the Exchange lobby to
answer questions and distribute forms and information, and signs have
been posted on the trading floor alerting the affected membership of
the need to notify the staff of their election. Notwithstanding this
effort, as of November 7, 1995, almost 40% of eligible individuals\4\
had not completed the necessary paperwork or indicated their election
to the staff.
\4\ As of November 7, 1995, 452 individuals had not completed
the necessary paperwork or indicated their election to the staff.
Subsequently, as a result of a concerted drive, an additional 216
individuals have indicated their election, leaving 236 individuals
who have not done so as of December 7, 1995.
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In order to efficiently administer the Gratuity Fund it is
imperative that each eligible individual's status in this regard be
definitively resolved. The lack of complete information has resulted in
significant record keeping problems in terms of determining who is
subject to an assessment upon a Participant's death, as well as the
amount that should be assessed to other Participants.\5\ Moreover,
interpretative difficulties are presented by the death of an individual
who has not yet made an election.
\5\ Because the pool of Participants is now variable, the amount
of each assessment is determined by dividing $125,000 by the number
of Participants.
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Accordingly, the Exchange is proposing to amend the Admission of
Members and Member Organizations section of its Rules to require that
all individuals who have a right to elect to ``opt-in'' or ``opt-out''
of the Gratuity Fund must make such election by March 29, 1996. An
individual who does not make an election by that date will be
conclusively deemed to have elected to ``opt-out'' of participation in
the Gratuity Fund. This date has been selected to give the Exchange a
period of time during which persons can receive ample warning of the
new deadline.\6\
\6\ The Exchange will take the following steps to notify
affected persons of the deadline: A certified letter will be sent to
the latest address for each such individual in the files of the
Exchange's Membership Services Department, and if necessary a second
follow-up certified letter will be sent to such address. In
addition, unless an individual has previously responded to such
written notification, if such person does business on the Floor of
the Exchange and can be found on the Floor of the Exchange, an
Exchange staff member will personally speak to the individual to
inform him or her of the deadline. For all other individuals who
have not responded to a written notification, to the extent the
files of the Membership Services Department contain a telephone
number for such individual, an Exchange staff member will place one
telephone call to such number to attempt to orally notify the
individual of the deadline.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
\7\ in general and furthers the objectives of Section 6(b)(4) in
particular in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among members.
\7\ 15 U.S.C. 78f(b).
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B. Self-Regulatory Organization's Statement on Burden on Competition
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
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
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
(3) does not become operative for 30 days from December 7, 1995, the
date on which it was filed, and the Exchange provided the Commission
with written notice of its intent to file the proposed rule change at
least five business days prior to the filing date, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(e)(6) thereunder.\9\
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(e)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing.
[[Page 65703]]
Persons making written submissions should file six copies thereof with
the Secretary, Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, DC. 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.
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-95-49 and should be submitted by January 10, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 95-30856 Filed 12-19-95; 8:45 am]
BILLING CODE 8010-01-M
