[Federal Register Volume 62, Number 40 (Friday, February 28, 1997)]
[Notices]
[Pages 9224-9225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5028]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38324; File No. SR-Amex-97-07]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the American
Stock Exchange, Inc., Relating to the Disclaimer Provisions of Amex
Rule 902C
February 24, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 29, 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 and
II below, which Items have been prepared by the self-regulatory
organization. The Exchange has requested accelerated approval for the
proposal. This order approves the Amex's proposal on an accelerated
basis and solicits comments from interested persons.
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\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Amex is proposing to amend Exchange Rule 902C to include the de
Jager Year 2000 Index (``Index'') in the disclaimer provisions of the
Rule.
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 III 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
In conjunction with a proposal to list and trade options on the de
Jager Year 2000 Index, the Amex is proposing to amend Exchange Rule
902C to provide a disclaimer for de Jager & Company, a consulting
company active in promoting awareness of the ``Year 2000'' problem. The
Exchange's proposal to list and trade options on the Index has been
given summary effectiveness treatment pursuant to Section 19(b)(3)(A)
of the Act.\3\
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\3\ See Securities Exchange Act Release No. 38307 (February 19,
1997) (Amex-97-04).
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The Amex and de Jager & Company have developed a new index called
The de Jager Year 2000 Index, based entirely on shares of widely-held
companies whose business is expected to benefit from the need of
companies, governments, and others to address and resolve the ``Year
2000'' problem.\4\ The ``Year 2000'' problem arises because most
business application software programs (mainframe, client/server, and
personal computer) written over the past twenty years use only two
digits to specify the year, rather than four.
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\4\ The industries represented by these companies include:
packaged software providers; computer programming consulting firms;
and computer outsourcing services.
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Therefore, on January 1, 2000, unless the software is corrected,
most computers with time-sensitive software programs will recognize the
year as ``00'' and may assume that the year is ``1900.'' This could
either force the computer to shut down or lead to incorrect
calculations. The Index will be calculated and maintained by the Amex.
A representative of de Jager & Company will be available to advise the
Exchange when, pursuant to Exchange Rule 901C(b), the Amex substitutes
stocks, or adjusts the number of stocks included in the Index, based on
changing conditions in the ``Year 2000'' industry or in the event of
certain types of corporate actions. It is anticipated that the Amex
will consult with de Jager & Company on a quarterly basis to review
possible candidates for removal from or inclusion in the Index.
The disclaimer, identical in content to disclaimers currently in
place for Standard & Poor's Corporation (``S&P''),\5\ Morgan Stanley &
Co. Incorporated,\6\ and [email protected] Enterprises L.L.C.,\7\ states that
de Jager & Company does not guarantee the accuracy or completeness of
the Index, makes no express or implied warranties with respect to the
Index, and will have no liability for any damages, claims, losses, or
expenses caused by errors in the Index calculation.
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\5\ See Exchange Rule 902C(c).
\6\ See Exchange Rule 902C(d).
\7\ See Exchange Rule 902C(e).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act in general and
[[Page 9225]]
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 change, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
B. Self-Regulatory Organization's Statement on Burden on Competition
The self-regulatory organization 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
Comments were neither solicited nor received with respect to the
proposed rule change.
III. 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 changes that are filed
with the Commission, and all written communications relating to the
proposed rule changes 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 Section, 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such filings also will be
available for inspection and copying at the principal office of the
Amex. All submissions should refer to File No. SR-Amex-97-05 and should
be submitted by March 21, 1997.
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
The Commission finds that the proposed rule change is consistent
with the Act and the rules and regulations thereunder applicable to a
national securities exchange, and, in particular, the requirements of
Section 6(b)(5) thereunder.
The Commission believes that it is reasonable for de Jager &
Company to be released from liability for any damages, claims, losses,
or expenses related to the accuracy or completeness of the Index or
caused by errors in the Index calculation. The Commission notes that de
Jager & Company will not be involved, except in the limited advisory
capacity described above, in the calculation or maintenance of the
Index.
The Commission finds good cause to approve the proposal prior to
the thirtieth day after the date of publication of notice of filing
thereof in the Federal Register in that this rule filing is being filed
in connection with the Exchange's proposal to list and trade options on
the Index, which has been given summary effectiveness treatment
pursuant to Section 19(b)(3) of the Act.\8\ In addition, this proposal
raises no new issues as the Commission has previously approved similar
proposals by the Amex to release various entities from certain
liability for damages resulting from the use of their products where
these entities have no active role in the trading and calculation of
the index value.\9\ Accordingly, the Commission believes that it is
consistent with Sections 6(b)(5) and 19(b)(2) of the Act to approve the
proposed rule change on an accelerated basis.
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\8\ See supra note 3.
\9\ See Exchange Rules 902C(c), (d), and (e).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) \10\ of the
Act, that the proposed rule change (File No. SR-Amex-97-05) is hereby
approved on an accelerated basis.
\10\ 15 U.S.C. Sec. 78s(b)(2) (1988).
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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).
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[FR Doc. 97-5028 Filed 2-27-97; 8:45 am]
BILLING CODE 8010-01-M
