[Federal Register Volume 59, Number 41 (Wednesday, March 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4701]
[[Page Unknown]]
[Federal Register: March 2, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33665; File No. SR-Amex-93-43]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of a Proposed Rule Change by the American
Stock Exchange, Inc. Relating to a Modification of the Trading Hours
for Amex Biotechnology Index Options
February 23, 1994.
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
23, 1993, 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 Amex. 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 Amex proposes to modify the trading hours for options on its
Biotechnology Index (``BTK''). 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 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 the
Statutory Basis for, the Proposed Rule Change
Currently, Exchange rules generally provide that, except as
otherwise indicated or under unusual conditions, the trading hours for
broad-based index option contracts shall be from 9:30 a.m. to 4:15 p.m.
Four narrow-based index options (Computer Index, Oil Index, North
American Telecommunications Index, and the Pharmaceutical Index)
presently have trading hours of 9:30 a.m. to 4:10 p.m. The BTK,
although narrow-based, currently has trading hours identical to those
assigned to the Exchange's broad-based index options. The purpose of
the current proposal is to modify the trading hours for options on the
BTK from a 4:15 p.m. New York time close to a 4:10 p.m. New York time
close.
The Amex believes that market professionals (including the
specialist and market-makers) in BTK options are exposed to undue risk
during the five-minute interval between the closing of equity options
at 4:10 p.m. and the closing of BTK options at 4:15 p.m. Unlike
specialists and market-makers in broad-based index options who can
hedge their positions in the index futures market (for which trading
terminates at 4:15 p.m. New York time), market-makers in a narrow-based
index option such as BTK are best able to hedge their risks by taking
or liquidating positions in options on the individual securities that
comprise that index. However, since trading in equity options
terminates on the Amex and on other option markets at 4:10 p.m. New
York time, the Amex believes that Specialists and market-makers in
narrow-based index options (such as BTK options) who are required to
maintain a trading market until 4:15 p.m. are unnecessarily exposed to
market risk during the five-minute interval between the closings of
equity options and BTK options. The Exchange also believes that the
proposed change will eliminate potential investor confusion by creating
uniform trading hours for all narrow-based indexes on the Exchange as
well as with other options markets.\1\
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\1\The Amex has stated that, upon Commission approval of the
rule change proposal, it will provide its membership with notice two
weeks prior to effecting the change of trading hours. The Exchange
will issue an information circular advising the membership of the
new closing time that will be sent by facsimile to the Exchange's
contacts at the major options firms, mailed to recipients of the
Exchange's options related information circulars, and made available
to subscribers of the Options News Network. See letter from Claire
P. McGrath, Managing Director and Special Counsel, Derivative
Securities, Amex, to Sharon Lawson, Assistant Director, Office of
Self-Regulatory Oversight, Division of Market Regulation, SEC, dated
February 22, 1994.
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The Exchange believes that 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 promote
just and equitable principles of trade and prevent fraudulent and
manipulative acts and practices.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The Amex 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 solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange requests that the proposed rule change be given
accelerated effectiveness pursuant to Section 19(b)(2) of the Act. The
Commission finds that the proposed rule change is consistent with the
requirements of 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.\2\ Specifically, the
Commission concludes that the proposed rule change promotes just and
equitable principles of trade by creating uniform trading hours for all
Amex narrow-based indexes, thereby eliminating the possibility of
investor and market participant confusion.
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\2\15 U.S.C. 78f (b) (5) (1982).
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The Commission finds good cause for approving the proposed rule
change proposal prior to the thirtieth day after the date of
publication of notice of filing thereof in the Federal Register so that
the change in trading hours can become effective as soon as possible,
allowing the Amex to implement uniform trading hours for all Amex
narrow-based indexes.\3\
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\3\The Commission notes that it did not receive any comments
when the Chicago Board Options Exchange, Inc. amended its rules in
order to change the trading hours of its BioTech Index from 4:15
p.m. to 4:10 p.m., New York time. See Securities Exchange Act
Release No. 32937, 58 FR 5002 (September 28, 1993).
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IV. Solicitation of Comments
Interested person 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, NW., 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 in the
Commission's Public Reference Section, 450 Fifth Street, NW.,
Washington, DC. 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 No. SR-Amex-93-43 and should be
submitted by March 23, 1994.
It is therefore ordered, Pursuant to section 19(b)(2) of the
Act,\4\ that the proposed rule change (File No. SR-Amex-93-43) is
approved.
\4\15 U.S.C. 78(b)(2) (1988).
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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) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-4701 Filed 3-1-94; 8:45 am]
BILLING CODE 8010-01-M
