[Federal Register Volume 59, Number 60 (Tuesday, March 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7279]
[[Page Unknown]]
[Federal Register: March 29, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33802; File No. SR-Amex-93-15]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc. Relating to Its After-Hours
Trading Facility
March 22, 1994.
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 April 21, 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, 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.\3\
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\1\15 U.S.C. 78s(b)(1) (1988).
\2\17 CFR 240.19b-4 (1991).
\3\Concurrently with this notice, the Commission is also
publishing for comment proposals submitted by the New York Stock
Exchange, Inc. (``NYSE''), the Boston Stock Exchange, Inc.
(``BSE''), the Chicago Stock Exchange, Inc. (``CHX''), the
Philadelphia Stock Exchange, Inc. (``Phlx'') and the Pacific Stock
Exchange, Inc. (``PSE''), to request permanent approval for their
respective programs which provide for executions of securities after
regular trading hours. See File Nos. SR-NYSE-93-50; BSE-93-24; SR-
CHX-93-23; SR-Phlx-94-8; and SR-PSE-94-2.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange requests permanent approval of its pilot After-Hours
Trading (``AHT'') facility.\4\ Originally approved in 1991, the AHT
facility has been extended on a temporary basis, most recently until
April 30, 1994.\5\
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\4\As originally filed, File No. SR-Amex-93-15 requested
permanent approval of Amex's pilot After-Hours Trading facility. On
January 4, 1994, the Amex amended the filing with an additional
request for a three month extension of the pilot until April 30,
1994, in order to give the Commission adequate time to consider the
request for permanent approval and requested that the extension be
granted accelerated approval. See letter from William Floyd-Jones,
Jr., Amex, to Sandra Sciole, Special Counsel, Commission, dated
December 23, 1993. That extension was approved in Securities
Exchange Act Release No. 33561. See infra note 5.
\5\The Commission partially approved the Exchange's AHT facility
in 1991. See Securities Exchange Act Release No. 29515 (August 2,
1991), 56 FR 37736 (August 8, 1991). The Commission subsequently
approved extensions of the Exchange's AHT facility. See Securities
Exchange Act Release No. 32363 (May 25, 1993), 58 FR 31558 (June 3,
1993) and 33561 (February 1, 1994), 59 FR 5789 (February 8, 1994)
(order granting partial accelerated approval to File No. SR-Amex-93-
15).
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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
In August 1991, the Commission partially approved the Exchange's
AHT facility on a temporary basis.\6\ This facility permits the
execution of coupled and single-sided closing price orders after the
close of the 9:30 a.m. to 4 p.m. trading session. Commencing at 4:15
p.m., single-sided round lot orders for equity securities can be
entered through the Exchange's PER system or left with the specialist
or the specialist's authorized representative for matching and
execution at 5 p.m. at the Exchange's last closing regular way price.
Coupled buy and sell round lot, odd lot and partial round lot orders
also can be entered through the PER system, or left with the specialist
for execution at 5 p.m. against each other at the Exchange's last
regular way price. Members are permitted to designate good 'till
canceled (``GTC'') limit orders entered during the regular trading
session as eligible for execution in the AHT session. Such orders are
marked ``GTX'' and migrate to the AHT facility for possible
execution.\7\
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\6\See Securities Exchange Act Release No. 29515 (August 2,
1991), 56 FR 37736 (August 8, 1991) (order approving File No. SR-
Amex-91-15) (Amex AHT Approval Order).
\7\The Commission notes that the Amex's AHT facility enables
members, not including specialists, to enter both proprietary and
agency orders in any Exchange traded equity security, including
stocks, rights, warrants, primes and scores, ADRs, and non-option
equity derivative products, for execution at the Exchange's last
closing regular way price.
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The Commission stated in its order approving the AHT facility that
it would review the operation of the facility during the temporary
approval period. In this regard, the Commission asked the Exchange to
assemble date on the operation of the facility which the Exchange
submitted under separate cover. It is the Exchange's opinion that the
system has functioned well during the temporary approval period and
that the operation of the system has not had any adverse affects upon
the development of the national market system.\8\ In the order
extending the pilot until April 30, 1994, the Commission requested that
the Exchange submit to the Commission by March 15, 1994, an updated
report concerning the pilot activity through February 28, 1994. This
updated report will assist the Commission in considering the Exchange's
request for permanent approval prior to the April 30, 1994 expiration
of the pilot program.
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\8\File No. SR-Amex-93-15 also requests Commission approval for
specialist participation in the AHT facility for investment trust
securities listed pursuant to Section 118B of the Exchange's Listing
Guidelines. The previous pilot and extension orders temporarily
approved only the portion of the AHT proposal which establishes the
AHT facility and which allows members, not including specialists, to
enter proprietary and agency orders in Exchange-traded equities. The
Commission has not approved on a pilot basis the portion of the
proposed rule change which allows specialists to participate in any
way for their own accounts in the AHT facility. See File No. SR-
Amex-93-15. See also Securities Exchange Act Release Nos. 32363 and
33561, supra note 5.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
of 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, promote just and equitable principles of trade, remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, protect investors and the
public interest.
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 of 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 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, 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 at the
Commission's Public Reference Room, 450 Fifth Street, NW., Washington,
DC 20549. Copies of the 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-93-15 and should be submitted by April 19,
1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\17 CFR 200.30-3(a)(12) (1991).
[FR Doc. 94-7277 Filed 3-28-94; 8:45 am]
BILLING CODE 8010-01-M
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33800; File No. SR-BSE-93-24]
Self-Regulatory Organizations; Filing of Proposed Rule Change by the
Boston Stock Exchange, Inc. (``BSE'') Relating to the Facilitation of
GTX Orders
March 22, 1994.
Pursuant to section 19(b)(1) of the Securities Exchanges Act of
1934 (``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on
December 23, 1993, the Boston Stock Exchange, Inc. (``BSE'' 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\
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\1\Concurrently with this notice, the Commission is also
publishing for comment proposals submitted by the New York Stock
Exchange, Inc., the American Stock Exchange Inc., the Chicago Stock
Exchange, Inc., the Philadelphia Stock Exchange, Inc. and the
Pacific Stock Exchange, Inc., to request permanent approval for
their respective programs which provide for executions of securities
after regular trading hours. See File Nos. SR-NYSE-93-50; SR-CHX-93-
23; SR-Amex-93-15; SR-Phlx-94-8; and SR-PSE-94-2.
I. Self-Regulatory Organization's Statement of the Terms of
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Substance of the Proposed Rule Change
The Exchange requests permanent approval of its pilot program for
the facilitation of customer ``GTX'' orders (good until cancelled,
executable through crossing session) after the close of the 9:30 a.m.
to 4 p.m. trading session.\2\ On February 1, 1994, the Commission
approved an extension of the BSE's pilot program until April 30,
1994.\3\
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\2\On June 13, 1991, the Commission approved, on a pilot basis,
File No. SR-BSE-91-04, which established BSE procedures for
providing primary market protection after regular trading hours for
customer limit orders. See Securities Exchange Act Release No. 29301
(June 13, 1993), 56 FR 28182 (order approving File No. SR-BSE-91-04)
(BSE Approval Order). The BSE procedures provide primary market
protection for customer GTX orders in securities listed on the NYSE
and on the Amex and traded during the after-hours sessions on those
Exchanges. The New York Stock Exchange (``NYSE'') initiated its Off-
Hours trading (``OHT'') Crossing Sessions in June 1991. See
Securities Exchange Act Release No. 29237 (May 24, 1991), 56 FR
24853 (approving File Nos. SR-NYSE-90-52 and NYSE-90-53). The
American Stock Exchange, Inc. (``Amex'') established an after-hours
trading facility in August 1991. See Securities Exchange Act Release
No. 29515 (August 2, 1991), 56 FR 37736 (approving File No. SR-Amex-
91-15). The Commission approved extensions of the NYSE, Amex and BSE
pilots, as well as pilots by other regional exchanges until January
31, 1994 and further extended the pilots until April 30, 1994. See
Securities Exchange Act Release Nos. 32365 (May 25, 1993), 58 FR
31560 (June 3, 1993), and 33562 (February 8, 1994), 59 FR 5792
(February 8, 1994).
\3\See Securities Exchange Act Release No. 33562, supra note 2.
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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
The purpose of the proposed rule change is to request permanent
approval of the proposed rule which expires on April 30, 1994, and
which permits Exchange specialists to provide primary market price
protection to limit orders through the acceptance of cancellations and
issuance of trade reports after the close of the 9:30 a.m. to 4 p.m.
trading session in order to accommodate certain member orders
designated as GTX orders. The GTX order is an unconditioned good until
canceled (``FTC'') order designated by the entering broker as
executable at 5:00 p.m. at the primary market closing price. This pilot
does not establish a separate after-hours trading session on the
Exchange.
Under the pilot program, pursuant to the BSE's Execution Guarantee
Rule, if an issue has traded at the limit price in a primary market's
after-hours trading session, the specialist is required to fill GTX
orders after the close of the 9:30 a.m. to 4:00 p.m. trading session
based on volume that prints in the primary market's after-hours trading
session, unless it can be demonstrated to the primary market or the
broker and specialist agree to a specific volume-related or other
criteria requiring a fill.\4\
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\4\The BSE Execution Guarantee Rule states, among other things,
that all agency limit orders will be filled if the issue is trading
on the primary market at the limit price unless it can be
demonstrated that such order would not have been executed if it had
been transmitted to the primary market, or the broker and specialist
agree to a specific volume-related or other criteria requiring a
fill. See BSE Rules of the Board, Chapter II, Section 33.01. In
effect, pursuant to this rule, if an issue has traded at the limit
price in a primary market's after-hours trading session, the BSE
specialist must fill limit orders, designated as executable after
the BSE close by the GTX designation, based on volume that prints in
the primary market's after-hours session. See Securities Exchange
Act Release No. 29301, supra note 2.
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Procedurally, the Exchange's BEACON system\5\ scans each
specialist's limit order books for limit orders designated as GTX and
priced at the primary market closing price. All such orders become
eligible for execution at the primary market closing price up to the
amount of the volume that prints in the primary market's after-hours
trading session. GTX orders on the specialists' books retain priority
among themselves and are entitled to an execution based on that
priority. Any eligible GTX orders that are not due a report based on
prints in the primary market's after-hours trading session remain on
the specialists' books and retain their priority in the next day's
regular trading session.
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\5\BEACON, the Boston Exchange Automated Communications Order
Routing Network, routes orders in eligible stocks from member firms
to the BSE. BEACON allows orders to be transmitted from member firms
to a BSE specialist's post where they are displayed on the
specialist's terminal together with the automatically assigned
BEACON quote at which the order would be automatically executed. The
order is displayed on the specialist's terminal for up to 15 seconds
to permit the specialist to intervene in the automatic execution of
the order should be or she wish to improve on the BEACON quotation.
When the specialist does not intervene, the order automatically will
be executed at the BEACON quote. See Securities Exchange Act Release
No. 27012 (July 10, 1989), 54 FR 30487 (July 20, 1989).
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Eligible GTX orders that are due an execution are manually executed
and reported to the Consolidated Tape as regular way transactions after
the primary market prints its 5:00 p.m. transactions.
In addition, the proposed pilot defines one-sided and two-sided
single stock orders in the event that the Exchange chooses to adapt its
current proposed procedures to provide for the acceptance, execution
and reporting of such orders at a future date.\6\ The Commission
requested in its order extending the pilot until April 30, 1994, that
the Exchange submit to the Commission by March 15, 1994, an updated
report concerning the pilot activity through February 28, 1994. This
updated report will assist the Commission in considering the Exchange's
request for permanent approval prior to the April 30, 1994 expiration
of the pilot program.
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\6\While the BSE pilot program includes definitions of one-sided
and two-sided single stock orders, the BSE currently does not effect
such orders after the regular chose of business. Under current
procedures, the BSE only effects transactions after-hours in order
to provide primary market protection to GTX orders held on a BSE
specialist's book.
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2. Statutory Basis
The proposed rule change will advance the objectives of section
6(b)(5) of the Act in that it is designed to promote just and equitable
principles of trade, foster cooperation and coordination with persons
engaged in facilitating transactions in securities, and remove
impediments to and perfect the mechanism of a free and open market and
a national market system. This is accomplished through the ability of
the Exchange to compete with the primary markets in protecting limit
orders that are sent to the BSE that may have been eligible for an
after-hours execution if they had been sent to the primary market, and
in effect allows the Exchange to compete with the primary markets in
regard to this new order type. The proposed rule gives Exchange
specialists the ability to provide additional liquidity to that
provided in the primary markets,\7\ thus advancing the objective of
public order protection. Because of this ability to compete with the
primary markets and to protect customer limit orders, the concept of a
free and national market system is strengthened.
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\7\A regional specialist may send a mirror order to the primary
market to aid in determining whether an after-hours execution is
due. In such situations, the regional specialist would not be
providing additional liquidity, but would be protecting his or her
customers' limit orders.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule will impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received comments on the
proposed rule.
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 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, 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 at the
Commission's Public Reference Room, 450 Fifth Street, NW., Washington,
DC 20549. Copies of the filing will also be available for inspection
and copying at the principal office of the BSE. All submissions should
refer to File No. SR-BSE-93-24 and should be submitted by April 19,
1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-7279 Filed 3-28-95; 8:45 am]
BILLING CODE 8010-01-M
