[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Notices]
[Pages 15552-15553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8229]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38437; File No. SR-Amex-97-14]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc. Relating to Trading in One
Sixteenth of a Dollar
March 25, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 17, 1997, 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 self-regulatory organization.
Subsequently, the Exchange submitted Amendment No. 1 to the proposed
rule change.\2\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ Letter from James F. Duffy, Executive Vice President and
General Counsel, Amex, to Anthony P. Pecora, Attorney, Division of
Market Regulation, SEC, dated March 24, 1997 (``Amendment No. 1'').
In addition to correcting a typographical oversight, Amendment No. 1
enhanced the Amex's discussion concerning the filing's impact on the
Intermarket Trading System and its burden on competition.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Amex proposes to amend Exchange Rule 127 (Minimum Fractional
Changes) to permit trading in sixteenths in Amex securities selling at
$10 and higher.
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 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.
[[Page 15553]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Amex proposes to amend Amex Rule 127 (Minimum Fractional
Changes) to provide a significant expansion in the number of Amex
securities traded in fractions of \1/16\ of $1.00. In 1992, the
Commission approved sixteenths trading for Amex securities selling
under $5 and above $0.25.\3\ In 1995, the Commission approved an
expansion of these parameters to allow sixteenths trading in Amex
securities selling under $10.\4\
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\3\ Securities Exchange Act Release No. 31118 (Aug. 28, 1992),
57 FR 40484 (Sept. 3, 1992) (approving SR-Amex-91-07).
\4\ Securities Exchange Act Release No. 35537 (Mar. 27, 1995),
60 FR 16894 (Apr. 3, 1995) (approving File No. SR-Amex-95-02).
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The Exchange has determined to extend the benefits of trading in
sixteenths to Amex equity securities priced at $10 and over, which
currently includes approximately 50% of Amex's equity list.\5\ The
Exchange believes that trading in sixteenths will promote investor
protection by, among other things, enhancing the already significant
potential for price improvement available on the Amex to both retail
and professional orders.
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\5\ Standard and Poor's Depositary Receipts
(``SPDRs'') and S&P MidCap 400 SPDRsTM will continue
to trade in \1/64\'s.
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On March 18, 1997, the Amex discussed the proposed expansion of
trading in sixteenths with the Intermarket Trading System (``ITS'')
participants and with the Securities Industry Automation Corporation
(``SIAC''). The ITS Operating Committee voted unanimously to instruct
SIAC to make necessary enhancements to the ITS host system to
accommodate the proposed expanded sixteenths trading. SIAC also agreed
to coordinate with the ITS participants regarding any required testing
and changes to the participants' internal systems.\6\
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\6\ The Commission notes that the tests conducted March 22, 1997
involving the Amex, the Boston Stock Exchange, the Nasdaq Stock
Market, and the Pacific Stock Exchange were successful. Amendment
No. 1, supra note 2.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) \7\ of the Act in general and furthers the objectives of
Section 6(b)(5) \8\ in particular in that it is designed to promote
just and equitable principles of trade, to facilitate transactions in
securities and, in general, to protect investors and the public
interest.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposed rule change will impose no
burden on competition. Indeed, the Exchange believes an expansion of
trading in sixteenths will enhance competition by permitting trading in
all Amex equity securities by all ITS participants in narrower trading
fractions, with the potential for significant price improvement for
investors. The proposed rule change will require SIAC to modify the
host system and may require individual ITS participant markets to
modify their own systems to permit trading in sixteenths via ITS in
Amex securities priced $10 and higher. No competitive issue is raised
by these system changes, however, as expanded sixteenths trading will
not commence until the SIAC and participant system changes have been
effected.
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 written comments.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the 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 Section, 450 Fifth Street, NW.,
Washington, DC 20549. Also, copies of such filing will be available for
inspection and copying at the principal office of the Amex. All
submissions should refer to File No. SR-Amex-97-14 and should be
submitted by April 22, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 C.F.R. 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-8229 Filed 3-31-97; 8:45 am]
BILLING CODE 8010-01-M
