[Federal Register Volume 60, Number 94 (Tuesday, May 16, 1995)]
[Notices]
[Pages 26057-26058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12001]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35689; File No. SR-Amex-95-16]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange,
Inc., Relating to Minimum Fractions of Trading in Standard & Poor's
MidCap 400 Depositary Receipts
May 8, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 3, 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.
\1\ 15 U.S.C. 78s(b)(1) (1988).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Amex proposes to amend its Rule 127, Commentary .01 to provide
that the minimum fractional change applicable to trading of Standard &
Poor's MidCap 400 Depositary Receipts (``MidCap SPDRs'') shall be \1/
64\ of $1.00.
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
Amex Rule 127 provides parameters for the minimum fractional change
for dealings in securities on the Exchange. Commentary .01 to Rule 127
provides that for securities listed under Amex Rule 1000 et seq., which
relate to Portfolio Depositary Receipts (``PDRs''), the minimum
fractional change shall be \1/32\ of $1.00. Since April 1994, Standard
and Poor's Depositary Receipts (``SPDRs''), which have been trading on
the Exchange since January 1993, have had a minimum fractional change
of \1/64\ of $1.00.\2\
\2\ Securities Exchange Act Release No. 33900 (April 12, 1994),
59 FR 18585. SPDRs are PDRs based on the S&P 500 Composite Stock
Price Index.
---------------------------------------------------------------------------
In initially approving trading of PDRs in \1/32\'s, the Commission
stated that such trading would enhance market liquidity and should
promote more accurate pricing, tighter quotations, and reduced price
fluctuations. The Commission also noted that such trading should allow
customers to receive the best possible execution of their transactions
in these securities.\3\
\3\ Securities Exchange Act Release No. 31794 (January 29,
1993), 58 FR 7272.
---------------------------------------------------------------------------
The Commission has approved Exchange listing and trading of S&P
MidCap 400 Depositary Receipts with a minimum fractional change of \1/
32\ of $1.00.\4\ The Exchange, however, [[Page 26058]] believes the
benefits identified by the Commission in connection with trading PDRs
in \1/32\'s will be further enhanced by trading MidCap SPDRs in \1/
64\'s.\5\ The Amex believes that trading MidCap SPDRs in \1/64\'s
should further reduce price fluctuations based on the underlying index
for the particular issuance (i.e., the S&P MidCap 400 Index). According
to the Exchange, trading MidCap SPDRs in \1/64\'s should benefit retail
customers, institutions, and other market participants that invest in
or trade these PDRs. In addition, the expected result of a narrower
quotation spread in MidCap SPDRs should make such securities more
useful instruments for institutional arbitragers and other market
professionals who may hedge their positions in futures or other
derivative markets.\6\
\4\ Securities Exchange Act Release No. 35534 (March 24, 1995),
60 FR 16686.
\5\ As the Commission noted in approving the trading of SPDRs in
\1/64\'s, another market could seek to commence trading in PDRs;
however, the Intermarket Trading System (``ITS'') does not currently
accommodate quotes in \1/64\'s. See Securities Exchange Act Release
No. 33900, supra note 2. The Exchange would discuss with the ITS
Operating Committee or other ITS participants appropriate
modifications to ITS to permit trading of PDRs in fraction of \1/
64\'s, should another market seek to initiate such trading. The
Exchange notes, however, that other regulatory issues (e.g., the
need for a market seeking to trade PDRs to adopt a rule comparable
to Amex Rule 1000, Commentary .01) would also need to be addressed
prior to the commencement of PDR trading in other markets.
\6\ As noted above, ITS currently is not capable of
accommodating quotes in \1/64\'s. See id. Consequently, if other
securities exchanges or national securities associations desire to
list and trade MidCap SPDRs, the Commission expects the Amex to
discuss with ITS and other ITS participants the means by which ITS
would be modified to accommodate such trading.
---------------------------------------------------------------------------
The Exchange will issue an ``Information Circular'' to members and
member organizations relating to trading MidCap SPDRs in \1/64\'s prior
to commencement of such trading.
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act in general, and Section 6(b)(5) in
particular, in that it is designed to promote just and equitable
principles of trade, to facilitate transactions in securities, and to
protect investors and the public interest.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The Amex believes that 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
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change constitutes a stated policy,
practice, or interpretation with respect to the meaning,
administration, or enforcement of Amex Rule 127, it has become
effective pursuant to Section 19(b)(3)(A) of the Act and subparagraph
(e) of Rule 19b-4 thereunder. At any time within 60 days of the filing
of such 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. 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 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, N.W.,
Washington, D.C. Copies of such filing will also be available for
inspection and copying at the principal office of the above-mentioned
self-regulatory organization. All submissions should refer to File No.
SR-Amex-95-16 and should be submitted by June 6, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
\7\ 17 CFR 200.30-3(a)(12) (1994).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-12001 Filed 5-15-95; 8:45 am]
BILLING CODE 8010-01-M
