[Federal Register Volume 61, Number 132 (Tuesday, July 9, 1996)]
[Notices]
[Pages 36094-36095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17354]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37384; File No. SR-Amex-96-22]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange,
Inc. Relating to Fee Changes
June 28, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on
June 25, 1996, 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.
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Amex proposes to waive its equity transaction charges on
[[Page 36095]]
proprietary equity trades in paired securities effected on the Exchange
floor by options specialists and registered options traders (``ROTs'').
The text of the proposed rule change is available at the Office of
the Secretary, 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
Statutory Basis for, the Proposed Rule Change
In 1991, the Exchange imposed transaction charges on proprietary
equity trades by members and member organizations, while maintaining an
exemption for proprietary trades of equity specialists in view of the
market making function they perform.\1\ Subsequently, in 1995, the
Exchange waived such charges on proprietary equity trades effected by
Registered Equity Market Markers (``REMMs'') in order to facilitate
their market making function as set forth in Exchange Rule 114 and
place them on an equal footing with Exchange equity specialists.\2\
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\1\ See Securities Exchange Act Release No. 28794 (Jan. 17,
1991), 56 FR 2964 (Jan. 25, 1991).
\2\ See Securities Exchange Act Release No. 36081 (Aug. 10,
1995), 60 FR 42635 (Aug. 16, 1995).
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When option specialists and ROTs\3\ that trade ``paired
securities'' (i.e., where both the option and underlying equity
security are traded on the Amex) hedge an option position by trading in
the underlying Amex listed security, they are currently subject to the
Exchange's transaction charge on proprietary equity trades. The
Exchange is now waiving its equity transaction charge imposed on
proprietary equity trades by option specialists and ROTs hedging in
paired securities. Option specialists and ROTs, like equity specialists
and REMMs, perform a market making function in their assigned
securities and the Exchange believes it is equitable that they be
treated the same with respect to transaction charges on proprietary
equity trades used for hedging purposes.
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\3\ ROTs are members that trade on a proprietary basis on the
Floor in one or more designated classes of options. Exchange Rule
958 sets forth the obligations and requirements under which ROTs are
permitted to conduct such proprietary trading on the Floor. When
trading in their designated options, ROTs are required under the
Rule to contribute to the maintenance of a fair and orderly market
in such options, engaging in dealings in such options which
contribute to price continuity or depth or minimize the effects of a
temporary disparity between the supply and demand for such options.
Thus, while not subject to an option specialist's continuous market
making obligation, when ROTs effect proprietary equity trades on the
Floor, they are required to comply with the same market making
obligations as option specialists.
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The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act in general and furthers the objectives of
Section 6(b)(4) in particular in that they provide for the equitable
allocation of reasonable dues, fees, and other charges among Amex
members, issuers, and other persons using the Exchange's facilities.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes 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
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The fee change has become effective pursuant to Section 19(b)(3)(A)
of the Act and subparagraph (e)(2) of Rule 19b-4. At any time within 60
days of the filing of such fee change, the Commission may summarily
abrogate such fee 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. 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 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-96-22 and should be
submitted by July 30, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12) (1994).
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Jonathan G. Katz,
Secretary.
[FR Doc. 96-17354 Filed 7-8-96; 8:45 am]
BILLING CODE 8010-01-M
