Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Odd-Lots in Nasdaq Securities, 412-414 [05-79]
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412
Federal Register / Vol. 70, No. 2 / Tuesday, January 4, 2005 / Notices
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 Board consents the
Commission will:
(a) By order approve such proposed
rule; or
(b) Institute proceedings to determine
whether the proposed rule should be
disapproved.
Number PCAOB–2004–02 and should
be submitted on or before January 25,
2005.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule is
consistent with the requirements of
Title I of the Act. Comments may be
submitted by any of the following
methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/pcaob.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number PCAOB–2004–02 on the subject
line.
By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4–3923 Filed 1–3–05; 8:45 am]
BILLING CODE 8010–01–P
[Release No. 34–50934; File No. SR–Amex–
2004–108]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Relating to
Odd-Lots in Nasdaq Securities
December 27, 2004.
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 December
22, 2004, the American Stock Exchange
LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Paper Comments
Commission (‘‘Commission’’) the
proposed rule change as described in
• Send paper comments in triplicate
items I, II, and III below, which items
to Jonathan G. Katz, Secretary,
have been prepared by the Exchange.
Securities and Exchange Commission,
The Exchange filed the proposal
450 Fifth Street, NW., Washington, DC
pursuant to Section 19(b)(3)(A) of the
20549–0609.
Act 3 and Rule 19b–4(f)(6) thereunder,4
All submissions should refer to File
which renders the proposal effective
Number PCAOB–2004–02. This file
upon filing with the Commission. The
number should be included on the
subject line if e-mail is used. To help the Commission is publishing this notice to
solicit comments on the proposed rule
Commission process and review your
change from interested persons.
comments more efficiently, please use
only one method. The Commission will I. Self-Regulatory Organization’s
post all comments on the Commission’s Statement of the Terms of Substance of
Internet Web site (https://www.sec.gov/
the Proposed Rule Change
rules/pcaob.shtml). Copies of the
The Amex proposes to extend for an
submission, all subsequent
additional six-month period ending
amendments, all written statements
June 30, 2005, the Exchange’s pilot
with respect to the proposed rule that
program for odd-lot execution
are filed with the Commission, and all
procedures for Nasdaq securities traded
written communications relating to the
on the Exchange pursuant to unlisted
proposed rule change between the
Commission and any person, other than trading privileges.
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 20549. Copies of such
filing also will be available for
inspection and copying at the principal
office of PCAOB. All comments received
will be posted without change; we do
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
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18:02 Jan 03, 2005
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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
Exchange 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
PO 00000
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
Frm 00087
Fmt 4703
Sfmt 4703
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
1. Purpose
The Commission approved, and the
Exchange implemented, a pilot program
for odd-lot order 5 executions in Nasdaq
securities transacted on the Exchange
pursuant to unlisted trading privileges.
Paragraph (j) of Rule 118 (‘‘Trading in
Nasdaq National market Securities’’)
describes the Exchange’s odd-lot
execution procedures for Nasdaq
securities, and Commentary .05 of Amex
Rule 205 (‘‘Manner of Executing OddLot Orders’’) references rule 118(j) oddlot procedures. The pilot program was
originally approved on august 2, 2002,
for a six-month period, and was
reestablished on July 14, 2003, for an
additional six-month period ending
December 27, 2003.6 On November 20,
2003, the Commission provided notice
of the Exchange’s proposed rule change
to amend paragraph (j) of Amex Rule
118 and to extend the pilot program
through June 27, 2004,7 and on June 14,
2004, the Commission provided notice
of a further extension of the pilot
program through December 27, 2004.8
Under the Exchange’s current pilot
program, after the opening of trading in
Nasdaq securities, odd-lot market orders
and executable odd-lot limit orders are
executed at the qualified national best
bid or offer 9 at the time the order is
5 An odd-lot order is an order for less than 100
shares.
6 See Securities Exchange Act Release No. 46304
(August 2, 2002) 67 FR 51903 (August 9, 2002)
approving SR–Amex–2002–56, and Securities
Exchange Act Release No. 48174 (July 14, 2003) 68
FR 43409 (July 22, 2003) (SR–Amex–2003–56).
7 See Securities Exchange Act Release No. 48995
(December 24, 2003) 68 FR 75670 (December 31,
2003) (SR–Amex–2003–102).
8 See Securities Exchange Act Release No. 49855
(June 14, 2004) 69 FR 35399 (June 24, 2004) (SR–
Amex–2004–30).
9 In Amex Rule 118(j), the qualified national best
bid and offer are defined as the highest bid and
lowest offer, respectively, disseminated (A) by the
Exchange or (B) by another market center
participating in the Joint Self-Regulatory
Organization Plan Governing the Collection,
Consolidation and Dissemination of Quotation and
Transaction Information for Nasdaq Listed
Securities Traded on Exchanges on an Unlisted
Trading Privileges Basis; provided, however, that
the bid and offer in another such market center will
be considered in determining the qualified national
best bid or offer in a stock only if (i) the quotation
conforms to the requirements of Amex Rule 127
(‘‘Minimum Price Variations’’), (ii) the quotation
does not result in a locked or crossed market, (iii)
the market center is not experiencing operational or
E:\FR\FM\04JAN1.SGM
04JAN1
Federal Register / Vol. 70, No. 2 / Tuesday, January 4, 2005 / Notices
received at the trading post or through
the Amex Order File. Odd-lot market
orders and executable odd-lot limit
orders entered before the opening of
trading in Nasdaq securities are
executed at the price of the first roundlot or part of round-lot transaction on
the Exchange. Non-executable limit
orders, stop orders, stop limit orders,
orders filled after the close and nonregular way trades are executed in
accordance with Amex Rule 205 A(2),
A(3), A(4), C(1) and C(2), respectively.
Orders to buy or sell ‘‘at the close’’ are
filled at the price of the closing roundlot sale on the Exchange. In a locked
market condition, odd-lot market orders
and executable odd-lot limit orders are
executed at the locked market price. In
a crossed market condition, odd-lot
market orders are executed at the mean
of the bid and offer prices when the
displayed national best bid is higher
than the displayed national best offer by
$.05 or less. When the displayed
national best bid is higher than the
displayed national best offer by more
than $.05, odd-lot market orders are
executed when the crossed market
condition no longer exists. In addition,
in a crossed market condition,
executable odd-lot limit orders are
executed at the crossed market bid price
(in the case of an order to sell) or at the
crossed market offer price (in the case
of an order to buy). For example, if the
bid and offer were $10.10 and $20.00,
respectively, an executable odd-lot sell
limit order priced at $20.10 or less
would be executed at $20.10, and an
executable odd-lot buy limit order
priced at $20.00 or higher would be
executed at $20.00.
The Exchange believes that the
existing odd-lot execution procedures
have operated efficiently. Furthermore,
the Exchange has received no
complaints from members or the public
regarding odd-lot executions. Therefore,
the Exchange seeks an extension to the
pilot program for an additional sixmonth period ending June 30, 2005,
which would provide the Exchange
with time to asses further enhancements
to the odd-lot execution procedures.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act 10 in general and
system problems with respect to the dissemination
of quotation information, and (iv) the bid or offer
is ‘‘firm,’’ that is, members of the market center
disseminating the bid or offer are not relieved of
their obligations with respect to such bid or offer
under paragraph (c)(2) of Amex Rule 11 Ac1–1
pursuant to the ‘‘unusual market’’ exception of
paragraph (b)(3) of Rule 11 Ac1–1.
10 15 U.S.C. 78f(b).
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18:02 Jan 03, 2005
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furthers the objectives of section
6(b)(5) 11 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, in settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to,
and perfect the mechanism of, a free and
open market and a national market
system, and in general, to protect
investors and the public interest, and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
B. Self-Regulatory Organization’s
statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any 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
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) Impose any significant burden on
competition; and
(iii) Become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, if consistent with the
protection of investors and the public
interest, it has become effective
pursuant to section 19(b)(3)(A) of the
Act 12 and Rule 19b–4(f)(6)
thereunder.13 At any time within 60
days of the filing of the 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.
The Exchange has requested that the
Commission waive the 30-day operative
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6). The Commission notes
that Amex provided written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change at
least five business days prior to the date of filing
of the proposed rule change.
PO 00000
11 15
12 15
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413
delay. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because acceleration of the operative
date will allow the Amex to continue its
pilot odd-lot execution procedures
applicable to trading in Nasdaq
securities without interruption. For this
reason, the Commission designates the
proposal to be effective and operative
upon filing with the Commission.14 In
addition, the Commission requests that
the Exchange report any problems
complaints from members and the
public regarding odd-lot execution
procedures applicable to trading Nasdaq
securities, and that the Amex submit
any proposal to extend, or permanently
approve, the pilot at least two months
before the expiration of the six-month
pilot.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Amex–2004–108 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, NW., Washington, DC
20549–0609.
All submissions should refer to File
Number SR–Amex–2004–108. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web sit (https://www.sec.gov/
rules/sro.shtml). 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
14 For purposes only of waiving the 30-day
operative delay of the proposed rule change, the
Commission considered the proposed rule’s impact
on efficiency, competition, and capital formation.
15 U.S.C. 78c(f).
E:\FR\FM\04JAN1.SGM
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414
Federal Register / Vol. 70, No. 2 / Tuesday, January 4, 2005 / Notices
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
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of the Amex. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submission should refer to File Number
SR–Amex–2004–108 and should be
submitted on or before January 21, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 05–79 Filed 1–3–05; 8:45 am]
BILLING CODE 8010–01–M
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–50935; File No. SR–CHX–
2004–44]
Self-Regulatory Organizations;
Chicago Stock Exchange,
incorporated; Notice of Filing and
Immediate Effectiveness of Extension
of Pilot Rule Change Relating to
Transactions in Certain ExchangeTraded Funds
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
In its submission, the Exchange
requested extension of a pilot rule
change to CHX Article XX, Rule 37(a),
which governs manual execution of
eligible market and marketable limit
orders. The pilot rule change, which
will remain in effect for an additional
60-day pilot period, permits a CHX
specialist, acting in its principal
capacity, to manually executive an
incoming market or marketable limit
order in one of three exchange-traded
funds at a price other than the national
best bid or offer. The text of the
proposed rule change is available at the
Office of the Secretary, CHX 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
CHX included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received regarding the
proposal. The text of these statements
may be examined at the places specified
in item IV below. The CHX 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
December 27, 2004.
1. Purpose
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
22, 2004, the Chicago Stock Exchange,
Incorporated (‘‘CHX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
a request for extension of a pilot rule
change as described in items I, II and III
below, which items have been prepared
by the Exchange. The Exchange filed the
proposed rule change pursuant to
section 19(b)(3)(A) of the Act,3 and Rule
19b–4(f)(6) 4 thereunder, which renders
the rule change effective upon filing
with the Commission. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
On August 28, 2002, the Commission
issued an order granting a de minimis
exemption (the ‘‘Exemption’’) for
transactions in certain exchange-traded
funds (‘‘Exempt ETFs’’) 5 from the tradethrough provisions of the Intermarket
Trading System (‘‘ITS’’) Plan.6
According to the CHX, as stated by
both Commission staff and
commissioners at an open meeting on
August 27, 2002, rapid-fire quotations
and executions in Exempt ETFs occur
consistent throughout the trading day
within a range around the NBBO,
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1 15
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18:02 Jan 03, 2005
Jkt 205001
three affected Exempt ETFs are the
exchange-traded funds tracking the Nasdaq–100
Index (‘‘QQQ’’), the Dow Jones Industrial Average
(‘‘DIAMONDs’’) and the Standard & Poor’s 500
Index (‘‘SPDRs’’). The Commission notes that the
QQQ is now traded on Nasdaq.
6 See Securities Exchange Act Release No. 46428
(August 28, 2002). At present, the Exemption
extends to transactions that are ‘‘executed at a price
that is no more than three cents lower than the
highest bid displayed in CQS and no more than
three cents higher than the lowest offer displayed
in CQS.’’
PO 00000
5 The
Frm 00089
Fmt 4703
Sfmt 4703
rendering it extremely difficult, if not
impossible, to access liquidity at an
exact NBBO price point. Compounding
the ‘‘flickering’’ noted by the
Commission, the Exchange has noted a
marked increase in the incidence of
locked and crossed markets in Exempt
ETFs.
CHX Article XX, Rule 37(a),
commonly referred to as the Exchange’s
‘‘Best Rule,’’ requires that with respect
to any market or marketable limit order
not executed automatically, a CHX
specialist must ‘‘* * * either (a)
manually execute such order at a price
and size equal to the NBBO price and
size at the time the order was received;
or (b) act as agent for such order in
seeking to obtain the best available price
for such order on a marketplace other
than the Exchange, using order routing
systems where appropriate.’’
According to the CHX, given the
unique environment in which the ETFs
are traded, and the difficulty that CHX
represents that its specialists often
encounter in accessing NBBO price
points, the Exchange’s Department of
Market Regulation (the ‘‘Department’’)
believes that its enforcement of the Best
Rule must take the ETF trading
environment into account when the
Department evaluates the execution
prices of eligible market and marketable
limit orders for Exempt ETFs. The
Department believes that in certain
instances, execution of an order in an
Exempt ETF at a price other than the
NBBO may nonetheless be consistent
with the specialist’s best execution
obligation, in light of the unique
environment that characterizes trading
in Exempt ETFs. The Exchange believes
that the current version of the BEST
Rule contains sufficient latitude with
respect to an order executed by a CHX
specialist acting as agent for the order,7
but does not contemplate any flexibility
for specialists acting in their principal
capacity.8 Accordingly, the Exchange
proposed a rule change on a pilot basis,
which permits a CHX specialist, acting
in its principal capacity, to manually
execute an incoming market or
marketable limit order in an Exempt
ETF at a price other than the NBBO.9The
7 The Best Rule provision governing manual
agency executions obligates the CHX specialist to
seek ‘‘* * * the best available price.’’ CHX Article
XX, Rule 37(a)(2).
8 The Best Rule provision governing manual
principal executions obligates the CHX specialist to
execute the order at the ‘‘* * * NBBO price and
size at the time the order was received.’’ CHX
Article XX, Rule 37(a)(2).
9 The CHX represents that this proposed rule
change is closely analogous to the Exchange’s
previously submitted interpretation regarding
execution of resting limit orders in Exempt ETFs.
Under the limit order interpretation, CHX
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]]>Agencies
[Federal Register Volume 70, Number 2 (Tuesday, January 4, 2005)]
[Notices]
[Pages 412-414]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-79]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-50934; File No. SR-Amex-2004-108]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Odd-Lots in Nasdaq Securities
December 27, 2004.
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 December 22, 2004, the American Stock Exchange LLC (``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 Exchange. The
Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the Act
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. 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).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Amex proposes to extend for an additional six-month period
ending June 30, 2005, the Exchange's pilot program for odd-lot
execution procedures for Nasdaq securities traded on the Exchange
pursuant to unlisted trading privileges.
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 Exchange 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
1. Purpose
The Commission approved, and the Exchange implemented, a pilot
program for odd-lot order \5\ executions in Nasdaq securities
transacted on the Exchange pursuant to unlisted trading privileges.
Paragraph (j) of Rule 118 (``Trading in Nasdaq National market
Securities'') describes the Exchange's odd-lot execution procedures for
Nasdaq securities, and Commentary .05 of Amex Rule 205 (``Manner of
Executing Odd-Lot Orders'') references rule 118(j) odd-lot procedures.
The pilot program was originally approved on august 2, 2002, for a six-
month period, and was reestablished on July 14, 2003, for an additional
six-month period ending December 27, 2003.\6\ On November 20, 2003, the
Commission provided notice of the Exchange's proposed rule change to
amend paragraph (j) of Amex Rule 118 and to extend the pilot program
through June 27, 2004,\7\ and on June 14, 2004, the Commission provided
notice of a further extension of the pilot program through December 27,
2004.\8\
---------------------------------------------------------------------------
\5\ An odd-lot order is an order for less than 100 shares.
\6\ See Securities Exchange Act Release No. 46304 (August 2,
2002) 67 FR 51903 (August 9, 2002) approving SR-Amex-2002-56, and
Securities Exchange Act Release No. 48174 (July 14, 2003) 68 FR
43409 (July 22, 2003) (SR-Amex-2003-56).
\7\ See Securities Exchange Act Release No. 48995 (December 24,
2003) 68 FR 75670 (December 31, 2003) (SR-Amex-2003-102).
\8\ See Securities Exchange Act Release No. 49855 (June 14,
2004) 69 FR 35399 (June 24, 2004) (SR-Amex-2004-30).
---------------------------------------------------------------------------
Under the Exchange's current pilot program, after the opening of
trading in Nasdaq securities, odd-lot market orders and executable odd-
lot limit orders are executed at the qualified national best bid or
offer \9\ at the time the order is
[[Page 413]]
received at the trading post or through the Amex Order File. Odd-lot
market orders and executable odd-lot limit orders entered before the
opening of trading in Nasdaq securities are executed at the price of
the first round-lot or part of round-lot transaction on the Exchange.
Non-executable limit orders, stop orders, stop limit orders, orders
filled after the close and non-regular way trades are executed in
accordance with Amex Rule 205 A(2), A(3), A(4), C(1) and C(2),
respectively. Orders to buy or sell ``at the close'' are filled at the
price of the closing round-lot sale on the Exchange. In a locked market
condition, odd-lot market orders and executable odd-lot limit orders
are executed at the locked market price. In a crossed market condition,
odd-lot market orders are executed at the mean of the bid and offer
prices when the displayed national best bid is higher than the
displayed national best offer by $.05 or less. When the displayed
national best bid is higher than the displayed national best offer by
more than $.05, odd-lot market orders are executed when the crossed
market condition no longer exists. In addition, in a crossed market
condition, executable odd-lot limit orders are executed at the crossed
market bid price (in the case of an order to sell) or at the crossed
market offer price (in the case of an order to buy). For example, if
the bid and offer were $10.10 and $20.00, respectively, an executable
odd-lot sell limit order priced at $20.10 or less would be executed at
$20.10, and an executable odd-lot buy limit order priced at $20.00 or
higher would be executed at $20.00.
---------------------------------------------------------------------------
\9\ In Amex Rule 118(j), the qualified national best bid and
offer are defined as the highest bid and lowest offer, respectively,
disseminated (A) by the Exchange or (B) by another market center
participating in the Joint Self-Regulatory Organization Plan
Governing the Collection, Consolidation and Dissemination of
Quotation and Transaction Information for Nasdaq Listed Securities
Traded on Exchanges on an Unlisted Trading Privileges Basis;
provided, however, that the bid and offer in another such market
center will be considered in determining the qualified national best
bid or offer in a stock only if (i) the quotation conforms to the
requirements of Amex Rule 127 (``Minimum Price Variations''), (ii)
the quotation does not result in a locked or crossed market, (iii)
the market center is not experiencing operational or system problems
with respect to the dissemination of quotation information, and (iv)
the bid or offer is ``firm,'' that is, members of the market center
disseminating the bid or offer are not relieved of their obligations
with respect to such bid or offer under paragraph (c)(2) of Amex
Rule 11 Ac1-1 pursuant to the ``unusual market'' exception of
paragraph (b)(3) of Rule 11 Ac1-1.
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The Exchange believes that the existing odd-lot execution
procedures have operated efficiently. Furthermore, the Exchange has
received no complaints from members or the public regarding odd-lot
executions. Therefore, the Exchange seeks an extension to the pilot
program for an additional six-month period ending June 30, 2005, which
would provide the Exchange with time to asses further enhancements to
the odd-lot execution procedures.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act \10\ in general and furthers the
objectives of section 6(b)(5) \11\ in particular, in that it is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing, in
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to, and perfect the
mechanism of, a free and open market and a national market system, and
in general, to protect investors and the public interest, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any 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
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, if
consistent with the protection of investors and the public interest, it
has become effective pursuant to section 19(b)(3)(A) of the Act \12\
and Rule 19b-4(f)(6) thereunder.\13\ At any time within 60 days of the
filing of the 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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). The Commission notes that Amex
provided written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change at least five business days prior to the date of filing of
the proposed rule change.
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The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because acceleration of the operative date will allow
the Amex to continue its pilot odd-lot execution procedures applicable
to trading in Nasdaq securities without interruption. For this reason,
the Commission designates the proposal to be effective and operative
upon filing with the Commission.\14\ In addition, the Commission
requests that the Exchange report any problems complaints from members
and the public regarding odd-lot execution procedures applicable to
trading Nasdaq securities, and that the Amex submit any proposal to
extend, or permanently approve, the pilot at least two months before
the expiration of the six-month pilot.
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\14\ For purposes only of waiving the 30-day operative delay of
the proposed rule change, the Commission considered the proposed
rule's impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Amex-2004-108 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-Amex-2004-108. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web sit (https://www.sec.gov/
rules/sro.shtml). 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
[[Page 414]]
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 Room. Copies of such filing also will be available for
inspection and copying at the principal office of the Amex. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submission should refer to File Number SR-Amex-2004-108 and should be
submitted on or before January 21, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 05-79 Filed 1-3-05; 8:45 am]
BILLING CODE 8010-01-M
