Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment No. 1 Thereto Relating to Dissemination of Order Imbalances in Tape A and Tape B Securities Admitted to Unlisted Trading Privileges in the Same Manner as Order Imbalances in Tape C Securities Admitted to Unlisted Trading Privileges, 16314-16315 [E5-1391]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 60 (Wednesday, March 30, 2005)]
[Notices]
[Pages 16314-16315]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-1391]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51423; File No. SR-Amex-2005-020]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change and Amendment No. 1 Thereto Relating to Dissemination of 
Order Imbalances in Tape A and Tape B Securities Admitted to Unlisted 
Trading Privileges in the Same Manner as Order Imbalances in Tape C 
Securities Admitted to Unlisted Trading Privileges

March 23, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934, as amended, (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on February 11, 2005, 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 and II below, which Items have been prepared by the Exchange. 
On March 18, 2005, the Exchange filed Amendment No. 1 to the 
proposal.\3\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons and is approving the proposal, as amended, on an accelerated 
basis.
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240. 19b-4.
    \3\ Amendment No. 1 replaces and supersedes the Amex's original 
19b-4 filing in its entirety.
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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 Amex Rule 131A to provide for the 
dissemination of order imbalances in Tape A and Tape B securities 
admitted to unlisted trading privileges (``UTP'') in the same manner as 
order imbalances in Tape C (NASDAQ) securities admitted to UTP.
    The text of the proposed rule change, as amended, is available on 
the Amex's Web site https://www.amex.com, at the Amex's Office of the 
Secretary, and at the Commission's Public Reference Room.

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, as 
amended, 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 III 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 Exchange's rules provide for mandatory and discretionary 
publication of imbalances of market-on-close (``MOC'') and limit-on-
close (``LOC'') orders for listed and unlisted stocks. Currently, Amex 
order imbalances in listed stocks \4\ are published over the Tape B 
high speed line. Order imbalances in NASDAQ stocks admitted to UTP on 
the Amex are disseminated in a different manner since the NASDAQ 
Securities Information Processor (``SIP'') does not support order 
imbalance dissemination by NASDAQ UTP Plan Participants. Amex 
specialists in NASDAQ stocks, as the result, currently enter their 
order imbalances into a PC at the post and this information is 
transferred to an Amex server that uploads the information at 3:40 and 
3:50 p.m. by means of FTP file transfer protocol to market data 
vendors, firms that have requested the information, and the Amex Web 
site.\5\
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    \4\ There are nine stocks that were admitted to unlisted trading 
privileges on the Exchange prior to February 28, 1950. These nine 
stocks are treated by the Securities Industry Automation Corporation 
(``SIAC'') as if they were listed on the Amex for purposes of 
publishing order imbalances.
    \5\ See Amex Rule 118.
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    The Exchange recently admitted to UTP the common stock of a 
particular security reported and quoted over Tape B. On the first day 
of trading this particular Tape B listed security, the Exchange 
attempted to disseminate an imbalance of on-close orders but was unable 
to do so because SIAC, the SIP for Tape A and B, would not permit it. 
The Amex represents that it currently accounts for more than 50 percent 
of trade market share in this Tape B listed security, but temporarily 
does not accept MOC and LOC orders because of its inability to publish 
order imbalances as required under Amex Rule 131A. The Amex believes 
that implementing this rule change would enable the Amex to accept MOC/
LOC orders, and conduct robust closings.
    The Amex represents that SIAC is of the view that its systems 
prohibit it from disseminating order imbalances for markets other than 
the listing market. Because SIAC believes that a Consolidated Tape 
Association (``CTA'') Plan (``CTA Plan'') amendment and technical 
systems changes are necessary for it to disseminate order imbalances in 
stocks where the Exchange is not the listing market, and because the 
Exchange believes that it would be time consuming and futile to seek a 
CTA Plan amendment due to the requirement of unanimous approval of such 
changes, the Exchange is instead proposing an amendment to Amex Rule 
131A to permit the dissemination of order imbalances in Tape A and B 
securities admitted to UTP in the same manner as order imbalances in 
NASDAQ securities admitted to UTP. The proposed rule change, as 
amended, would exempt equity derivatives and options from the proposed 
change, because the Amex does not now disseminate order imbalances in 
these securities. The proposed rule also would exempt the handful of 
stocks traded on the Exchange that were admitted to UTP more than half 
a century ago because, according to the Amex, SIAC has no objection to 
disseminating order imbalances in these securities over Tape B.
2. Statutory Basis
    The proposed rule change, as amended, is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, and, in general, to protect investors 
and the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change will impose no 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

[[Page 16315]]

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 by the Exchange on 
this proposal.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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-2005-020 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-2005-020. 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 site (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 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. Copies of 
such filing also will be available for inspection and copying at the 
principal offices of 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 submissions should refer to File Number 
SR-Amex-2005-020 and should be submitted on or before April 20, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change, as amended, is consistent with the requirements of the Act 
and the rules and regulations thereunder, applicable to a national 
securities exchange, and, in particular, with the requirements of 
Section 6(b)(5) of the Act,\8\ which requires, among other things, that 
the Exchange's rules promote just and equitable principles of trade and 
facilitate transactions in securities, and, in general, protect 
investors and the public interest. The proposed rule change will enable 
the dissemination of order imbalances before the close in stocks for 
which Amex is not the listing market adding transparency to the closing 
process.
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    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange has requested that the Commission approve the proposed 
rule change, as amended, on an accelerated basis, stating that this may 
eliminate inconsistencies in the marketplace and avoid confusion among 
its members and member organizations regarding the dissemination of 
MOC/LOC orders. The Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\9\ for approving the proposed rule change, as 
amended, prior to the thirtieth day after the date of publication of 
notice in the Federal Register. The Commission notes that the proposed 
rule change, as amended, would facilitate the dissemination of order 
imbalances for MOC/LOC orders, which, according to the Amex, SIAC 
cannot disseminate for secondary markets. The Commission further notes 
that order imbalance information for listed securities (Tape A and B) 
admitted to UTP would be disseminated in a manner similar to how the 
Amex currently disseminates order imbalance information for NASDAQ UTP 
securities (Tape C) pursuant to Amex Rule 118. The Commission believes 
that the dissemination of order imbalances for listed UTP securities 
could be beneficial to investors, contribute to the information flow 
necessary to make informed investment decisions, and should enable the 
Amex to conduct more efficient closings. The Commission believes that 
accelerating approval of this proposal would allow the Exchange to 
immediately begin dissemination of MOC/LOC order imbalance information 
for listed securities admitted to UTP on the Amex. Accordingly, the 
Commission finds that there is good cause, consistent with Sections 
6(b)(5) and 19(b)(2) of the Act,\10\ to approve the proposed rule 
change, as amended, on an accelerated basis.
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ 15 U.S.C. 78f(b)(5) and 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change, as amended, (SR-Amex-2005-020) 
is hereby approved on an accelerated basis.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-1391 Filed 3-29-05; 8:45 am]
BILLING CODE 8010-01-P