Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change Establishing a De Minimis Exception to the 80/20 Test, 43470-43471 [E5-3999]

Download as PDF 43470 Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION proposed rule change (SR–Amex–2005– 55), be, and it hereby is, approved. Electronic Comments [Release No. 34–52061; File No. SR–Amex– 2005–55] For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Jill M. Peterson, Assistant Secretary. [FR Doc. E5–3984 Filed 7–26–05; 8:45 am] • 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 4–429 on the subject line. Paper Comments July 19, 2005. • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File Number 4–429. 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 proposed Joint Amendment No. 17 that are filed with the Commission, and all written communications relating to proposed Joint Amendment No. 17 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 Room. Copies of such filings also will be available for inspection and copying at the principal offices of the Amex, BSE, CBOE, ISE, PCX and Phlx. 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 publicly available. All submissions should refer to File Number 4–429 and should be submitted on or before August 17, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.6 Jonathan G. Katz, Secretary. [FR Doc. E5–3986 Filed 7–26–05; 8:45 am] BILLING CODE 8010–01–P 6 17 CFR 200.30–3(a)(29). VerDate jul<14>2003 20:48 Jul 26, 2005 Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval to Proposed Rule Change Relating to the Continuation of a Quote Assist Feature in Options on a Pilot Basis Jkt 205001 On May 19, 2005, the American Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’)1 and Rule 19b–4 thereunder,2 a proposed rule change to extend its pilot program implementing a quote-assist feature retroactively from April 30, 2005 to May 18, 2005. The proposed rule change was published for comment in the Federal Register on June 16, 2005.3 The Commission received no comments on the proposal. This order approves the proposed rule change. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 4 and, in particular, the requirements of Section 6 of the Act 5 and the rules and regulations thereunder. Specifically, the Commission finds the proposal to be consistent with Section 6(b)(5) of the Act,6 in that 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. The quote assist feature provides a mechanism to ensure that eligible customer limit orders are displayed within the appropriate time frame. Additionally, by extending the pilot program retroactively from April 30, 2005 to May 18, 2005, the Exchange rules will accurately reflect the fact that the pilot program was in place during this time. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 51815 (June 9, 2005), 70 FR 35142 (June 16, 2005) (SR– Amex–2005–55). 4 In approving this proposed rule change, as amended, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 5 15 U.S.C. 78f. 6 15 U.S.C. 78f(b)(5). 7 15 U.S.C. 78s(b)(2). PO 00000 1 15 2 17 Frm 00081 Fmt 4703 Sfmt 4703 BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52067; File No. SR–Amex– 2005–048] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change Establishing a De Minimis Exception to the 80/20 Test July 20, 2005. 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 April 28, 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, II, and III below, which Items have been prepared by the Amex. 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 Exchange proposes to amend Amex Rule 944 to provide a de minimis exception to the limitation on principal order access imposed by the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (‘‘Linkage Plan’’) 3 and related rules. The text of the proposed rule change is available on the Amex’s Web site at https://www.amex.com, the Office of the Secretary, the Amex and at the Commission’s Public Reference Room. 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating an intermarket options market linkage (‘‘Linkage’’) proposed by Amex, Chicago Board Options Exchange, Inc., and International Securities Exchange, Inc. See Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, Philadelphia Stock Exchange, Inc., Pacific Exchange, and Boston Stock Exchange, Inc. joined the Linkage Plan. See Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004). 1 15 E:\FR\FM\27JYN1.SGM 27JYN1 Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to implement proposed Joint Amendment No. 17 to the Linkage Plan. Joint Amendment No. 17, together with this proposed rule change, would establish a ‘‘de minimis’’ exception to the ‘‘80/20 Test’’ set forth in section 8(b)(iii) of the Linkage Plan and Amex Rule 944. Section 8(b)(iii) of the Linkage Plan provides that Eligible Market Makers should send Principal Orders through the Linkage on a limited basis and not as a primary aspect of their business. The 80/20 Test implements this policy in the Linkage Plan and Amex Rule 944 by prohibiting a specialist or registered options trader (‘‘ROT’’) from sending Principal Orders in an eligible option class if, in the last calendar quarter, the specialist or ROT’s Principal Order contract volume is disproportionate to the specialist or ROT’s contract volume executed against customer orders in its own market. The Exchange believes that applying the 80/20 Test has resulted in anomalies for ROTs with limited volume in an eligible option class. In particular, if a ROT has very little overall trading volume in an option, the execution of one or two Principal Orders during a calendar quarter could result in the ROT failing to meet the 80/20 Test. This would then prohibit the ROT from using the Linkage to send Principal Orders in that options class for the following calendar quarter. The Exchange believes that it is not the intent of the Linkage Plan and Exchange rules to prohibit ROTs with limited volume from sending Principal Orders through the Linkage in these circumstances since such trading clearly is not ‘‘a primary aspect of their business.’’ Accordingly, the proposed rule change seeks to establish a ‘‘de minimis’’ exception from the 80/20 Test VerDate jul<14>2003 19:40 Jul 26, 2005 Jkt 205001 43471 in Amex Rule 944 for specialists and ROTs that have total contract volume of less than 1,000 contracts in an option class for a calendar quarter. File No. SR–Amex–2005–048 on the subject line. 2. Statutory Basis • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File No. SR–Amex–2005–048. 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 Room, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. 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 No. SR–Amex–2005–048 and should be submitted on or before August 17, 2005. The Amex believes that the proposed rule change is consistent with Section 6(b) of the Act 4 in general and furthers the objectives of Section 6(b)(5) 5 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system, and, in general, protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The Amex 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 Within 35 days of the date of 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 Exchange consents, the Commission will: (A) By order approve such 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, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Paper Comments For the Commission, by the Division of Market Regulation, pursuant to delegated authority.6 Jill M. Peterson, Assistant Secretary. [FR Doc. E5–3999 Filed 7–26–05; 8:45 am] BILLING CODE 8010–01–P Electronic Comments • Use the Commission’s Internet comment form at https://www.sec.gov/ rules/sro.shtml or send an e-mail to rule-comments@sec.gov. Please include PO 00000 4 15 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00082 Fmt 4703 6 17 Sfmt 4703 E:\FR\FM\27JYN1.SGM CFR 200.30–3(a)(12). 27JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Notices]
[Pages 43470-43471]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3999]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52067; File No. SR-Amex-2005-048]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Establishing a De Minimis 
Exception to the 80/20 Test

July 20, 2005.
    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 April 28, 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, II, 
and III below, which Items have been prepared by the Amex. 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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Amex Rule 944 to provide a de 
minimis exception to the limitation on principal order access imposed 
by the Plan for the Purpose of Creating and Operating an Intermarket 
Option Linkage (``Linkage Plan'') \3\ and related rules.
---------------------------------------------------------------------------

    \3\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
options market linkage (``Linkage'') proposed by Amex, Chicago Board 
Options Exchange, Inc., and International Securities Exchange, Inc. 
See Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 
48023 (August 4, 2000). Subsequently, Philadelphia Stock Exchange, 
Inc., Pacific Exchange, and Boston Stock Exchange, Inc. joined the 
Linkage Plan. See Securities Exchange Act Release Nos. 43573 
(November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 
(November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 
(February 5, 2004), 69 FR 7029 (February 12, 2004).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Amex's Web 
site at https://www.amex.com, the Office of the Secretary, the Amex and 
at the Commission's Public Reference Room.

[[Page 43471]]

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to implement proposed 
Joint Amendment No. 17 to the Linkage Plan. Joint Amendment No. 17, 
together with this proposed rule change, would establish a ``de 
minimis'' exception to the ``80/20 Test'' set forth in section 
8(b)(iii) of the Linkage Plan and Amex Rule 944.
    Section 8(b)(iii) of the Linkage Plan provides that Eligible Market 
Makers should send Principal Orders through the Linkage on a limited 
basis and not as a primary aspect of their business. The 80/20 Test 
implements this policy in the Linkage Plan and Amex Rule 944 by 
prohibiting a specialist or registered options trader (``ROT'') from 
sending Principal Orders in an eligible option class if, in the last 
calendar quarter, the specialist or ROT's Principal Order contract 
volume is disproportionate to the specialist or ROT's contract volume 
executed against customer orders in its own market.
    The Exchange believes that applying the 80/20 Test has resulted in 
anomalies for ROTs with limited volume in an eligible option class. In 
particular, if a ROT has very little overall trading volume in an 
option, the execution of one or two Principal Orders during a calendar 
quarter could result in the ROT failing to meet the 80/20 Test. This 
would then prohibit the ROT from using the Linkage to send Principal 
Orders in that options class for the following calendar quarter. The 
Exchange believes that it is not the intent of the Linkage Plan and 
Exchange rules to prohibit ROTs with limited volume from sending 
Principal Orders through the Linkage in these circumstances since such 
trading clearly is not ``a primary aspect of their business.'' 
Accordingly, the proposed rule change seeks to establish a ``de 
minimis'' exception from the 80/20 Test in Amex Rule 944 for 
specialists and ROTs that have total contract volume of less than 1,000 
contracts in an option class for a calendar quarter.
2. Statutory Basis
    The Amex believes that the proposed rule change is consistent with 
Section 6(b) of the Act \4\ in general and furthers the objectives of 
Section 6(b)(5) \5\ in particular in that it is designed to prevent 
fraudulent and manipulative acts and practices, promote just and 
equitable principles of trade, remove impediments to and perfect the 
mechanisms of a free and open market and a national market system, and, 
in general, protect investors and the public interest.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Amex 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

    Within 35 days of the date of 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 Exchange consents, the Commission will:
    (A) By order approve such 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, 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 at https://
www.sec.gov/rules/sro.shtml or send an e-mail to rule-comments@sec.gov. 
Please include File No. SR-Amex-2005-048 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File No. SR-Amex-2005-048. 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 Room, 100 F Street, 
NE., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. 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 No. SR-Amex-2005-048 and should be 
submitted on or before August 17, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3999 Filed 7-26-05; 8:45 am]
BILLING CODE 8010-01-P

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