Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval to Proposed Rule Change, and Amendment No. 1 Thereto, to Expand the Types of Trusts Permitted to Directly Own Amex Memberships, 49341-49342 [E5-4595]

Download as PDF Federal Register / Vol. 70, No. 162 / Tuesday, August 23, 2005 / Notices the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–52275; File No. SR–Amex– 2005–003] • 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–2005–078 on the subject line. Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval to Proposed Rule Change, and Amendment No. 1 Thereto, to Expand the Types of Trusts Permitted to Directly Own Amex Memberships Paper Comments August 16, 2005. • 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 Number SR–Amex–2005–078. 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. Copies of the filing also will be available for inspection and copying at the principal office 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–2005–078 and should be submitted on or before September 13, 2005. On January 7, 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 amend Amex Rule 356 to expand the types of trusts permitted to directly own Amex memberships. On June 7, 2005, the Exchange filed Amendment No. 1 to the proposed rule change.3 The proposed rule change, as amended, was published for comment in the Federal Register on June 28, 2005.4 The Commission received no comments on the proposal. The Exchange proposed to amend Amex Rule 356 to permit grantor trusts to directly own Exchange memberships. Currently, the Exchange permits certain pension trusts (generally comprised of trusts or custodial accounts, i.e., Keoghs and IRAs) to directly own Exchange memberships for investment purposes and either lease the seat or designate a nominee to operate the seat. Under the proposed rule change, grantor trusts will be able to acquire one or more Amex memberships either by transfer from an existing owner of an Amex membership or by a direct purchase. The grantor of the trust (i.e., either the member transferring a membership to a trust or the grantor of the trust purchasing a membership) will be required during the grantor’s lifetime or existence (in the case of a non-natural person) to be a beneficiary of the trust. In the event that the trust terminates or is amended such that it no longer For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–4589 Filed 8–22–05; 8:45 am] BILLING CODE 8010–01–P 9 17 CFR 200.30–3(a)(12). VerDate Aug<18>2005 15:03 Aug 22, 2005 Jkt 205001 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 1, the Exchange revised the proposed rule text to clarify that an Exchange member owner who does not conduct broker-dealer activities on the floor of the Exchange is not required to be registered with the Commission as a broker-dealer. Member owners can be individuals, partnerships, corporations, custodial accounts or, pursuant to the proposed rule change, grantor trusts. Amendment No. 1 replaced and superseded the original filing in its entirety. 4 See Securities Exchange Act Release No. 51900 (June 22, 2005), 70 FR 37139. 2 17 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 49341 qualifies to own an Amex membership, any memberships held by the trust will revert to the grantor. As is the case with pension trusts, the trustee and grantor will be required on behalf of the trust to execute an agreement with the Exchange acknowledging that the trust will own the membership subject to the Exchange’s Constitution and Rules, as well as certain other limitations and indemnifications, and will also be required to provide a legal opinion confirming that the trust was validly created and is authorized to own a membership and that the trustee is vested with all necessary authority to either appoint a nominee to operate the seat on behalf of the trust and/or lease the seat, as well as to enter into the requisite agreement. Additionally, the trustee and the grantor will be required to become allied members or approved persons of the Exchange, as applicable. After careful review, 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 5 and, in particular, the requirements of Section 6(b) of the Act 6 and the rules and regulations thereunder. The Commission finds specifically that the proposed rule change, as amended, is consistent with Section 6(b)(5) of the Act 7 in particular, which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, 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. The Commission believes that permitting grantor trusts to directly own Amex memberships is designed to provide Amex members with increased estate and tax planning options and to achieve a reasonable balance between the Exchange’s interest in providing members with the flexibility to plan their estates and the Exchange’s interest in regulating and protecting its membership. The Commission notes that the grantor of the trust would be required during the grantor’s lifetime or existence to be a beneficiary of the trust. Moreover, the trustee and grantor will be required on behalf of the trust to execute an agreement with the Exchange acknowledging that the trust will own 5 In approving this proposed rule change, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). E:\FR\FM\23AUN1.SGM 23AUN1 49342 Federal Register / Vol. 70, No. 162 / Tuesday, August 23, 2005 / Notices the membership subject to the Exchange’s Constitution and Rules. In addition, the trustee and grantor will be required to become allied members or approved persons of the Exchange, as applicable, and will remain subject to the Constitution and Rules of the Exchange. The Commission also notes that the proposal is similar to a Chicago Board Options Exchange, Incorporated (‘‘CBOE’’) rule 8 that was previously approved by the Commission and permits trusts to directly own CBOE seats. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,9 that the proposed rule change (SR–Amex–2005– 003), as amended, be, and hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–4595 Filed 8–22–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52252; File No. SR–CBOE– 2005–17] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change To Adopt a Revenue Sharing Program for Trades in Tape B Securities revenue CBOE receives under the Consolidated Tape Association Plan for trades in Tape B securities consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.5 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act,6 which requires that the rules of the exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system. The Commission notes that CBOE will begin its Revenue Sharing Program upon the launch of its new stock trading platform.7 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (SR–CBOE–2005– 17) be, and it hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–4583 Filed 8–22–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52278, File No. SR–MSRB– 2005–04] August 15, 2005. On February 7, 2005, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ 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 adopt a Revenue Sharing Program for trades in Tape B securities.3 The proposed rule change was published for comment in the Federal Register on July 15, 2005.4 The Commission received no comments on the proposal. This order approves the proposed rule change. The Commission finds CBOE’s proposal to amend its Fee Schedule to adopt a Revenue Sharing Program for 8 See CBOE Rule 3.25. U.S.C. 78s(b)(2). 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Tape B securities are securities listed on the American Stock Exchange or the regional national securities exchanges. 4 See Securities Exchange Act Release No. 52005 (July 11, 2005), 70 FR 41063. 9 15 VerDate Aug<18>2005 15:03 Aug 22, 2005 Jkt 205001 Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving Proposed Rule Change and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 1 to the Proposed Rule Change Relating to Solicitation of Municipal Securities Business under MSRB Rule G–38 August 17, 2005. On March 22, 2005, the Municipal Securities Rulemaking Board (‘‘MSRB’’ or ‘‘Board’’), filed with the Securities and Exchange Commission (‘‘SEC’’ or 5 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). 7 The CBOE has filed a proposed rule change (SR– CBOE–2004–21) to adopt a new set of rules to allow for the trading of non-option securities on CBOEdirect, the exchange’s screen based trading system. 8 15 U.S.C. 78s(b)(2). 9 17 CFR 200.30–3(a)(12). Frm 00088 Fmt 4703 II. Description of the Proposal The proposal would delete existing Rule G–38, on consultants, and replace it with new Rule G–38, on solicitation of municipal securities business. The MSRB believes that it would be appropriate to apply the basic standards of fair practice and professionalism embodied in MSRB rules to all persons who solicit municipal securities business on behalf of dealers. A full description of the proposal is contained in the Commission’s Notice.6 In Amendment No. 1, the MSRB provides that the proposed rule change would become effective on the first business Monday at least five business days after Commission approval. Amendment No. 1 also deletes the requirement in proposed Rule G–38(c) relating to transitional payments that 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 51561 (April 15, 2005), 70 FR 20782 (April 21, 2005). 4 See letter from Rick Santorum, Senator, United States Senate, to William H. Donaldson, Chairman, Commission, dated March 31, 2005 (‘‘Senator Santorum’s Letter’’); letter from Chris Charles, President, Wulff, Hansen & Co. (‘‘Wulff, Hansen’’), to Jonathan G. Katz, Secretary, Commission, dated May 6, 2005 (‘‘Wulff, Hansen’s Letter’’); letter from Lynnette Kelly Hotchkiss, Senior Vice President and Associate General Counsel, The Bond Market Association (the ‘‘BMA’’), to Jonathan G. Katz, Secretary, Commission, dated May 5, 2005 (‘‘BMA’s Letter’’); and letter from Jonathan Stein, Director of Regulatory Affairs—Fixed Income, Raymond James & Associates, Inc. (‘‘Raymond James’’), to Jonathan G. Katz, Secretary, Commission, dated May 24, 2005 (‘‘Raymond James’’ Letter). 5 Amendment No. 1 is described in Section II, infra. 6 See supra note 3. 2 17 I. Introduction PO 00000 ‘‘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 deleting existing Rule G–38, on consultants, and replacing it with new Rule G–38, on solicitation of municipal securities business. In addition, the proposed rule change would make related amendments to Rule G–37, on political contributions and prohibitions on municipal securities business, Rule G–8, on recordkeeping, Form G–37/G– 38 and Form G–37x, as well as add new Form G–38t. The proposed rule change was published for comment in the Federal Register on April 21, 2005.3 The Commission received four comment letters regarding the proposal.4 On August 9, 2005, the MSRB filed Amendment No. 1 to the proposed rule change and a response to the four comment letters.5 This order approves the proposed rule change, accelerates approval of Amendment No. 1, and solicits comments from interested persons on Amendment No. 1. Sfmt 4703 E:\FR\FM\23AUN1.SGM 23AUN1

Agencies

[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Pages 49341-49342]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4595]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52275; File No. SR-Amex-2005-003]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval to Proposed Rule Change, and Amendment No. 1 Thereto, 
to Expand the Types of Trusts Permitted to Directly Own Amex 
Memberships

August 16, 2005.
    On January 7, 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 amend Amex Rule 356 to expand the types of 
trusts permitted to directly own Amex memberships. On June 7, 2005, the 
Exchange filed Amendment No. 1 to the proposed rule change.\3\ The 
proposed rule change, as amended, was published for comment in the 
Federal Register on June 28, 2005.\4\ The Commission received no 
comments on the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange revised the proposed rule 
text to clarify that an Exchange member owner who does not conduct 
broker-dealer activities on the floor of the Exchange is not 
required to be registered with the Commission as a broker-dealer. 
Member owners can be individuals, partnerships, corporations, 
custodial accounts or, pursuant to the proposed rule change, grantor 
trusts. Amendment No. 1 replaced and superseded the original filing 
in its entirety.
    \4\ See Securities Exchange Act Release No. 51900 (June 22, 
2005), 70 FR 37139.
---------------------------------------------------------------------------

    The Exchange proposed to amend Amex Rule 356 to permit grantor 
trusts to directly own Exchange memberships. Currently, the Exchange 
permits certain pension trusts (generally comprised of trusts or 
custodial accounts, i.e., Keoghs and IRAs) to directly own Exchange 
memberships for investment purposes and either lease the seat or 
designate a nominee to operate the seat.
    Under the proposed rule change, grantor trusts will be able to 
acquire one or more Amex memberships either by transfer from an 
existing owner of an Amex membership or by a direct purchase. The 
grantor of the trust (i.e., either the member transferring a membership 
to a trust or the grantor of the trust purchasing a membership) will be 
required during the grantor's lifetime or existence (in the case of a 
non-natural person) to be a beneficiary of the trust. In the event that 
the trust terminates or is amended such that it no longer qualifies to 
own an Amex membership, any memberships held by the trust will revert 
to the grantor.
    As is the case with pension trusts, the trustee and grantor will be 
required on behalf of the trust to execute an agreement with the 
Exchange acknowledging that the trust will own the membership subject 
to the Exchange's Constitution and Rules, as well as certain other 
limitations and indemnifications, and will also be required to provide 
a legal opinion confirming that the trust was validly created and is 
authorized to own a membership and that the trustee is vested with all 
necessary authority to either appoint a nominee to operate the seat on 
behalf of the trust and/or lease the seat, as well as to enter into the 
requisite agreement. Additionally, the trustee and the grantor will be 
required to become allied members or approved persons of the Exchange, 
as applicable.
    After careful review, 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 \5\ and, in particular, the requirements of Section 
6(b) of the Act \6\ and the rules and regulations thereunder. The 
Commission finds specifically that the proposed rule change, as 
amended, is consistent with Section 6(b)(5) of the Act \7\ in 
particular, which requires, among other things, that the rules of an 
exchange be designed to promote just and equitable principles of trade, 
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.
---------------------------------------------------------------------------

    \5\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that permitting grantor trusts to directly 
own Amex memberships is designed to provide Amex members with increased 
estate and tax planning options and to achieve a reasonable balance 
between the Exchange's interest in providing members with the 
flexibility to plan their estates and the Exchange's interest in 
regulating and protecting its membership. The Commission notes that the 
grantor of the trust would be required during the grantor's lifetime or 
existence to be a beneficiary of the trust. Moreover, the trustee and 
grantor will be required on behalf of the trust to execute an agreement 
with the Exchange acknowledging that the trust will own

[[Page 49342]]

the membership subject to the Exchange's Constitution and Rules. In 
addition, the trustee and grantor will be required to become allied 
members or approved persons of the Exchange, as applicable, and will 
remain subject to the Constitution and Rules of the Exchange. The 
Commission also notes that the proposal is similar to a Chicago Board 
Options Exchange, Incorporated (``CBOE'') rule \8\ that was previously 
approved by the Commission and permits trusts to directly own CBOE 
seats.
---------------------------------------------------------------------------

    \8\ See CBOE Rule 3.25.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-Amex-2005-003), as amended, 
be, and hereby is, approved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4595 Filed 8-22-05; 8:45 am]
BILLING CODE 8010-01-P
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