Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Requirement that Registered Options Traders May Only Sign on to Auto-Ex for ETFs Traded by the Same or Adjoining Specialists and Shall Sign on to Auto-Ex for a Maximum of Fifteen ETFs, 57336-57338 [E5-5325]
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Federal Register / Vol. 70, No. 189 / Friday, September 30, 2005 / Notices
60611–2092 or send an e-mail to
Ronald.Hodapp@RRB.GOV. Written
comments should be received within 60
days of this notice.
Charles Mierzwa,
Clearance Officer.
[FR Doc. 05–19582 Filed 9–29–05; 8:45 am]
BILLING CODE 7905–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold the following
meetings during the week of October 3,
2005:
A Closed Meeting will be held on
Thursday, October 6, 2005 at 2:30 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters may also be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(5), (7), (9)(B), and (10)
and 17 CFR 200.402(a)(5), (7), 9(ii) and
(10) permit consideration of the
scheduled matters at the Closed
Meeting.
Commissioner Campos, as duty
officer, voted to consider the items
listed for the closed meeting in closed
session.
The subject matters of the Closed
Meeting scheduled for Thursday,
October 6, 2005 will be:
Formal orders of private investigations;
Institution and settlement of injunctive
actions;
Institution and settlement of
administrative proceedings of an
enforcement nature; and
Adjudicatory matters.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
Dated: September 27, 2005.
Jonathan G. Katz,
Secretary.
[FR Doc. 05–19698 Filed 9–28–05; 11:40 am]
BILLING CODE 8010–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52505; File No. SR–Amex–
2005–056]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing of Proposed Rule Change and
Amendment No. 1 Thereto Relating to
the Requirement that Registered
Options Traders May Only Sign on to
Auto-Ex for ETFs Traded by the Same
or Adjoining Specialists and Shall Sign
on to Auto-Ex for a Maximum of Fifteen
ETFs
September 23, 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 May 23,
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 Exchange. On
September 13, 2005, the Amex
submitted Amendment No. 1 to the
proposed rule change.3 The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Amex proposes amendments to
Amex Rule 958, Commentary .10 and
Amex Rule 958–ANTE, Commentary
.09, to establish that Registered Options
Traders (‘‘ROTs’’) may only sign on to
Auto-Ex for Portfolio Depository
Receipts, Index Fund Shares, and Trust
Issued Receipts (collectively ‘‘ExchangeTraded Funds’’ or ‘‘ETFs’’) traded by the
same or adjoining specialists, for a
maximum of three (3) contiguous
panels, and shall also not sign on to
Auto-Ex for more than a maximum of
fifteen (15) ETFs.
Below is the text of the proposed rule
change. Proposed new language is in
italics; proposed deletions are in
[brackets].
*
*
*
*
*
Rule 958. Options Transactions of
Registered Traders
(a)–(h)—No change.
Commentary * * *
.01–.09—No change.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Form 19b–4 dated September 13, 2005,
which replaced the original filing in its entirety
(‘‘Amendment No. 1’’).
2 17
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.10 (a) Transactions on the Floor in
index warrants, currency warrants,
securities listed pursuant to Section 107
of the Company Guide (‘‘Other
Securities’’), and Trust Issued Receipts
listed pursuant to Amex Rules 1200 et
seq. which are otherwise traded under
the Exchange’s equity trading rules,
shall be effected in accordance with the
provisions of this rule, and shall only be
effected by Registered Traders who are
regular members. Transactions by
Registered Traders on the Floor in
derivative products (as defined in
Article I, Section 3(d) of the Exchange
Constitution) which are otherwise
traded under the Exchange’s equity
trading rules, shall be effected in
accordance with the provisions of this
rule. In addition, Amex Rule 111,
Commentary .01 shall not apply to such
transactions. (See Amex Rule 111,
Commentary .12, and Amex Rule 114,
Commentary .14.)
(b) A Registered Trader who is logged
onto Auto-Ex shall only sign on to AutoEx for Portfolio Depository Receipts,
Index Fund Shares and Trust Issued
Receipts (collectively ‘‘Exchange Traded
Funds’’ or ‘‘ETFs’’) traded on the same
or contiguous panels, i.e. ETFs traded
by two adjoining Specialists, or ETFs
traded by the same Specialist for a
maximum of three (3) panels. A
Registered Trader also shall not sign on
to Auto-Ex for more than fifteen (15)
ETFs. A Senior Floor Official may
modify the foregoing restrictions if he
determines that a Registered Trader is
able to appropriately fulfill his
obligations to the market due to the
level of activity in the ETFs and their
proximity.
*
*
*
*
*
Rule 958. ANTE Options Transactions
of Registered Options Traders
(a)–(i)—No change.
Commentary * * *
.01–.08—No change.
.09 (a) Transactions on the Floor and
through the facilities of the Exchange in
index warrants, currency warrants,
securities listed pursuant to Section 107
of the Company Guide (‘‘Other
Securities’’), and Trust Issued Receipts
listed pursuant to Amex Rules 1200 et
seq. which are otherwise traded under
the Exchange’s equity trading rules,
shall be effected in accordance with the
provisions of this rule, and shall only be
effected by registered options traders
who are regular members. Transactions
by registered options traders on the
Floor in derivative products (as defined
in Article I, Section 3(d) of the Exchange
Constitution) which are otherwise
traded under the Exchange’s equity
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Federal Register / Vol. 70, No. 189 / Friday, September 30, 2005 / Notices
trading rules, shall be effected in
accordance with the provisions of this
rule. In addition, Amex Rule 111,
Commentary .01 shall not apply to such
transactions. (See Amex Rule 111,
Commentary .12, and Amex Rule 114,
Commentary .14.)
(b) A Registered Trader who is logged
onto Auto-Ex shall only sign on to AutoEx for Portfolio Depository Receipts,
Index Fund Shares and Trust Issued
Receipts (collectively ‘‘Exchange Traded
Funds’’ or ‘‘ETFs’’) traded on the same
or contiguous panels, i.e. ETFs traded
by two adjoining Specialists, or ETFs
traded by the same Specialist for a
maximum of three (3) panels. A
Registered Trader also shall not sign on
to Auto-Ex for more than fifteen (15)
ETFs. A Senior Floor Official may
modify the foregoing restrictions if he
determines that a Registered Trader is
able to appropriately fulfill his
obligations to the market due to the
level of activity in the ETFs and their
proximity.
*
*
*
*
*
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
Exchange 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
1. Purpose
Amex Rule 958(c) and Amex Rule
958(c)–ANTE currently provide that an
ROT is required to make competitive
bids and offers necessary to contribute
to the maintenance of a fair and orderly
market. ROTs must reasonably engage in
dealings for their own accounts when
there exists a lack of price continuity
and a temporary disparity between the
supply and demand of ETFs. As part of
their market making activities in ETFs,
ROTs may sign on to Auto-Ex, the
Exchange’s automatic execution system.
The Exchange proposes to amend
Amex Rule 958, Commentary .10 and
Amex Rule 958–ANTE, Commentary .09
to state that if an ROT logs onto AutoEx for ETFs, the ROT would only be
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16:14 Sep 29, 2005
Jkt 205001
allowed only to log onto contiguous
panels, or on panels traded on by the
same or adjoining specialists (i.e.,
electronic order book work stations).4
ROTs would be permitted to log onto a
maximum of three (3) contiguous
panels. The amendments to Amex Rule
958, Commentary .10 and Amex Rule
958–ANTE, Commentary .09 would also
limit an ROT to trading in a maximum
of fifteen (15) ETFs while signed onto
Auto-Ex.5 A Senior Floor Official would
be permitted to modify these restrictions
if he determines that an ROT is able to
appropriately fulfill his obligations to
the market due to the level of activity in
the ETFs and their proximity.
The Exchange believes the foregoing
amendments are necessary to ensure
that ROTs fulfill their market-making
obligations to make competitive bids
and offers as reasonably necessary to
contribute to the maintenance of a fair
and orderly market in ETFs, by
encouraging ROTs logged onto Auto-Ex
to remain in the crowd. In order to make
competitive bids, ROTs must remain in
the crowd near the specialist panels. If
ROTs were allowed to log onto Auto-Ex
panels throughout the trading floor, it
would be difficult for them to remain in
the crowd. The Exchange notes that
ROTs logged onto Auto-Ex may not be
actively quoting because they do not
post their own quotes on Auto-Ex;
instead they receive executions, which
are allocated to ROTs and specialists on
the wheel, at the specialist quote.
However, the Exchange’s proposal,
which only would permit a ROT to log
onto three contiguous panels, would
confine the ROT to one section of the
trading floor with the intent of
encouraging the ROT to remain in that
area as part of the crowd in order to
make competitive bids and offers in
ETFs.
2. Statutory Basis
The Exchange believes the proposal 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.
4 Each panel has one specialist assigned to it.
Numerous ETFs may be traded on one panel.
5 Although ETFs are traded on NETS (New Equity
Trading System) and not ANTE (Amex New
Trading Environment), Amex Rule 958–ANTE
applies to ETFs.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
PO 00000
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57337
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes the proposed
rule change will impose no burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act.
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. 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 the 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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Amex–2005–056 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
Number SR–Amex–2005–056. 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
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Federal Register / Vol. 70, No. 189 / Friday, September 30, 2005 / Notices
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 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
Number SR–Amex–2005–056 and
should be submitted on or before
October 21, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Jonathan G. Katz,
Secretary.
[FR Doc. E5–5325 Filed 9–29–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52503; File No. SR–Amex–
2005–066]
Self-Regulatory Organizations;
American Stock Exchange LLC; Order
Approving a Proposed Rule Change
and Amendment No. 1 Thereto
Relating to the Exchange’s
Determination of the National Best Bid
or Offer When Another Exchange Is
Disconnected From the Intermarket
Option Linkage
September 23, 2005.
I. Introduction
On June 17, 2005, the American Stock
Exchange LLC (‘‘Amex’’), filed with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to
amend Amex Rules 933(g) and 933(g)–
ANTE regarding the determination of
the National Best Bid or Offer (‘‘NBBO’’)
when another participant in the Plan for
the Purpose of Creating and Operating
an Intermarket Option Linkage
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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16:14 Sep 29, 2005
Jkt 205001
(‘‘Linkage Plan’’) 3 is disconnected from
the Linkage.4 On August 4, 2005, the
Amex filed Amendment No. 1 to the
proposed rule change.5 The proposed
rule change, as amended, was published
for comment in the Federal Register on
August 23, 2005.6 The Commission
received one comment letter on the
proposal.7 This order approves the
proposed rule change, as amended.
II. Description of the Proposed Rule
Change
The Amex proposes to amend Amex
Rules 933(g) and 933(g)–ANTE to add a
provision regarding the determination of
the NBBO when another Participant
Exchange 8 is disconnected from the
Linkage. Amex Rules 933(g) and 933(g)–
ANTE currently provide that a Floor
Governor or Exchange Official may
determine that certain quotes from
another Participant Exchange are not
reliable when such other Participant
Exchange either (i) declares its quotes
non-firm and directly communicates or
disseminates a message through Options
Price Reporting Authority (OPRA), or
(ii) communicates to the Amex that such
Participant Exchange is experiencing
systems or other problems affecting the
reliability of its disseminated quotes.
The Amex proposes to add to Amex
Rules 933(g) and 933(g)–ANTE that
when another Participant Exchange is
disconnected from the Linkage and is
not accepting Linkage orders, a Floor
Governor or Exchange Official may
determine the quotes from such
Participant Exchange are unreliable and
may exclude such quotes from the
Amex’s determination of the NBBO. The
3 On July 28, 2000, the Commission approved a
national market system plan for the purpose of
creating and operating an intermarket option
linkage proposed by the Amex, the Chicago Board
Options Exchange, Incorporated, and the
International Securities Exchange, Inc. See
Securities Exchange Act Release No. 43086 (July 28,
2000), 65 FR 48023 (August 4, 2000). Subsequently,
upon separate requests by the Philadelphia Stock
Exchange, Inc., the Pacific Exchange, Inc., and the
Boston Stock Exchange, Inc., the Commission
issued orders to permit these exchanges to
participate in 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).
4 See Amex Rule 940(b)(9).
5 Amendment No. 1 superseded and replaced the
original filing in its entirety.
6 See Securities Exchange Act Release No. 52270
(August 16, 2005), 70 FR 49335.
7 See letter from Matthew Hinerfeld, Managing
Director and Deputy General Counsel, Citadel
Investment Group, L.L.C., on behalf of Citadel
Derivatives Group LLC, to Jonathan G. Katz,
Secretary, Commission, dated August 26, 2005.
8 A ‘‘Participant Exchange’’ is a registered
national securities exchange that is a party to the
Linkage Plan. See Amex Rule 940(b)(14).
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Frm 00091
Fmt 4703
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Amex believes that adding this third
circumstance is necessary because there
are times when due to system
malfunctions, a Participant Exchange is
disconnected from the Linkage but has
not declared its quotes to be ‘‘non-firm’’
and has not informed the other
exchanges that the disconnected
Participant Exchange may have quote
problems. As a result, access to the
disconnected Participant Exchange is
limited, and the Amex believes such
Participant Exchange’s quotes should be
excluded from the Amex’s
determination of the NBBO.
III. Comment Received
As noted above, the Commission
received one comment letter on the
proposal.9 The commenter was strongly
supportive of the Amex’s proposed rule
change, including the Amex’s proposed
method of determining that a
Participant Exchange’s quote is
unreliable.10
IV. Discussion
After careful consideration, the
Commission finds that the proposed
rule change is consistent with the
requirements of Section 6 of the Act 11
and the rules and regulations
thereunder applicable to a national
securities exchange.12 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,13 which requires,
among other things, that the rules of the
Amex 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 it is appropriate for the
Amex to remove a Participant
Exchange’s disseminated quote(s) from
the Amex’s determination of the NBBO
when such Participant Exchange is
disconnected from Linkage and is not
9 See
supra note 7.
comment letter also addressed File No.
SR–BSE–2005–30, a proposal to allow the Boston
Options Exchange (‘‘BOX’’) to exclude a Participant
Exchange’s quotes from BOX’s determination of the
NBBO when, among other circumstances, such
Participant Exchange is disconnected from Linkage.
The commenter supported the Boston Stock
Exchange, Inc.’s proposal, but suggested a
modification to the proposal, as discussed in an
order issued separately. See Securities Exchange
Act Release No. 52501 (September 23, 2005). In
addition, the commenter urged the Commission to
address issues related to non-firm quotes that are
outside the scope of these proposed rule changes.
11 15 U.S.C. 78f.
12 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
13 15 U.S.C. 78f(b)(5).
10 The
E:\FR\FM\30SEN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 189 (Friday, September 30, 2005)]
[Notices]
[Pages 57336-57338]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5325]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52505; File No. SR-Amex-2005-056]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto
Relating to the Requirement that Registered Options Traders May Only
Sign on to Auto-Ex for ETFs Traded by the Same or Adjoining Specialists
and Shall Sign on to Auto-Ex for a Maximum of Fifteen ETFs
September 23, 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 May 23, 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 Exchange. On
September 13, 2005, the Amex submitted Amendment No. 1 to the proposed
rule change.\3\ 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\ See Form 19b-4 dated September 13, 2005, which replaced the
original filing in its entirety (``Amendment No. 1'').
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Amex proposes amendments to Amex Rule 958, Commentary .10 and
Amex Rule 958-ANTE, Commentary .09, to establish that Registered
Options Traders (``ROTs'') may only sign on to Auto-Ex for Portfolio
Depository Receipts, Index Fund Shares, and Trust Issued Receipts
(collectively ``Exchange-Traded Funds'' or ``ETFs'') traded by the same
or adjoining specialists, for a maximum of three (3) contiguous panels,
and shall also not sign on to Auto-Ex for more than a maximum of
fifteen (15) ETFs.
Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in [brackets].
* * * * *
Rule 958. Options Transactions of Registered Traders
(a)-(h)--No change.
Commentary * * *
.01-.09--No change.
.10 (a) Transactions on the Floor in index warrants, currency
warrants, securities listed pursuant to Section 107 of the Company
Guide (``Other Securities''), and Trust Issued Receipts listed pursuant
to Amex Rules 1200 et seq. which are otherwise traded under the
Exchange's equity trading rules, shall be effected in accordance with
the provisions of this rule, and shall only be effected by Registered
Traders who are regular members. Transactions by Registered Traders on
the Floor in derivative products (as defined in Article I, Section 3(d)
of the Exchange Constitution) which are otherwise traded under the
Exchange's equity trading rules, shall be effected in accordance with
the provisions of this rule. In addition, Amex Rule 111, Commentary .01
shall not apply to such transactions. (See Amex Rule 111, Commentary
.12, and Amex Rule 114, Commentary .14.)
(b) A Registered Trader who is logged onto Auto-Ex shall only sign
on to Auto-Ex for Portfolio Depository Receipts, Index Fund Shares and
Trust Issued Receipts (collectively ``Exchange Traded Funds'' or
``ETFs'') traded on the same or contiguous panels, i.e. ETFs traded by
two adjoining Specialists, or ETFs traded by the same Specialist for a
maximum of three (3) panels. A Registered Trader also shall not sign on
to Auto-Ex for more than fifteen (15) ETFs. A Senior Floor Official may
modify the foregoing restrictions if he determines that a Registered
Trader is able to appropriately fulfill his obligations to the market
due to the level of activity in the ETFs and their proximity.
* * * * *
Rule 958. ANTE Options Transactions of Registered Options Traders
(a)-(i)--No change.
Commentary * * *
.01-.08--No change.
.09 (a) Transactions on the Floor and through the facilities of the
Exchange in index warrants, currency warrants, securities listed
pursuant to Section 107 of the Company Guide (``Other Securities''),
and Trust Issued Receipts listed pursuant to Amex Rules 1200 et seq.
which are otherwise traded under the Exchange's equity trading rules,
shall be effected in accordance with the provisions of this rule, and
shall only be effected by registered options traders who are regular
members. Transactions by registered options traders on the Floor in
derivative products (as defined in Article I, Section 3(d) of the
Exchange Constitution) which are otherwise traded under the Exchange's
equity
[[Page 57337]]
trading rules, shall be effected in accordance with the provisions of
this rule. In addition, Amex Rule 111, Commentary .01 shall not apply
to such transactions. (See Amex Rule 111, Commentary .12, and Amex Rule
114, Commentary .14.)
(b) A Registered Trader who is logged onto Auto-Ex shall only sign
on to Auto-Ex for Portfolio Depository Receipts, Index Fund Shares and
Trust Issued Receipts (collectively ``Exchange Traded Funds'' or
``ETFs'') traded on the same or contiguous panels, i.e. ETFs traded by
two adjoining Specialists, or ETFs traded by the same Specialist for a
maximum of three (3) panels. A Registered Trader also shall not sign on
to Auto-Ex for more than fifteen (15) ETFs. A Senior Floor Official may
modify the foregoing restrictions if he determines that a Registered
Trader is able to appropriately fulfill his obligations to the market
due to the level of activity in the ETFs and their proximity.
* * * * *
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 Exchange 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
1. Purpose
Amex Rule 958(c) and Amex Rule 958(c)-ANTE currently provide that
an ROT is required to make competitive bids and offers necessary to
contribute to the maintenance of a fair and orderly market. ROTs must
reasonably engage in dealings for their own accounts when there exists
a lack of price continuity and a temporary disparity between the supply
and demand of ETFs. As part of their market making activities in ETFs,
ROTs may sign on to Auto-Ex, the Exchange's automatic execution system.
The Exchange proposes to amend Amex Rule 958, Commentary .10 and
Amex Rule 958-ANTE, Commentary .09 to state that if an ROT logs onto
Auto-Ex for ETFs, the ROT would only be allowed only to log onto
contiguous panels, or on panels traded on by the same or adjoining
specialists (i.e., electronic order book work stations).\4\ ROTs would
be permitted to log onto a maximum of three (3) contiguous panels. The
amendments to Amex Rule 958, Commentary .10 and Amex Rule 958-ANTE,
Commentary .09 would also limit an ROT to trading in a maximum of
fifteen (15) ETFs while signed onto Auto-Ex.\5\ A Senior Floor Official
would be permitted to modify these restrictions if he determines that
an ROT is able to appropriately fulfill his obligations to the market
due to the level of activity in the ETFs and their proximity.
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\4\ Each panel has one specialist assigned to it. Numerous ETFs
may be traded on one panel.
\5\ Although ETFs are traded on NETS (New Equity Trading System)
and not ANTE (Amex New Trading Environment), Amex Rule 958-ANTE
applies to ETFs.
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The Exchange believes the foregoing amendments are necessary to
ensure that ROTs fulfill their market-making obligations to make
competitive bids and offers as reasonably necessary to contribute to
the maintenance of a fair and orderly market in ETFs, by encouraging
ROTs logged onto Auto-Ex to remain in the crowd. In order to make
competitive bids, ROTs must remain in the crowd near the specialist
panels. If ROTs were allowed to log onto Auto-Ex panels throughout the
trading floor, it would be difficult for them to remain in the crowd.
The Exchange notes that ROTs logged onto Auto-Ex may not be actively
quoting because they do not post their own quotes on Auto-Ex; instead
they receive executions, which are allocated to ROTs and specialists on
the wheel, at the specialist quote. However, the Exchange's proposal,
which only would permit a ROT to log onto three contiguous panels,
would confine the ROT to one section of the trading floor with the
intent of encouraging the ROT to remain in that area as part of the
crowd in order to make competitive bids and offers in ETFs.
2. Statutory Basis
The Exchange believes the proposal 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 the proposed rule change will impose no
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
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. 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 the 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Amex-2005-056 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 Number SR-Amex-2005-056. 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
[[Page 57338]]
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 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 Number SR-Amex-2005-056 and should be
submitted on or before October 21, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-5325 Filed 9-29-05; 8:45 am]
BILLING CODE 8010-01-P
