Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Amendments to the Amex Membership Corporation's Certificate of Incorporation, 8319-8321 [E6-2200]
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Federal Register / Vol. 71, No. 32 / Thursday, February 16, 2006 / Notices
allocation of reasonable fees among its
members, issuers and other users of its
facilities.
2. Statutory Basis
The Amex believes that the proposed
rule change, as amended, is consistent
with Section 6(b) of the Act 8 in general
and furthers the objectives of Section
6(b)(4) of the Act 9 in particular because
it is designed to provide for the
equitable allocation of reasonable dues,
fees and other charges among its
members and issuers and other persons
using its facilities. Specifically, the
Exchange is proposing to reimburse a
recent fee increase that the Exchange
believes disproportionately impacts
some members.10
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Amex does not believe that the
proposed rule change, as amended, will
impose any 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 with respect to the proposed
rule change, as amended.
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 rulecomments@sec.gov. Please include File
Number SR–Amex–2005–130 on the
subject line.
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
10 Amex clarified that although it refers in this
sentence to the elimination of a recent fee increase,
this proposal requests approval to rebate the
increased amount of the Specialist Transaction Fee
collected between October 3, 2005 and February 6,
2006. Telephone conversation between Claire
McGrath, Senior Vice President and General
Counsel, Amex, and Johnna B. Dumler, Attorney,
Division of Market Regulation, Commission, on
February 9, 2006. In a separate filing, SR–Amex–
2006–008, which became effective upon filing, the
Amex eliminated the increase in the Specialist
Transaction Fee. See supra note 5.
dsatterwhite on PROD1PC65 with NOTICES
9 15
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15:56 Feb 15, 2006
Jkt 208001
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–Amex–2005–130. 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 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
submissions should refer to File No.
SR–Amex–2005–130 and should be
submitted on or before March 9, 2006.
IV. Commission’s Findings and Order
Granting Accelerated Approval of
Proposed Rule Change
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.11
Specifically, the Commission believes
that the proposed rule change, as
amended, is consistent with Section
6(b)(4) of the Act,12 which requires that
the rules of the exchange provide for the
equitable allocation of reasonable dues,
fees, and other charges among its
members and issuers and other persons
using its facilities. The Commission
notes that the Exchange believes that the
increase in the Specialist Transaction
Fee, which became effective on October
11 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).
12 15 U.S.C. 78f(b)(4).
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8319
3, 2005, resulted in a disproportionate
burden on Specialists who trade highpriced and/or high volume securities
because the Specialist Transaction Fee
is based on the dollar value of equity
shares executed by the specialist.
Therefore, and as noted above, the
Exchange has reduced the amount of the
Specialist Transaction Fee from $.00007
to $.00005 in a separate filing (effective
upon filing on February 6, 2006) 13 and
now requests approval to reimburse the
increased amount of the Specialist
Transaction Fee collected since October
3, 2005. The Commission finds that the
Exchange’s proposal to rebate the
increased amount of the Specialist
Transaction Fee collected between
October 3, 2005 and February 6, 2006 is
consistent with the Act and the rules
and regulations thereunder applicable to
a national securities exchange.
Moreover, the Commission finds good
cause for approving this proposed rule
change, as amended, before the thirtieth
day after the date of publication of
notice thereof in the Federal Register.
The Commission believes that
accelerated approval of the proposal is
appropriate in order to allow Amex to
issue credits to its Specialists as quickly
as possible.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,14 that the
proposed rule change, and Amendment
No. 1 thereto, (SR–Amex–2005–130) be,
and hereby is, approved on an
accelerated basis.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.15
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–2199 Filed 2–15–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53264; File No. SR–Amex–
2005–117]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing of Proposed Rule Change and
Amendment Nos. 1 and 2 Thereto
Relating to Amendments to the Amex
Membership Corporation’s Certificate
of Incorporation
February 9, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
13 See
supra note 5.
U.S.C. 78s(b)(2).
15 17 CFR 200.30–3(a)(12).
14 15
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8320
Federal Register / Vol. 71, No. 32 / Thursday, February 16, 2006 / Notices
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
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 Amex. On
January 24, 2006, Amex filed
Amendment No. 1 to the proposed rule
change.3 On February 1, 2006, Amex
filed Amendment No. 2 to the proposed
rule change.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange submits for
Commission approval amendments to
the Amex Membership Corporation’s
(‘‘AMC’’) Restated Certificate of
Incorporation (‘‘AMC Certificate’’). In
addition, the Amex proposes to amend
Articles II, IV, and XIII of its
Constitution to revise various references
to the AMC Certificate.
The text of the proposed rule change
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, as amended.
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.
dsatterwhite on PROD1PC65 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
AMC proposes to amend the AMC
Certificate to: (i) Permit the transfer or
lease of trading rights among AMC
members and member organizations
apart from the memberships in respect
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amendment No. 1 replaced the original filing in
its entirety.
4 See Partial Amendment No. 2.
2 17
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15:56 Feb 15, 2006
Jkt 208001
of which they were made available; and
(ii) eliminate the existing requirement
that AMC submit to a vote of its
members the authorization of new forms
of trading rights. As part of the sale of
the Amex to AMC, the Amex submitted
and the Commission approved a
proposal requiring that amendments to
the AMC Certificate and By-laws be
submitted to the Amex Board of
Governors for determination of whether
the amendments constituted a ‘‘rule of
an exchange’’ as that term is defined in
the Act.5 If the Amex Board determines
that the amendments to the AMC
Certificate or Bylaws are ‘‘rules of the
exchange’’, then such amendments must
be filed with and approved by the
Commission pursuant to Section 19(b)
of the Act and Rule 19b–4 thereunder
before they may become effective. At its
meeting on July 20, 2005, the Amex
Board reviewed the proposed
amendments to the AMC Certificate and
determined that they constituted a rule
of the exchange since, as more
specifically described below, the
amendments involved whether certain
actions by Amex need the consent of the
holders of AMC memberships and
involve the consents necessary for the
issuance of trading rights on the Amex.
Currently, Section 6 of the AMC
Certificate provides that AMC make
available one Regular Trading Right for
each Regular Member and one Options
Principal Trading Right for each
Options Principal Member and that
such trading rights shall not be
transferred or leased apart from those
memberships. In addition, Section 7(a)
of the AMC Certificate provides that the
following actions need the consent of
the holders of its memberships: (i) The
sale, issuance, transfer or other
disposition of ‘‘equity securities’’ as that
term is defined in Section 7(a); and (ii)
the authorization, grant or issuance of
trading rights other than regular trading
rights, options principal trading rights
or the Limited Trading Permits. The
AMC Board at its meeting on July 11,
2005 voted to approve and recommend
to its members that the AMC Certificate
be amended to: (i) Eliminate the
reference in Section 6 to one trading
right, thus allowing the issuance of
more than one right to Regular Members
5 See Securities Exchange Act Release No. 50927
(December 23, 2004) 69 FR 78486 (December 30,
2004) (approving SR–Amex–2004–50). Section
3(a)(27) of the Act defines the rules of an exchange
to be the constitution, articles of incorporation, bylaws, and rules, or instruments corresponding to the
foregoing, of an exchange, and such stated policies,
practices, or interpretations of such exchange as the
Commission, by rule, may determine to be
necessary or appropriate in the public interest or for
the protection of investors to be deemed to be rules
of such exchange.
PO 00000
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Sfmt 4703
and Options Principal Members; (ii)
eliminate the prohibition in Section 6
on such trading rights being transferred
or leased apart from the Regular and
Options Principal Memberships; and
(iii) eliminate the requirement that a
vote of the membership is required for
the authorization or issuance of trading
rights as described in Section 7(a)(ii).
Instead, the AMC membership’s consent
will be required for any action taken by
the Amex to increase the number of
memberships issued by AMC.
Membership consent will still be
required for the sale, issuance, transfer
or other disposition of equity securities
as provided in Section 7(a)(i). It should
also be noted that Amex will still need
to get AMC Board approval for the
issuance of new trading rights. The
AMC Board can, if it chooses, seek the
consent of its membership for any
proposal calling for the issuance of new
trading rights.
The issue of transferable trading rights
arose recently in regard to a proposal to
allow specialists and registered options
traders to enter quotes in options from
remote locations.6 To participate in
remote quoting, specialists and
registered options traders will be issued
rights, which will attach to the
individual eligible to receive them and
will not attach to a sale of the
membership. It is proposed that with
the permission of the Amex these rights
will be separately transferable by the
specialist or registered options trader
eligible to receive them. Therefore,
while the rights will only be transferable
to other members or member
organizations, they will trade separately
from the membership and will not
increase the number of memberships
issued by AMC. The AMC Board
believes that the issuance of these types
of rights is appropriate and the rights
should be transferable or able to be
leased apart from the membership.
Additionally, the AMC Board does not
believe that the issuance of these types
of rights was contemplated to be
included as an action requiring consent
pursuant to Section 7(a) of the AMC
Certificate. Therefore, the AMC Board is
proposing to amend the AMC Certificate
to: (i) Provide that trading rights can be
transferred or leased apart from the
membership; and (ii) revise the
requirement so that consent is not
required for the issuance of trading
rights that do not include an increase in
the number of memberships issued by
AMC. The AMC Board determined to
make this change to the AMC Certificate
in order to give flexibility to the Amex
6 See Securities Exchange Act Release No. 53220
(February 3, 2006) (notice for SR–Amex–2005–100).
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Federal Register / Vol. 71, No. 32 / Thursday, February 16, 2006 / Notices
to take prompt action to implement new
forms of trading rights designed to
enhance Amex’s position in an
increasingly competitive and fast
moving marketplace. At a special
meeting of the Regular and Options
Principal members held on September
28, 2005, the AMC members approved
the amendments to the AMC Certificate.
The AMC Board also approved nonsubstantive changes to the text of the
AMC Certificate.
In addition, management proposes to
amend the following sections of the
Amex Constitution: Article II, Section 8;
Article IV, Section 1; and Article XIII,
Sections 1 and 3 to replace references to
the AMC’s ‘‘Second Restated Certificate
of Incorporation’’ with ‘‘Restated
Certificate of Incorporation’’. Further,
Amex proposes to delete the following
text from Article II, Section 8 of the
Amex Constitution: ‘‘as in effect on the
date hereof’’, which is used when
referring to the AMC Certificate and Bylaws, since it is unnecessary and
confusing. The Commission notes that
Amex also proposes other nonsubstantive changes to the proposed
rule text.7
2. Statutory Basis
The Exchange believes that the
proposed rule change, as amended, is
consistent with the provisions of
Section 6(b) of the Act,8 in general, and
with Section 6(b)(5) of the Act,9 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 facilitating
transactions in securities, and 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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
dsatterwhite on PROD1PC65 with NOTICES
The Exchange does not believe that
the proposed rule change, as amended,
will impose any burden on competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
7 Telephone conversation between Claire
McGrath, Senior Vice President & General Counsel,
Amex, and David Michehl, Attorney, Division of
Market Regulation, Commission, on January 31,
2006 confirming the intention of the Amex to make
non-substantive changes to the introduction and
Sections 3, 6, and 19 of the AMC Certificate.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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15:56 Feb 15, 2006
Jkt 208001
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange did not receive any
written comments on 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 self-regulatory
organization consents, the Commission
will:
A. By order approve such proposed
rule change, as amended; or
B. institute proceedings to determine
whether the proposed rule change, as
amended, should be disapproved.
8321
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 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–2005–117 and
should be submitted on or before March
9, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–2200 Filed 2–15–06; 8:45 am]
BILLING CODE 8010–01–P
IV. 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 rulecomments@sec.gov. Please include File
Number SR–Amex–2005–117 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53266; File No. SR–CBOE–
2005–59]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Order Granting Accelerated Approval
of Proposed Rule Change and
Amendment Nos. 1 and 2 Thereto
Relating to Listing Standards for
Broad-Based Index Options
February 9, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
Paper Comments
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on August 3,
• Send paper comments in triplicate
2005, the Chicago Board Options
to Nancy M. Morris, Secretary,
Exchange, Incorporated (‘‘CBOE’’ or
Securities and Exchange Commission,
‘‘Exchange’’) filed with the Securities
Station Place, 100 F Street, NE.,
and Exchange Commission
Washington, DC 20549–1090.
(‘‘Commission’’) the proposed rule
All submissions should refer to File
change as described in Items I and II
Number SR–Amex–2005–117. This file
below. On October 24, 2005, the CBOE
number should be included on the
subject line if e-mail is used. To help the filed Amendment No. 1 to the proposed
rule change.3 On February 6, 2006, the
Commission process and review your
CBOE filed Amendment No. 2 to the
comments more efficiently, please use
4
only one method. The Commission will proposed rule change. The Commission
post all comments on the Commission’s
10 17 CFR 200.30–3(a)(12).
Internet Web site (https://www.sec.gov/
1 15 U.S.C. 78s(b)(1).
rules/sro.shtml). Copies of the
2 17 CFR 240.19b–4.
submission, all subsequent
3 Amendment No. 1, which replaces the original
amendments, all written statements
filing in its entirety, includes several nonsubstantive revisions that provide clearer and more
with respect to the proposed rule
accurate listing standards.
change that are filed with the
4 Amendment No. 2 makes a technical revision to
Commission, and all written
CBOE Rule 24.2(a) to include a reference to
communications relating to the
proposed new paragraph 24.2(f), which was
Continued
proposed rule change between the
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]]>Agencies
[Federal Register Volume 71, Number 32 (Thursday, February 16, 2006)]
[Notices]
[Pages 8319-8321]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2200]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53264; File No. SR-Amex-2005-117]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing of Proposed Rule Change and Amendment Nos. 1 and 2
Thereto Relating to Amendments to the Amex Membership Corporation's
Certificate of Incorporation
February 9, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 8320]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 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 Amex. On January 24,
2006, Amex filed Amendment No. 1 to the proposed rule change.\3\ On
February 1, 2006, Amex filed Amendment No. 2 to the proposed rule
change.\4\ The Commission is publishing this notice to solicit comments
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 replaced the original filing in its
entirety.
\4\ See Partial Amendment No. 2.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange submits for Commission approval amendments to the Amex
Membership Corporation's (``AMC'') Restated Certificate of
Incorporation (``AMC Certificate''). In addition, the Amex proposes to
amend Articles II, IV, and XIII of its Constitution to revise various
references to the AMC Certificate.
The text of the proposed rule change 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, as amended. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
AMC proposes to amend the AMC Certificate to: (i) Permit the
transfer or lease of trading rights among AMC members and member
organizations apart from the memberships in respect of which they were
made available; and (ii) eliminate the existing requirement that AMC
submit to a vote of its members the authorization of new forms of
trading rights. As part of the sale of the Amex to AMC, the Amex
submitted and the Commission approved a proposal requiring that
amendments to the AMC Certificate and By-laws be submitted to the Amex
Board of Governors for determination of whether the amendments
constituted a ``rule of an exchange'' as that term is defined in the
Act.\5\ If the Amex Board determines that the amendments to the AMC
Certificate or Bylaws are ``rules of the exchange'', then such
amendments must be filed with and approved by the Commission pursuant
to Section 19(b) of the Act and Rule 19b-4 thereunder before they may
become effective. At its meeting on July 20, 2005, the Amex Board
reviewed the proposed amendments to the AMC Certificate and determined
that they constituted a rule of the exchange since, as more
specifically described below, the amendments involved whether certain
actions by Amex need the consent of the holders of AMC memberships and
involve the consents necessary for the issuance of trading rights on
the Amex.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 50927 (December 23,
2004) 69 FR 78486 (December 30, 2004) (approving SR-Amex-2004-50).
Section 3(a)(27) of the Act defines the rules of an exchange to be
the constitution, articles of incorporation, by-laws, and rules, or
instruments corresponding to the foregoing, of an exchange, and such
stated policies, practices, or interpretations of such exchange as
the Commission, by rule, may determine to be necessary or
appropriate in the public interest or for the protection of
investors to be deemed to be rules of such exchange.
---------------------------------------------------------------------------
Currently, Section 6 of the AMC Certificate provides that AMC make
available one Regular Trading Right for each Regular Member and one
Options Principal Trading Right for each Options Principal Member and
that such trading rights shall not be transferred or leased apart from
those memberships. In addition, Section 7(a) of the AMC Certificate
provides that the following actions need the consent of the holders of
its memberships: (i) The sale, issuance, transfer or other disposition
of ``equity securities'' as that term is defined in Section 7(a); and
(ii) the authorization, grant or issuance of trading rights other than
regular trading rights, options principal trading rights or the Limited
Trading Permits. The AMC Board at its meeting on July 11, 2005 voted to
approve and recommend to its members that the AMC Certificate be
amended to: (i) Eliminate the reference in Section 6 to one trading
right, thus allowing the issuance of more than one right to Regular
Members and Options Principal Members; (ii) eliminate the prohibition
in Section 6 on such trading rights being transferred or leased apart
from the Regular and Options Principal Memberships; and (iii) eliminate
the requirement that a vote of the membership is required for the
authorization or issuance of trading rights as described in Section
7(a)(ii). Instead, the AMC membership's consent will be required for
any action taken by the Amex to increase the number of memberships
issued by AMC. Membership consent will still be required for the sale,
issuance, transfer or other disposition of equity securities as
provided in Section 7(a)(i). It should also be noted that Amex will
still need to get AMC Board approval for the issuance of new trading
rights. The AMC Board can, if it chooses, seek the consent of its
membership for any proposal calling for the issuance of new trading
rights.
The issue of transferable trading rights arose recently in regard
to a proposal to allow specialists and registered options traders to
enter quotes in options from remote locations.\6\ To participate in
remote quoting, specialists and registered options traders will be
issued rights, which will attach to the individual eligible to receive
them and will not attach to a sale of the membership. It is proposed
that with the permission of the Amex these rights will be separately
transferable by the specialist or registered options trader eligible to
receive them. Therefore, while the rights will only be transferable to
other members or member organizations, they will trade separately from
the membership and will not increase the number of memberships issued
by AMC. The AMC Board believes that the issuance of these types of
rights is appropriate and the rights should be transferable or able to
be leased apart from the membership. Additionally, the AMC Board does
not believe that the issuance of these types of rights was contemplated
to be included as an action requiring consent pursuant to Section 7(a)
of the AMC Certificate. Therefore, the AMC Board is proposing to amend
the AMC Certificate to: (i) Provide that trading rights can be
transferred or leased apart from the membership; and (ii) revise the
requirement so that consent is not required for the issuance of trading
rights that do not include an increase in the number of memberships
issued by AMC. The AMC Board determined to make this change to the AMC
Certificate in order to give flexibility to the Amex
[[Page 8321]]
to take prompt action to implement new forms of trading rights designed
to enhance Amex's position in an increasingly competitive and fast
moving marketplace. At a special meeting of the Regular and Options
Principal members held on September 28, 2005, the AMC members approved
the amendments to the AMC Certificate. The AMC Board also approved non-
substantive changes to the text of the AMC Certificate.
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\6\ See Securities Exchange Act Release No. 53220 (February 3,
2006) (notice for SR-Amex-2005-100).
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In addition, management proposes to amend the following sections of
the Amex Constitution: Article II, Section 8; Article IV, Section 1;
and Article XIII, Sections 1 and 3 to replace references to the AMC's
``Second Restated Certificate of Incorporation'' with ``Restated
Certificate of Incorporation''. Further, Amex proposes to delete the
following text from Article II, Section 8 of the Amex Constitution:
``as in effect on the date hereof'', which is used when referring to
the AMC Certificate and By-laws, since it is unnecessary and confusing.
The Commission notes that Amex also proposes other non-substantive
changes to the proposed rule text.\7\
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\7\ Telephone conversation between Claire McGrath, Senior Vice
President & General Counsel, Amex, and David Michehl, Attorney,
Division of Market Regulation, Commission, on January 31, 2006
confirming the intention of the Amex to make non-substantive changes
to the introduction and Sections 3, 6, and 19 of the AMC
Certificate.
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2. Statutory Basis
The Exchange believes that the proposed rule change, as amended, is
consistent with the provisions of Section 6(b) of the Act,\8\ in
general, and with Section 6(b)(5) of the Act,\9\ 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 facilitating
transactions in securities, and 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.
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\8\ 15 U.S.C. 78f(b).
\9\ 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, as
amended, will impose any 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
The Exchange did not receive any written comments on 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 self-regulatory organization consents, the Commission will:
A. By order approve such proposed rule change, as amended; or
B. institute proceedings to determine whether the proposed rule
change, as amended, 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, 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-2005-117 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Amex-2005-117. 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 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 Number SR-Amex-2005-117 and should be submitted on or before March
9, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-2200 Filed 2-15-06; 8:45 am]
BILLING CODE 8010-01-P
