Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Amendments to the Amex Membership Corporation's Certificate of Incorporation, 15231-15232 [E6-4368]

Download as PDF Federal Register / Vol. 71, No. 58 / Monday, March 27, 2006 / Notices the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Nancy M. Morris, Secretary. [FR Doc. E6–4343 Filed 3–24–06; 8:45 am] IV. Solicitation of Comments BILLING CODE 8010–01–P 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 wwhite on PROD1PC65 with NOTICES • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Amex–2006–26 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53525; File No. SR–Amex– 2005–117] Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Amendments to the Amex Membership Corporation’s Certificate of Incorporation March 21, 2006. I. Introduction On November 23, 2005, the American Paper Comments Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with the Securities • Send paper comments in triplicate and Exchange Commission to Nancy M. Morris, Secretary, (‘‘Commission’’), pursuant to section Securities and Exchange Commission, 19(b)(1) of the Securities Exchange Act 100 F Street, NE., Washington, DC of 1934 (‘‘Act’’) 1 andRule 19b–4 20549–1090. thereunder,2 a proposed rule change to All submissions should refer to File amend the Amex Membership Number SR–Amex–2006–26. This file Corporation’s (‘‘AMC’’) 3 Restated number should be included on the Certificate of Incorporation (‘‘AMC subject line if e-mail is used. To help the Certificate’’) and AMC Constitution. On Commission process and review your January 24, 2006, Amex filed comments more efficiently, please use Amendment No. 1 to the proposed rule only one method. The Commission will change.4 On February 1, 2006, Amex post all comments on the Commission’s filed Amendment No. 2 to the proposed Internet Web site (http://www.sec.gov/ rule change.5 The proposed rule change, rules/sro.shtml). Copies of the as amended, was published for submission, all subsequent comment in the Federal Register on amendments, all written statements February 16, 2006.6 The Commission with respect to the proposed rule received no comments on the proposal. change that are filed with the This order approves the proposed rule Commission, and all written change, as amended. communications relating to the II. Description and Discussion proposed rule change between the Commission and any person, other than Currently, section 6 of the AMC those that may be withheld from the Certificate provides that AMC shall public in accordance with the make available one Regular Trading provisions of 5 U.S.C. 552, will be Right for each Regular Member and one available for inspection and copying in Options Principal Trading Right for the Commission’s Public Reference each Options Principal Member and that Room. Copies of such filing also will be such trading rights shall not be available for inspection and copying at 17 17 CFR 200.30–3(a)(12). the principal office of the Amex. All 1 15 U.S.C. 78s(b)(1). comments received will be posted 2 17 CFR 240.19b–4. without change; the Commission does 3 AMC is the sole owner of the Exchange. Amex not edit personal identifying members (Regular and Options Principal Members) information from submissions. You are members of AMC. See Securities Exchange Act should submit only information that Release No. 50927 (December 23, 2004), 69 FR you wish to make available publicly. All 78486 (December 30, 2004). 4 Amendment No. 1 replaced the original filing in submissions should refer to File its entirety. Number SR–Amex–2006–26 and should 5 See Partial Amendment No. 2. be submitted on or before April 17, 6 See Securities Exchange Act Release No. 53264 2006. (February 9, 2006), 71 FR 8320. VerDate Aug<31>2005 18:19 Mar 24, 2006 Jkt 208001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 15231 transferred or leased apart from those memberships. In addition, section 7(a)(ii) of the AMC Certificate requires the consent of the AMC members (i.e., the Amex members) to authorize, grant, or issue trading rights other than Regular Trading Rights, Options Principal Trading Rights, or Limited Trading Permits. The proposed rule change would amend the AMC Certificate 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 Regular and Options Principal Memberships; and (iii) eliminate the requirement that a vote of the membership is required for the authorization, grant, or issuance of trading rights as described in section 7(a)(ii).7 The AMC Board determined to make these changes to give flexibility to Amex 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. AMC membership’s consent will still be required for any action taken to increase the number of memberships issued by AMC. The proposed rule change, as amended, also makes other nonsubstantive changes to the AMC Certificate and the Amex Constitution. The Commission finds that the proposed rule change, as amended, is consistent with the requirements of section 6 of the Act,8 and the rules and regulations thereunder applicable to a national securities exchange.9 In particular, the Commission finds that the proposed rule change is consistent with section 6(b)(5) of the Act,10 which requires, among other things, that the Exchange’s rules be 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. The Commission notes that Amex will still need to obtain AMC Board approval for 7 Amex will still need to obtain the consent of the AMC Board to authorize, grant, or issue new trading rights. See Amex Constitution Article 11, section 8. 8 15 U.S.C. 78f(b). 9 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). \\ALPHA3\E\FR\FM\27MRN1.SGM 27MRN1 15232 Federal Register / Vol. 71, No. 58 / Monday, March 27, 2006 / Notices the issuance of new trading rights.11 The AMC Board can, if it so chooses, seek the consent of its full membership for any proposal calling for the issuance of new trading rights. Further, any new trading rights would be subject to approval by the Commission pursuant to the rule filing process of section 19 of the Act. The Commission also notes that the AMC membership’s consent will be required for any action taken by Amex to increase the number of memberships issued by AMC.12 In addition, these changes to the AMC Certificate shall provide Amex with more flexibility to take prompt action to implement new forms of trading rights. It is therefore ordered, pursuant to section 19(b)(2) of the Act,13 that the proposed rule change (SR–Amex–2005– 117), as amended, is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Nancy M. Morris, Secretary. [FR Doc. E6–4368 Filed 3–24–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53516; File No. SR–BSE– 2006–14] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendments No. 1 and 2 Thereto Relating to Information Contained in a Directed Order on the Boston Options Exchange March 20, 2006. wwhite on PROD1PC65 with NOTICES Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 14, 2006, the Boston Stock Exchange, Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II 11 See Amex Constitution Article II, section 8. The AMC Nominating Committee nominates director candidates for the AMC board of directors, and AMC members have the right to put up their own nominees by petition. The AMC board is then elected by the members of AMC. See Amended and Restated By-Laws of The Amex Membership Corporation Sections 1.10, 1.13 and 3.03. 12 See AMC Certificate section 7(a)(ii); Amex Constitution Article II, section 8; and Amex Constitution Article IV, section 1(a)(1) and section 1(b)(1). 13 15 U.S.C. 78s(b)(2). 14 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Aug<31>2005 18:19 Mar 24, 2006 Jkt 208001 below, which Items have been prepared by the BSE. On March 16, 2006, the BSE filed Amendment No. 1 to the proposed rule change.3 On March 17, 2006, the BSE filed Amendment No. 2 to the proposed rule change.4 The BSE filed the proposed rule change pursuant to section 19(b)(3)(A) of the Act 5 and Rule 19b–4(f)(6) thereunder,6 which renders the proposed rule change effective upon filing with the Commission. 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 Boston Stock Exchange, Inc. (‘‘BSE’’ or ‘‘Exchange’’) is proposing to amend its rules governing its Directed Order process on the Boston Options Exchange (‘‘BOX’’). The Exchange is proposing to clearly state that the BOX Trading Host identifies to an Executing Participant (‘‘EP’’) 7 the identity of the firm entering a Directed Order. This rule will be effective until June 30, 2006, while the Commission considers a corresponding Exchange proposal 8 to amend its rules to permit EPs to choose the firms from whom they will accept Directed Orders, while providing complete anonymity of the firm entering a Directed Order.9 In addition, the Exchange commits that it will cease to provide the identity of order entry firms prior to June 30, 2006, if the Commission staff prohibits all options exchanges from disclosing the identity of order entry firms in their Directed Order systems. 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 BSE included statements concerning the 3 In Amendment No. 1, which supersedes and replaces the original filing in its entirety, the BSE changed the statutory basis of the filing. 4 In Amendment No. 2, which supersedes and replaces the original filing and Amendment No. 1 in its entirety, the BSE changed the statutory basis of the filing. 5 15 U.S.C. 78s(b)(3)(A). 6 17 CFR 240.19b–4(f)(6). 7 BSE proposes that a Market Maker who desires to accept Directed Orders must systemically indicate that it is an EP whenever the Market Maker wishes to receive Directed Orders. 8 See Securities Exchange Act Release No. 53357 (February 23, 2006), 71 FR 10730 (March 2, 2006) (SR–BSE–2005–52). 9 In the event that the issue of anonymity in the Directed Order process is not resolved by June 30, 2006, the Exchange intends to submit another filing under Rule 19b–4(f)(1) under the Act extending this rule and system process. PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 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 BSE 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 BSE seeks to amend its rules to clearly state that the BOX Trading Host identifies to an EP the identity of the firm entering a Directed Order. Market Makers are able to handle orders on an agency basis directed to them by Order Flow Providers (‘‘OFPs’’). In Section 1, Chapter I of the BOX Rules, a Directed Order is defined as a Customer Order directed to a Market Maker by an OFP. An OFP sends a Directed Order to BOX with a designation of the Market Maker to whom the order is to be directed. BOX then routes the Directed Order to the appropriate Market Maker. Under Chapter VI, Section 5(c)(ii) of the BOX Rules, a Market Maker only has two choices when he receives a Directed Order: (1) Submit the order to the PIP process; or (2) send the order back to BOX for placement onto the BOX Book. The BSE proposes to amend Chapter VI, Section 5(c)(i) of the BOX Rules to clarify that unlike all other orders submitted to the BOX Trading Host, Directed Orders are not anonymous. The Options Participant identification number (‘‘Participant ID’’) of the OFP sending the Directed Order will be revealed to the Market Maker recipient. The Market Maker must submit this Participant ID to BOX whenever the Market Maker chooses to submit the Directed Order and his Primary Improvement Order to the PIP process. However, once the Directed Order is submitted to the PIP process or the BOX Book, the Participant ID is not shown to any market participant and the identity of the OFP will be anonymous pursuant to Chapter V, Section 14(e) of the BOX Rules. Chapter VI, Section 5(c)(i) of the BOX Rules prohibits a Market Maker from rejecting a Directed Order. The BSE wishes to clarify that upon systematically indicating its desire to accept Directed Orders, a Market Maker that receives a Directed Order is not, under any circumstances, to reject the receipt of the Directed Order from the BOX Trading Host nor reject the Directed Order back to the OFP who \\ALPHA3\E\FR\FM\27MRN1.SGM 27MRN1

Agencies

[Federal Register Volume 71, Number 58 (Monday, March 27, 2006)]
[Notices]
[Pages 15231-15232]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4368]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53525; File No. SR-Amex-2005-117]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval of Proposed Rule Change and Amendment Nos. 1 and 2 
Thereto Relating to Amendments to the Amex Membership Corporation's 
Certificate of Incorporation

March 21, 2006.

I. Introduction

    On November 23, 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\ andRule 19b-4 thereunder,\2\ a 
proposed rule change to amend the Amex Membership Corporation's 
(``AMC'') \3\ Restated Certificate of Incorporation (``AMC 
Certificate'') and AMC Constitution. On January 24, 2006, Amex filed 
Amendment No. 1 to the proposed rule change.\4\ On February 1, 2006, 
Amex filed Amendment No. 2 to the proposed rule change.\5\ The proposed 
rule change, as amended, was published for comment in the Federal 
Register on February 16, 2006.\6\ The Commission received no comments 
on the proposal. This order approves the proposed rule change, as 
amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ AMC is the sole owner of the Exchange. Amex members (Regular 
and Options Principal Members) are members of AMC. See Securities 
Exchange Act Release No. 50927 (December 23, 2004), 69 FR 78486 
(December 30, 2004).
    \4\ Amendment No. 1 replaced the original filing in its 
entirety.
    \5\ See Partial Amendment No. 2.
    \6\ See Securities Exchange Act Release No. 53264 (February 9, 
2006), 71 FR 8320.
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II. Description and Discussion

    Currently, section 6 of the AMC Certificate provides that AMC shall 
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)(ii) of the AMC 
Certificate requires the consent of the AMC members (i.e., the Amex 
members) to authorize, grant, or issue trading rights other than 
Regular Trading Rights, Options Principal Trading Rights, or Limited 
Trading Permits.
    The proposed rule change would amend the AMC Certificate 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 Regular 
and Options Principal Memberships; and (iii) eliminate the requirement 
that a vote of the membership is required for the authorization, grant, 
or issuance of trading rights as described in section 7(a)(ii).\7\ The 
AMC Board determined to make these changes to give flexibility to Amex 
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. AMC membership's consent will still be required for 
any action taken to increase the number of memberships issued by AMC. 
The proposed rule change, as amended, also makes other non-substantive 
changes to the AMC Certificate and the Amex Constitution.
---------------------------------------------------------------------------

    \7\ Amex will still need to obtain the consent of the AMC Board 
to authorize, grant, or issue new trading rights. See Amex 
Constitution Article 11, section 8.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of section 6 of the Act,\8\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.\9\ In particular, the Commission finds that the proposed rule 
change is consistent with section 6(b)(5) of the Act,\10\ which 
requires, among other things, that the Exchange's rules be 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. The Commission notes that 
Amex will still need to obtain AMC Board approval for

[[Page 15232]]

the issuance of new trading rights.\11\ The AMC Board can, if it so 
chooses, seek the consent of its full membership for any proposal 
calling for the issuance of new trading rights. Further, any new 
trading rights would be subject to approval by the Commission pursuant 
to the rule filing process of section 19 of the Act. The Commission 
also notes that the AMC membership's consent will be required for any 
action taken by Amex to increase the number of memberships issued by 
AMC.\12\ In addition, these changes to the AMC Certificate shall 
provide Amex with more flexibility to take prompt action to implement 
new forms of trading rights.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\  See Amex Constitution Article II, section 8. The AMC 
Nominating Committee nominates director candidates for the AMC board 
of directors, and AMC members have the right to put up their own 
nominees by petition. The AMC board is then elected by the members 
of AMC. See Amended and Restated By-Laws of The Amex Membership 
Corporation Sections 1.10, 1.13 and 3.03.
    \12\  See AMC Certificate section 7(a)(ii); Amex Constitution 
Article II, section 8; and Amex Constitution Article IV, section 
1(a)(1) and section 1(b)(1).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-Amex-2005-117), as amended, 
is approved.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-4368 Filed 3-24-06; 8:45 am]
BILLING CODE 8010-01-P