Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving Proposed Rule Change To Amend Rule 777 Regarding Depository Eligibility, 74964-74965 [E6-21169]

Download as PDF 74964 Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Notices changes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such 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. 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: hsrobinson on PROD1PC76 with NOTICES Electronic Comments • 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–2006–105 on the subject line. Number SR–Amex–2006–105 and should be submitted on or before January 3, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21161 Filed 12–12–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54882; File No. SR–Amex– 2006–80] Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving Proposed Rule Change To Amend Rule 777 Regarding Depository Eligibility December 6, 2006. I. Introduction On August 21, 2006, the American Stock Exchange LLC (‘‘Amex’’) filed with the Securities and Exchange Paper Comments Commission (‘‘Commission’’) proposed rule change SR–Amex–2006–80 • Send paper comments in triplicate pursuant to Section 19(b)(1) of the to Nancy M. Morris, Secretary, Securities Exchange Act of 1934 Securities and Exchange Commission, (‘‘Act’’).1 Notice of the proposal was Station Place, 100 F Street, NE, published in the Federal Register on Washington, DC 20549–1090. September 21, 2006.2 No comment All submissions should refer to File letters were received. For the reasons Number SR–Amex–2006–105. This file discussed below, the Commission is number should be included on the subject line if e-mail is used. To help the approving the proposed rule change as amended. Commission process and review your comments more efficiently, please use II. Description only one method. The Commission will In general, Amex is amending its post all comments on the Commission’s depository eligibility requirement. The Internet Web site (http://www.sec.gov/ rule change: (i) Deletes a reference to a rules/sro.shtml). Copies of the distinction between domestic and submission, all subsequent foreign issuers; (ii) deletes an exception amendments, all written statements for securities whose terms cannot be with respect to the proposed rule reasonably modified to meet the criteria change that are filed with the for depository eligibility at all securities Commission, and all written depositories; and (iii) deletes additional communications relating to the requirements imposed by the rule that proposed rule change between the Commission and any person, other than are no longer necessary. Previously, before an issue of those that may be withheld from the securities could be listed, Rule 777(a) public in accordance with the required only a domestic issuer to provisions of 5 U.S.C. 552, will be represent to Amex that a CUSIP number available for inspection and copying in identifying the securities had been the Commission’s Public Reference Room. Copies of such filing also will be included in the file of eligible issues maintained by a securities depository available for inspection and copying at the principal office of the Exchange. All registered with the Commission as a clearing agency under section 17A of comments received will be posted the Act.3 The same requirement did not without change; the Commission does not edit personal identifying 12 17 CFR 200.30–3(a)(12). information from submissions. You 1 15 U.S.C. 78s(b)(1). should submit only information that 2 Securities Exchange Act Release No. 54442 you wish to make available publicly. All (September 14, 2006), 71 FR 55229. 3 15 U.S.C. 78q–1. submissions should refer to File VerDate Aug<31>2005 21:31 Dec 12, 2006 Jkt 211001 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 apply to foreign issuers. However, exclusion of foreign issuers is no longer necessary because they have the capacity to comply with Rule 777 and have been doing so voluntarily for years. Amex’s rule change also deletes the exception in Rule 777(a) for securities whose terms cannot be reasonably modified to meet the criteria for depository eligibility at all securities depositories. The exception was originally included in Rule 777(a) because, among other things, various states and countries precluded the bookentry issuance of securities. Following implementation of Rule 777(a), however, most, if not all, states have amended their corporate statutes to allow for book-entry issuance, and as a result the exception is no longer needed to accommodate such issuers. Furthermore, Amex’s rule change deletes a provision that prevented new issues distributed by an underwriting syndicate prior to the date a securities depository system for monitoring repurchases of distributed shares by the underwriting syndicate from becoming depository eligible because such a system has become available. Prior to the availability of such a system, a managing underwriter could delay the date a security was deemed depository eligible for up to three months after commencement of trading on Amex. Since the approval of Rule 777, The Depository Trust Company (‘‘DTC’’) 4 implemented its Initial Public Offering Tracking System 5 that enables lead managers and syndicate members of equity underwritings to monitor repurchases of distributed shares in an automated book-entry environment. Since DTC has the capability to monitor repurchases of distributed shares, the requirements listed in Rule 777(b) are no longer necessary, and Amex has deleted Rule 777(b) in its entirety. Finally, Amex has cross-referenced rules 776 and 777 in Part 1 of the Amex Company Guide to clarify that Rules 776 and 777 are initial and continued listing standards applicable to companies listed on Amex. III. Discussion Section 19(b) of the Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to 4 DTC is a securities depository registered with the Commission under sections 17A and 19 of the Act as a clearing agency. 5 Securities Exchange Act Release No. 37208 (May 13, 1996), 61 FR 25253 (May 20, 1996) [File No. SR– DTC–95–27]. E:\FR\FM\13DEN1.SGM 13DEN1 Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Notices such organization.6 Section 6(b)(5) of the Act requires, among other things, that the rules of an exchange be designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities and to remove impediments to and perfect the mechanism of a free and open market and a national market system.7 The Commission finds that Amex’s rule change is consistent with these requirements. By revising its rule regarding depository eligibility, Amex’s proposed rule change fosters cooperation and coordination with persons engaged in clearing and settling transactions in securities and perfects the mechanism of a free and open market and a national market system.8 IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and in particular Section 6(b)(5) of the Act and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,9 that the proposed rule change (File No. SR– Amex–2006–80) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21169 Filed 12–12–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54884; File No. SR–BSE– 2006–52] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change Relating to the Time a Marketable Order Is Exposed on the BOX Book December 6, 2006. hsrobinson on PROD1PC76 with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 U.S.C. 78s(b). U.S.C. 78f(b)(5). 8 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78s(b)(2). 10 17 CFR 200.30–3(a)(12). (‘‘Act’’), 1 and Rule 19b–4 thereunder, 2 notice is hereby given that on November 15, 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 below, which Items have been prepared by BSE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposal on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Section 16 (Execution and Price/Time Priority) of Chapter V of the Rules of the Boston Options Exchange (‘‘BOX’’) to reduce the time that an order is exposed in the internal BOX market when BOX is not matching the national best bid or offer (‘‘NBBO’’) from three seconds to one second. The text of the proposed rule change is available on the Exchange’s Internet Web site (http:// www.bostonstock.com), at the Exchange’s principal office, 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 Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item III 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Section 16 (Execution and Price/Time Priority) of Chapter V of the BOX Rules to reduce the time that an order is exposed in the internal BOX market when the BOX best bid and offer (‘‘BBO’’) is not matching the NBBO from three seconds to one second. 3 The 6 15 7 15 VerDate Aug<31>2005 21:31 Dec 12, 2006 Jkt 211001 1 15 U.S.C. 78s(b)(l). CFR 240. 19b–4. 3 See BOX Rules, Chapter V, Section 16(b) ‘‘Filtering of BOX In-Bound Orders to Prevent Trade-Throughs.’’ This rule and the mechanism utilized by BOX for this purpose are called the ‘‘Filter.’’ 2 17 PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 74965 Exchange’s experience with the Filter has shown that one second is ample time for any party interested in trading with the exposed order at the NBBO to generate and send its contra-side order to the BOX Trading Host for matching. Consequently, the Exchange believes that a reduction in this exposure time will not result in an appreciable difference in the number of executions on BOX through the use of the Filter. In addition, the reduction in exposure time will permit the earlier generation and sending of an InterMarket Linkage P/A Order in the case where BOX is unable to provide the NBBO price. Therefore, the Exchange believes that the filtered order would have an improved chance of being executed at the NBBO before the market moves to the disfavor of the order.4 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b)5 of the Act, in general, and furthers the objectives of Section 6(b)(5) 6 in particular in that it is designed to promote just and equitable principles of trade, and to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition 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 has neither solicited nor received written comments on the proposed rule change. III. 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: 4 The Exchange asked the Commission to incorporate in the Purpose section of this notice the purpose discussion in the Form 19b–4 submitted for this filing rather than the discussion in the Exhibit 1 for the filing. E-mail communication between Brian Donnelly, AVP Regulation & Compliance, BSE, and Leah Mesfin, Special Counsel, Division of Market Regulation, Commission on December 5, 2006. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). E:\FR\FM\13DEN1.SGM 13DEN1

Agencies

[Federal Register Volume 71, Number 239 (Wednesday, December 13, 2006)]
[Notices]
[Pages 74964-74965]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-21169]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54882; File No. SR-Amex-2006-80]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Approving Proposed Rule Change To Amend Rule 777 Regarding Depository 
Eligibility

December 6, 2006.

I. Introduction

    On August 21, 2006, the American Stock Exchange LLC (``Amex'') 
filed with the Securities and Exchange Commission (``Commission'') 
proposed rule change SR-Amex-2006-80 pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'').\1\ Notice of the 
proposal was published in the Federal Register on September 21, 
2006.\2\ No comment letters were received. For the reasons discussed 
below, the Commission is approving the proposed rule change as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 54442 (September 14, 
2006), 71 FR 55229.
---------------------------------------------------------------------------

II. Description

    In general, Amex is amending its depository eligibility 
requirement. The rule change: (i) Deletes a reference to a distinction 
between domestic and foreign issuers; (ii) deletes an exception for 
securities whose terms cannot be reasonably modified to meet the 
criteria for depository eligibility at all securities depositories; and 
(iii) deletes additional requirements imposed by the rule that are no 
longer necessary.
    Previously, before an issue of securities could be listed, Rule 
777(a) required only a domestic issuer to represent to Amex that a 
CUSIP number identifying the securities had been included in the file 
of eligible issues maintained by a securities depository registered 
with the Commission as a clearing agency under section 17A of the 
Act.\3\ The same requirement did not apply to foreign issuers. However, 
exclusion of foreign issuers is no longer necessary because they have 
the capacity to comply with Rule 777 and have been doing so voluntarily 
for years.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    Amex's rule change also deletes the exception in Rule 777(a) for 
securities whose terms cannot be reasonably modified to meet the 
criteria for depository eligibility at all securities depositories. The 
exception was originally included in Rule 777(a) because, among other 
things, various states and countries precluded the book-entry issuance 
of securities. Following implementation of Rule 777(a), however, most, 
if not all, states have amended their corporate statutes to allow for 
book-entry issuance, and as a result the exception is no longer needed 
to accommodate such issuers.
    Furthermore, Amex's rule change deletes a provision that prevented 
new issues distributed by an underwriting syndicate prior to the date a 
securities depository system for monitoring repurchases of distributed 
shares by the underwriting syndicate from becoming depository eligible 
because such a system has become available. Prior to the availability 
of such a system, a managing underwriter could delay the date a 
security was deemed depository eligible for up to three months after 
commencement of trading on Amex. Since the approval of Rule 777, The 
Depository Trust Company (``DTC'') \4\ implemented its Initial Public 
Offering Tracking System \5\ that enables lead managers and syndicate 
members of equity underwritings to monitor repurchases of distributed 
shares in an automated book-entry environment. Since DTC has the 
capability to monitor repurchases of distributed shares, the 
requirements listed in Rule 777(b) are no longer necessary, and Amex 
has deleted Rule 777(b) in its entirety.
---------------------------------------------------------------------------

    \4\ DTC is a securities depository registered with the 
Commission under sections 17A and 19 of the Act as a clearing 
agency.
    \5\ Securities Exchange Act Release No. 37208 (May 13, 1996), 61 
FR 25253 (May 20, 1996) [File No. SR-DTC-95-27].
---------------------------------------------------------------------------

    Finally, Amex has cross-referenced rules 776 and 777 in Part 1 of 
the Amex Company Guide to clarify that Rules 776 and 777 are initial 
and continued listing standards applicable to companies listed on Amex.

III. Discussion

    Section 19(b) of the Act directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to

[[Page 74965]]

such organization.\6\ Section 6(b)(5) of the Act requires, among other 
things, that the rules of an exchange be designed to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities and to remove impediments to and perfect the 
mechanism of a free and open market and a national market system.\7\ 
The Commission finds that Amex's rule change is consistent with these 
requirements. By revising its rule regarding depository eligibility, 
Amex's proposed rule change fosters cooperation and coordination with 
persons engaged in clearing and settling transactions in securities and 
perfects the mechanism of a free and open market and a national market 
system.\8\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange and in particular Section 6(b)(5) of the Act and 
the rules and regulations thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (File No. SR-Amex-2006-80) be and 
hereby is approved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).
    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-21169 Filed 12-12-06; 8:45 am]
BILLING CODE 8011-01-P