[Federal Register Volume 59, Number 18 (Thursday, January 27, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-1713] [[Page Unknown]] [Federal Register: January 27, 1994] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-33495; International Series No. 629 File No. SR-Amex- 93-40] Self-Regulatory Organizations; Order Granting Approval and Notice of Filing and Order Granting Accelerated Approval of Amendment No. 1 to a Proposed Rule Change by the American Stock Exchange, Inc. Relating to Stock Upside Note Securities (``SUNS'') January 19, 1994. I. Introduction On November 18, 1993, the American Stock Exchange, Inc. (``Amex'' or ``Exchange''), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4 thereunder,\2\ filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') a proposed rule change to list and trade Stock Upside Note Securities (``SUNS''),\3\ the return on which is based on the Lehman Brothers Global Emerging Telecommunications Basket (``Telecommunications Basket'').\4\ Notice of the proposal appeared in the Federal Register on December 6, 1993.\5\ No comment letters were received on the proposed rule change. On January 6, 1994, the Amex filed Amendment No. 1 to the proposed rule change.\6\ This order approves the proposal. --------------------------------------------------------------------------- \1\15 U.S.C. 78s(b)(1) (1988). \2\17 CFR 240.19b-4 (1992). \3\``SUNS,'' ``Stock Upside Note Securities,'' and ``Global Emerging Telecommunications Basket'' are registered service marks of Lehman Brothers Holdings, Inc. (``Lehman Brothers''). \4\The Telecommunications Basket is a static portfolio consisting of 24 equity securities listed as: (1) Common shares outside of the United States in the countries having the greatest exchange trading volume for the shares; (2) common shares in the United States; or (3) as American Depositary Receipts (``ADRs'') in the United States. An ADR is a negotiable receipt which is issued by a depositary, generally a bank, representing shares of a foreign issuer that have been deposited and are held, on behalf of holders of the ADRs, at a custodian bank in the foreign issuer's home country. The securities which comprise the Telecommunications Basket are securities issued by corporations formed under Argentina, Brazil, Canada, Chile, France, Hong Kong, Israel, Italy, Malaysia, Mexico, New Zealand, the Philippines, Spain, Sweden, Thailand, the United States, and the United Kingdom. \5\See Securities Exchange Act Release No. 33255 (November 18, 1993), 58 FR 64347 (December 6, 1993). \6\Amendment No. 1 to the proposed rule change states that: (i) if the entity that is used to calculate the value of the Telecommunications Basket is required to use the bid and offer price for a portfolio security to determine the market price of such portfolio security, then that entity shall not use any bid or offer price announced by Lehman Brothers or any affiliate of Lehman Brothers; and (ii) Lehman Brothers will monitor the volatility of the Telecommunications Basket securities and will discuss with the Commission the need to increase the frequency of portfolio value dissemination if the volatility of the Telecommunications Basket increases materially. See Letter from John Riley, Simpson Thacher & Bartlett, to Brad Ritter, Attorney, Office of Derivatives Regulation, Division of Market Regulation, Commission, dated January 6, 1994 (``January 6 Letter''). --------------------------------------------------------------------------- II. Description of the Proposal Under section 107 of the Exchange's Company Guide (``Guide''), the Amex may approve for listing securities which can not be readily categorized under the listing criteria for common and preferred stocks, bonds, debentures, and warrants. The Amex is proposing to list for trading under section 107 of the Guide, Telecommunications Basket SUNS.\7\ --------------------------------------------------------------------------- \7\The Commission recently approved a proposed rule change submitted by the New York Stock Exchange, Inc. (``NYSE'') for the listing and trading of two similar products: (1) Market Index Target Term Securities (``MITTS'') based upon a global portfolio of securities representing telecommunications companies; and (2) MITTS based upon a portfolio of securities of European companies. See Securities Exchange Act Release Nos. 32840 (September 2, 1993), 58 FR 47485 (September 9, 1993); and 33368 (December 22, 1993), 58 FR 68975 (December 29, 1993), respectively (collectively ``MITTS Approval Orders''). --------------------------------------------------------------------------- The Telecommunications Basket SUNS will conform to the listing guidelines under Section 107 of the Guide, which provide that issues must have: (1) A minimum public distribution of one million trading units; (2) a minimum of 400 shareholders; and (3) a market value of at least $20 million. In addition, the listing guidelines provide that the issuer have assets in excess of $100 million, and stockholder's equity of at least $10 million. In the case of an issuer which is unable to satisfy the earnings criteria stated in section 101 of the Guide, the Exchange will require the issuer to have the following: (1) Assets in excess of $200 million and stockholders' equity of at least $10 million; or (2) assets in excess of $100 million and stockholders' equity of at least $20 million. SUNS are non-callable senior hybrid debt securities of Lehman Brothers. SUNS will have a term of four to seven years and will pay an annual coupon based on the annual appreciation of the Telecommunications Basket. At maturity, holders of SUNS also will receive from the issuer the entire principal amount of the note. Telecommunications Basket SUNS are cash-settled in that they do not give the holder any right to receive a portfolio security or any other ownership right or interest in the portfolio securities, although the return on the investment is based on the aggregate portfolio value of the Telecommunications Basket. According to the Amex, Telecommunications Basket SUNS will allow investors to combine the protection of the principal amount of the SUNS with potential additional payments based upon the performance of a portfolio of securities representing 24 highly capitalized global telecommunications companies. In particular, the proposed Telecommunications Basket SUNS will provide 100% principal protection of the original issue price at maturity with the opportunity to participate in any upside appreciation of the underlying Telecommunications Basket during the term of the note. The Telecommunications Basket consists of securities of 24 global telecommunications companies that have significantly different levels of market capitalization, ranging from a high of approximately US$77.5 billion for American Telephone & Telegraph Company to a low of approximately US$616 million for Champion Technology.\8\ The securities in the Telecommunications Basket include the common stock of five U.S. telecommunications companies,\9\ the common stock of three foreign issuers (which stocks are listed and trade on, or traded over the facilities of, U.S. securities markets),\10\ ADRs of nine foreign issuers,\11\ and the ordinary shares of seven foreign issuers traded primarily on or through non-U.S. securities markets.\12\ The average daily trading volume for the components of the Telecommunications Basket for the period from August 1993, through October 1993, ranged from a high of approximately 2.4 billion shares for Telecommunications Brasileiras S.A., to a low of approximately 45,000 shares for Tadiran. In addition, the public float\13\ as of November 2, 1993 for the securities comprising the Telecommunications Basket ranged from a high of approximately US$74.8 billion for American Telephone & Telegraph Company to a low of approximately US$275 million for Tadiran.\14\ --------------------------------------------------------------------------- \8\These values are as of November 2, 1993. \9\The U.S. companies include: ALLTEL, AT&T, Bell Atlantic Corporation, GTE Corporation, and MCI Corporation. The common stock of these issuers is listed and traded on NYSE, the Exchange, or traded through the National Association of Securities Dealers, Inc. (``NASD'') Automated Quotation (``NASDAQ'') system's National Market System (``NMS''). \10\The foreign common stock issues traded on or over the facilities of U.S. securities markets include: Newbridge Networks Corporation (Canada), Philippine Long Distance Telephone Company (Phillippines), and Tadiran (Israel). Newbridge Networks is traded through NASDAQ/NMS, Philippine Lone Distance Telephone is traded on the Amex, and Tadiran is traded on the NYSE. \11\Each of the ADRs is either listed or traded on, or traded over the facilities of, U.S. securities markets. The ADRs represent Alcatel Alsthom Compagnie Generale d'Electricite; Cable & Wireless; Compania de Telefonos de Chile S.A.; Hong Kong Telecommunications, Ltd.; L.M. Ericsson Telephone Company, Inc.; Telecom Corporation of New Zealand, Ltd.; Telefonica de Espana; Telefonos de Mexico, S.A. de C.V.; and Vodaphone Group Plc. \12\The ordinary shares of the foreign issuers are: Advanced Info. Services (Thailand); Champion Technology (Hong Kong); STET (Italy); Telecom Argentina (Argentina); Telecomunicacoes Brasileiras (Brazil); Telefonica de Argentina (Argentina); and Telekom Malaysia (Malaysia). \13\As used herein, ``public float'' is defined as shares outstanding as reported by the issuer, minus treasury stock, times the security price. \14\Lehman Brothers has represented that public float information is not readily available for the seven foreign components traded outside of the U.S. See Letter from John Riley, Simpson Thacher & Bartlett, to Brad Ritter, Attorney, Office of Derivatives Regulation, Division of Market Regulation, Commission, dated December 16, 1993. --------------------------------------------------------------------------- At the outset, each of the securities in the Telecommunications Basket will have equal representation. Specifically, each security included in the portfolio will be assigned a multiplier on the date of issuance so that the security represents an equal percentage of the value of the entire portfolio on the date of issuance. The multiplier indicates the number of shares (or fraction of one share) of a security, given its market price, to be included in the calculation of the portfolio. Accordingly, each of the 24 companies included in the Telecommunications Basket will represent approximately 4.167% of the total portfolio at the time of issuance. The multiplier for each security in the Telecommunications Basket will generally remain unchanged except for limited adjustments that may be necessary as a result of stock splits or stock dividends.\15\ There will be no adjustments to the multipliers to reflect cash dividends paid with respect to a portfolio security. In addition, no adjustments of any multiplier of a portfolio security will be made unless such adjustment would require a change of at least 1% in the multiplier then in effect. --------------------------------------------------------------------------- \15\Lehman Brothers will adjust the multiplier of any Telecommunications Basket security if the security is subject to a stock split or reverse split or similar adjustment in the case of an ADR, to equal the product of the number of shares issued with respect to one share of the Telecommunications Basket security, or the number of receipts issued with respect to an ADR, and the prior multiplier. In the case of a stock dividend, the multiplier will be adjusted so that the new multiplier will equal the former multiplier plus the product of the number of shares of such portfolio security issued with respect to one share of the portfolio security and the prior multiplier. In the case of a listing of ADRs on a national securities exchange in the United States or on NASDAQ/NMS, the multiplier will be adjusted so that the new multiplier will equal the conversion of ordinary shares to ADRs. The listed ADRs then will be used to calculate the value of the Telecommunications Basket. --------------------------------------------------------------------------- If the issuer of a security included in the Telecommunications Basket no longer exists, whether for reason of a merger, acquisition or similar type of corporate control transaction, then Lehman Brothers will assign to that security a value equal to the security's final value for the purposes of calculating portfolio values. For example, if a company included in the Telecommunications Basket is acquired by another company, Lehman Brothers shall thereafter assign a value to the share of the acquired company's securities equal to the value per share at which time the acquisition takes place. If the issuer of a portfolio security is in the process of liquidation or subject to a bankruptcy proceeding, insolvency, or other similar adjudication, such security will continue to be included in the Telecommunications Basket so long as a market price for such security is available. If a market price is no longer available for a portfolio security, including, but not limited to, liquidation, bankruptcy, insolvency, or any other similar proceeding, then the value of the portfolio security will be assigned a value of zero in connection with calculating the daily portfolio value and the closing portfolio value of the Telecommunications Basket, for so long as no market price exists for that security.\16\ --------------------------------------------------------------------------- \16\Lehman Brothers will not attempt to find a replacement stock or to compensate for the extinction of a security due to bankruptcy or a similar event. --------------------------------------------------------------------------- The value of the Telecommunications Basket will initially be calculated once a day either by an affiliate of Lehman Brothers or by an independent calculation agent (``Pricing Agent''). These values will be disseminated to investors once a day after 5:00 p.m. Eastern Standard Time. The portfolio value, for any day, will equal the sum of the products of the most recently available market prices and the applicable multipliers for the portfolio securities.\17\ In addition, if the Pricing Agent is an affiliate of Lehman Brothers, Lehman Brothers has undertaken to implement certain surveillance and compliance procedures with respect to the dissemination of the portfolio value, requiring that the portfolio value be announced only through public dissemination and restricting the access of the affiliate's trading desk to the portfolio value determined by the affiliate.\18\ --------------------------------------------------------------------------- \17\The procedures for determining the prices of the components of the Global Telecommunications Basket will be the same as those approved by the Commission for MITTS (see MITTS Approval Orders, supra note 7). Specifically, the market price used for calculation of the portfolio value is the last reported sale price if the portfolio security is listed and traded on a national securities exchange, or is traded through NASDAQ/NMS. If the portfolio security is a security of a foreign issuer or is an ADR that is not listed on a national securities exchange in the U.S. or is not a NASDAQ/NMS security, then the market price is the last reported sale price on the securities exchange on which the portfolio security is listed having the greatest volume of trading for the preceding calendar month as determined by the Pricing Agent, provided that if such last reported sale price is for a transaction that occurred more than 4 hours prior to the close of such exchange, then the market price is the average of the last available bid and offer price on such exchange. If a foreign-issued portfolio security is not listed or trading on any securities exchange or if the last reported sale price or bid and offer are not obtainable, then the market price is the last reported sale price on the over-the-counter (``OTC'') market with the greatest volume of trading as determined by the Pricing Agent. However, if such last reported sale price is for a transaction which occurred more than 4 hours prior to when trading in such OTC market typically ends, then the market price is the average of the last available bid and offer price of the three most active dealers, as selected by the Pricing Agent. See Letter from John Riley, Simpson Thacher & Bartlett, to Brad Ritter, Attorney, Office of Derivatives Regulation, Division of Market Regulation, Commission, dated January 13, 1994 (``January 13 Letter''). If the Pricing Agent is required to use the bid and offer price for a portfolio security to determine the market price of such portfolio security, then the pricing Agent will not use any bid or offer price announced by the Pricing Agent or any other affiliate of Lehman Brothers. See January 6 Letter, supra note 6. \18\See January 13 Letter, supra note 17. --------------------------------------------------------------------------- Telecommunications Basket SUNS will be denominated in U.S. dollars and will entitle holders to receive annual coupon payments based upon the percentage change in the value of the Telecommunications Basket from the beginning to the end of the year. If the market value of the portfolio has declined, the holder will receive not less than 100% of the original principal amount of the security. Like the MITTS listed on the NYSE, Telecommunications Basket SUNS may not be redeemed prior to maturity and are not callable by the issuer. Holders of Telecommunications Basket SUNS will be able to cash-out of their investment by selling the security on the Amex. The Exchange anticipates that the trading value of the security in this secondary trading market will depend in large part on the value of the securities comprising the Telecommunications Basket and also on such other factors as the level of interest rates, the volatility of the value of the Telecommunications Basket, the time remaining to maturity, dividend rates, and the creditworthiness of the issuer, Lehman Brothers.\19\ --------------------------------------------------------------------------- \19\Lehman Brothers will deposit registered global securities representing Global Telecommunications Basket SUNS with its depository, The Depository Trust Company (``DTC''), so as to permit book-entry settlement of transactions by participants in DTC. See January 13 Letter, supra note 17. --------------------------------------------------------------------------- Because Telecommunications Basket SUNS are linked to a portfolio of equity securities, the Amex's existing equity floor trading rules will apply to the trading of Telecommunications Basket SUNS. First, pursuant to Amex Rule 411, the Exchange will impose a duty of due diligence on its members and member firms to learn the essential facts relating to every customer prior to trading Telecommunications Basket SUNS.\20\ Second, consistent with Amex Rule 411, the Exchange will further require that a member or member firm specifically approve a customer's account for trading Telecommunications Basket SUNS prior to, or promptly after, the completion of the transaction. Third, Telecommunications Basket SUNS will be subject to the equity margin rules of the Exchange. Fourth, prior to trading Telecommunications Basket SUNS, the Exchange will distribute a circular to the membership, in the form reviewed by the Commission, providing guidance with regard to member firm compliance responsibilities (including suitability recommendations) when handling transactions in Telecommunications Basket SUNS and highlighting the special risks and characteristics of the Telecommunications Basket SUNS. --------------------------------------------------------------------------- \20\Amex Rule 411 requires that every member, member firm or member corporation use due diligence to learn the essential facts relative to every customer and to every order or account accepted. --------------------------------------------------------------------------- III. Commission Findings and Conclusions 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, the requirements of section 6(b)(5).\21\ Specifically, the Commission believes that providing for exchange-trading of Telecommunications Basket SUNS will offer a new and innovative means of participating in the market for global telecommunications securities. In particular, the Commission believes that Telecommunications Basket SUNS will permit investors to gain equity exposure in global telecommunications companies, while at the same time, limiting the downside risk of the original investment.\22\ For these reasons, as well as those discussed in the MITTS Approval Orders,\23\ the Commission finds that the listing and trading of Telecommunications Basket SUNS by the Amex is consistent with the Act.\24\ --------------------------------------------------------------------------- \21\15 U.S.C. 78f(b)(5) (1988). \22\Pursuant to section 6(b)(5) of the Act the Commission must predicate approval of exchange trading of new products upon a finding that the introduction of the product is in the public interest. Such a finding would be difficult with respect to a product that served no investment, hedging, or other economic function, because any benefits that might be derived by market participants would likely be outweighed by the potential for manipulation, diminished public confidence in the integrity of the markets, and other valid regulatory concerns. \23\See MITTS Approval Orders, supra note 7. \24\See MITTS Approval Orders, supra note 7. --------------------------------------------------------------------------- As with MITTS, Telecommunications Basket SUNS are not leveraged instruments, however, their price will still be derived and based upon the underlying basket of securities. Accordingly, the level of risk involved in the purchase or sale of a Telecommunications Basket SUNS is similar to the risk involved in the purchase or sale of traditional common stock. Nonetheless, as with the MITTS, the Commission has several specific concerns regarding the trading of this type of product. The Commission notes that the Exchange's rules and procedures that address the special concerns attendant to the trading of hybrid securities will be applicable to Telecommunications Basket SUNS. In particular, by imposing the hybrid listing standards, suitability, disclosure, and compliance requirements noted above, the Commission believes the Exchange has addressed adequately the potential problems that could arise from the hybrid nature of Telecommunications Basket SUNS. Moreover, the Exchange will distribute a circular to its membership calling attention to the specific risks associated with Telecommunications Basket SUNS. The Commission notes that Lehman Brothers intends to have the Pricing Agent publish the value of the Telecommunications Basket once each business day after 5 p.m. Eastern Standard Time for dissemination to electronic reporting services as well as to newspapers and trade publications. Lehman Brothers asserts that the value of a SUNS does not necessarily correlate with the intra-day price moves related to the underlying component securities, largely as a result of the time value to maturity of the SUNS. As a general matter, the Commission continues to believe that for new derivative products, real-time dissemination of the value of the underlying instrument should be provided to all investors. Nevertheless, the Commission has determined to permit Telecommunications Basket SUNS to trade without real-time dissemination at this time for several reasons. First, a SUNS is not a leveraged product that has its value determined primarily from the underlying securities but rather guarantees recoupment of 100% of the principal amount. Second, factors such as the creditworthiness of the issuer, in addition to price movements in the underlying securities will be relevant in pricing the Telecommunications Basket SUNS. Third, the Telecommunications Basket SUNS should, at least prior to expiration, trade more like a bond or debt security, based on the issuer's ability to perform rather than the value of the Telecommunications Basket.\25\ Accordingly, the Commission believes that real-time dissemination of the aggregate market value of the underlying Telecommunications Basket is not necessary at this time but would nevertheless expect Lehman Brothers, along with the Amex, to monitor the product to determine if increased reporting is necessary especially as the product approached maturity.\26\ --------------------------------------------------------------------------- \25\Lehman Brothers has agreed to monitor the volatility of the market price of the Global Telecommunications Basket SUNS in relation to the underlying Global Telecommunications Basket and to discuss with the Commission the need to implement more frequent portfolio value dissemination in the event of an increase in intra- day volatility. See January 6 Letter, supra note 6. \26\Notwithstanding the above, the Commission still believes that it is useful and beneficial for all investors and market participants to have access to the value of the portfolio on a real- time basis and encourages the Amex and Lehman Brothers to further explore the possibilities in this area. --------------------------------------------------------------------------- The Commission realizes that SUNS do not contain a clearinghouse guarantee (as in the case of standardized options), but are instead dependent upon the individual credit of the issuer.\27\ This heightens the possibility that a purchaser of Telecommunications Basket SUNS may not be able to receive the promised payment of 100% of the principal upon maturity. To some extent this credit risk is minimized by the Exchange's continued listing standards which require issuers to maintain a minimum aggregate market value of $1 million for its publicly-held shares.\28\ In addition, the Exchange's hybrid listing standards further require that Telecommunications Basket SUNS have at least $20 million in market value.\29\ In any event, financial information regarding Lehman Brothers, in addition to information on substantially all of the issuers of the underlying securities comprising the Telecommunications Basket, will be publicly available.\30\ --------------------------------------------------------------------------- \27\In this case, the issuer of Telecommunications Basket SUNS will be Lehman Brothers. \28\See Amex Company Guide Sec. 1003(b). \29\See Amex Company Guide Sec. 107. \30\With the exception of one component (Telekom Malaysia), the securities comprising the Telecommunications Basket are either issued by companies that are reporting companies under the Act or subject to a limited exemption under Rule 12g3-2(b) of the Act. See Letter from Benjamin Krause, Senior Vice President, Capital Markets Group, Amex, to Richard Zack, Branch Chief, Office of Derivatives Regulation, Division of Market Regulation, Commission, dated October 25, 1993 (``October 25 Letter''). --------------------------------------------------------------------------- The Commission also has a systemic concern, however, that a broker- dealer, such as Lehman Brothers, or a subsidiary providing a hedge for the issuer will incur position exposure. As discussed in the MITTS Approval Orders, the Commission believes this concern is minimal given the size of Telecommunications Basket SUNS issuance in relation to the net worth of Lehman Brothers.\31\ --------------------------------------------------------------------------- \31\See MITTS Approval Orders, supra note 7. --------------------------------------------------------------------------- The Commission believes that the listing and trading of Telecommunications Basket SUNS should not unduly impact the market for the underlying securities comprising the Telecommunications Basket. First, the underlying securities comprising the portfolio are either well-capitalized stocks, or in the case of ADRS, represent in dollar terms substantial market value.\32\ Second, the all but one of the issuers of the underlying securities comprising the Telecommunications Basket, are subject to reporting requirements under the Act, and a large percentage of the portfolio securities are either listed or traded on, or traded over the facilities of, U.S. securities markets.\33\ Third, the Exchange has surveillance agreements in place for a large percentage of the securities in the Telecommunications Basket for the sharing of market information.\34\ This in addition to the Amex's surveillance procedures will serve to deter as well as detect any potential manipulation. Fourth, Lehman Brothers will not include quotations made by or through Lehman Brothers or its affiliates when calculating the value of the Telecommunications Basket.\35\ Lastly, the Pricing Agent will agree to restrict information with respect to all calculations of portfolio securities so that individuals trading such securities on behalf of the Pricing Agent will only be able to receive such information through public means and not prior to its release to the public.\36\ --------------------------------------------------------------------------- \32\ See supra notes 8-14 and accompanying test. \33\ The Commission notes that 17 of the 24 component securities are traded on the NYSE, Amex, or through NASDAQ/NMS. \34\ The Amex has information sharing agreements with the home markets for all the non-U.S. components included in the Basket except for Advanced Info. Services (Thailand); Philippine Long Distance Telephone Company (Philippines); STET (Italy); and Telefonos de Mexico, S.Z. de C.V. (Mexico). See October 25 Letter, supra note 30. \35\ January 6 Letter, supra note 6. \36\ See January 13 Letter, supra note 17. --------------------------------------------------------------------------- The Commission finds good cause for approving Amendment No. 1 to the proposed rule change prior to the thirtieth day after the date of publication of notice thereof in the Federal Register. The Commission finds that the proposal, as amended, is substantially similar to the MITTS products which were previously approved by the Commission for listing and trading on the NYSE. Furthermore, this proposal was published in the Federal Register for the full 21-day comment period without any comments being received by the Commission. Therefore, the Commission believes it is consistent with section 6(b)(5) of the Act to approve Amendment No. 1 to the proposed rule change on an accelerated basis. Interested persons are invited to submit written data, views and arguments concerning Amendment No. 1 to the proposed rule change. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. 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, 450 Fifth Street, NW., Washington, DC. Copies of such filing will also be available for inspection and copying at the principal office of the Amex. All submissions should refer to File No. SR-Amex-93-40 and should be submitted by February 17, 1994. It is Therefore Ordered, pursuant to section 19(b)(2) of the Act,\37\ that the proposed rule change (File No. SR-Amex-93-40) is approved. \37\15 U.S.C. 78s(b)(2) (1988). --------------------------------------------------------------------------- For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\38\ --------------------------------------------------------------------------- \38\17 CFR 200.30-3(a)(12) (1993). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 94-1713 Filed 1-26-94; 8:45 am] BILLING CODE 8010-01-M