[Federal Register Volume 59, Number 41 (Wednesday, March 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4701]


[[Page Unknown]]

[Federal Register: March 2, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33665; File No. SR-Amex-93-43]

 

Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of a Proposed Rule Change by the American 
Stock Exchange, Inc. Relating to a Modification of the Trading Hours 
for Amex Biotechnology Index Options

February 23, 1994.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December 
23, 1993, the American Stock Exchange, Inc. (``Amex'' 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 the Amex. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes to modify the trading hours for options on its 
Biotechnology Index (``BTK''). The text of the proposed rule change is 
available at the Office of the Secretary, the Amex, and at the 
Commission.

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 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 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 the 
Statutory Basis for, the Proposed Rule Change

    Currently, Exchange rules generally provide that, except as 
otherwise indicated or under unusual conditions, the trading hours for 
broad-based index option contracts shall be from 9:30 a.m. to 4:15 p.m. 
Four narrow-based index options (Computer Index, Oil Index, North 
American Telecommunications Index, and the Pharmaceutical Index) 
presently have trading hours of 9:30 a.m. to 4:10 p.m. The BTK, 
although narrow-based, currently has trading hours identical to those 
assigned to the Exchange's broad-based index options. The purpose of 
the current proposal is to modify the trading hours for options on the 
BTK from a 4:15 p.m. New York time close to a 4:10 p.m. New York time 
close.
    The Amex believes that market professionals (including the 
specialist and market-makers) in BTK options are exposed to undue risk 
during the five-minute interval between the closing of equity options 
at 4:10 p.m. and the closing of BTK options at 4:15 p.m. Unlike 
specialists and market-makers in broad-based index options who can 
hedge their positions in the index futures market (for which trading 
terminates at 4:15 p.m. New York time), market-makers in a narrow-based 
index option such as BTK are best able to hedge their risks by taking 
or liquidating positions in options on the individual securities that 
comprise that index. However, since trading in equity options 
terminates on the Amex and on other option markets at 4:10 p.m. New 
York time, the Amex believes that Specialists and market-makers in 
narrow-based index options (such as BTK options) who are required to 
maintain a trading market until 4:15 p.m. are unnecessarily exposed to 
market risk during the five-minute interval between the closings of 
equity options and BTK options. The Exchange also believes that the 
proposed change will eliminate potential investor confusion by creating 
uniform trading hours for all narrow-based indexes on the Exchange as 
well as with other options markets.\1\
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    \1\The Amex has stated that, upon Commission approval of the 
rule change proposal, it will provide its membership with notice two 
weeks prior to effecting the change of trading hours. The Exchange 
will issue an information circular advising the membership of the 
new closing time that will be sent by facsimile to the Exchange's 
contacts at the major options firms, mailed to recipients of the 
Exchange's options related information circulars, and made available 
to subscribers of the Options News Network. See letter from Claire 
P. McGrath, Managing Director and Special Counsel, Derivative 
Securities, Amex, to Sharon Lawson, Assistant Director, Office of 
Self-Regulatory Oversight, Division of Market Regulation, SEC, dated 
February 22, 1994.
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    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act, in general, and furthers the objectives 
of section 6(b)(5) in particular, in that it is designed to promote 
just and equitable principles of trade and prevent fraudulent and 
manipulative acts and practices.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Amex does not believe that the proposed rule change will impose 
any inappropriate burden on competition.

(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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange requests that the proposed rule change be given 
accelerated effectiveness pursuant to Section 19(b)(2) of the Act. 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) thereunder.\2\ Specifically, the 
Commission concludes that the proposed rule change promotes just and 
equitable principles of trade by creating uniform trading hours for all 
Amex narrow-based indexes, thereby eliminating the possibility of 
investor and market participant confusion.
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    \2\15 U.S.C. 78f (b) (5) (1982).
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    The Commission finds good cause for approving the proposed rule 
change proposal prior to the thirtieth day after the date of 
publication of notice of filing thereof in the Federal Register so that 
the change in trading hours can become effective as soon as possible, 
allowing the Amex to implement uniform trading hours for all Amex 
narrow-based indexes.\3\
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    \3\The Commission notes that it did not receive any comments 
when the Chicago Board Options Exchange, Inc. amended its rules in 
order to change the trading hours of its BioTech Index from 4:15 
p.m. to 4:10 p.m., New York time. See Securities Exchange Act 
Release No. 32937, 58 FR 5002 (September 28, 1993).
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IV. Solicitation of Comments

    Interested person are invited to submit written data, views and 
arguments concerning the foregoing. 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-93-43 and should be 
submitted by March 23, 1994.
    It is therefore ordered, Pursuant to section 19(b)(2) of the 
Act,\4\ that the proposed rule change (File No. SR-Amex-93-43) is 
approved.

    \4\15 U.S.C. 78(b)(2) (1988).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-4701 Filed 3-1-94; 8:45 am]
BILLING CODE 8010-01-M