[Federal Register Volume 59, Number 75 (Tuesday, April 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9398]


[[Page Unknown]]

[Federal Register: April 19, 1994]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33900; File No. SR-Amex-94-10]

 

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange, 
Inc. Relating to the Minimum Fractional Change for Trading in Standard 
& Poor's Depositary Receipts

April 12, 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 April 7, 
1994, the American Stock Exchange, Inc. (``Amex or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
the proposed rule change as described in Items I, II and III below, 
which Items have been prepared by the self-regulatory organization. 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 Exchange proposed to amend Rule 127, Commentary .01 to provide 
that the minimum fractional change applicable to trading of Standard & 
Poor's (``S&P'') Depositary Receipts (``SPDRs'') shall be 1/64 of 
$1.00.\1\ The text of the proposed rule change is available at the 
Office of the Secretary, Amex, and at the Commission.
---------------------------------------------------------------------------

    \1\The Commission notes that, although SPDRs currently are 
listed and traded on the Amex, it is conceivable that other national 
securities exchanges or the National Association of Securities 
Dealers, Inc. could apply for authority to list and trade SPDRs. At 
the present time, however, the Intermarket Trading System (``ITS'') 
is not capable of accommodating quotes in 1/64's. Telephone 
conversation between Thomas Demchek, SIAC, and Beth Stekler, 
Attorney, Division of Market Regulation, SEC, on April 12, 1994. 
Accordingly, if other securities exchanges and/or national 
securities associations file for permission to list and trade SPDRs, 
the Commission would at that time be required to re-evaluate the 
adequacy and sufficiency of ITS in conjunction with section 11A's 
statutory mandate to assure fair competition between the exchanges.
---------------------------------------------------------------------------

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 self-regulatory organization 
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 self-regulatory organization 
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 Purposes of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Amex Rule 127 provides parameters for the minimum fractional change 
for dealings in securities on the Exchange. Commentary .01 to Rule 127 
provides that for securities listed under Amex Rule 1000 et seq., 
Portfolio Depositary Receipts (``PDRs''), the minimum fractional change 
shall be 1/32 of $1.00. One issuance of PDRs, SPDRs, is currently 
trading on the Exchange. The Exchange now proposes to reduce the 
minimum fractional change applicable to SPDRs to 1/64.
    In approving trading of PDRs in 1/32's, the Commission stated that 
such trading would enhance market liquidity and should promote more 
accurate pricing, tighter quotations and reduced price fluctuations. 
The Commission also noted that such trading should allow customers to 
receive the best possible execution of their transactions in these 
securities.\2\
---------------------------------------------------------------------------

    \2\See Securities Exchange Act Release No. 31794 (January 29, 
1993), 58 FR 7272 (February 5, 1993) (File No. SR-Amex-92-45).
---------------------------------------------------------------------------

    The Exchange believes the benefits identified by the Commission in 
connection with trading PDRs in 1/32's will be further enhanced by 
trading SPDRs in 1/64's. Such trading should further reduce price 
fluctuations based on the underlying index for the particular issuance 
(i.e., S&P 500 Index). Such trading parameters should benefit retail 
customers, institutions, and other market participants that invest in 
or trade SPDRs. In addition, a narrower quotation spread should make 
such securities more useful professionals who may hedge their positions 
in futures or other derivative markets.
    The Exchange will issue an Information Circular to members and 
member organizations relating to trading SPDRs in 1/64's prior to 
commencement of such trading.
2. Statutory Basis
    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 intended to promote just and equitable principles of 
trade, to facilitate transactions in securities, and to protect 
investors and the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change will impose no 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 foregoing rule change establishes or changes a due, fee, or 
other charge imposed by the Exchange and therefore has become effective 
pursuant to section 19(b)(3)(A) of the Act and subparagraph (e) of Rule 
19b-4 thereunder. At any time within 60 days of the filing of such 
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. 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 at the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549. 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-94-10 and should be 
submitted by May 10, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-9398 Filed 4-18-94; 8:45 am]
BILLING CODE 8010-01-M