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