[Federal Register Volume 59, Number 81 (Thursday, April 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10092]


[Federal Register: April 28, 1994]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33936); File No. SR-Amex-94-07]


Self-Regulatory Organizations; Order Granting Accelerated 
Approval to Proposed Rule Change by the American Stock Exchange, Inc., 
Relating to the Modification of Trading Hours for the EUROTOP 100 Index

April 20, 1994.
    On March 7, 1994, the American Stock Exchange, Inc. (``Amex'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'')\1\ and rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Amex Rule 1 to modify the trading hours 
for the Exchange's EUROTOP 100 Index (``E-100'').
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    \1\15 U.S.C. 78s(b)(1) (1982).
    \2\17 CFR 240.19b-4 (1993.
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    The proposed rule change was published for comment in the Federal 
Register on March 21, 1994.\3\ No comments were received on the 
proposed rule change. This order approves the proposal.
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    \3\Securities Exchange Act Release No. 33757 (March 11, 1994), 
59 FR 13349 (March 21, 1994).
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    In October 1992, the Exchange began trading standardized options on 
the E-100. The E-100 measures the collective performance of the most 
actively traded stocks on Europe's major stock exchanges. This broad-
based index is calculated continuously from 5 a.m. to 11:30 a.m. 
Eastern Standard Time (11 a.m. to 5:30 p.m. Central European time). The 
Exchange's trading hours for options on the E-100 are from 8:30 a.m. to 
4:15 p.m. (New York time). The one hour earlier opening was adopted in 
order to attract European investors as well as to conform more closely 
with trading hours for futures contracts on the E-100 traded at the New 
York Commodity Exchange (``COMEX''), which begins trading at 7:30 a.m. 
(New York time).
    However, in the aftermath of the bombing of the World Trade Center 
in February 1993, the COMEX curtailed trading hours for all of its 
products and has continued to cease trading the E-100 futures contract 
at 11:30 a.m. (New York time), since such time corresponds with the 
cessation of trading of the underlying component securities in the 
European markets.\4\ The Exchange has proposed to modify the trading 
hours for its E-100 options to cease trading at 11:30 a.m. as well, 
since these hours will correspond more closely to the current trading 
hours for E-100 futures contract at the COMEX.
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    \4\The COMEX scaled back the trading hours on the E-100 futures 
contract on March 1, 1993.
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    The Exchange believes that its current trading hours for E-100 
options expose both the specialists and market makers to undue risk 
after both the underlying component securities and the E-100 futures 
contract have stopped trading, since they are unable to hedge their 
market risk effectively.
    The Exchange will give its membership two weeks notice of the 
change in E-100 trading hours. An information circular advising the 
membership of the new closing time of 11:30 a.m. will be sent by 
facsimile to the Exchange's contracts 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.
    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),\5\ in that the 
proposal is designed to facilitate transactions in securities and to 
protect investors and the public interest. Specifically, the Commission 
believes that the continuation of trading in options on the E-100 after 
trading in the E-100 futures contract has ended may place undue risks 
on Amex specialists and market makers in light of their inability to 
hedge their option positions effectively with the E-100 futures 
contract during that time. The Commission also believes that the 
Exchange's commitment to provide two weeks advance notice of the change 
in the E-100 options trading hours, as well as the manner in which such 
notice will be circulated, will ensure that all market participants are 
aware of the reduced trading hours, and as such will serve to protect 
investors and the public interest. Therefore, the Commission concludes 
that modifying the closing time for options on the E-100 from 4:30 p.m. 
to 11:30 a.m., to correspond the E-100 option trading hours more 
closely with the trading hours for the E-100 futures contract on the 
COMEX, will facilitate transactions in securities, remove impediments 
to and perfect the mechanism of a free and open market, and, generally, 
protect investors and the public interest.
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    \5\15 U.S.C. 78f(b)(5).
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    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice of filing thereof in the Federal Register, in recognition of the 
fact that the closing time for the E-100 futures contract already had 
been changed to 11:30 a.m. as of March 1, 1993. Given the potential 
risks to which specialists and market makers have been exposed since 
the reduction of the E-100 futures trading hours, the Commission 
believes that accelerating approval of the proposed rule change will 
help to minimize such risks, and thus promote just and equitable 
principles of trade and perfect the mechanism of a free and open 
market. In addition, the original proposal was published for the full 
21-day comment period, and no comments were received. As a result, the 
Commission finds good cause for accelerating approval of the proposed 
rule change.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-Amex-94-07) is 
approved on an accelerated basis.

    \6\15 U.S.C. 78s(b)(2) (1982).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-10092 Filed 4-26-94; 8:45 am]
BILLING CODE 8010-01-M