[Federal Register Volume 59, Number 199 (Monday, October 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25552]


[[Page Unknown]]

[Federal Register: October 17, 1994]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34811; File No. SR-Amex-94-37]

 

Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange, Inc., Relating to the Off-Site 
Storage of Customer Options Account Information

October 7, 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 
September 12, 1994, the American Stock Exchange, Inc. (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') 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

    Currently, paragraph (b), ``Maintenance of Customer Records,'' of 
Amex Rule 922, ``Supervision of Accounts,'' requires that background 
and financial information of customers who have been approved for 
options transactions be maintained at both the branch office servicing 
the customer's account and at the principal supervisory office with 
jurisdiction over the branch office. Amex Rule 922(b) also requires 
that copies of account statements be maintained at both the branch 
office supervising the accounts and at the principal supervisory office 
with jurisdiction over the branch for the most recent six-month period. 
The Amex proposes to amend Exchange Rule 922(b) to provide that the 
customer information and account statements currently maintained at the 
principal supervisory office may be maintained at a location other than 
the principal supervisory office if the documents and information are 
readily accessible and promptly retrievable.
    The text of the proposal is available at the Office of the 
Secretary, 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 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 Purpose of, and 
Statutory Basis for, the Proposed Rule Change

(a) Purpose
    Presently, the rules of all the options exchanges and the National 
Association of Securities Dealers, Inc. (``NASD'') uniformly require 
that both the branch office servicing an options customer's account and 
the principal supervisory office having jurisdiction over the branch 
office retain account statements and other financial and background 
information for the account for supervisory purposes. With the advances 
in data storage and retrieval capability available through optical 
disks, fax machines, microfiche and computer, coupled with the 
escalating costs of storing records on-site, many member organizations 
prefer to store documents away from their principal supervisory 
offices. In this connection, an increasing number of member 
organizations have asked and received permission from the self-
regulatory organizations (``SROs'') to store the required customer 
option account documents off-site so long as they are readily 
accessible and promptly retrievable. In view of the number of requests 
received by the SROs to store customer options information off-site, 
the Options Self-Regulatory Council (``OSRC'')\1\ has asked each of the 
options exchanges and the NASD to consider amending their rules to 
permit the principal supervisory office to store customer account 
information off-site.
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    \1\The OSRC is a committee comprised of representatives from 
each of the options exchanges and the NASD.
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    The Exchange believes that these off-site storage arrangements are 
consistent with the record retention requirement rules, provided the 
documents are readily accessible and promptly retrievable. In this 
regard, the proposed rule will not compromise the supervisory 
obligations of a member firm since the firm will still be required to 
maintain customer option account documents and information at the 
branch office servicing the customer's account. To ensure compliance 
with the provisions of the rule, the Amex states that it will 
periodically examine the document retrieval capabilities of member 
firms using off-site document storage arrangements.
(b) Basis
    The Amex 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 prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.

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

    The Amex does not believe that the proposed rule change will impose 
any 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

    Within 35 days after the publication of this notice in the Federal 
Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reason for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (a) By order approve such proposed rule change, or
    (b) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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. Copies of such filing will also be available for 
inspection and copying at the principal office of the above-mentioned 
self-regulatory organization. All submissions should refer to the file 
number in the caption above and should be submitted by November 7, 
1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\2\

    \2\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-25552 Filed 10-14-94; 8:45 am]

BILLING CODE 8010-01-M