[Federal Register Volume 59, Number 207 (Thursday, October 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26642]


[[Page Unknown]]

[Federal Register: October 27, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34869; File No. SR-Amex-94-25]

 

Self-Regulatory Organizations; American Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change Relating to Increasing 
the Share Parameters for Orders Entered Through PER

October 20, 1994.
    On June 23, 1994, the American Stock Exchange, Inc. (``Amex'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``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 increase the share parameters, 
from 5,099 to 30,099 shares, for orders entered through the Exchange's 
Post Execution Reporting (PER) system.
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    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\17 CFR 240.19b-4 (1991).
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    The proposed rule change was published for comment in Securities 
Exchange Act Release No. 34347 (July 11, 1994), 59 FR 36238 (July 15, 
1994). No comments were received on the proposal.
    The PER system provides member firms with the means to 
electronically transmit equity orders up to volume limits specified by 
the Exchange directly to the specialist's post on the Exchange Floor. 
Market and marketable limit orders and preopening market orders are 
placed on the specialist's electronic book. Once the PER order is 
executed, the system transmits the execution report directly back to 
the member firm.
    Currently, the PER system accepts (1) up to 5,099 shares for all 
eligible market and limit orders; (2) up to 25,000 shares for eligible 
market and limit orders for Unit Investment Trust securities (such as 
Standard & Poor's Depositary Receipts);\3\ and (3) up to 30,099 shares 
for market and limit round lot orders for those securities included in 
the S&P 500 Index.\4\
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    \3\See Securities Exchange Act Release No. 32544 (June 29, 
1993), 58 FR 36485, July 7, 1993.
    \4\See Securities Exchange Act Release No. 34347 (July 11, 
1994), 59 FR 36238 (July 15, 1994) (granting accelerated approval to 
that portion of the current proposed rule change as it relates to 
Amex securities in the S&P 500 Index) (``Amex Approval Order'').
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    In the Amex Approval Order, the Commission granted partial 
accelerated approval for that portion of the instant filing which 
pertains to those Exchange-listed equity securities included in the S&P 
500 Index. The Commission also stated in the Amex Approval Order that 
if, after three months, the Exchange wishes to extend the PER 
parameters to all other Exchange-listed equity securities, then it has 
the option to do so. During the three-month pilot the Exchange has had 
an opportunity to observe the level of increased utilization of PER and 
factor that into its assessment of how best to implement the parameter 
increase for the remainder of the Exchange-listed equity securities. 
The Exchange represents that it has not experienced any systems 
problems in processing the additional order flow through PER. The 
Exchange now requests an extension of the PER parameters to all other 
Exchange-listed equity securities.\5\
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    \5\See letter from Ivonne Nagy, Special Counsel, Amex, to Amy 
Bilbija, Commission, dated October 18, 1994. The letter confirms the 
systems capabilities and the Amex's intention, upon Commission 
approval, to extend the increased order size that may be routed 
through PER to all other Exchange-listed equity securities to take 
effect on November 1st.
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    The Commission finds that the Amex's proposal to increase the PER 
share parameters, from 5,099 to 30,099, for orders of the remaining 
Exchange-listed equity securities (i.e., equity securities in addition 
to those included in the S&P 500 Index), is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange. Specifically, the 
Commission finds that the proposed rule change is consistent with the 
requirements of Section 6(b)(5) of the Act\6\ because it will 
facilitate transactions in securities by allowing for the timely 
transmission of a larger number of orders to the Amex floor. The 
proposal will also result in more efficient and effective market 
operations, consistent with Section 11A(a)(1)(B) and will further the 
maintenance of fair and orderly markets and the efficient execution of 
securities transactions consistent with Section 11A(a)(1)(C) of the 
Act.\7\
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    \6\15 U.S.C. 78f(b)(5) (1988).
    \7\15 U.S.C. 78f(b)(5) and 78k-1 (1988).
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    Finally, based upon representations from the Amex, the Commission 
is satisfied that the Exchange's PER system will have adequate computer 
processing capacity to accommodate the increased order size 
eligibility.\8\ The Commission notes, however, that if the Exchange 
does not implement the expansion to all Exchange-listed equity 
securities within six months of the approval date of this order, then 
it cannot so implement without demonstrating to the Commission that the 
systems capacity remains adequate to facilitate the additional order 
flow.\9\
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    \8\See note 5, infra.
    \9\As of the date of this order, the Exchange has indicated that 
it plans to expand the increased parameters for PER eligibility on 
November 1, 1994.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-Amex-94-25) is approved.
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    \10\15 U.S.C. 78s(b)(2) (1988).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\17 CFR 200.30-3(a)(12) (1991).
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Jonathan G. Katz,
Secretary.
[FR Doc. 94-26642 Filed 10-26-94; 8:45 am]
BILLING CODE 8010-01-M