[Federal Register Volume 60, Number 33 (Friday, February 17, 1995)]
[Notices]
[Pages 9416-9417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4044]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35363; International Series Release No. 785 File No. 
SR-Amex-95-04]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change By the American Stock Exchange, Inc. Relating to the Listing of 
Warrants Based on the Value of the U.S. Dollar in Relation to the 
Mexican Peso

February 13, 1995.
    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 February 
8, 1995, the American Stock Exchange, Inc. (``Amex'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
items have been prepared by the Amex. 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 proposes to approve for listing and trading under 
section 106 of the Amex Company Guide (``Guide'') warrants based on the 
value of the U.S. dollar in relation to the Mexican peso (``Mexican 
Peso Warrants''). The text of the proposed rule change is available at 
the Office of the Secretary, the 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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discuss 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 Amex 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 the 
Statutory Basis for, the Proposed Rule Change

    Under section 106 (Currency and Index Warrants) of the Guide, the 
Exchange may approve for listing warrants based on the relation of the 
[[Page 9417]] U.S. dollar to foreign currencies.\1\ The Amex currently 
trades foreign currency warrants based upon the value of the U.S. 
dollar in relation to a single foreign currency (e.g., Japanese yen and 
German mark) as well as warrants based on the value of the U.S. dollar 
in relation to multiple foreign currencies.\2\

    \1\The Commission notes that the Exchange has filed a proposed 
rule change that would, among other things, revise the criteria 
pursuant to section 106 for listing stock index and currency 
warrants. These new standards will apply to Mexican Peso Warrants 
issued following approval of that proposed rule change. See 
Securities Exchange Act Release No. 35086 (December 12, 1994), 59 FR 
65561 (December 20, 1994) (notice of File No. SR-Amex-94-38).
    \2\See Securities Exchange Act Release Nos. 24555 (June 5, 
1987), 52 FR 22570 (June 12, 1987) (approval of listing requirements 
for single foreign currency warrants), and 31627 (December 21, 
1992), 57 FR 62399 (December 30, 1992) (approval of listing 
requirements for multiple foreign currency warrants).
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    The Exchange represents that Mexican Peso Warrants will conform to 
the listing guidelines under section 106 of the Guide, which provide, 
among other things, that: (1) the issuer must have assets in excess of 
U.S. $100,000,000 and otherwise substantially exceed the size and 
earnings requirements in section 101(A) of the Guide; (2) the term of 
the warrants will be for a period ranging from one to five years from 
the date of issuance; and (3) the minimum public distribution will be 
one million warrants, together with a minimum of 400 public holders, 
and an aggregate market value of at least U.S. $4,000,000 million.
    Mexican Peso Warrants generally will be direct obligations of their 
issuers and will be cash-settled in U.S. dollars. Mexican Peso Warrants 
will either be exercisable throughout their life (i.e., American-style) 
or exercisable only during a specified period immediately prior to the 
expiration date (i.e., European-style). Upon exercise, the holder of a 
warrant structured as a ``put'' will receive payment in U.S. dollars to 
the extent that the value of the Mexican peso has declined in relation 
to the U.S. dollar below a pre-stated base level. Conversely, upon 
exercise, holders of a Mexican Peso Warrant structured as a ``call'' 
will receive payment in U.S. dollars to the extent that the value of 
the Mexican peso has increased in relation to the U.S. dollar above a 
pre-stated base level. Mexican Peso Warrants that are ``out-of-the-
money'' at the time of expiration will expire worthless.
    Notwithstanding any other Amex rule,\3\ the Exchange will require 
that Mexican Peso Warrants be sold only to customers whose accounts 
have been approved for options trading pursuant to Amex Rule 921. 
Additionally, the options suitably standards in Amex Rule 923 will 
apply to recommendations in Mexican Peso Warrants. Moreover, all 
discretionary orders in Mexican Peso Warrants must be approved and 
initialed by a Senior Registered Options Principal or Registered 
Options Principal. Further, the Exchange will require that customer 
positions in Mexican Peso Warrants be subject to the margin 
requirements applicable to foreign currency options.

    \3\See, e.g., Amex Rule 411, Commentary .01.
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    Finally, prior to the commencement of trading of Mexican Peso 
Warrants, the Amex will distribute a circular to its membership calling 
attention to specific risks associated with Mexican Peso Warrants.\4\

    \4\The Commission notes that the Amex will be required to submit 
a draft of the circular to the Commission staff for approval prior 
to distribution to members.
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    The Exchange 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, and is not designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers.

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

    The Amex does not believe that the proposed rule change will impose 
any inappropriate 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 of the date of 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 reasons 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 coping in 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 Amex. All 
submissions should refer to File No. SR-Amex-95-04 and should be 
submitted by March 10, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\

    \5\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-4044 Filed 2-16-95; 8:45 am]
BILLING CODE 8010-01-M