[Federal Register Volume 60, Number 206 (Wednesday, October 25, 1995)]
[Notices]
[Pages 54736-54737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26431]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36386; File No. SR-Amex-95-36]

Self-Regulatory Organizations; Order Approving a Proposed Rule 
Change by the American Stock Exchange Inc., Relating to Disclaimer 
Provisions of Amex Rule 902C
October 18, 1995.
I. Introduction
    On August 25, 1995, the American Stock Exchange, Inc. (``Amex'' or 
``Exchange'') filed a proposed rule change with 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\ to include Inter@ctive Enterprises L.L.C., published and 
owner of Inter@ctive Week, in the disclaimer provision of Amex Rule 
920C.

    \1\15 U.S.C. 78s(b)(1).
    \2\17 CFR 240.19b-4.
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    Notice of the proposal was published for comment and appeared in 
the Federal Register on September 18, 1995.\3\ No comment letters were 
received on the proposed rule change. This order approves the 
Exchange's proposal.

    \3\See Securities Exchange Act Release No. 36212 (September 11, 
1995), 60 FR 48180.
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II. Description of the Proposal.
    In conjunction with the Exchange's proposal to trade options on the 
Inter@ctive Week Internet Index (``Index''), the Exchange proposes to 
amend Rule 902C to provide a disclaimer for Inter@ctive Enterprises 
L.L.C. (``Inter@active Enterprises''), publisher and owner of 
Inter@ctive Week, a bi-weekly magazine. The Exchange's proposal to list 
and trade options on the Index was filed pursuant to Section 
19(b)(3)(A) of the Securities Exchange Act of 1934 on August 23, 1995. 
The Exchange intends to list the Index options for trading on October 
18, 1995.\4\ Inter@ctive Enterprises and the Amex developed the Index, 
based on shares of widely held companies involved in providing digital 
interactive services, developing and marketing digital interactive 
software and manufacturing digital interactive hardware. Inter@ctive 
Enterprises will have two representatives on a committee with 
representatives from the Amex and the digital interactive industry to 
advise the Exchange when the Exchange substitutes stocks, or adjusts 
the number of stocks included in the Index. The committee will meet on 
a quarterly basis to review possible candidates for removal or 
inclusion in the Index. The Exchange, however, will have the ultimate 
authority over the maintenance of the Index.

    \4\Telephone conversation between Claire McGrath, Special 
Counsel, Amex, and John Ayanian, Attorney, Office of Market 
Supervision, Division of Market Regulation, Commission, on September 
19, 1995. See also Securities Exchange Act Release No. 36163 (August 
29, 1995), 60 FR 45750 (September 1, 1995)
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    The disclaimer, identical in content to disclaimers currently in 
place for Standard & Poor's Corporation\5\ and Morgan Stanley & Co. 
Incorporated,\6\ states that Inter@ctive Enterprises L.L.C. does not 
guarantee the accuracy or completeness of the Index, makes no express 
or implied warranties with respect to the Index and shall have no 
liability for any damages, claims, losses or expenses caused by errors 
in the Index calculation. The Exchange represents that it will have 
sole discretion over the calculation and maintenance of the Index.\7\

    \5\See Amex Rule 902C(c).
    \6\See Amex Rule 902C(d).
    \7\See Release No. 36163, supra note 4.

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III. Commission Finding and Conclusions

    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) of the Act.\8\ 
Specifically, the Commission finds that the Exchange's proposal strikes 
a reasonable balance between the Commission's mandates under Section 
6(b)(5) to remove impediments to and perfect the mechanism of a free 
and open market and a national market system, while protecting 
investors and the public interest.

    \8\15 U.S.C. 78f(b)(5).
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    The Commission believes that it is reasonable for Inter@ctive 
Enterprises L.L.C. to be released from liability for any damages, 
claims, losses or expenses related to the Index or caused by errors in 
the Index calculation. The Commission notes that Inter@ctive 
Enterprises L.L.C. will not be involved, except in its limited advisory 
capacity and described above, in the calculation or maintenance of the 
Index. Additionally, as noted above, the Commission has previously 
approved similar proposals by the Amex to release various entities from 
certain liability for damages resulting from use of their products.\9\

    \9\See e.g., Securities Exchange Act Release Nos. 36103 (August 
14, 1995), 60 FR 43481 (August 21, 1995); and 36283 (September 26, 
1995), 60 FR 51825 (October 3, 1995). 

[[Page 54737]]

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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (File No. SR-Amex-95-36), is 
approved.

    \10\15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\

    \11\17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-26431 Filed 10-24-95; 8:45 am]
BILLING CODE 8010-01-M