[Federal Register Volume 60, Number 235 (Thursday, December 7, 1995)]
[Notices]
[Pages 62911-62912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29777]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36535; File No. SR-AMEX-95-38]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 to Proposed Rule Change by the American 
Stock Exchange, Inc. Relating to Transactions in Currency Warrants by 
Registered Options Traders

November 30, 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 
September 22, 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 self-regulatory 
organization. On September 26, 1995, the Amex filed Amendment No. 1 
(``Amendment No. 1'') to the proposal.\1\ The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.

    \1\See Letter from William Floyd-Jones, Assistant General 
Counsel, Amex, to Stephen M. Youhn, SEC, dated Sept. 26, 1995. The 
amendment renumbers two rule provisions that were misstated in the 
original filing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes to amend Commentary .12 to Amex Rule 111 
(Restrictions on Registered Traders). Commentary .14 to Rule 114 
(Registered Equity Market Makers) and Commentary .10 to Rule 958 
(Options Transactions of Registered Traders) to provide that 
proprietary transactions on the Floor in currency warrants shall be 
governed by, and affected in accordance with, Rule 958. The text of the 
proposed rule change 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 Amex 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 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Amex proposes to amend Commentary .12 to Rule 111 (Restrictions 
on Registered Traders), Commentary .14 to Rule 114 (Registered Equity 
Market Makers) and Commentary .10 to Rule 958 (Options Transactions of 
Registered Traders) to provide that proprietary transactions on the 
Amex Floor in currency warrants, shall be governed by, and effected in 
accordance with, Rule 958.
    In 1992, the Exchange amended its rules to permit regular members 
to register as a Registered Trader under Rule 958 to engage in 
supplemental market making activity in stock index warrants and certain 
other non-options derivative products.\2\ The Exchange enacted these 
changes to conform its rules to those of other markets, and to provide 
additional liquidity to the market for the Exchange's Portfolio 
Depositary Receipts and LOR SuperUnits. Due to the limited purpose of 
the 1992 rule changes, the Exchange did not seek at that time to extend 
this treatment to the trading of listed currency warrants by ROTs.

    \2\See Securities Exchange Act Release No. 30768 (June 2, 1992). 
A Registered Trader under Rule 958 is also referred to as a 
Registered Options Trader (``ROT'').
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    At present, currency warrants are traded on the Floor by Registered 
Equity Market Makers (``REMMs'') under the Exchange's equity trading 
rules, pursuant to the provisions of Rule 114 (which includes 
applicable provisions of Rule 111). Under the proposed rule changes, 
regular members wishing to engage in supplemental market making 
activity in currency warrants may register as Registered Traders under 
Rule 958, and would trade for their own account in such securities 
pursuant to the provisions of that Rule.
    In contrast to REMMs trading pursuant to Rules 111 and 114, Rule 
958 imposes continuous affirmative market making obligations upon 
Registered Traders.\3\ In recognition of this, such 

[[Page 62912]]
market makers are designated as Specialists on the Exchange for all 
purposes under the Act (See Rule 958, Commentary .01), and are entitled 
to good faith market maker margin with respect to transactions on the 
Floor in these assigned securities. The Exchange anticipates that 
application of Rule 958 requirements to supplemental Exchange market 
makers will encourage additional competing market maker activity in 
currency warrants, thereby enhancing liquidity in such securities, and 
eliminate an anomalous regulatory disparity between currency warrant 
and stock index warrant trading.

    \3\Moreover, due to the derivative pricing of currency warrants, 
the Exchange believes it is inappropriate to apply the stabilization 
requirements applicable to REMMs to market maker transactions in 
currency warrants.
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2. Statutory Basis
    The Exchange believes 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 and to promote just and 
equitable principles of trade, and is not designed to permit unfair 
discrimination between customers, issuers, brokers and dealers.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposed rule change will impose no 
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the publication of this notice in the Federal 
Register or within such other period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishers its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the 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, N.W., Washington, D.C. 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, N.W., 
Washington, D.C. 20549. 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-95-38 and should be 
submitted by December 28, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\

    \4\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-29777 Filed 12-6-95; 8:45 am]
BILLING CODE 8010-01-M