[Federal Register Volume 61, Number 126 (Friday, June 28, 1996)]
[Notices]
[Pages 33786-33787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16574]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37356; File No. SR-Amex-96-21]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc. Relating to Dissemination
of Indications in Connection With Circuit Breaker Trading Halts Under
Rule 117
June 24, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 17, 1996, the American Stock Exchange, Inc. (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Amex proposes to implement guidelines for dissemination of
indications to the consolidated tape in connection with the resumption
of trading following a ``circuit breaker'' trading halt pursuant to the
Amex's Rule 117.\3\
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\3\ The Commission notes that Rule 117--the Exchange's ``circuit
breaker'' rule--provides that trading in securities on the Exchange
shall halt (a ``Rule 117 halt'') and not reopen for one hour if the
Dow Jones Industrial Average (``DJIA'') falls 250 points or more
below its closing value on the previous trading day. The rule
provides further that trading on the Exchange shall halt for two
hours if the DJIA falls 400 points or more on that same day. Rule
117 was approved by the Commission on a pilot basis on October 19,
1988 and has been extended annually since then. See Securities
Exchange Act Release No. 36414 (Oct. 25, 1995), 60 FR 55630 (Nov. 1,
1995) (Commission's most recent order extending temporary approval
of Rule 117).
The Amex has filed a proposal to amend Rule 117 to reduce from
one hour to thirty minutes the time period during which trading is
halted due to a decline in the DJIA of 250 points below its closing
value on the previous trading day, and to reduce from two hours to
one hour the time period for a halt due to a 400 points decline in
the DJIA. See Securities Exchange Act Release No. 37146 (April 26,
1996), 61 FR 19650 May 2, 1996). The Commission has not yet
completed its review of this proposed amendment.
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[[Page 33787]]
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
1. Purpose
The Exchange proposes to implement guidelines for the mandatory
dissemination of indications to the consolidated tape in connection
with the resumption of trading following a circuit breaker halt
pursuant to its Rule 117. The purposes of the proposed criteria is to
provide guidance to the Exchange's specialists as to the specific
circumstances under which they are required to disseminate indications
if a significant decline in the price of a stock from the previous last
sale on the Exchange is anticipated when trading resumes following a
circuit breaker halt.
The Exchange proposes to implement the following guidelines:
Dissemination of an indication shall be mandatory prior to
the reopening of trading if such reopening will result in a price
change constituting the lesser of 10% or three points from the last
sale reported on the Amex, or five points if the previous reported last
sale is $100 or higher. No indications would be required if the price
change is less than one point.
If, on any day that a Rule 117 halt is in effect, trading
in a security has not reopened by one-half hour after the resumption of
trading on the Exchange, the matter should be treated as a delayed
opening, and would require an indication as well as a Floor Official's
supervision.
The Exchange has existing procedures which require dissemination of
indications prior to delayed openings and reopenings following
regulatory or non-regulatory halts in individual securities. The
Exchange will continue to require dissemination of indications in those
situations.\4\
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\4\ The Exchange notes that the proposed criteria are identical
to those currently in place at the New York Stock Exchange
(``NYSE'') in connection with circuit breaker halts under NYSE Rule
80B. See Securities Exchange Act Release No. 26419 (January 5,
1989), 54 FR 1041 (January 11, 1989).
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2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) that an exchange have rules that are
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 regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to protect and
perfect the mechanism of a free and open market and a national market
system, and in general, to protect investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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 either solicited or received.
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 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 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. Sec. 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-96-21 and should be
submitted by July 19, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-16574 Filed 6-27-96; 8:45 am]
BILLING CODE 8010-01-M