[Federal Register Volume 61, Number 132 (Tuesday, July 9, 1996)]
[Notices]
[Pages 36094-36095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17354]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-37384; File No. SR-Amex-96-22]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange, 
Inc. Relating to Fee Changes

June 28, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on 
June 25, 1996, 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. 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 Amex proposes to waive its equity transaction charges on

[[Page 36095]]

proprietary equity trades in paired securities effected on the Exchange 
floor by options specialists and registered options traders (``ROTs'').
    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

    In 1991, the Exchange imposed transaction charges on proprietary 
equity trades by members and member organizations, while maintaining an 
exemption for proprietary trades of equity specialists in view of the 
market making function they perform.\1\ Subsequently, in 1995, the 
Exchange waived such charges on proprietary equity trades effected by 
Registered Equity Market Markers (``REMMs'') in order to facilitate 
their market making function as set forth in Exchange Rule 114 and 
place them on an equal footing with Exchange equity specialists.\2\
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    \1\ See Securities Exchange Act Release No. 28794 (Jan. 17, 
1991), 56 FR 2964 (Jan. 25, 1991).
    \2\ See Securities Exchange Act Release No. 36081 (Aug. 10, 
1995), 60 FR 42635 (Aug. 16, 1995).
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    When option specialists and ROTs\3\ that trade ``paired 
securities'' (i.e., where both the option and underlying equity 
security are traded on the Amex) hedge an option position by trading in 
the underlying Amex listed security, they are currently subject to the 
Exchange's transaction charge on proprietary equity trades. The 
Exchange is now waiving its equity transaction charge imposed on 
proprietary equity trades by option specialists and ROTs hedging in 
paired securities. Option specialists and ROTs, like equity specialists 
and REMMs, perform a market making function in their assigned 
securities and the Exchange believes it is equitable that they be 
treated the same with respect to transaction charges on proprietary 
equity trades used for hedging purposes.
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    \3\ ROTs are members that trade on a proprietary basis on the 
Floor in one or more designated classes of options. Exchange Rule 
958 sets forth the obligations and requirements under which ROTs are 
permitted to conduct such proprietary trading on the Floor. When 
trading in their designated options, ROTs are required under the 
Rule to contribute to the maintenance of a fair and orderly market 
in such options, engaging in dealings in such options which 
contribute to price continuity or depth or minimize the effects of a 
temporary disparity between the supply and demand for such options. 
Thus, while not subject to an option specialist's continuous market 
making obligation, when ROTs effect proprietary equity trades on the 
Floor, they are required to comply with the same market making 
obligations as option specialists.
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    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)(4) in particular in that they provide for the equitable 
allocation of reasonable dues, fees, and other charges among Amex 
members, issuers, and other persons using the Exchange's facilities.

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

    The fee change has become effective pursuant to Section 19(b)(3)(A) 
of the Act and subparagraph (e)(2) of Rule 19b-4. At any time within 60 
days of the filing of such fee change, the Commission may summarily 
abrogate such fee change if it appears to the Commission that such 
action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.

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-96-22 and should be 
submitted by July 30, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12) (1994).
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Jonathan G. Katz,
Secretary.
[FR Doc. 96-17354 Filed 7-8-96; 8:45 am]
BILLING CODE 8010-01-M