[Federal Register Volume 61, Number 188 (Thursday, September 26, 1996)]
[Notices]
[Pages 50524-50525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24701]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37706; File No. SR-Amex-96-32]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange, Inc., To Amend the Firm 
Facilitation Exemption

September 20, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\

[[Page 50525]]

notice is hereby given that on September 10, 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.
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    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \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, pursuant to Rule 19b-4 of the Act, proposes to amend 
Exchange Rules 904 and 904C to revise the firm facilitation exemption 
provisions from its position and exercise limit rules.

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 Section 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
    In May of this year, the Exchange received Commission approval to 
expand the firm facilitation exemption \3\ from position and exercise 
limits to all non-multiply-listed Exchange option classes.\4\ 
Currently, only a member firm who facilitates and executes an order for 
its own customers \5\ may qualify for a firm facilitation exemption.
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    \3\ The Amex notes that a facilitation trade is a transaction 
that involves crossing an order of a member firm's public customer 
with an order from the member firm's proprietary account.
    \4\ See Securities Exchange Act Release No. 37179 (May 8, 1996), 
61 FR 24520 (May 15, 1996) (approval order for File No. SR-Amex-96-
11).
    \5\ The Amex defines customer order as one that is entered, 
cleared, in which the resulting position is carried with the firm.
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    The Exchange is proposing to amend the firm facilitation exemption 
so that (a) a member firm who facilitates its own customer whose 
account it carries, whether the firm executes the order itself or gives 
the order to an independent broker for execution, and (b) a member firm 
who receives a customer order for execution only (and thus will not 
have the resulting position carried by the firm) may qualify for this 
exemption. The Exchange believes that the proposed rule change will 
better allow its member firms to meet the investing needs of their 
customers.
    The Exchange also believes that the proposed amendment to the firm 
facilitation exemption should enhance the depth and liquidity of the 
market by allowing member firms an exemption from position limits to 
facilitate large customer orders, whether they are firms who accept 
customer orders for execution only, or are firms who carry their 
customers' accounts and positions.
2. Statutory Basis
    Based upon the foregoing, 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 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, 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 copying at the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing also will be available for 
inspection and copying at the principal office of the Amex. All 
submissions should refer to File No. SR-Amex-96-32 and should be 
submitted by October 17, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-24701 Filed 9-25-96; 8:45 am]
BILLING CODE 8010-01-M