[Federal Register Volume 61, Number 229 (Tuesday, November 26, 1996)]
[Notices]
[Pages 60135-60136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30174]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37965; File No. SR-Amex-96-43]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc., Relating to Extending
Trading Hours To Permit the Execution of Matched Orders for Exchange-
Listed Securities Which Are Part of a Basket Trade Being Done in Large
Part on the New York Stock Exchange's Crossing Session II
November 19, 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 November 12, 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 Exchange. 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 Exchange proposes to extend its trading hours to permit the
execution of matched orders for Exchange-listed securities which are
part of a basket trade being done in large part on the New York Stock
Exchange's (``NYSE'') Crossing Session II. The text of the proposed
rule change is available at the Office of the Secretary, the Exchange,
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 Exchange 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 Exchange 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
When the Exchange implemented an After-Hours Trading Facility for
single-sided and matched closing price orders, it determined that it
would not, at that time, establish an after-hours crossing session for
aggregate-price basket trades similar to the NYSE's Crossing Session
II.\3\ Some member organizations, however, have noted that the
Exchange's lack of such a facility has impaired their ability to effect
program trades which include Amex-listed stocks. For example, if a firm
wanted to do an after-hours program trade based on the S&P 500 Index,
it would cross the component stocks listed on the NYSE during Crossing
Session II; it would cross those listed on Nasdaq in-house; but it
would have to cross most of the Amex-listed component stocks overseas.
Because most of the Amex-listed stocks included in the S&P 500 Index
are not 19c-3 securities (that is, they were exchange-listed on or
prior to April 26, 1979), Exchange Rule 5 (Off Board Trading) applies
and prohibits member firms from acting as principal in an upstairs
trade in these securities executed in the United States. Due to the
time differences, the Exchange believes that executing the Amex
component of the basket trade overseas creates administrative
difficulties and increased costs for member firms engaging in these
transactions.
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\3\ As part of its overall after-hours trading plan, the NYSE
created a facility for the execution of aggregate-price basket
orders involving at least 15 NYSE-listed securities with an
aggregate minimum value of one million dollars (``Crossing Session
II''). In this facility, which is available from 4:00 p.m. to 5:15
p.m., New York time, a member transmits matched buy and sell orders
to the NYSE on a facsimile from listing the number of stocks and
shares to be traded and the total dollar value of the basket trade.
Transactions effected during Crossing Session II are aggregated and
reported on Tape A as an administration message at the close of the
session. Only the aggregate share volume and dollar amount of all
programs executed during the session are reported. No reports are
printed with respect to the individual stocks comprising the
baskets. Notwithstanding the foregoing, members and member
organizations effecting trades in Crossing Session II are required
to submit to the NYSE's Market Surveillance by T+3 the names and the
number of shares of each NYSE-listed stock comprising each basket.
All NYSE transaction fees are waived for transactions effected
during Crossing Session II.
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The Exchange is proposing to create a facility to permit members
and member organizations to execute on the Exchange, after normal
trading hours, coupled orders for Amex-listed securities which are part
of an aggregate-price basket trade otherwise being done in the NYSE's
Crossing Session II. Operationally, the Exchange's After-Hours Trading
Facility for aggregate-price coupled orders would work in the same
manner as the NYSE's Crossing Session II. Members and member
organizations using the facility would transmit a facsimile form which
would specify the number of stocks, aggregate number of shares and the
dollar value of the securities to be crossed. The trade would be
executed, and a report transmitted by facsimile to the initiating firm.
At the end of the session (5:15 p.m. New York time) the number of
stocks, shares and the dollar value of all baskets traded during the
session would be aggregated separately for the Exchange-listed and
NYSE-listed components of the baskets, and the totals would be
transmitted to the Securities Industry Automation
[[Page 60136]]
Corporation for publication on the ``Tape'' as administrative messages.
A print of the NYSE listed portion of the basket would appear on Tape B
reflecting the Exchange-listed portion of the basket transactions.
On T+3 members will report to the Exchange the names and number of
shares of each Amex-listed stock included in the basket. On T+4, the
Exchange will publish this information in its Daily Sales Report.
The Amex will waive all transaction fees in connection with the
execution of coupled orders for Amex-listed securities which are part
of an aggregate-price basket trade otherwise being done in the NYSE's
Crossing Session II.
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 Exchange believes that 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
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 date of 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 Exchange consents, the Commission will:
(A) by order approve such 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 in 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 Exchange. All
submissions should refer to File No. SR-Amex-96-43 and should be
submitted by December 17, 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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-30174 Filed 11-25-96; 8:45 am]
BILLING CODE 8010-01-M