[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