[Federal Register Volume 62, Number 86 (Monday, May 5, 1997)]
[Notices]
[Pages 24519-24520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11607]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38549; File No. SR-AMEX-97-13]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the American 
Stock Exchange, Inc. Relating to Exchange Policy on Indications, 
Openings and Reopenings

April 28, 1997.
    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 March 5, 1997, 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 and 
Ii 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 and to 
grant accelerated approval to the proposed rule change.
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    \1\ 15 U.S.C. Sec. 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 revise Exchange policy regarding indications, 
openings and reopenings. The text of the proposed rule change is 
available at the Office of the Secretary, the 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 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 III 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
    Amex specialists disseminate indications of interest to the 
consolidated tape prior to the opening or reopening of trading in a 
previously halted stock, or in the event of a delayed opening. These 
indications communicate the probable price range where the stock will 
open or reopen.
    The Amex's policy on dissemination of tape indications currently 
requires a minimum of 15 minutes to elapse between the first indication 
and the opening or reopening of a stock. In addition, when multiple 
indications are used, a minimum of 10 minutes must elapse after the 
last indication when it does not overlap the prior indication, and a 
minimum of 5 minutes must elapse after the last indication when it 
overlaps the prior indication.
    The Exchange is proposing that these minimum time periods before 
opening or reopening a stock be compressed from 15 to 10 minutes after 
the first indication; and to 5 minutes after the last indication, 
regardless of whether it overlaps the prior indication, provided that a 
minimum of 10 minutes elapses between the first indication and the 
opening or reopening of a stock. The proposed rule shortens the time 
period for indications and strikes an appropriate balance between 
preserving the price discovery process while providing timely 
opportunities for investors to participate in the market.
2. Statutory Basis
    The basis under the Act for the proposed rule change is the 
requirement under Section 6(b)(5) that an Exchange have rules that are 
designed to promote just and equitable principles of trade, to remove 
impediments to, and perfect the mechanism of a free and open market 
and, in general, to protect investors and the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    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. 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

[[Page 24520]]

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 Room. 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-97-13 and should be 
submitted by May 27, 1997.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and, in 
particular, with the requirements of Section 6(b) of the Act.\3\ 
Specifically, the Commission believes the proposal is consistent with 
the Section 6(b)(5) \4\ requirements that rules of an exchange be 
designed to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts, and, in general, to protect investors 
and the public.\5\
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    \3\ 15 U.S.C. Sec. 78f(b).
    \4\ 15 U.S.C. Sec. 78f(b)(5).
    \5\ In approving this rule change, the Commission has considered 
the proposed rules' impact on efficiency, competition, and capital 
formation. 15 U.S.C. Sec. 78c(f).
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    Specifically, the Exchange proposed that minimum time periods 
before opening or reopening a stock be compressed from 15 to 10 minutes 
after the first indication; and to 5 minutes after the last indication, 
provided that a minimum of 10 minutes elapsed between the first 
indication and the opening or reopening of a stock. For example, if 
only 3 minutes had elapsed from the time of the first indication to the 
second indication, the minimum waiting period after the second 
indication would be 7 minutes.
    The Commission agrees with the Exchange that due to increases in 
the speed of communications, relevant market information can be 
disseminated and responded to very quickly. The Commission finds 
reasonable the Exchange's determination that the propose rule change 
will allow the opening or reopening of a stock in a more expeditious 
fashion while still providing sufficient time for appropriate pricing 
of orders. The Commission finds that in the rule change, the Exchange 
has made a reasonable determination that balances the preservation of 
the price discovery process while providing timely opportunities for 
investors to participation in the market. Exchange staff has 
represented that the change in the timing of tape indications is 
consistent with Intermarket Trading System re-opening procedures.\6\
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    \6\ Telephone conversation between Mike Cavalier, Attorney, Amex 
and David Sieradzki, Attorney, SEC, on March 20, 1997.
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    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice of filing thereof in the Federal Register. The rule change is 
being approved with a corresponding amendment to Section XI(a) (Trading 
Halt and Suspension Procedures) of the Consolidated Tape Association 
Plan.\7\ An identical policy on indications, openings, and reopenings 
was approved for use on the New York Stock Exchange on January 31, 1997 
following a full notice period during which no comments were 
received.\8\
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    \7\ See Securities Exchange Release No. 38546 (Apr. 25, 1997).
    \8\ See Securities Exchange Act Release No. 38225 (Jan. 31, 
1997), 62 FR 5875 (Feb. 7, 1997) (order approving File No. SR-NYSE-
96-32).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-AMEX-97-13) is approved.

    \9\ 15 U.S.C. Sec. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-11607 Filed 5-2-97; 8:45 am]
BILLING CODE 8010-01-M