[Federal Register Volume 63, Number 200 (Friday, October 16, 1998)]
[Notices]
[Pages 55660-55661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27821]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40533; File No. SR-AMEX-98-36]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange, 
Inc. Relating to the Extension of the Exchange's Pilot Program for 
Specialists in Portfolio Depositary Receipts, Investment Trust 
Securities and Index Fund Shares to Participate In the After-Hours 
Trading Facility

October 8, 1998.
    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 October 2, 1998, 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 person.
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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 is proposing to extend the pilot program permitting 
specialists in Portfolio Depository Receipts (``PDRs'') \3\, investment 
trust securities and Index Fund Shares to particpiate in the After-
Hours Trading (``AHT``) facility to ``clean-up'' order imbalances and 
to effect closing price coupled orders. The text of the proposed rule 
change is available at the Office of the Secretary, Amex and at the 
Commission.
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    \3\ The Exchange currently lists three Portfolio Depository 
Receipts: Depository Receipts on the Standard and Poor's 
500 and Mid Cap Indexes and Depository Receipts 
on the Dow Jones Industrial Average TM. The Exchange also 
lists 17 Index Fund Shares which are commonly referred to as 
WEBSsm. WEBS are shares issued by an open-end management 
investment company that seeks to provide investment results that 
correspond generally to the price and yield performance of a 
specified foreign or domestic equity market index. The Exchange 
currently lists WEBS based on the following Morgan Stanley Capital 
International ``MSCI'') indices: MSCI Australia Index, MSCI Austria 
Index, MSCI Belgium Index, MSCI Canada Index, MSCI France Index, 
MSCI Germany Index, MSCI Hong Kong Index, MSCI Italy Index, MSCI 
Japan Index, MSCI Malaysia Index, MSCI Mexico Index, MSCI 
Netherlands Index, MSCI Singapore (Free) Index, MSCI Spain Index, 
MSCI Sweden Index, MSCI Switzerland Index, and MSCI United Kingdom 
Index. The Commission notes that due to certain restrictions imposed 
by the Malaysian government WEBS based on the MSCI Malaysia Index 
currently trade differently than the other WEBS trading on Amex.
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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 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
    The Exchange seeks an extension to October 31, 1998, of the pilot 
program permitting specialists in PDRs, investment trust securities and 
Index Fund Shares to participate in the AHT facility to ``clean-up'' 
order imabalances and to effect closing price coupled orders.
    The Exchange believes that an extension of the Exchange's pilot 
program to permit specialists in PDRs, investment trust securities and 
Index Fund Shares to participate in the AHT facility in order to 
``clean-up'' order imbalances and effect closing price coupled orders 
would benefit investors by providing additional liquidity to the listed 
cash market for derivative securities based upon well known market 
indexes. Investor interest in these securities is rapidly increasing, 
and specialist participant in the AHT session provides necessary 
liquidity after the close of the regular trading session. In addition, 
the market price of these exchange traded funds is based upon 
transactions largely effected in markets other than the Amex. (In the 
case of Index Fund Shares, the market price of these securities is 
based exclusively on transaction occurring outside the Amex). The 
specialist in the Amex listed securities has no unique access to market 
sensitive information regarding the market for the underlying 
securities or closing index values. The Exchange, therefore, believes 
that specialist participation in the AHF facility in PDRs, investment 
trust securities and Index Fund Shares in the manner previously 
approved by the Commission on a pilot basis does not raise any market 
integrity issues. In addition, should a customer not care for an 
execution at the closing price, the rules of the Exchange's AHT 
facility permit cancellation of an order up to the close of the AHT 
session at 5:00 p.m. (Orders in the AHT facility are not executed until 
the 5:00 p.m. close of the After-Hours session.) A customer, therefore, 
has approximately 40 minutes to determine if an execution at the 
closing price suits his needs and may cancel the order if he believes 
that the closing price does not suit his objectives.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section

[[Page 55661]]

6(b) \4\ of the Act, in general, and furthers the objectives of Section 
6(b)(4),\5\ in particular, in that it is designed to prevent fraudulent 
manipulative acts and practices, promote just and equitable principles 
of trade, remove impediments to and perfect the mechanism of a free and 
open market and a national market system and, in general, protect 
investors and the public interest.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
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

    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 foregoing rule change is concerned solely with the 
administration of the Exchange and, therefore, has become effective 
pursuant to Section 19(b)(3)(A) of the Act \6\ and subparagraph (e) of 
Rule 19b-4 thereunder.\7\ At any time within 60 days of the filing of 
the proposed rule change, the Commission may summarily abrogate such 
rule 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(e)(3).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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 Room. Copies of such filing will also be 
available for inspection and copying at the principal office of Amex. 
All submissions should refer to the File No. SR-AMEX-98-36 and should 
be submitted by November 6, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-27821 Filed 10-15-98; 8:45 am]
BILLING CODE 8010-01-M