[Federal Register Volume 64, Number 80 (Tuesday, April 27, 1999)]
[Notices]
[Pages 22663-22664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10454]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41310; File No. SR-Amex-99-11]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to an Increase in the Maximum Size of Options Orders 
Eligible To Be Entered Through the Amex Order File System Into the Amex 
Options Display Book

April 19, 1999.
    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 29, 1999, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to increase from 50 to 100 the maximum number 
of equity and index option contracts in an order that may be entered 
through the Amex Order File System (``AOF'') into the Amex Options 
Display Book (``AODB''). The text of the proposed rule change is 
available at the Office of the Secretary, Amex and 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 Amex 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 AOF routes orders to specialists' order books and to Auto-Ex, 
an automatic execution system that executes public customer market and 
marketable limit orders in options at the best bid or offer displayed 
at the time the order is entered. Currently, the AOF permits a Member 
or Member Firm to enter orders for up to 50 option contracts directly 
into an Exchange specialist's order book (the AODB) \3\ from off the 
Exchange's trading floor and orders of up to 20 contracts into Auto-
Ex.\4\
---------------------------------------------------------------------------

    \3\ The Exchange represents that currently, orders for more than 
50 option contracts are either manually entered by the specialist 
into the AODB or ``worked'' in the crowd. Telephone conversation 
between Scott Van Hatten, Legal Counsel, Amex and Gordon Fuller, 
Special Counsel, Division of Market Regulation (``Division''), SEC 
(April 7, 1999).
    \4\ The Commission notes that Amex received Commission approval 
to increase the maximum size of orders entered into Auto-Ex from 20 
options contracts to 50. Securities Exchange Act Release No. 41098 
(February 24, 1999), 64 FR 10511 (March 4, 1999) (File No. SR-Amex-
98-44). Amex represents, however, that the Auto-Ex order size limit 
is currently set at 20 contracts. Telephone conversation between 
Scott Van Hatten, Amex, and David Sieradzki and Gordon Fuller, 
Special Counsels, Division, SEC (April 5, 1999).
---------------------------------------------------------------------------

    Amex proposes to increase the maximum size of options orders that 
may be entered through the AOF into the AODB from 50 to 100 option 
contracts.\5\ This increase in maximum size of orders eligible for 
automated entry into the AODB will permit Members and Member Firms to 
send a larger percentage of orders directly to a specialist's order 
book for execution, resulting in increased automated order handling. 
Amex believes this increased automated order handling will benefit 
customers as well as Members and Member Firms by expanding the number 
of option orders eligible for automated handling and promoting the 
orderly and timely delivery, processing and execution of such orders.
---------------------------------------------------------------------------

    \5\ Amex represents that its systems capacity is sufficient to 
accommodate the anticipated increased volume of orders entered into 
AODB as a result of the increase in maximum order size. Telephone 
conversation between Scott Van Hatten, Amex, and David Sieradzki and 
Gordon Fuller, Special Counsels, Division, SEC (April 5, 1999).
---------------------------------------------------------------------------

    The Exchange represents that AOF/AODB has been successful in 
enhancing execution and operational efficiencies. In anticipates that 
the proposed increase in the AOF's maximum order size parameters should 
further increase execution and operational efficiencies realized since 
the introduction of the AOF.
2. Statutory Basis
    The Exchange represents that the proposed rule change is consistent 
with Section 6(b) \6\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) \7\ in particular, because it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanism of a 
free and open market and a national market system.\8\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ In reviewing this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any 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.

[[Page 22664]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Amex represents that the foregoing rule change effects a change 
in an Amex order-entry system that: (1) Does not significantly affect 
the protection of investors or the public interest; (2) does not impose 
any significant burden on competition; and (3) does not have the effect 
of limiting the access to or availability of the system. Therefore, the 
rule change has become effective pursuant to Section 19(b)(3)(A) of the 
Act \9\ and subparagraph (f)(5) of Rule 19b-4 under the Act.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

    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.

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, 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 Room. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to File No. SR-Amex-99-11 and 
should be submitted by May 18, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-10454 Filed 4-26-99; 8:45 am]
BILLING CODE 8010-01-M