[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