[Federal Register Volume 64, Number 182 (Tuesday, September 21, 1999)]
[Notices]
[Pages 51156-51158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24499]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41870; File No. SR-Amex-99-29]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by American Stock Exchange LLC Relating to Disclosures by 
Specialists Under Amex Rule 174

September 13, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 6, 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 Amex. 
The Commission is publishing this notice to solicit

[[Page 51157]]

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 amend Amex Rule 174 relating to 
disclosures by specialists. The text of the proposed rule change is as 
follows (brackets indicate deletions from current Amex Rule 174 and 
italics indicate new language):
* * * * *
Disclosures by Specialists [Prohibited]
    Rule 174. (a)[No] A member acting as a specialist [shall, directly 
or indirectly, at any time] may disclosure [to any person other than a 
Floor Official or authorized official of the Exchange any] information 
in regard to orders entrusted to [him as a] the specialist as provided 
in this rule. [except that]
    [a](b) [w]When requested by a member, member organization, or a 
representative of the issuer of the security involved, the specialist 
may disclose to such parties the names of buying and selling member 
organizations in either completed or partially executed Exchange 
transactions unless specifically directed to the contrary by the 
parties involved[;].
    [b](c) While acting in a market making capacity, the specialist may 
in response to an inquiry from a member conducting a market probe in 
the normal course of business provide any information about buying or 
selling interest in the market [at or near the prevailing quotation and 
such information] which may include the identity of bidders or offerors 
represented on his book unless the specialist has been expressly 
directed to the contrary by the broker who entered the order with the 
specialist and may also include information regarding stop orders if 
the specialist has a reasonable basis to believe that the member 
intends to trade the security at a price at which stop orders would be 
relevant, provided that the specialist shall, while on the Floor, make 
the same information available in a fair and impartial manner to any 
member [who shall so inquire], and provided further that the 
specialist, when requested, shall disclose whether a bid or offer is in 
whole or in part for an account in which he has a direct or indirect 
interest[; and].
    [c](d) The specialist shall disclose information in regard to 
limited price orders entrusted to him as a specialist to the extent 
required by the Plan provided for in Rule 230. [In any such case, the 
specialist shall at the same time make the information so disclosed 
available to all members.] The provision of the Plan shall not be 
construed to require a specialist to disclose the name of a bidder or 
offeror whose order is contained in the specialist's book.

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

(1) Purpose
    Presently, Amex Rule 174 prohibits specialists from disclosing 
information regarding orders left with the specialist other than to a 
Floor Official or an authorized Amex official. This prohibition is 
subject to three exceptions: (1) a specialist may disclose information 
to requesting members or issuer representatives regarding names of 
buying and selling member organizations in completed or partially 
executed Amex transactions unless parties to the trade direct 
otherwise; (2) in response to a member's probe of the market, the 
specialist, in a fair and impartial manner, may provide information 
about buying and selling interest at or near the prevailing quotation, 
including the identity of bidders or offerors represented on the book, 
unless the entering broker directs otherwise; and (3) the specialist 
must disclose information regarding limited price orders held by the 
specialist to the extent required by the Intermarket Trading System 
Plan.
    The Exchange proposes to amend Amex Rule 174 to expand the 
information that the specialist, while acting in a market making 
capacity on the Floor, is permitted to disclose following a market 
probe by a member in the normal course of business. These amendments 
will promote market transparency by permitting additional disclosure of 
away-from-the-market information. Specifically, the amendment will 
strike the requirement that only information regarding orders ``at or 
near the prevailing quotation'' may be disclosed. Instead, the rule 
will permit any information concerning buying and selling interest of 
orders held by the specialist on the specialist's book to be disclosed 
following a member's market probe. In addition, the specialist will be 
permitted to disclose information regarding stop orders if the 
specialist reasonably believes that the requesting member intends to 
trade the security at a price at which stop orders would be relevant 
(for example, if stop orders would be triggered if a proposed trade 
occurred at a certain price).\3\ The proposed rule change would also 
permit disclosure of percentage orders in a manner similar to 
disclosure of any other orders (except stop orders).\4\
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    \3\ A stop order to buy (sell) becomes a market order when a 
transaction in the security occurs at or above (below) the stop 
price after the order is represented in the Trading Crowd. A stop 
limit order to buy (sell) becomes a limit order executable at the 
limit price or better when a transaction occurs at or above (below) 
the stop price after the order is represented. See Amex Rule 131(q) 
and (r) respectively
    \4\ A percentage order is a limited price order to buy or sell 
50% of the volume of a specified stock after its entry. A percentage 
order is ``elected'' and becomes capable of execution under 
circumstances set forth in Amex Rule 131.
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    The Exchange notes that the specialist is not required to provide 
any such information in response to a probe, either under the existing 
or the proposed rule. However, if the specialist determines to make 
such disclosure, the same information must be made available in a fair 
and impartial manner to any member while on the Floor.
(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5),\6\ in particular, in that it is 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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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.

[[Page 51158]]

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 self-regulatory organization 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, 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-
0609. 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 the 
Amex. All submissions should refer to File No. SR.-AMEX-99-29 and 
should be submitted by October 12, 1999.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 99-24499 Filed 9-20-99; 8:45 am]
BILLING CODE 8010-01-M