[Federal Register Volume 65, Number 15 (Monday, January 24, 2000)]
[Notices]
[Pages 3750-3751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1574]


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SECURITIES AND EXCHANGE COMMISSION

(Release No. 34-42342; File No. SR-Amex-99-21)


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange LLC Amending Section 106 of the 
Amex Company Guide

DATE:  January 14, 2000.
    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 June 10, 1999, the American Stock Exchange LLC (``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 Amex. The Exchange 
filed Amendments No. 1 \3\ and No. 2 \4\ to the proposed rule change on 
June 14, 1999 and December 1, 1999, respectively. The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Letter from Scott Van Hatten, Amex, to Richard Strasser, 
Assistant Director, Division of Market Regulation (``Division''), 
Commission, dated June 11, 1999 (``Amendment No. 1''). The Exchange 
originally filed the proposed rule change under Section 19(b)(3)(A) 
of the Act. Pursuant to Commission staff's request, the Exchange 
refiled the proposed rule change under Section 19(b)(2) of the Act.
    \4\ Letter from Scott Van Hatten, Amex, to Nancy Sanow, 
Assistant Director, Division, Commission, dated December 1, 1999 
(``Amendment No. 2''). Amendment No. 2 states that the exchange will 
issue a circular prior to trading any new index warrant pursuant to 
Rule 19b-4(e) to (i) highlight specific risks associated with 
warrants on new indexes and remind members that index warrants are 
direct obligations of the issuer, which are not subject to a 
clearing house guarantee, (ii) clarify that index warrants may only 
be sold to accounts approved for standardized options trading, and 
(iii) clarify that the Exchange's options suitability standards 
apply to index warrants. Amendment No. 2 also states that Amex Rules 
1100 through 1110, which govern issuer eligibility, margin 
requirements, discretionary accounts, supervision of accounts, 
position and exercise limits, reportable positions, and trading 
halts and suspensions, will apply to index warrants. Finally, 
Amendment No. 2 states that the Exchange's enhanced surveillance 
procedures will continue to apply to surveillance of index warrants 
traded pursuant to Rule 19b-4(e).
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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 Section 106 of the Amex Company 
Guide to provide for the trading of narrow-based stock index warrants 
pursuant to new Rule 19b-4(e) \5\ under the Act.
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    \5\ See Securities Exchange Act Release No. 40761 (Dec. 8, 
1998), 63 FR 70952 (Dec. 22, 1998).
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II. Self-Regulatory Organization's Statement of the Propose 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 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 Exchange proposes to amend Section 106 of the Amex Company 
Guide to provide for the trading of stock index industry group warrants 
\6\ pursuant to new Rule 19b-4(e) under the Act. Section 106 of the 
Amex Company Guide currently authorizes the Exchange to trade warrants 
on a stock index industry group pursuant to Section 19(b)(3)(A) of the 
Act provided that the index meets the generic criteria set forth in 
Commentary .02 to Amex Rule 901C.\7\ As discussed in the Commission 
release adopting new Rule 19b-4(e), however, the Exchange would no 
longer be required to submit, pursuant to new Rule 19b-4(e) under the 
Act, a proposed rule change to trade warrants on a new stock index 
industry group provided the index meets the generic criteria set forth 
in Commentary .02 to Amex Rule 901C.
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    \6\ Amex Rule 900C defines ``Stock Index Industry Group'' as a 
stock index group relating to a stock index which reflects 
representative stock market values or prices of a particular 
industry or related industries (also referred to as a ``narrow based 
index'').
    \7\ The Commission granted approval to list and trade narrow-
based index warrants pursuant to Section 19(b)(3)(A) in Securities 
Exchange Act Release No. 37007 (March 21, 1996), 61 FR 14165 (March 
29, 1996).
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    In its release adopting new Rule 19b-4(e), the Commission noted 
that in order to rely on the amendment and not submit filings pursuant 
to Section 19(b)(3)(A) for warrants that satisfy the criteria of Rule 
901C, a self-regulatory organization would be required to submit a 
proposed rule change for Commission approval to eliminate the Section 
19(b)(3)(A) rule filing

[[Page 3751]]

requirement from its existing rules.\8\ Accordingly, to enable the 
Exchange to use new Rule 19b-4(e), the Exchange proposes to eliminate 
the Section 19(b)(3)(A) rule filing requirement from Section 106 of the 
Amex Company Guide.\9\ Amex Rule 901C will remain unchanged. The 
Exchange represents that the use of new rule 19b-4(e) will be in 
accordance with the terms and conditions set forth in the order 
approving the Rule.
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    \8\ See supra n. 5, at n. 89.
    \9\ The Commission approved a similar change to Amex Rule 901C 
to permit the trading of narrow-based index options pursuant to new 
Rule 19-4(e). See Securities Exchange Act Release No. 41091 (Feb. 
23, 1999), 64 FR 10515 (March 4, 1999).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\10\ in general and furthers the objectives of Section 6(b)(5) \11\ in 
particular in that 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.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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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 did not solicit or receive any written comments with 
respect to the proposed rule change.

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 Exchange 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 the filing will also be 
available for inspection and copying at the principal office of the 
Amex. All submissions should refer to the File No. SR-Amex-99-21 and 
should be submitted by February 14, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 00-1574 Filed 1-21-00; 8:45 am]
BILLING CODE 8010-01-M