[Federal Register Volume 65, Number 179 (Thursday, September 14, 2000)]
[Notices]
[Pages 55653-55655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23565]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43252; File No. SR-AMEX-00-50]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to Its Policy Prohibiting Harassment, Intimidation, 
``Refusals To Deal'' and Retaliation

September 6, 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 September 5, 2000, 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 Exchange. The 
proposed rule change has been filed by the Amex as a ``non-
controversial'' rule change under Rule 19b-4(f)(6) of the Act.\3\ The 
Commission is publishing this notice to solicit 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.
    \3\ 17 CFR 240.19b-4(f)(6). At the Exchange's request, the 
original filing, received by the Commission on August 24, 2000, will 
be treated as the pre-filing required under this paragraph of the 
rules. Telephone conversation between Claire McGrath, Vice President 
and Special Counsel, Derivative Securities, Amex, and Deborah Flynn, 
Senior Special Counsel, Division of Market Regulation, Commission, 
on September 6, 2000.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to codify in Commentary to Amex Rule 16, its 
long standing policy prohibiting harassment,

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intimidation, ``refusals to deal'' and retaliation.
    The text of the proposed rule change is available at the AMEX and 
at 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 Amex 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 has long interpreted Article V, Section 4 of the Amex 
Constitution and Rule 16 to prohibit harassment, intimidation, 
``refusals to deal'' and retaliation by and against members and their 
employees. Rule 16 and Article V, Section 4 of the Amex Constitution 
require members to observe the principles of good business practices 
and just and equitable principles of trade. Pursuant to this 
interpretation, the Exchange issued a Floor Member Circular on August 
24, 1998 regarding the appropriate interaction of specialists, 
registered options traders and floor brokers on the trading floor.\4\ 
The Circular concluded ``* * * any attempts to harass, intimidate or 
unduly influence members of a trading crowd by any Exchange member will 
not be tolerated and will be referred to the Exchange's Enforcement 
Division for appropriate disciplinary action.'' The Exchange has 
brought disciplinary actions against members pursuant to this Circular. 
However, although such conduct is already prohibited and the Exchange 
will continue to bring disciplinary actions against members pursuant to 
the Circular, the Exchange has determined to codify this interpretation 
in Commentary .01 to Amex Rule 16 in order to emphasize the importance 
placed by the Exchange on the enforcement of the prohibition.
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    \4\ See Floor Member Circular #98-760.
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    The interpretation codified in new Commentary .01 to Amex Rule 16 
states that it is conduct inconsistent with just and equitable 
principles of trade for any member or employee of a member to engage, 
directly, or indirectly, in any conduct that threatens, harasses, 
intimidates, constitutes a ``refusal to deal'' or retaliates against 
any member or employee of a member because: (i) Such member or employee 
has made a proposal to any exchange or other market to list or trade 
any option class; (ii) of such member's or employee's advocacy of or 
proposals concerning the listing or trading of an option class on any 
exchange or other market; (iii) such member or employee has commenced 
making a market in or trading any option class on any exchange or other 
market; (iv) such member or employee seeks to increase the capacity of 
any options exchange or the options industry to disseminate quote or 
trade data; (v) such member or employee seeks to introduce new option 
products; or (vi) such member or employee acts, or seeks to act, 
competitively.
    The Exchange believes the prohibited conduct discussed in this new 
interpretation is fundamentally inconsistent with the obligations of 
members to their customers and is inimical to the public interest in 
fair and efficient options markets.\5\
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    \5\ According to the Amex, it has also been Exchange policy that 
its employees, Governors, committee members, agents and other 
officials are also prohibited from harassing, intimidating, refusing 
to deal and retaliating against members or other market 
participants. Since the proposed Commentary to Amex Rule 16 will 
apply only to those persons and organizations under Exchange 
jurisdiction (i.e. members and their employees), the Exchange has 
revised its employee Code of Conduct and Statements of Fiduciary 
Responsibilities for Governors and Committee Members to include the 
same interpretation.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(5) \7\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices and to 
promote just and equitable principles of trade.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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

    Written comments were neither solicited nor received.

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

    The proposed rule change has been filed by the Exchange as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) of the Act 
\8\ and Rule 19b-4(f)(6) thereunder. \9\ Because the foregoing proposed 
rule change: (1) Does not significantly affect the protection of 
investors or the public interest, (2) does not impose any significant 
burden on competition, and (3) by its terms does not become operative 
for 30 days after the date of this filing, or such shorter time as the 
Commission may designate,\10\ it has become effective pursuant to 
Section 19(b)(3)(A) \11\ of the Act and Rule 19b-4(f)(6) \12\ 
thereunder. 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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    \8\ 15 U.S.C. 78f(b)(3)(A).
    \9\ 17 CFR 240.19b-4(F)(6).
    \10\ The Commission hereby waives the requirement that the 
proposed rule change not become operative for 30 days and the rule 
is, therefore, immediately effective and operative. For purposes 
only of accelerating the operative date of this proposal, the 
Commission has considered has considered the proposed rule's impact 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ CFR 240.19b-4(f)(6).
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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, NW., Washington, DC 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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All

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submissions should refer to the File No. SR-AMEX-00-50 and should be 
submitted by October 5, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-23565 Filed 9-13-00; 8:45 am]
BILLING CODE 8010-01-M