[Federal Register Volume 66, Number 53 (Monday, March 19, 2001)]
[Notices]
[Pages 15513-15514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-6665]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44065; File No. SR-AMEX-01-11]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC to Increase the Maximum Permissible Number of Equity and Index 
Option Contracts in an Order Entered Through the Amex Order File System

March 12, 2001.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given that 
on February 28, 2001, 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 Amex. 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.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule

    Amex proposes to increase from 250 to 2500 the maximum permissible 
number of equity and index option contracts in an order that may be 
entered in the Amex Order File System. Although this limit does not 
appear in the Exchange's rules as such, Amex will notify members of the 
increase in this limit by issuing an information circular.\3\
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    \3\ Telephone conversation between Claire P. McGrath, Vice 
President and Special Counsel, Amex, and Michael Gaw, Attorney-
Adviser, Division of Market Regulation, Commission, on March 12, 
2001.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, 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. 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 Amex Order File (``AOF'') handles limit orders routed to 
specialists' order books and orders routed 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. In October 1999, Amex filed to expand from 100 to 
250 the number of option contracts that a member or member firm may 
enter directly into an Exchange specialist's order book (the Amex Order 
Display Book or ``AODB'') from off the Exchange's trading floor using 
AOF.\4\
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    \4\ See Securities Exchange Act Release No. 42128 (November 10, 
1999), 64 FR 63836 (November 22, 1999).
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    The Exchange now proposes to further increase from 250 to 2500 the 
maximum permissible number of option contracts in an order that can be 
entered through AOF directly into the AODB.\5\ By increasing the size 
of orders eligible for entry into the AOF, members and member firms 
will be able to send a larger percentage of orders directly to a 
specialist's order book for execution resulting in increased automated 
order handling. This increased automated order handling will benefit 
customers, as well as members and member firms, by expanding the option 
orders eligible for automated handling, further ensuring the orderly 
and timely delivery, processing, and execution of such orders.
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    \5\ Although this filing would give the Exchange authority to 
increase the limit to 2500 contracts, Amex may for business or 
operational reasons set the actual limit at less than 2500 
contracts. Telephone conversation between Claire P. McGrath, Vice 
President and Special Counsel, Amex, and Michael Gaw, Attorney-
Adviser, Division of Market Regulation, Commission, on March 12, 
2001.
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    Amex believes that, since its introduction, AOF/AODB has been 
successful in enhancing execution and operational efficiencies. Amex 
anticipates that the proposed increase to the AOF's parameters should 
further increase the enhanced execution and operational efficiencies 
realized since the introduction of the AOF.
2. Statutory Basis
    Amex states 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 that it is designed to prevent fraudulent and

[[Page 15514]]

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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    \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

    Amex 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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    Amex represents that the proposed rule change would effect a change 
in an existing order-entry or trading system that: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not have the effect of limiting the access to or 
availability of the system. Amex concludes, therefore, that the 
proposal has become effective pursuant to section 19(b)(3)(A) of the 
Act \8\ and Rule 19b-4(f)(5)\9\ 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 the furtherance of the 
purposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(5).
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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 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 
Exchange. All submissions should refer to File No. SR-Amex-01-11 and 
should be submitted by April 9, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-6665 Filed 3-16-01; 8:45 am]
BILLING CODE 8010-01-M