[Federal Register Volume 66, Number 195 (Tuesday, October 9, 2001)]
[Notices]
[Pages 51482-51483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25128]



[[Page 51482]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44890; File No. SR-Amex-2001-82]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change, Amendment No. 1, and Amendment 
No. 2 Thereto by the American Stock Exchange LLC Relating to the 
Temporary Amendment of Exchange Rule 220

October 1, 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 October 1, 2001, the American Stock Exchange LLC (``Exchange'' 
or ``Amex'') 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. On 
October 1, 2001, the Amex file Amendment No. 1 to the proposed rule 
change.\3\ On October 1, 2001, the Amex filed Amendment No. 2 to the 
proposed rule change.\4\ The proposed rule change, as amended, has been 
filed by the Amex as a ``non-controversial'' rule change under Rule 
19b-4(f)(6) \5\ under the Act. 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\ In Amendment No. 1, the Exchange completely replaced the 
original proposed rule change it filed with the Commission.
    \4\ In Amendment No. 2, the Exchange clarified the procedures 
under Rule 220T when a Floor broker receives incoming calls on his 
or her cellular telephone and the caller wishes to give an order, as 
opposed to when a Floor broker initiates an outgoing call on his or 
her cellular telephone. See infra note 5.
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Amex proposes to amend Exchange Rule 220 on a ten business-day 
pilot basis to permit members to use personal cellular telephones on a 
temporary basis so long as service is limited on Exchange provided 
telephones as a result of damage sustained to the Exchange due to the 
attacks on the World Trade Center on September 11, 2001.
    The text of the proposed rule change, as amended, is available at 
the Office of the Secretary, 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, as 
amended, 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's telecommunications facilities, along with those of 
virtually every business enterprise in the western half of downtown New 
York, sustained serious damage as the result of the attacks on the 
World Trade Center on September 11, 2001. Amex staff is working 
diligently with their primary telecommunications services providers and 
their members firms to restore these facilities to full operational 
status on Monday, October 1, 2001, when the Amex anticipates that 
trading will resume on the Exchange's Trading Floor at 86 Trinity 
Place. It is likely, however, that the repairs will not be fully 
completed, and full telephone communication for all of our Floor 
members will not be restored, by the open on October 1. The Exchange, 
accordingly, is seeking to suspend on a ten-business-day, pilot-program 
basis the current prohibition in Amex Rule 220 on the use by members 
(i.e., specialists, registered traders, and Floor brokers) of personal 
cellular telephones in the event that service is limited on the 
Exchange's telephone system when trading resumes on the Amex. The use 
by members of personal cellular telephones would be subject to the 
following conditions:
     A member must have (1) tested his or her Exchange provided 
telephones and found significant limitations on service, and (2) 
furnished a written statement to the Exchange to that effect;
     A member may not use a personal cellular telephone once 
full service is restored to the member's or member organization's 
Exchange telephone systems;
     A member must maintain his or her cellular telephone 
records, including logs of calls placed, for a period of not less than 
one year. The Exchange reserves the right to inspect and/or examine 
such telephone records;
     A Floor broker may only receive orders at the trading post 
during outgoing calls initiated by the broker; \6\ and
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    \6\ See supra note 4. If a broker were to receive an incoming 
call on his or her cellular telephone, and the caller wished to give 
the broker an order for a security traded at the post where the 
broker was standing, the broker would have to step-out of the crowd 
prior to accepting the order. In contrast, if a broker were to 
receive an incoming call on his or her cellular telephone, and the 
caller wished to give the broker an order for a security traded at 
some other location on the Floor, the broker would not be required 
to leave the crowd where he or she was standing in order to receive 
the order. The proposed rule also would permit a broker to initiate 
an outgoing call on a cellular telephone and (1) accept an order for 
a security traded at the post where he or she was standing without 
leaving the trading crowd, or (2) accept an order for a security 
traded at some other location on the Floor.
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     Except as provided in Rule 220T, all other requirements 
applicable to the use of Exchange provided telephones by members shall 
apply to the use by members of personal cellular telephones.\7\
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    \7\ The rules of the Exchange continue to prohibit individuals 
who are not properly qualified to take public orders for securities 
(i.e., non-Series 7 member or member firm employees) from 
interacting with the public. Surveillance of such telephone usage 
will be accomplished through the record-maintenance requirements of 
Rule 220T, which requires members to maintain cellular telephone 
records for at least one year and give the Exchange the authority to 
inspect such records. Telephone Conversation between William Floyd-
Jones, Assistant General Counsel, and Florence Harmon, Senior 
Special Counsel, Division of Market Regulation, Commission (October 
1, 2001).
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2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act \8\ in general, and furthers 
the objectives of Section 6(b)(5) \9\ 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, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. The Exchange also believes 
that the proposed rule change, as amended, is not designed to permit 
unfair discrimination between customers, issuers, brokers, and dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Amex does not believe that the proposed rule change, as 
amended, will impose any inappropriate burden on competition.

[[Page 51483]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change, as amended: (1) Does 
not significantly affect the production of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative for 30 days after the date of filing, 
or such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest; provided that the 
self-regulatory organization has given the Commission written notice of 
its intent to file the proposed rule change, along with a brief 
description and text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed rule change, 
or such shorter time as designated by the Commission, the proposed rule 
change, as amended, has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) \11\ thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally 
requires that the self-regulatory organization give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change; however, Rule 19b-4(f)(6)(iii) permits the Commission to 
designate a shorter time period. The Amex seeks to have the Commission 
waive the five-day notice. The Commission finds good cause to waive the 
five-day notice because the Exchange's staff discussed with Commission 
staff the possibility of permitting members to use personal cellular on 
a temporary basis prior to filing this proposed rule change.
    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Amex seeks to have the proposed 
rule change, as amended, become operative immediately. The Commission 
notes that the proposed rule change, as amended, is a direct result of 
exigencies created by the September 11, 2001 attacks on the World Trade 
Center; as such, the Commission, consistent with the protection of 
investors and the public interest, has determined to make the proposed 
rule change, as amended, operative as of October 1, 2001.\12\
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    \12\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, as amended, 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.\13\
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    \13\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78(b)(3)(C).
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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, as amended, 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, as amended, 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-2001-82 and should 
be submitted by October 30, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-25128 Filed 10-5-01; 8:45 am]
BILLING CODE 8010-01-M