[Federal Register Volume 67, Number 31 (Thursday, February 14, 2002)]
[Notices]
[Pages 6956-6958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-3570]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45417; File No. SR-Amex-00-47]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to Amendment of Exchange Rule 933

February 7, 2002.
    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 August 17, 2000, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange

[[Page 6957]]

Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. 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 Change

    The Amex proposes to amend Exchange Rule 933 to add new Commentary 
.01. Below is the text of the proposed rule change. Proposed new 
language is italicized.
    .01 If a member or member organization grants a non-member 
electronic access to the Exchange's order routing or executions systems 
through the member's or member organization's order routing systems, 
and if the non-member uses that access to violate Exchange rules or 
other applicable regulations, including, but not limited to, the 
Exchange's ``unbundling'' prohibition, the member or member 
organization is in violation of Exchange rules if it has either 
knowingly facilitated the violation or has failed to establish 
procedures reasonably designed to prevent access to the member or 
member organization's order routing systems from being used to effect 
such violation.

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 represents that it established the Auto-Ex system to 
provide small customer orders with an immediate single price execution. 
In 1996, the Exchange adopted Rule 933 to prohibit the ``unbundling'' 
(i.e., the splitting or dividing-up) of customer option orders to make 
them fit within the size parameters of the Exchange's Auto-Ex 
system.\3\
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    \3\ See Securities Exchange Act Release No. 37429 (July 12, 
1996), 61 FR 37782 (July 19, 1996) (SR-Amex-96-26).
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    The new Commentary would make explicit the existing implicit 
obligations of members and member organizations under Rule 933. Thus, 
members and member organizations that provide their customers with 
electronic access to the Exchange's order routing and execution systems 
would be explicitly required to take reasonable steps to ensure that 
their customers do not unbundle their orders to satisfy Auto-Ex 
eligibility criteria and to otherwise comply with the Exchange's rules 
and other applicable regulations. The new Commentary would further 
provide that members and member organizations may not knowingly 
facilitate a violation of the Exchange rules (including the unbundling 
rule) and other applicable regulations by non-members that have 
electronic access to the Trading Floor through the member 
organization's order routing systems. The Exchange represents that the 
Chicago Board Options Exchange (``CBOE'') has already adopted a similar 
rule,\4\ and the Exchange believes that the proposed clarification of 
Rule 933 will assist members and member organizations in understanding 
their compliance responsibilities.
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    \4\ See Securities Exchange Act Release No. 38974 (August 26, 
1997), 62 FR 46528 (September 3, 1997) (SR-CBOE-97-32). See also 
CBOE Regulatory Bulletin 00-27, ``Access to Retail Automatic 
Execution Systems (`RAES'),'' (January 27, 2000).
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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 prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, 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; 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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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 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

    Because the foregoing rule change constitutes a stated policy, 
practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule of the Exchange, it 
has become effective pursuant to section 19(b)(3)(A)(i) of the Act \7\ 
and subparagraph (f)(1) of Rule 19b-4 thereunder.\8\ Although 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,\9\ the Commission notes that the abrogation 
period for this proposed rule change has expired. The Commission also 
notes that concurrently with this notice, it is publishing an order 
granting accelerated approval to a proposed rule change by the Amex 
that, among other things, deletes the Commentary that is proposed 
herein.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(i).
    \8\ 17 CFR 240.19b-4(f)(1).
    \9\ 15 U.S.C. 78s(b)(3)(C).
    \10\ See Securities Exchange Act Release No. 45418 (February 7, 
2002) (SR-Amex-2001-96).
    \11\ 17 CFR 200.30-3(a)(12).
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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

[[Page 6958]]

available for inspection and copying at the principal office of the 
Exchange.
    All submissions should refer to the File No. SR-Amex-00-47 and 
should be submitted by March 7, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-3570 Filed 2-13-02; 8:45 am]
BILLING CODE 8010-01-P