[Federal Register Volume 67, Number 73 (Tuesday, April 16, 2002)]
[Notices]
[Pages 18660-18661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9191]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45719; File No. SR-Amex-2002-28]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to the Implementation of a Start-Up Fee for Specialist 
Participants in the Exchange's Program To Trade Nasdaq Securities on an 
Unlisted Basis

April 9, 2002.
    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 April 3, 2002, 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 
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 Exchange proposes to charge a one-time start-up fee to 
specialist participants in the Exchange's program to trade Nasdaq 
securities on an unlisted basis. 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 Exchange 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 Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant parts 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 is implementing a program to trade Nasdaq securities 
on an unlisted basis, which, according to the Exchange, involves 
significant technology enhancements, Trading Floor renovations, 
marketing expenses and other start-up costs. To defray the Exchange's 
costs of establishing the Nasdaq Unlisted Trading Privileges (``UTP'') 
program, the Exchange proposes to assess a start-up fee on the 
specialist firms participating in the program.
    The Exchange plans to list approximately 100 Nasdaq securities, and 
it anticipates that these securities will be equally allocated among 
five participating specialist firms so that each firm has a critical 
mass of securities (approximately 20 apiece) to dedicate sufficient 
resources to the program to make it a success. The Exchange, 
consequently, would divide the approximately $5 million cost of the 
program equally among the participating specialists.
    In the event that there are fewer than five specialist firms in the 
UTP program, the Exchange still would admit approximately 100 
securities to dealings and would allocate more than 20 stocks to one or 
more specialists. The Exchange, in this circumstance, would raise the 
$5 million needed to fund the program by dividing the cost of the 
program among the participating specialist firms in proportion to the 
number of securities that they are allocated, provided, however, that 
the start-up fee would be at least $1 million per specialist firm.
    In the event that there are six qualified specialists that 
participate in the program or if the Exchange so decides, the Exchange 
would admit approximately 120 Nasdaq securities to dealings. The cost 
of the program would increase to approximately $6 million as a result 
of this expansion to include more securities. If the Exchange expands 
the program to approximately 120 securities, the Exchange anticipates 
that these securities would be allocated so that each specialist firm 
has at least the critical mass of securities to dedicate sufficient 
resources to make the program a success (approximately 20 securities 
apiece). In addition, it is possible that one or more firms might be 
allocated more than 20 securities if the Exchange determines to admit 
approximately 120 securities to dealings. The Exchange would divide the 
$6 million cost of the expanded program among the participating 
specialists in proportion to the number of securities that they are 
allocated, provided, however, that the start-up fee would be at least 
$1 million per specialist firm.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \3\ in general, and furthers the 
objectives of section 6(b)(4) \4\ in particular, because it is designed 
to provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members, issuers and other persons using its 
facilities.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
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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

[[Page 18661]]

any burden on competition not necessary or appropriate in furtherance 
of the purposes of the Act.

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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    The proposed rule change has become effective pursuant to section 
19(b)(3)(A)(ii) of the Act \5\ and subparagraph (f)(2) of Rule 19b-4 
thereunder \6\ because it establishes or changes a due, fee, or other 
charge imposed by the Exchange. At any time within 60 days of the 
filing of such 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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    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \6\ 17 CFR 240.19b-4(f)(2).
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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 Section. 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-2002-28 and 
should be submitted by May 7, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority. \7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-9191 Filed 4-15-02; 8:45 am]
BILLING CODE 8010-01-P