[Federal Register Volume 67, Number 80 (Thursday, April 25, 2002)]
[Notices]
[Pages 20559-20561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10153]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45782; File No. SR-Amex-2002-34]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to the Exchange's Booth Automated Routing System (BARS)

April 18, 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 17, 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 Amex. Amex has 
designed the proposed rule change as ``non-controversial'' under Rule 
19b-4(f)(6),\3\ thus rendering it immediately effective. 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).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Amex is filing enhancements to its order routing technology known 
as BARS (Booth Automated Routing System). There is no proposed rule 
text as such.

[[Page 20560]]

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
    BARS is an order routing system with no order execution 
capabilities. Amex understands BARS to be functionally similar to the 
Broker Booth Support System (``BBSS'') of the New York Stock Exchange 
(``NYSE'') and the Order Routing System (``ORS'') of the Chicago Board 
Option Exchange. BARS allows brokers to manage and route orders for 
Amex-traded securities. There is also a market look function that 
allows floor brokers to provide booth clerks with information regarding 
the state of the market for a particular security.
    Since it is an integrated part of the Exchange's order routing and 
processing systems, BARS accepts only orders that these systems can 
process (i.e., CMS-eligible orders).\4\ Currently, multi-legged option 
orders (e.g., spreads) and certain contingency orders \5\ are not CMS-
eligible. The maximum size for a BARS order is 99,900 shares for a 
stock and 30,000 contracts for an option. These are system limitations.
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    \4\ The Common Message Switch (``CMS'') is the means by which 
member firms may send electronic orders to both Amex and the NYSE.
    \5\ CMS currently accommodates market on close, market or 
better, stop, stop limit, all or none, fill or kill, immediate or 
cancel, and opening options orders. CMS accommodates the same 
contingencies for equity orders with the addition of market with or 
without and close orders.
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    Orders can be received electronically into BARS from CMS. Brokers 
can program different algorithms for each Amex security into BARS to 
determine which orders are routed to the specialist for execution or 
``booking,'' and which orders are routed to the broker's booth on the 
Amex floor. These algorithms can be changed dynamically and can be a 
combination of order size, order type, and security. Booth clerks also 
can enter orders into BARS that are telephoned to the floor (i.e., 
orders that are not systematized when they arrive on the Exchange). 
BARS users can determine whether to route an order to the specialist, 
to a broker on the floor via a BARS handheld terminal (``HHT''), or 
print the order for manual handling. BARS HHT uses the Exchange's 
wireless data network to maintain communications between the HHT and 
the booth. Orders that are printed remain in BARS and, thus, a complete 
record of these orders is maintained. BARS automatically routes 
requests to cancel or modify orders to the appropriate user for his or 
her action.
    As noted above, a BARS user can route orders to a particular BARS 
HHT. The BARS HHT provides a broker with the order management and trade 
reporting \6\ functions required by brokers. All information regarding 
trades entered either through the BARS booth terminal or a broker HHT 
is automatically sent to the Exchange's trade processing facilities. 
Floor brokers also can use BARS HHT to route orders to other brokers or 
back to the booth.
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    \6\ ``Reporting'' in this sense does not refer to disseminating 
last sale information through the Consolidated Trade System. Rather, 
it refers to advising the persons who are handling an order of its 
execution and submitting the trade to comparison.
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    Since BARS provides an electronic order management system, it 
allows brokers to have a complete electronic record in a single 
location of orders handled by the firm. Amex believes that BARS thereby 
facilitates audit trail and billing functions.
    As of April 1, 2002, all Amex floor brokers have BARS terminals in 
their booths. With this initial implementation complete, BARS HHTs are 
being rolled out firm by firm. Currently, there are approximately 50 
floor brokers representing 12 firms with assigned BARS HHTs. This is 
approximately 40 percent of the total number of BARS HHTs that 
ultimately will be assigned.
2. Statutory Basis
    Amex believes that the proposed rule change is consistent with 
Section 6(b) of the Act \7\ in general and furthers the objectives of 
Section 6(b)(5) \8\ 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. Amex also 
believes that the proposed rule change is not designed to permit unfair 
discrimination between customers, issuers, brokers, and dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex has stated that BARS would impose no 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

    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 has stated that, because the proposed rule change does not (1) 
significantly affect the protection of investors or the public 
interest; (2) impose any significant burden on competition; and (3) 
become operative for 30 days from the date on which it was filed (or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest), it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    Amex has requested that the Commission waive the 30-day pre-
operative period under Rule 19b-4(f)(6)(iii). The Commission finds that 
waiving the pre-operative period is consistent with the protection of 
investors and the public interest.\11\ Rule 19b-4(f)(6) also requires 
the self-regulatory organization to provide the Commission written 
notice of its intent to file the proposed rule change at least five 
business days before doing so (or such shorter time as designated by 
the Commission). Amex also has requested that the Commission waive the 
five-day pre-filing requirement. The Commission hereby grants this 
request.
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    \11\ 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. See 15 
U.S.C. 78c(f).
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    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.

[[Page 20561]]

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-2002-34 and 
should be submitted by May 16, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Margaret H. McFarland,
Deputy Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 02-10153 Filed 4-24-02; 8:45 am]
BILLING CODE 8010-01-P