[Federal Register Volume 67, Number 89 (Wednesday, May 8, 2002)]
[Notices]
[Pages 30985-30986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11393]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45864; File No. SR-Amex-2002-33]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by American Stock Exchange LLC Relating to Proprietary Order 
Routing Facilities for Amex Listed Options

May 2, 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 16, 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 submitted 
Amendment No. 1 to the proposed rule change on April 30, 2002.\3\ 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 proposed Commentary .06 to 
Amex Rule 220. See letter from Geraldine M. Brindisi, Vice President 
and Corporate Secretary, Amex, to Nancy J. Sanow, Assistant 
Director, Division of Market Regulation, Commission, dated April 29, 
2002 (``Amendment No. 1'').
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance ofthe Proposed Rule Change

    Amex proposes to permit members to use, on an interim basis, 
facilities that are not owned or operated by the Exchange 
(``Proprietary Facilities'') to transmit orders electronically from the 
Amex floor to other exchanges and to receive orders transmitted 
electronically to the Amex floor from other exchanges for the purchase 
or sale of Amex listed options until the complete implementation of the 
permanent intermarket linkage in the options market (``Permanent 
Options Linkage'').\4\ Below is the text of the

[[Page 30986]]

proposed rule change. Proposed new language is italicized.
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    \4\ The Commission approved the Plan for the Purpose of Creating 
and Operating an Intermarket Options Linkage in July 2000. See 
Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 
48023 (August 4, 2000).
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Communications to and on the Floor

    Rule 220. (No change).
* * * Commentary
    .01 through .05 (No change).
    .06 Proprietary Facilities for Routing Options Orders. With the 
prior written approval of the Exchange, a member or member organization 
may establish and maintain facilities that are not owned or operated by 
the Exchange (``Proprietary Facilities'') to transmit orders 
electronically from the Amex Floor to other exchanges and to receive 
orders transmitted electronically to the Amex Floor from other 
exchanges for the purchase or sale of Amex listed options until the 
permanent Options Linkage is established. Such Proprietary Facilities 
may not be used for transmitting orders for listed equities and ETFs as 
the Intermarket Trading System serves as the mechanism for routing 
trading interest in these securities between exchanges.

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 Exchange believes that until a Permanent Options Linkage is 
implemented, Amex should permit member firms to establish Proprietary 
Facilities to route orders in Amex listed options to and from the 
Exchange. This could facilitate member firm compliance with best 
execution obligations. Once the Permanent Options Linkage is 
implemented, however, the Exchange believes that, for reasons of 
regulatory oversight, a single mechanism for routing orders between 
options exchanges is preferable to a number of different proprietary 
systems. Management, accordingly, is proposing to terminate the ability 
of members to use Proprietary Facilities to route orders in Amex listed 
options to and from the Exchange once the Options Linkage is 
implemented. The proposed Proprietary Facilities could not be used for 
listed equities and Exchange-Traded Funds as the Intermarket Trading 
System serves as the mechanism for routing trading interest in these 
securities between exchanges.
2. Statutory Basis
    Amex 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) of the Act,\6\ in particular, because it is designed to 
prevent fraudulent and manipulative acts and practices, promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and 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.
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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 believes that the proposed rule change will impose no 
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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which Amex consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal, 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 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-2002-33 and 
should be submitted by May 29, 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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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 02-11393 Filed 5-7-02; 8:45 am]
BILLING CODE 8010-01-P