[Federal Register Volume 67, Number 117 (Tuesday, June 18, 2002)]
[Notices]
[Pages 41550-41551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15255]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46064; File No. SR-Amex-2002-49]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC To Allow the Amex's Chief Executive Officer To Halt, Extend or 
Suspend Trading in the Event of an Emergency or an Extraordinary Market 
Condition

June 12, 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 May 31, 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. On June 
6, 2002, the Amex amended the proposal.\3\ The Exchange filed the 
proposal pursuant to Section 19(b)(3)(A) of the Act,\4\ and Rule 19b-
4(f)(6) thereunder,\5\ which renders the proposal effective upon filing 
with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See undated letter from Claire P. McGrath, Senior Vice 
President and Deputy General Counsel, Amex, to Alton Harvey, 
Division of Market Regulation, Commission (``Amendment No. 1''). In 
Amendment No. 1, the Amex asked the Commission to consider the 
proposed rule change pursuant to Section 19(b)(3)(A) of the Act and 
Rule 19b-4(f)(6) thereunder. 15 U.S.C. 78s(b)(3)(A), 17 CFR 240.19b-
4(f)(6). The Amex asked the Commission to waive the 5-day pre-filing 
notice requirement and the 30-day operative delay.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes to amend Amex Rule 1, ``Hours of Business,'' to 
afford the Chief Executive Officer (``CEO'') of the Exchange, or his 
designee, in consultation with the Vice Chairman or Senior Supervisory 
Officer on the floor of the Exchange, greater guidance, specificity and 
flexibility with regard to halting, extending or suspending trading, or 
by closing some or all Exchange facilities, in the event of an 
emergency or an extraordinary market condition to meet the kinds of 
challenges that the Exchange may face in the future. The proposed 
amendment is consistent with Article XII of the Exchange Constitution 
(``Constitution'') and merely provides specific guidance to the CEO and 
others concerning the types of emergencies and special circumstances 
envisioned in the authority delegated to him by the Board of Governors 
(``Board'') pursuant to Article XII of the Constitution. The text of 
the proposed rule change is below. Proposed additions are in italics.
Hours of Business
    Rule 1. Except as otherwise determined by the Board of Governors, 
the Exchange shall be open for the transaction of business on every 
business day, Monday through Friday. At 9:00 a.m., official 
announcement shall be made that the Exchange is open for trading in 
options on debt securities. At 9:30 a.m., official announcement shall 
be made that the Exchange is open for all other business purposes. The 
Exchange shall remain open until closed by official announcement at 
4:00 p.m.; provided however, that option transactions in debt options 
may be effected on the Exchange only until 3:00 p.m. and all other 
option transactions may be effected on the Exchange until 4:02 p.m. 
each business day at which times no further debt or other options 
transactions may be made.
    ``After-Hours Trading'' (as defined in Rule 1300(e)(iii)) shall be 
conducted during such hours as the Exchange may from time to time 
specify.
    Except as may be otherwise determined by the Board of Governors, 
the Chief Executive Officer of the Exchange, or his designee, shall 
have the power to halt, extend or suspend trading in some or all 
securities traded on the Exchange, to close some or all Exchange 
facilities, and to determine the duration of any such halt, extension, 
suspension or closing, when he deems such action to be necessary or 
appropriate for the maintenance of a fair and orderly market or the 
protection of investors, or otherwise in the public interest, due to 
extraordinary circumstances, such as (1) actual or threatened physical 
danger, severe climatic conditions, civil unrest, terrorism, acts of 
war, or loss or interruption of facilities utilized by the Exchange; 
(2) a request by a governmental agency or official; or (3) a period of 
mourning or recognition for a person or event. In considering such 
action, the Chief Executive Officer of the Exchange, or his designee, 
shall consult with the Vice Chairman or Senior Supervising Officer on 
Floor, if available, and such available Floor Governors as he deems 
appropriate under the circumstances. The Chief Executive Officer of the 
Exchange, or his designee, shall notify the Board of Governors of 
actions taken pursuant to this Rule, except for a period of mourning or 
recognition for a person or event, as soon thereafter as is feasible.
Commentary--No change.
* * * * *

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 its proposal and discussed any 
comments it received regarding the proposal. 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 proposes to amend Rule 1, ``Hours of Business,'' to 
afford the CEO, or his designee, greater flexibility with regard to 
suspension of

[[Page 41551]]

trading in the event of an emergency or extraordinary market condition 
to meet the kinds of challenges that the Exchange may face in the 
future.
    Currently, Article XII of the Constitution authorizes the Board, or 
a person or persons designated by the Board, to take any action 
regarding the trading of any or all securities on the Exchange and the 
operation of any Exchange trading system or facility, if such action is 
deemed necessary or appropriate for the protection of investors, the 
public interest or the orderly operation of the Exchange or any 
Exchange system or facility. The Board has delegated these emergency 
powers to the CEO or his designee.
    The proposed amendment to Rule 1 is consistent with Article XII of 
the Constitution and merely provides greater guidance, specificity and 
flexibility to the CEO or his designee during an emergency or 
extraordinary market condition.
    The proposal calls for the CEO or his designee, in consultation 
with the Vice Chairman or Senior Supervisory Officer on the floor of 
the Exchange, and such available Floor Governors as he deems 
appropriate under the circumstances, to be authorized to respond to 
extraordinary circumstances, as described below, by halting, extending 
or suspending trading in some or all securities traded on the Exchange 
or by closing some or all Exchange facilities, and to determine the 
duration of any such halt, extension, suspension or closing. The CEO, 
or his designee, will be required to notify the Board of actions taken, 
other than for a period of mourning or recognition for a person or 
event, as soon thereafter as is feasible.
    Under the proposed rule change, action would be taken only as a 
result of extraordinary circumstances and only as the CEO, or his 
designee, deems it necessary or appropriate for the maintenance of a 
fair and orderly market and the protection of investors or otherwise in 
the public interest. Examples of possible extraordinary circumstances 
include, but are not limited to (i) actual or threatened physical 
danger, severe climatic conditions, civil unrest, terrorism, acts of 
war, or loss or interruption of facilities utilized by the Exchange; 
(ii) a request by a governmental agency or official; and (iii) a period 
of mourning or recognition of a person or event.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \6\ in general, and furthers the objectives of Section 
6(b)(5) \7\ in particular in that it is designed to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, to protect investors and the public interest. The 
proposed rule change is designed to strengthen the Exchange's ability 
to respond appropriately and in a timely fashion to future 
extraordinary circumstances.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \8\ and 
Rule 19b-4(f)(6) thereunder.\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    The Amex has requested that the Commission waive the 5-day pre-
filing notice requirement and the 30-day operative delay. The 
Commission believes waiving the 5-day pre-filing notice requirement and 
the 30-day operative delay is consistent with the protection of 
investors and the public interest. Acceleration of the operative date 
will allow the CEO or his designee to respond appropriately and in a 
timely fashion to an emergency or extraordinary market conditions as of 
the date the Amex filed the proposed rule change. The Commission notes 
that a similar proposed rule change by the New York Stock Exchange, 
Inc. (``NYSE'') was published for notice and comment, and received no 
comment letters.\10\ Because the Amex's proposed rule change provides 
authority to the CEO similar to that in the NYSE's proposed rule 
change, the Commission designates the proposal to be effective and 
operative upon filing with the Commission.\11\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 45249 (January 7, 
2002), 67 FR 1529 (January 11, 2002)(SR-NYSE-2001-55).
    \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. 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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 number SR-Amex-2002-49 and should be 
submitted by July 9, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-15255 Filed 6-17-02; 8:45 am]
BILLING CODE 8010-01-P