[Federal Register Volume 67, Number 166 (Tuesday, August 27, 2002)]
[Notices]
[Pages 55048-55050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21772]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46384; File No. SR-Amex-2002-64]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 by the 
American Stock Exchange LLC to Suspend Transaction Charges for Certain 
Exchange Traded Funds

August 20, 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 July 26, 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 Amex 
amended the proposed rule change on August 14, 2002.\3\ On August 15, 
2002, the Amex again amended the proposed rule change.\4\ The Exchange 
filed the proposal pursuant to Section 19(b)(3)(A) of the Act,\5\ and 
Rule 19b-4(f)(6)

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thereunder,\6\ which renders the proposal effective upon filing with 
the Commission.\7\ 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\ See August 12, 2002 letter from Geraldine Brindisi, Vice 
President and Corporate Secretary, Amex, to Nancy Sanow, Assistant 
Director, Division of Market Regulation (``Division''), Commission, 
and attachments (``Amendment No. 1''). Amendment No. 1 completely 
replaced and superseded the original filing.
    \4\ See August 14, 2002 letter from Geraldine Brindisi, Vice 
President and Corporate Secretary, Amex, to Nancy Sanow, Assistant 
Director, Division, Commission, and attachments (``Amendment No. 
2''). In Amendment No. 2, the Amex added the text of the Regulatory 
Fee to the Equity Fee Schedule. The text was inadvertently omitted 
from Amendment No. 1. For purposes of calculating the 60-day 
abrogation period, the Commission considers the period to have 
commenced on August 15, 2002, the date the Amex filed Amendment No. 
2.
    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6).
    \7\ Rule 19b-4(f)(6) under the Act requires the Amex to provide 
the Commission with five business days notice of its intention to 
file a non-controversial proposed rule change. The Amex did not 
provide such notice, but the Commission has decided to waive the 
notice requirement. The Amex asked the Commission to waive the 30-
day operative delay. See Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-
4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to suspend Exchange transaction charges for 
the Lehman 1-3 year Treasury Bond Fund; iShares Lehman 7-10 year 
Treasury Bond Fund; Lehman 20+ year Treasury Bond Fund; and iShares GS 
$ InvesTop Corporate Bond Fund for (1) customer orders, and (2) until 
August 31, 2002, specialist, Registered Trader and broker-dealer 
orders. 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 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 is suspending transaction charges for transactions in 
the iShares Lehman 1-3 year Treasury Bond Fund (Symbol: SHY); iShares 
Lehman 7-10 year Treasury Bond Fund (Symbol: IEF); iShares Lehman 20+ 
year Treasury Bond Fund (Symbol: TLT); and iShares GS $ 
InvesTopTM Corporate Bond Fund (Symbol: LQD) ( Funds ) for 
(1) customer orders indefinitely, and (2) until August 31, 2002, 
specialist, Registered Trader, and broker-dealer orders.
    Off-Floor orders (i.e., customer and broker-dealer) in these 
securities currently are charged $.006 per share ($.60 per 100 shares), 
capped at $100 per trade (16,667 shares). Orders entered electronically 
into the Amex Order File (System Orders) from off the Floor for up to 
5,099 shares are currently not assessed a transaction charge, but 
System Orders over 5,099 shares currently are subject to a $.006 per 
share transaction charge, capped at $100 per trade. Exchange 
transaction charges applicable to customer orders are now suspended. 
The suspension for customer orders is for an indefinite time period, 
and the Exchange will file a proposed rule change if it determines to 
end the suspension and impose transaction charges for customer orders 
in these securities.
    Specialists in these securities are charged $0.0063 ($.63 per 100 
shares), capped at $300 per trade (47,619 shares). Registered Traders 
in these securities are charged $.0073 ($.73 per 100 shares), capped at 
$350 per trade (47,945 shares). Transaction charges for specialist, 
Registered Trader, and broker-dealer orders are suspended until August 
31, 2002.
    The Exchange believes a suspension of fees for these securities is 
appropriate to enhance the competitiveness of executions in these 
securities on the Amex. The Exchange will reassess the fee suspension 
as appropriate, and will file a proposed rule change for any 
modification to the fee suspension with the Commission.
    The Exchange is amending the Equities Fee Schedule to indicate that 
transaction charges have been suspended for the Funds. In addition, the 
Amex is amending the Equities Fee Schedule to refer to the suspension 
of transaction charges for specified Exchange Traded Funds and HOLDRs, 
as previously filed with the Commission.\8\
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    \8\ See Securities Exchange Act Release Nos. 44698 (August 14, 
2001), 66 FR 43926 (August 21, 2001)(for SPDRs[reg], Nasdaq 100[reg] 
Index Tracking Stock, DIAMONDS[reg] and iShares S&P 500 Index Fund); 
and 45773 (April 17, 2002), 67 FR 20558 (April 25, 2002)(for MidCap 
SPDRsTM, Select Sector SPDRs and HOLDRsTM ).
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the objectives of Section 
6(b)(4)\10\ in particular in that it is intended to assure the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and issuers and other persons using its facilities.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
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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.\11\
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    \11\ Although there are inconsistencies in the Amex's original 
filing, Amendment No. 1, and Amendment No. 2 with regard to the 
Amex's Statement on Burden on Competition, the Amex confirmed that 
it believes the proposed rule change will impose no burden on 
competition. August 19, 2002 telephone conversation between Michael 
Cavalier, Associate General Counsel, Amex, and Joseph Morra, Special 
Counsel, Division of Market Regulation, Commission.
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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 \12\ and 
Rule 19b-4(f)(6) thereunder.\13\ At any time within 60 days of the 
filing of the proposed rule change,\14\ 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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ See footnote 4, supra.
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    The Amex has requested that the Commission waive the 30-day 
operative delay. The Commission believes waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest. Acceleration of the operative date will permit the Amex to 
suspend these fees immediately. For these reasons, the Commission 
designates the proposal to be effective and operative upon filing with 
the Commission.\15\
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    \15\ 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).

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[[Page 55050]]

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-2002-64 and should be 
submitted by September 17, 2002.
    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-21772 Filed 8-26-02; 8:45 am]
BILLING CODE 8010-01-P