[Federal Register Volume 67, Number 202 (Friday, October 18, 2002)]
[Notices]
[Pages 64424-64425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-26517]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46635; File No. SR-Amex-2002-74]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Extending the Pilot Program Relating to Crossing Transactions in 
Nasdaq Securities Until March 31, 2003

October 10, 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 September 19, 2002 the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed a proposed rule change with the Securities and 
Exchange Commission (``SEC'' or ``Commission''). The proposed rule 
change is described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Exchange filed the proposed rule 
change pursuant to section 19(b)(3)(A) of the Act,\3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders the proposed rule change effective 
upon filing with the Commission. 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\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6). The Exchange has requested, and the 
Commission agrees, to waive the pre-filing notice required by Rule 
19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes to extend until March 31, 2003 the existing pilot 
program under Commentary .06 to Amex Rule 126(g) relating to crossing 
procedures on the Amex in Nasdaq National Market securities.

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 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. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange has implemented crossing procedures under Rule 126(g), 
Commentary .06 on a pilot basis extending until September 30, 2002.\5\ 
The Exchange proposes that the pilot program be extended for a six-
month period until March 31, 2003. Proposed Rule 126(g), Commentary .06 
provides that a floor broker is permitted to effect cross transactions 
in Nasdaq National Market securities involving 5,000 shares or more 
without interference by the specialist or market makers if, prior to 
presenting the cross transaction, the floor broker first requests a 
quote for the subject security. These requests place the specialist and 
market makers on notice that the floor broker intends to cross within 
the bid-offer spread. This arrangement ensures that a specialist or 
market maker retains the opportunity to better the cross price by 
updating their quote, but precludes the specialist or market maker from 
breaking up a cross transaction after the cross transaction is 
presented. The floor broker retains the ability to present both sides 
of the order at the post if the customers so desire.
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    \5\ Securities Exchange Act Release No. 46309 (August 5, 2002), 
67 FR 51902 (August 9, 2002) (SR-Amex-2002-58).
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    The Exchange is making no change to Rule 126(g), Commentary .06 as 
filed with the Commission in SR-Amex-2002-58 other than to extend the 
pilot program until March 31, 2003.
2. Statutory Basis
    The proposed rule change is consistent with section 6(b)\6\ of the 
Act in general and furthers the objectives of section 6(b)(5)\7\ in 
particular in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.\8\
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 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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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

    The Exchange did not receive any written comments on the proposed 
rule change.

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

    The foregoing rule change has become effective upon filing pursuant 
to section 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\ 
thereunder because the 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 the proposed rule change was filed, or 
such shorter time as the Commission may designate. At any time within 
60 days of the filing of a rule change pursuant to section 19(b)(3)(A) 
of the Act,\11\ the Commission may summarily abrogate the 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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
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    The Exchange has requested that the Commission waive the 30-day 
operative date. 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 Exchange 
to continue the existing pilot program without delay. In addition, no 
changes to Rule 126(g), Commentary .06 are being proposed at this time. 
Thus, the foregoing rule change has become effective pursuant to 
section 19(b)(3)(A) \12\ of the Act and subparagraph (f)(6) of Rule 
19b-4.\13\ 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,

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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.
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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 at 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 the File No. SR-Amex-2002-74 
and should be submitted by November 8, 2002.
    For the Commission by the Division of Market Regulation, pursuant 
to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-26517 Filed 10-17-02; 8:45 am]
BILLING CODE 8010-01-P