[Federal Register Volume 68, Number 49 (Thursday, March 13, 2003)]
[Notices]
[Pages 12110-12111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5994]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47446; File No. SR-Amex-2002-105]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 Thereto by the American Stock Exchange LLC 
To Amend Amex Rule 17 to Provide for ``Cash'' In Addition to ``Next 
Day'' Settlement of Transactions in Rights and Warrants During the 
Trading Days Prior to Expiration

March 5, 2003.
    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 December 12, 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 
filed an amendment to the proposed rule change on January 23, 2003.\3\ 
The Commission is publishing this notice to solicit comments on the 
proposed rule change and Amendment No. 1 from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from William Floyd-Jones, Jr., Assistant General 
Counsel, Amex, to Nancy J. Sanow, Assistant Director, Division of 
Market Regulation, Commission, dated January 21, 2003, replacing 
Form 19b-4 in its entirety (``Amendment No. 1''). In Amendment No. 
1, the Amex made corrections to rule text in Amex rule 17(b) to 
allow for ``cash'' settlement as well as ``next day'' settlement for 
all transactions in an issue of rights during the three business 
days preceding the final day for dealings on the Exchange and made 
corresponding changes and corrections to its discussion in the rule 
filing.
---------------------------------------------------------------------------

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

    The Amex proposes to amend Amex rule 17 to provide for ``cash'' in 
addition to ``next day'' settlement of transactions in rights and 
warrants during the trading days prior to expiration. The text of the 
proposed rule change is below. Text in brackets indicates material to 
be deleted, and text in italics indicates material to be added.
* * * * *

Transactions in Rights and Warrants

    Rule 17. (a) Unless otherwise directed by the Exchange, dealings on 
the Exchange in an issue of rights or warrants shall cease in 
accordance with the following procedure:
    (1) Dealings in an issue of rights shall cease at the close of 
business on the business day preceding the expiration date thereof, if 
such rights are exercisable in the New York City metropolitan area, and 
at such time in advance of the expiration date as may be announced by 
the Exchange, if such rights are exercisable outside such area; and
    (2) Dealings in an issue of warrants shall cease, in the case of 
book-entry warrants, at the close of business on their expiration date, 
and for all other warrants at the close of business on the last 
business date preceding their expiration date.
    (b) During the three business days preceding the final day for 
dealings therein on the Exchange, all transactions in an issue of 
rights shall be made only ``next day[.]'' or for ``cash''. On the final 
day for dealings therein on the Exchange, all transactions in an issue 
of rights shall be made only for ``cash.''
    (c) During the three final business days for trading in an issue of 
warrants, dealings on the Exchange shall be made only for ``cash.'' 
During the three preceding business days dealings on the Exchange shall 
be made only ``next day[.]'' or for ``cash'.

* * * Commentary

    See rule 179 for treatment of orders on a specialist's book during 
the final days for dealings in rights or warrants.
* * * * *

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 the proposed rule change, as 
amended, 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 Exchange 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
    Amex rule 17(b) currently provides that transactions in rights 
during the three trading days preceding the last trading session must 
be settled on a ``next day'' basis. Amex rule 17(c) currently provides 
that transactions in warrants during the three trading days preceding 
the last three trading sessions (i.e., the fourth, fifth and sixth 
trading sessions prior to expiration) must only

[[Page 12111]]

be effected on a ``next day'' basis. The Exchange believes that there 
is no reason why trades should not be settled for ``cash'' at any time 
during the final six days prior to expiration, and is proposing to 
amend Amex rule 17 to allow ``cash'' settlement during all of the final 
six days of trading in any right or warrant on the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with section 6(b) of the Act \4\ in general, and furthers 
the objectives of section 6(b)(5) of the Act \5\ in particular, because 
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 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change, as amended, 
will 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 in response 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 the Exchange 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 proposed rule 
change, 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, as 
amended, that are filed with the Commission, and all written 
communications relating to the proposed rule change, as amended, 
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-2002-105 and should be 
submitted by April 3, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-5994 Filed 3-12-03; 8:45 am]
BILLING CODE 8010-01-P