[Federal Register Volume 68, Number 68 (Wednesday, April 9, 2003)]
[Notices]
[Pages 17416-17418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8609]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47622; File No. SR-Amex-2003-20]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC to Extend a Pilot Program Relating to Crossing Procedures on the 
Amex in Nasdaq National Market Securities

April 2, 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 March 26, 2003, the American Stock Exchange LLC

[[Page 17417]]

(``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 March 31, 2003, the Amex amended the proposed rule 
change.\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.\6\ 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 March 28, 2003 letter from Geraldine Brindisi, Vice 
President and Corporate Secretary, Amex, to Nancy Sanow, Assistant 
Director, Division of Market Regulation, Commission and attachments 
(``Amendment No. 1''). Amendment No. 1 completely replaces and 
supersedes the original filing.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
    \6\ The Exchange 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 Amex proposes to extend until September 30, 2003 its pilot 
program under Commentary .06 to Amex rule 126(g) relating to crossing 
procedures on the Amex in Nasdaq National Market securities. The Amex 
proposes no substantive changes to the pilot, other than extending its 
operation until September 30, 2003. 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 Amex has implemented crossing procedures under Amex rule 
126(g), Commentary .06 on a pilot basis extending until March 31, 
2003.\7\ The Amex initially filed the pilot program in SR-Amex-2002-
58.\8\ The Exchange now proposes to extend the pilot for a six-month 
period until September 30, 2003. Proposed Amex 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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    \7\ See Securities Exchange Act Release No. 46635 (October 10, 
2002), 67 FR 64424 (October 18, 2003)(SR-Amex-2002-74).
    \8\ See Securities Exchange Act Release No. 46309 (August 5, 
2002), 67 FR 51902 (August 9, 2002)(SR-Amex-2002-58)
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    The Amex is making no changes to the pilot as filed with the 
Commission in SR-Amex-2002-58, other than to extend the pilot program 
until September 30, 2003.
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)(5) \10\ 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.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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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

    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 \11\ and 
rule 19b-4(f)(6) thereunder.\12\ 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    The Amex has requested that the Commission accelerate the 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 allow the pilot to operate 
without interruption until September 30, 2003. For these reasons, the 
Commission designates the proposal to be effective and operative upon 
filing with the Commission.\13\
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    \13\ 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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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

[[Page 17418]]

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-2003-20 and should be 
submitted by April 30, 2003.

    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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-8609 Filed 4-8-03; 8:45 am]
BILLING CODE 8010-01-P