[Federal Register Volume 68, Number 85 (Friday, May 2, 2003)]
[Notices]
[Page 23507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10821]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47748; File No. SR-Amex-2002-108]


Self-Regulatory Organizations; Order Granting Approval to 
Proposed Rule Change by the American Stock Exchange LLC To Amend Amex 
Rule 152 To Provide That a Member That Fails To Execute an Order May Be 
Compelled To Take or Supply the Securities Named in the Order

April 25, 2003.
    On December 18, 2002, the American Stock Exchange LLC (``Amex'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and rule 19b-4 thereunder,\2\ a proposed rule change to 
amend Amex rule 152 to provide that a member that fails to execute an 
order may be compelled to take or supply the securities named in the 
order. The proposed rule change was published for comment in the 
Federal Register on March 20, 2003.\3\ The Commission received no 
comments on the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 47493 (March 13, 
2003), 68 FR 13743.
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    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\4\ 
Specifically, the Commission finds that the proposal is consistent with 
section 6(b)(5) of the Act,\5\ which requires, among other things, that 
the Amex's rules be 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.
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    \4\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the Amex's proposal to explicitly 
provide that a member that has failed to execute an order may be 
compelled to take or supply the securities in the order should 
highlight the significant obligations of members in the handling of any 
order entrusted to them and their responsibility to correct 
transactions on behalf of their customers in cases of error.\6\ 
Furthermore, the Amex has noted that the consent provisions outlined in 
Amex rule 152(a) would continue to apply to the error transactions 
conducted under Amex rule 152(a)(1). Consequently, the Commission 
believes that the Amex's proposal would continue to reflect that, 
unless otherwise agreed, an agent is subject to a duty not to deal with 
his principal as an adverse party in a transaction connected with his 
agency without the principal's knowledge.
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    \6\ The Commission also notes that the proposed Amex rule is 
identical to the New York Stock Exchange, Inc.'s rule. See NYSE rule 
91(a).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\7\ that the proposed rule change (File No. SR-Amex-2002-108) be, 
and it hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-10821 Filed 5-1-03; 8:45 am]
BILLING CODE 8010-01-P