[Federal Register Volume 68, Number 134 (Monday, July 14, 2003)]
[Notices]
[Pages 41665-41666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17668]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48132; File No. SR-AMEX-2002-112]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Amendment No. 1 Thereto by the American Stock Exchange LLC 
Relating to Its Performance Evaluation and Allocations Procedures

July 7, 2003.
    On December 19, 2002, the American Stock Exchange LLC (``Amex'' or 
``Exchange''), 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 revise its performance evaluation and 
allocations procedures. On May 1, 2003 the Amex amended the proposed 
rule change.\3\ Specifically, Amex proposes to modify Amex Rule 26 to 
reduce the size of the Performance Committee and related subcommittees, 
while also modifying the committee pool balance where specialist 
relations with listed companies or Exchange Traded Funds (``ETF'') 
sponsors are in issue. The proposed rule change also modifies Amex 
Rules 26(e) and 29(d) to establish deadlines for submission of 
materials to Amex staff to accommodate transmission of materials in 
connection with specialist minimum performance standard meetings.\4\ 
Finally, the proposed rule change eliminates the Notice of Marketing 
Interest (``NOMI'') process in Amex Rule 27 that previously

[[Page 41666]]

required equity specialists to obtain written approval prior to 
contacting an unlisted company.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter from William Floyd Jones, Associate General 
Counsel, Amex, to Nancy Sanow, Assistant Director, Division of 
Market Regulation (``Division''), Commission, dated April 30, 2003 
(``Amendment No. 1''). In Amendment No. 1 the Exchange submitted a 
new Form 19b-4 which replaced the original filing in its entirety.
    \4\ Persons that are the subject of performance reviews have a 
reasonable amount of time between delivery of the written notice and 
the Committee's meeting to prepare their presentation to the 
Committee. A mutually convenient date for the performance review is 
selected by the person being reviewed and the Committee. Telephone 
discussions between William Floyd-Jones, Assistant General Counsel, 
Amex, Christopher B. Stone, Special Counsel, and Mia C. Zur, 
Attorney, Division, Commission (January 30 and 31, 2003).
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    The proposed rule change, as amended, was published for comment in 
the Federal Register on June 2, 2003.\5\ The Commission received no 
comments on the proposal.
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    \5\ See Securities Exchange Act Release No. 47914 (May 23, 
2003), 68 FR 32782 (June 2, 2003).
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    After careful review, the Commission finds that the proposed rule 
change, as amended, is consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange.\6\ Specifically, the Commission finds that the 
proposed rule change promotes the objectives of section 6(b)(5) of the 
Act,\7\ which requires among other things, that the rules of the 
Exchange 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 national market 
system, and in general, to protect investors and the public interest.
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    \6\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposed rule change is a 
reasonable modification of the Exchange's performance evaluation and 
allocations procedures as it is intended to enable the Performance 
Committee to operate more flexibly and responsively, as well as to more 
accurately reflect the views of issuers and ETF sponsors in certain 
situations. Additionally, the timely disclosure of information and 
materials to the Performance Committee and the Market Quality Committee 
will ensure adequate time for review and distribution to participants. 
Finally, the elimination of the now outdated NOMI process will better 
serve to facilitate the Exchange's listing efforts by removing a 
process that caused the unintended result of specialist firms 
requesting NOMIs to contact an unlisted company without then 
undertaking substantial contact with them.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\8\ that the amended proposed rule change (SR-AMEX-2002-112) be, 
and hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-17668 Filed 7-11-03; 8:45 am]
BILLING CODE 8010-01-P