[Federal Register Volume 68, Number 140 (Tuesday, July 22, 2003)]
[Notices]
[Pages 43407-43409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18528]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48173; File No. SR-Amex-2003-59]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the American Stock Exchange LLC To Renumber Commentary .02 to Rule 131 
and Amend a Reference Thereto in Commentary .06 to Rule 155

July 14, 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 June 10, 2003, 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 
Exchange filed the proposal pursuant to section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(3) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. On June 12, 2003, the

[[Page 43408]]

Exchange filed Amendment No. 1 to the proposed rule change.\5\ 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\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(3).
    \5\ In Amendment No. 1, the Exchange amended the proposal to 
replace Exhibit A as originally filed with a revised Exhibit A (i) 
to correct the text of Rule 131, Commentary .03 (as re-numbered) and 
(ii) to amend the text of Rule 155, Commentary .06, to change the 
reference therein from Rule 131, Commentary .02 to Rule 131, 
Commentary .03. See letter dated June 11, 2003, from Claire McGrath, 
Senior Vice President and Deputy General Counsel, Exchange, to Nancy 
Sanow, Assistant Director, Division of Market Regulation, 
Commission. For purposes of calculating the 60-day period within 
which the Commission may summarily abrogate the proposed rule change 
under section 19(b)(3)(C) of the Act, the Commission considers that 
the period to commence on June 12, 2003, the date the Exchange filed 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to renumber Rule 131, Commentary .02, as 
approved in Release No. 34-47960,\6\ as Rule 131, Commentary .03. The 
text of the proposed rule change is set forth below. Proposed new 
language is in italics; proposed deletions are in [brackets].
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    \6\ See Securities Exchange Act Release No. 47960 (June 2, 
2003), 68 FR 34440 (June 9, 2003) (SR-Amex-2003-17).
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* * * * *
Types of Orders
Rule 131
* * * * *
Commentary [.02] .03
    (a) ``Market at 4:00 p.m.'' orders. An order in Portfolio 
Depositary Receipts or Index Fund Shares that trade on the Exchange 
until 4:15 p.m. may be designated as ``market at 4 p.m.'' to denote 
that it is a market order which is to be executed at or as close as 
practicable to the close of the regular equity trading session on the 
exchange (normally 4 p.m. Eastern Time).
    (b) Where a member is holding simultaneously both buy and sell 
``market at 4 p.m.'' orders, and where there is an imbalance between 
the buy and sell ``market at 4 p.m.'' orders, the member shall, at 4 
p.m. or as close as practicable to 4 p.m., execute the imbalance 
against the prevailing bid or offer on the Exchange, as appropriate. 
(An imbalance of buy orders would be executed against the offer. An 
imbalance of sell orders would be executed against the bid.) The member 
shall then pair off the remaining ``market at 4 p.m.'' orders at the 
price of the immediately preceding sale described above.
    (c) Where the aggregate size of buy ``market at 4:00 p.m.'' orders 
equals the aggregate size of sell ``market at 4:00 p.m.'' orders in a 
given security, the buy and sell orders shall be paired off at the 
midpoint of the then prevailing bid and offer in that security on the 
Exchange. In the event that that midpoint consists of a number 
including a fraction of a cent, then the price of the transaction shall 
be at the next higher one cent increment above the midpoint.
* * * * *
Precedence Accorded to Orders Entrusted to Specialists
Rule 155
* * * * *
Commentary
* * * * *
    .06 Notwithstanding anything in Commentaries .03 and .04 above to 
the contrary, ``market at 4 p.m.'' orders entered with the specialist 
in Portfolio Depositary Receipts and Index Fund Shares (see Rule 131, 
Commentary [.02] .03) shall be executed at one price at 4 p.m. or as 
close as practicable to 4 p.m. and shall have priority over limit 
orders priced at the execution price.
* * * * *

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 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
    On June 2, 2003, the Commission approved a proposed rule change in 
Release No. 34-47960 relating to ``market at 4 p.m.'' orders for 
Exchange Traded Funds that added Commentary .02 to Rule 131 and 
Commentary .06 to Rule 155.\7\ The Exchange proposes to amend Rule 131, 
Commentary .02 as approved in Release No. 34-47960 to renumber it as 
Rule 131, Commentary .03. The Exchange also proposes to amend Rule 155, 
Commentary .06 to change the reference therein from Rule 131, 
Commentary .02 to Rule 131, Commentary .03. These changes would correct 
the erroneous numbering of two distinct provisions as Rule 121, 
Commentary .02, as approved in Release No. 34-47960 and Release No. 34-
47658.\8\
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    \7\ Id.
    \8\ See Securities Exchange Act Release No. 47658 (April 10, 
2003), 68 FR 19041 (April 17, 2003) (SR-Amex-2003-18).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of 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, as 
amended, 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

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action \11\
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    \11\ At the Exchange's request, the Commission corrected the 
rationale and the citation to the section of the Act pursuant to 
which the proposed rule change has become immediately effective. 
Telephone conversation between Michael Cavalier, Associate General 
Counsel, Exchange, and Ann E. Leddy, Attorney, Division of Market 
Regulation, Commission (July 9, 2003).
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    The proposed rule change has become effective pursuant to section 
19(b)(3)(A)(i) of the Act \12\ and subparagraph (f)(1) of Rule 19b-4 
thereunder \13\ because it constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule of the Exchange. At any

[[Page 43409]]

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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(1).
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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 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 
Exchange. All submissions should refer to file number SR-Amex-2003-59 
and should be submitted by August 12, 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. 03-18528 Filed 7-21-03; 8:45 am]
BILLING CODE 8010-01-P