[Federal Register Volume 68, Number 205 (Thursday, October 23, 2003)]
[Notices]
[Pages 60729-60731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26745]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48652; File No. SR-Amex-2003-81]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to Reporting of ``At-the-Close'' Orders in Nasdaq 
Securities

October 17, 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 8, 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 
proposed rule change has been filed by the Amex as a ``non-
controversial'' rule change under Rule 19b-4(f)(6) under the Act.\3\ 
The Commission is publishing this notice to solicit

[[Page 60730]]

comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes to amend Rule 109(d) Commentary .02 to 
accommodate reporting of ``at the close'' orders in securities listed 
on the Nasdaq Stock Market, Inc. (``Nasdaq'') as ``stopped stock'' 
pursuant to Amex Rule 109(d). The text of the proposed rule change is 
set forth below. Proposed new language is in italics; proposed 
deletions are in [brackets].
* * * * *
Rule 109 Stopping Stock
    (a) through (d) No change.
Commentary
    .01 No change.
    .02 Paragraph (d) of this rule shall apply to at-the-close orders 
entered on the Exchange in Nasdaq National Market securities to which 
the Exchange has extended unlisted trading privileges, except that the 
Exchange shall [not] disseminate information regarding ``pair off'' 
transactions reported pursuant to paragraph (d) as stopped stock [, 
pending implementation of systems changes by] to the Nasdaq Unlisted 
Trading Privileges Plan Processor [to permit dissemination of ``pair 
off'' transactions as ``stopped stock''].
* * * * *

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
    Amex Rule 109(d) requires that a member holding both buy and sell 
market on close (``MOC'') orders simultaneously must execute any 
imbalance against the prevailing Exchange bid or offer at the close, 
and then must ``pair off'' remaining buy and sell orders at the price 
of the immediately preceding sale. Amex Rule 109(d)(1) provides that 
the ``pair off'' transaction must be reported to the consolidated last 
sale reporting system as ``stopped stock,'' to inform the public that 
limit and limit on close (``LOC'') orders entered before the close may 
remain unexecuted.
    The Commission previously approved the Exchange's proposal to 
exempt reporting ``pair off'' transactions as ``stopped stock'' on a 
pilot basis until the Nasdaq Unlisted Trading Privileges (``UTP'') Plan 
Securities Information Processor (``SIP'') could accommodate Amex's 
request to print a transaction in Nasdaq security as ``stopped stock.'' 
\4\ Nasdaq has stated that, as of September 15, 2003, the Nasdaq UTP 
SIP will be able to accommodate Amex's reporting of transactions as 
``stopped stock,'' which would include ``pair off'' transactions under 
Rule 109(d).\5\
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    \4\ See Securities Exchange Act Release No. 47658 (April 10, 
2003), 68 FR 19041 (April 17, 2003).
    \5\ See UTP Vendor Alert 2003-42, July 18, 2003.
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    The Exchange, therefore, is proposing to amend Commentary .02 to 
Rule 109 (``Stopping Stock'') to delete the reference to the exemption 
from disseminating information regarding ``pair off'' transactions as 
``stopped stock'' pursuant to Rule 109(d). Following the enhancement to 
the Nasdaq UTP SIP on September 15, 2003, a ``pair off'' transaction 
would be printed as ``stopped stock'' for dissemination by the Nasdaq 
UTP SIP, in compliance with Rule 109(d).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(5),\7\ 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 regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism for a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest.\8\
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    \6\ 15 U.S.C. 78(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ At the request of the Exchange, Commission staff has revised 
the statutory basis for the proposed rule change to cite to Section 
6(b)(5) of the Act, 15 U.S.C. 78f(b)(5). Telephone conversation 
among Claire P. McGrath, Senior Vice President and Deputy General 
Counsel, Amex, Marija Willen, Associate General Counsel, Amex, 
Christopher Stone, Special Counsel, Division, Commission, and Ann E. 
Leddy, Attorney, Division, Commission (October 7, 2003).
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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

    No written comments were solicited or received with respect to 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 \9\ and 
Rule 19b-4(f)(6) thereunder.\10\ 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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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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

[[Page 60731]]

the Commission's Public Reference Room. Copies of the filing will also 
be available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to File No. SR-Amex-2003-81 and 
should be submitted by November 7, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-26745 Filed 10-22-03; 8:45 am]
BILLING CODE 8010-01-P